Biz Promotion – Step Right UpPosted on Sunday, November 2nd, 2003 by Mark Mehler
Promoting your business can be as tricky as launching one.
But our experts, including business consultants and entrepreneurs alike,
have strong words about how you can make your special promotions work. Here are six big ideas that shine.
On a drizzly November afternoon, more than 200 people are gathered at a New York video shop, awaiting the arrival of a local pro football star to celebrate the store’s grand opening. It’s easy to spot the owner among the crowd. He’s the one pacing the room, glancing at his watch every 15 seconds and muttering a stream of unprintable curses.
“He’s already an hour late,” says the owner, as the first potential customers begin to trickle out into the rain. “You’d think with all the money I’m paying this guy just to show up and sign some autographs, he could be on time!”
Another 30 minutes pass before the celebrity linebacker finally arrives, having been delayed in New York City traffic. But half the crowd has departed. Although the NFL star is gracious and accommodating with the fans, one look at the store owner tells you that he wishes he’d found an easier way to herald his grand opening.
“Celebrity promotions and endorsements can help attract traffic to a store,” says Gary Wright, a retail marketing consultant in Denver, Colo. “But they tend to work best when the celebrity is tied in some way to the product you’re selling. Otherwise, people are only coming to see the celebrity, not to buy from you.”
Bill Glazer, another retail sales consultant (www.bgsmarketing.com) and owner of Gage Menswear, a small apparel chain in Baltimore, Md., agrees that celebrities can boost sales. But he cautions that these events require careful planning and, even with the most meticulous attention, are subject to the vagaries of weather and transportation. Moreover, adds Glazer, small-business owners often end up paying more than they can afford for big-name celebrities, when cheaper local talent such as radio deejays and TV weather forecasters are just as effective in building traffic.
The same can be said about all types of sales promotions, whether they’re special discount offers, contests, giveaways or Barnum-esque publicity stunts. Although they can help retain existing customers and lure new ones, they also can backfire in disastrous ways.
For those adventurous and fun-loving small-business owners inclined toward the unconventional, consider these tips for running successful promotions:
1 Treat special promotions and events as part of an ongoing, well-orchestrated marketing program. “This is the number-one mistake that small companies make,” says Glazer. “They assume that one or two marketing stunts a year are enough.” But they’re not. You can’t ignore the fundamentals of direct-response marketing—a compelling headline, a deadline to respond, testimonials and, most important, frequent messages. According to one major study of 1,000 retail consumers, on average, customers want to be contacted by their suppliers every 20 days. Every month that you ignore them, you lose 10 percent of your customer base.”
2 Collect information about your customers and create a comprehensive customer database. Reason: It’s much easier to keep customers than develop new ones. “Wherever you have a contact point with the customer, collect information,” says Randy Lisciarelli of Vera Pax, a direct mail/Internet marketing firm. “Too many small companies don’t bother capturing customer data and instead depend on rented lists, which don’t work at all. ‘Retention marketing’—building a campaign around an existing customer database—yields the best returns for smaller firms without big marketing budgets and name brands.”*
David Frey, author of The Small Business Marketing Bible, says a simple way to start is by co-sponsoring free monthly lunch giveaways with restaurants in your area. To enter the contest, all restaurant patrons need to do is toss their business cards into a jar. One small business-to-business supplier that ran such a promotion with seven local eateries got an average of 350 to 400 business cards a day and ultimately wound up accumulating a database of thousands of potential customers.
3 Remember, timing is everything. Jan Huffman and her husband Vance, the former owners of Strasburg Pharmacy & Gift Shop in Strasburg, Ohio, ran an inventory liquidation sale between Thanksgiving and mid-January, which coincided with the national shopping season. Their promotional efforts included lots of giveaways (a big-screen TV was the grand prize), in-store scavenger hunts and special discounts. They sold their entire stock and actually generated a healthy profit on the inventory. “We would have been happy with a 75 or 80 percent sell-through,” Jan says. Moreover, the liquidation sale brought in a slew of new customers for the new store owner, Mike Dennis. Jan Huffman, who is now an employee of the store, says she and Dennis took extra pains to capture as much data as possible on all those new shoppers.
