WOLFBITES - Issue 31
How to fix your small business advertising
The typical small business owner is starved for new leads, most often because they relied exclusively on word of mouth advertising or spent precious advertising dollars on the wrong things at the wrong time.
Relying on word of mouth advertising works fine in the short term, but is doomed to fail in the long term for all but a select few small businesses that catch fire on social media because:
- the product or service is truly wonderful
- the business owner was a master of social media – or hired someone who was a social media Whiz
For just about everyone else, word of mouth advertising is the number lead source because it is the only lead source.
Let's also acknowledge the elephant in the room: small business owners like word of mouth advertising because it costs nothing.The small business death spiral
Having been in the marketing and advertising business for more than a quarter century, I know first hand what happens when a small or medium sized business has no advertising budget and relies exclusively on word of mouth of advertising. It's a death spiral that follows this general pattern:
- Business opens with no customers
- Business starts attracting new customers through word of mouth of advertising
- Business grows, new revenue is funneled into everything except advertising
- Some referral business is lost for reasons completely beyond control of the business owner
- Business growth flattens
- Business starts to shrink
- Business owner decides to start advertising, hoping to get an immediate inflow of new business leads
- Some new leads come in, but they are not enough to make up for the loses resulting from the shrinking referral network
- Declining revenues force the business owner to cut the advertising budget
- Business shrinks
- Business closes
Now that I have your attention, let's talk about the success formula followed by successful small business owners, none of whom relied exclusively on word of mouth advertising. Instead, their immediate goal was to attract new customers who were not friends or family – the true test of whether a business is marketable.
How the customers were attracted varied widely from company to company. Some put in a lot of financial equity (dollar spent). Others put in a lot of "sweat equity" (personal time). Still others put in a mix of both, recognizing that a low commitment in one area meant a higher commitment in the other.
Advertising tip #1: Build your partner network
Almost every business has natural links with other business – links that can become highly valuable because they generate what every small business needs: a constant flow of new business leads. For example, we worked with the owner of a carpet cleaning company who made his number one priority bringing "coffee and donuts" to every major carpet retailer in his target market. The retailers appreciated the gesture and in short order many of these retailers were recommending our client's carpet cleaning services. This is also an example of mega-customer advertising, where a single business relationship leads to many new business leads. This advertising campaign cost almost nothing to implement, but required a high amount of sweat equity (personal time).
Advertising Tip #2: Cross market and upsell
Many small business owners with multiple products and services focus their entire advertising budget on new business generation when they could get the same sales – at less cost and less risk – by cross selling or upselling existing customers. There is latent sales potential in every existing client, mostly because the average customer is not aware of everything you sell. Many will assume you only sell the product they are buying. So job one is to ensure that your customers are aware of everything you sell. Don't do this with hard sell, just some gentle education. Then stand back and watch the orders come in.
Advertising Tip #3: Changing times create opportunities
Savvy marketers are well aware of the major trends that are influencing of how people buy goods and service. But at the local business level, there is an almost shocking disregard for what is happening in the marketplace. Here are just two examples:
Increasing online shopping: With the massive shift to online shopping and the corresponding flight from brick and mortar retailers, you would think that every traditional retailer would be responding by finding ways to enrich the instore experience. Yet the retailers I visited recently at the local mall were offering business as usual. Worse still, many individual retailers have a woefully weak online presence and as a consequence most will soon be former retailers.
Boomers with time and money: Many businesses would enjoy a boom in sales if they paid more attention to Boomers, a highly lucrative demo made up of "Seniors" who have money to spend – and to time to spend it. Yet most marketers have made no adjustments to meet the needs and expectations of the average Boomer. For example, restaurant chains continue to offer menu portions that might suit a middle-aged dinner, but are too large (and too bland) for Boomer dinners.
|Wolfgang Franke is President & Creative Director of Words at Work Advertising & Marketing, a full service communications company established in 1988. Our growing list of valued clients are found throughout our local market, Markham and the Greater Toronto area, across Canada in cities such as London, Ontario, and Edmonton, Alberta, and an expanding list of international locations ranging from The Big Apple in New York to Kanturk, Ireland.|
Mini WolfBites 5
Before you approve that ad with a clever headline based on a colloquial phrase understood by English-speaking customers, remember that close to half of your prospects won't understand the phrase because English is their second language – or they don't speak English at all.
You probably think a marketing plan describes what you know. It does, but it is equally important to identify what you don't know.
Being on the internet – and being found on the internet – are two very different things.