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Small business marketing in a tough economy

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I was recently reading an article in Entrepreneur magazine that had some useful advice for small business marketing in a downturn. I’ve borrowed some of the suggestions and changed a few that I felt missed the mark. Below are five suggestions to consider:

1. Value, not price, will make you stand out.
Cost is paramount in the minds of many consumers. But, it’s not as overriding as you might think. The worth of something compared to the price paid or asked for it is the most decisive part of the sale. For example: If your buyers believe your price is too high and is not justified by the value you are providing, they will use price to eliminate you as a source for your product or service. And it can go the other way as well. What if your price is too low? They may still eliminate you. Why? It’ll cast doubt on your product or services’ reliability or your company’s trustworthiness. Therefore, your price should accurately reflect the value your product or service offers. When times get tough, price-cutting seems like a natural solution to boost sales. But, it should be tempered with value in mind.

2. Be Social
Facebook, Twitter, LinkedIn or other internet-based social networking are free, they can reach millions and they provide potential customers with a sense  of who you are on a more personal level and why they should want to connect with you.

A blog, as another networking option, may create a more informational focus — tips, strategies and other ideas for readers — more effective than a pure sales tool. And be prepared to put in the hours to keep your content fresh. Keeping a constant flow of new articles on your blog is a challenge, as I’m currently finding with this blog. But, the more fresh content you add, the more relevant you become to search engines.

3. Find a Cause
Here’s a great suggestion from Entrepreneur magazine’s article “Ramp Up Marketing in a Downturn” from Jeff Wuorio, June 11, 2009.

It may sound cynical, but embracing a good cause can present a viable opportunity for low-cost marketing. There are many approaches to cause-driven marketing. Earmark a portion of your company’s revenue for a worthwhile cause, suggests Joel Warady, a marketing consultant. Volunteering or offering training and mentoring programs can cement the central marketing message that you wish to convey. “You’re trying to build emotion associated with your brand,” he says. “Not only does cause-marketing allow you to connect with customers, but it also allows customers to get some insight into your company’s soul. Then, it becomes less about what you give than it does about why you give.”

Cause-marketing can also address a common problem shared by customers. Take Mike Faith, CEO of Headsets.com. When he heard that hundreds of drivers in California and Washington had gotten traffic tickets for violating new hands-free cell phone driving laws, he jumped at the chance for easy marketing. “We needed an inexpensive promotion to take advantage of the hands-free law,” says Faith, 44. “We offered a headset giveaway for people who got ticketed. Our message was ‘Send us proof of your ticket, and we’ll send you a free cellular headset.’”

Total cost: roughly $2,500 per month. Not bad, considering the projected $25 million company reached readers of 40 print publications and listeners of 30 radio stations around the country.

4. Don’t forget direct mail

Direct mail is still a viable marketing option for many small businesses. You hear various response rates to direct mail, but it can vary wildly based on factors such as:

  • Target list quality (how well it fits your ideal customer profile)
  • Appeal of the offer
  • Messaging/design of the direct piece
  • Whether you are measuring response or purchase
  • Product/service/company familiarity

The response can be as low as less than 1% or as high as 20%. And also consider it will take a series of mailings to best develop a familiarity with your product/service to your target market, especially if you’re relatively unknown.

5. E-mail/e-Newsletters

From email-marketing-reports.com:

  • According to research conducted by the Direct Marketing Association, email marketing generated an ROI of $43.62 for every dollar spent on it in 2009. The expected figure for 2010 is $42.08. As such, it outperforms all the other direct marketing channels examined, such as print catalogs (reference).
  • The Ad Effectiveness Survey commissioned by Forbes Media in Feb/March 2009 revealed that email and e-newsletter marketing are considered the second-most effective tool for generating conversions, just behind SEO (reference).
  • Shop.org’s State of Retailing Online 2009 survey of retailers found that “E-mail is the most mentioned successful tactic overall” (reference).
  • In Datran Media’s 2009 Annual Marketing & Media Survey, 80.4% of industry executives said the email channel performed strongly for their company. This was the top result (reference).
  • A December 2008 survey of hundreds of marketers by MarketingSherpa saw pay-per-click search ads rank top for ROI, followed by email marketing to house lists in second place (reference).
  • Marketing service Epsilon determined that clients were getting $0.14 revenue for each email delivered in Q3, 2008 (press release).
  • A February/March 2008 retailer survey by shop.org revealed that email marketing has the second lowest cost per order (CPO) of any online marketing tactic. The CPO of $6.85 compares favorably with, for example, paid search’s CPO of $19.33 (reference).
  • A 2008 survey by Newsweaver and B2B Marketing Magazine of 175 UK B2B marketers revealed 78% considered email “critical” or “very important” to their B2B marketing strategy (press release). Newsweaver also surveyed Irish marketers, and 78.1% said that email is either “important” or “very important” to their overall marketing strategy (article).
  • We all hate spam. But well-crafted and targeted emails and e-newsletters can be a vital link to new, current and past customers. It can be viewed as a welcome source of news and offers to the receptive viewer. And the return on investment is huge, compared to other marketing channels.

These are just a few suggestions to boost your sales in a down market. Give us a call or email and we can discuss your business goals and challenges to find a direction for your company.