4 Partner with other local firms. Chuck Rankin, the owner of eight Chuck’s family restaurants in the Dallas/Fort Worth, Texas, area, is a big believer in partnering. He partners to defray the rising cost of marketing and to leverage another company’s brand identity. Recently, Chuck’s hooked up with the Blue Bell ice cream company to create “Blue Extreme,” a blue confection with a vanilla flavor.
“To the kids, it became ‘Chuck’s blue ice cream,’” says Rankin, whose chain runs two special promotions a year. “The aim is not to give off a buzz, but to get families and kids to come back again and again. I’ll hook up with any legitimate firm or local institution that will help me generate repeat business.”
5 Be careful what you discount. One of the worst small-business mistakes, according to marketing experts, is running specials on the poorest-selling stock (“If nobody wants to buy a product, discounting it 15 percent is not going to help boost sales,” says Gary Wright).
“If you’re not careful, you can wind up setting an expectation of a lower street price,” says Andy Paul, managing director of the Carmel Valley Group, a San Diego, Calif., sales consulting firm. “It’s better to take a packaged approach, and discount installation and training on a bundle of products.”
6 Don’t overdo giveaways. In the business-to-business space, the aim of a special promotion is to generate a sales lead rather than an end-customer sale. Bob Bly, a veteran B-to-B marketing consultant, says you have to be careful not to give away incentives that are too generous, resulting in unqualified leads. Example: a firm that gave away hardwood baseball bats to everyone who requested a catalog. Many people sent in the catalog form just to get the free bat.
Met/Hodder, a Minneapolis film-production company, is one business-to-business firm that has mastered the art of special promotions. “We look for any opportunities to keep our card near the top of [our customers’] Rolodex,” says CEO Kent Hodder. The company created a “Go Fly a Kite” promotion, which urged existing and potential clients to take time out from their hectic schedules and fly a kite in the park; and a “We Can See Exactly What You Need” promotion, which featured a pair of novelty X-ray glasses. Both events highlighted the film company’s design creativity and its customized approach to client relations. The promos also gave clients a chuckle.
“Remember that companies don’t buy, people do,” says Ruben Melendez, CEO of Glomark, a Columbus, Ohio, sales consulting firm. “A thank-you box of Christmas cookies, a pair of tickets to a sporting event—these kinds of promotional things help cement a relationship. Just make sure that whatever you give away comes from a position of honesty and trust.”
In other words, run the promotions the same way you run your business.
Contributing Editor By Mark Mehler
|Cyberspace can be a wonderful place to run wild with promotions, but as in the bricks-and-mortar world, the rules of marketing are in force. Case in point: the now-discredited strategy of throwing in free shipping and handling on Internet purchases. Because shipping and handling constitute a healthy chunk of the cost of most Internet orders, a rise in sales didn’t mitigate the impact of falling profit margins.Small businesses typically offer many of the same kinds of giveaways and promotions online as they do in person. Providing customers or clients with a sample or free advice is especially popular on the Net. For example, a clothing-store owner provides weekly tips on dressing for business. A Web-site designer offers a monthly newsletter online to help clients run their sites effectively. Promotional giveaways, especially of branded products bearing the company’s name or logo, can be effective too. Bags, coolers, business supplies, computer gear, pens and household items such as towels are popular. The trick is to ensure that the giveaways are attracting customers or potential customers and not just “freebie junkies.”“No matter where you run your promotion, the guidelines of basic marketing apply,” says Ilise Benun, author of Self-Promotion Online. “You must keep your customer database up-to-date and usable in terms of your visitor’s obsessions, and you must offer value and a call to action by a certain date.”
David Frey, a sales consultant and author, points to the need to track the results
Other do’s and don’ts for online promoters:
Establish credibility with your audience by being believable and honest. This is even more crucial online than offline, given the awful reputation of some Internet marketers.
Don’t rely solely on a fancy Web design. “It’s good copy that sells products,” insists Frey. “It’s no accident that 99 percent of sites don’t sell. They’re all fixated on flashy graphics.”
Target a niche of passionate people and focus on their needs. The Internet can be paradise for niche marketers, notes Stewart. Once you hook into a customer base such as wine connoisseurs or stamp collectors, the possibilities for contests and premium giveaways are endless.
*Be aware that maintaining a database of customer information means establishing security to protect it. California recently passed a law that requires you to notify your customers located in California if you suspect you have suffered a computer-security breach.