Question: I feel like my business is wobbling along in a marketing fog. I've tried quite a few different forms of advertising and promotion, and some seem to work, and others don't. What's the deal?
Answer: It's very common for a small business to struggle with creative ways to attract new customers and clients. There are lots of traps along the way. Today we'll look at 10 marketing mistakes that are common and costly. Let's talk about this.
First off, realize that marketing is as much art, as it is science. This has been true for a long time. Consider this: A pioneer in retailing, John Wanamaker, opened one of the nation's first department stores in Philadelphia in the 1860s. He said "Half the money I spend on advertising is wasted. The trouble is, I don't know which half."
Let's take a look at some of the biggest mistakes that small business owners make in their marketing efforts.
Mistake No. 1: Not having a solid marketing plan. This is the single biggest reason why businesses, like yours, "wobble along." Remember the old saying from Alice in Wonderland: If you don't know where you're going, any road will take you there.
If you have a written business plan, you probably included a discussion of your marketing plans and methods in it. The marketing plan lays out your road map, typically for a year. But even more than that, for most businesses it's the single most important section of your business plan. Just ask any commercial loan officer who's considering making a business loan, especially to a startup business.
And, here's some hot news: there's a new way to customize your business' marketing plan, easily and for free. We'll talk about this more at the end of this column, but for now, let's move on.
Mistake No. 2: Overlooking your existing customers and clients. Studies show that it costs ten or more times as much to attract a new customer as it does to reach out to an existing one.
Mistake No. 3: Having a confused pricing model. You, as a new or small business, are NOT going to be the low price leader, period. Especially in retail, the buyers for the big chains buy in mega-quantities. If you mention your pricing policies at all, be very careful what you are suggesting. Price-matching with large competitors is a very bad idea.
Mistake No. 4: Spreading your advertising budget too thinly. A common mistake is to allocate, say, ten percent of your budget to ten different media. It's better to focus on three or four, and track the results.
Mistake No. 5: Failing to target your marketing to specific customer groups. Especially for a startup, your marketing dollars are best spent by focusing on one or just a few sub-groups. This might be a demographic niche, or a group of prospects likely to want your products or services. For example, an upscale restaurant would get a higher return from advertising in a visitors' guide than in a college newspaper.
Mistake No. 6: Not having a "killer" website, and a very strong social media presence. This is so basic now it goes without saying.
Mistake No. 7: Not testing the effectiveness of your marketing. Look into a technique called "split run" or "A/B testing." It's simple and effective. You may have heard a TV or radio ad telling you something like: "go to delta7.com, that's delta and the number 7, to get this special price." The imaginary Delta Company has coded several websites to test which ads, or air times, produce the best results.
Mistake No. 8: Fearing repetition. Marketing experts agree that customers respond after multiple advertising exposures.
Mistake No. 9: Arbitrary budgeting. Most every type of business has at least one trade organization. These collect data from their members and can suggest what a typical marketing budget should be, as a percentage of gross sales. For example, a retail business might devote 6 percent of sales to its marketing efforts. A service business may devote 10 percent.
Mistake No. 10: Under-using public relations. Volunteer to talk about your products or services on a radio show. Send out press releases when there's a noteworthy happening, like an upcoming event or new product unveiling.
If you need help with a marketing plan, the national SCORE organization has just released an excellent "Marketing Cookbook" for this exact purpose. You can print it out, or browse the table of contents for what fits your needs. Go to score.org and enter "cookbook" in the search box.
To learn more about managing cash flow, and other small business matters, contact SCORE, "Counselors to America's Small Business." SCORE is a nonprofit nationwide organization with more than 13,000 volunteer business counselors who provide free, confidential business counseling and low-cost training workshops to small business owners. Call the local SCORE chapter at 360-685-4259 to schedule an appointment. For details about the organization,visit SCORE.org.
Ask SCORE is prepared for The Bellingham Herald by Bob Dahms, a business counselor with the Bellingham chapter of SCORE. Submit questions for this column to firstname.lastname@example.org.