From the January 2001 issue of Startups

Everybody has their marketing forte. Perhaps you're a networking extraordinaire or a PR whiz. But everyone has their weak spots, too-and that's why we've created this marketing FAQ, courtesy of our current and former Entrepreneur.com Experts. Whether you need to brush up on advertising basics or improve your market research, you'll find the information you need here.

Research to Find Out if There's a Need for Your Business

Q: What's the best way to determine the market for my business and whether it's in demand?

A: Whether you're just starting a business or have run one for years, ongoing research is vital both to determine the market for a new product or service and to stay abreast of changes that affect your market and target audience. Research will help you identify who your best prospects will be, what they need and expect from you, the way they get their information about your type of product or service, how and when they buy it, and what they're willing to pay.

There are two types of research-primary and secondary. Secondary data-information you get from an outside source-is the easiest and least expensive to obtain. You can purchase studies from research firms and locate published information in newspapers, magazines and on the Internet. Make a habit of reviewing the publications your targeted prospects read for information on what you offer. Don't forget to scan the ads as well as the editorial content for new competitive products and services. Search the Internet regularly for published studies and articles that relate to the buying habits, preferences and changing demographics of your target audience. You'll find a database of secondary research at http://www.dialog.com. And join Internet discussion groups frequented by your types of prospects to stay up-to-date on trends and issues.

Primary research refers to studies you undertake directly, including focus groups, telephone surveys, polls of consumers at malls, surveys of current customers, Internet surveys and geographic market analyses to evaluate potential retail locations. The costs can range from several hundred dollars to send a postcard survey to current customers or to pay for the price of hors d'oeuvres and soft drinks for an informal roundtable focus group, to tens of thousands of dollars for a national telephone survey. To find a qualified research firm by location or specialty, visit http://www.quirks.com. -Kim T. Gordon

Do Market Research for Less

Q: How can I determine if there's a need for my business idea in my local area? I've been conducting my own market research by asking local people about my idea, and I've gotten a huge positive response. I think there's a large market for my idea, but I'm not sure how to begin the process.

A: Your hunch about the need for your idea may be right on. However, your research efforts shouldn't end here. There's more data you can uncover to support your expectations about a business's success as well as to uncover any potholes in your thinking.

You should cover the bases more thoroughly by examining a variety of information sources. Once you've squeezed out more details from both conventional and unconventional sources, then you can confidently move ahead. Here are more strategies to consider:

  • Contact the appropriate industry or trade association. Inquire about research reports or survey data available to members. Information gleaned from these resources can help you connect with more local hobbyists and shop owners, spot trends, and circumvent unprofitable or problematic situations. Industry organizations often provide a business with a start-up resource package upon request-so ask for one. You'll find more industry groups listed in the reference book, World Directory of Trade and Business Associations, which you can usually find at your local library.
  • Hire an MBA team. Through the Small Business Institute program, qualified graduate students are assigned projects to tackle for local businesses, including market studies. The work team gives you a detailed report and an oral presentation. Located at nearly 250 colleges and universities nationwide, some schools collect nominal fees from their clients. Any small-business owner or manager is eligible to participate. For information on a local program, call the Small Business Advancement National Center at (501) 450-5300.
  • Call on a business research center. There are sites nationwide that provide inexpensive research services to businesses. These facilities are usually affiliated with an academic library. For example, the Center for Business Research (516-299-2833) at Long Island University in New York has researched projects from the organic food market to high-tech firms moving to Silicon Mesa. The Internet-Plus Directory of Express Library Services: Research and Document Delivery for Hire lists 500 libraries that provide low-cost research services.
  • Study a set of old and current phone books. A shop may not exist today, but are you sure there's never been one in the area? Look to see if there's a category heading for your idea, then confirm how much competition exists and the movement of other businesses-those who've closed their doors or have grown or moved to other locations. Old phone books can be found at public libraries.
  • Visit your "first stop" business information center. These offices can provide information about licensing, permits, your particular business type and running a business in your community in general. Check the government listing in your phone book.

Go through these additional steps, and you'll be on your way to business success! -Kimberly Stansell

Set Up Your Marketing Program

Q: As a one-person enterprise, what would you say would be the best way to attract clients?

A: The key is to set up an annual marketing program you can manage along with the daily operations of your growing business. You should expect to spend about 40 percent of your time every week on marketing and sales-and more if you're just starting your business. All businesses have three kinds of prospects-cold, warm and hot-and it will take multiple contacts with most prospects to move them through your sales cycle from cold to hot. To create an effective annual program, plan activities that reach out to all three types of prospects on an ongoing basis. Here are some tips:

  • Cold prospects may be qualified, but they know little or nothing about your company. Warm them up with well-targeted direct-mail marketing, advertising or public relations placements in their favorite form of media, and by having a marketing program that drives qualified prospects to your Web site.
  • Warm prospects are midway through your sales cycle. To motivate them, add more personalized marketing tools such as electronic newsletters and presentation tools, and continue with your advertising, PR or direct-mail campaigns.
  • Your hottest prospects are those you've moved through the sales cycle from cold to warm, then hot, and businesses that come to you as referrals. For service firms, personal selling is usually necessary to add the final heat to close a sale. So when you meet with your hottest prospects, be sure you're ready to close with a great PowerPoint presentation, brochure or other marketing tools that are up to the challenge. -Kim T. Gordon

Market Your Business for $4 a Day

Q: How do I market my business to prospective customers on a daily basis with a shoestring budget?

A: You're right on target in your desire to market daily. Research shows consumers need to hear a message at least three times for them to have name recognition and recall, and nine times before they become a customer. One-time or sporadic tactics are ineffective in increasing awareness, acceptance, preference and demand for your product. You can create more marketing momentum with daily action. One way to do this is to use a $4-a-day marketing program.

The basic strategy is to contact 10 clients, prospects or contacts each day, five days a week. You can contact them by phone, fax, e-mail, letter or postcard. You can send out press releases, sales or follow-up letters, brochures, special offers, information sheets or thank-you notes. Your cost is about 55 cents to print and mail five letters for a total of $2.75. The telephone calls or faxes cost about a quarter each for a total of $1.25. You do the math. If you're communicating by e-mail, your costs will be even less. Your goal is to create a combination of daily activities that help you communicate with existing as well as potential customers.

Here are some effective contacts and programs you can set up with just $4 a day:

  • Send your existing customers' referral and buying incentives. Devote some energy to reselling to current customers again and again. Send all customers a post-purchase thank-you note that includes coupons for referring new people to you. You can also stay in contact via monthly postcard mailings that include a tip sheet about your business, a special sales invitation, a service call reminder or a mini newsletter.
  • Introduce yourself to the media. Free publicity has the potential to boost your business. Contact your local newspaper's editor and offer to lend expert quotes for any articles or columns regarding your expertise, or put together an informational press release concerning new trends in your industry. Poll your customers to find out about new trends and include that information in your release as well.
  • Invite people to your store. Be clever and piggyback onto events that can steer customers into your business. There are several celebrations each month you can promote with special offers. Look for other opportunities in the Chase Calendar of Events or on an online greeting service like Egreetings.com.

Remember: You must be consistent and do something every day for this program to work. It's easy to manage, inexpensive and potentially lucrative. So get going! -Kimberly Stansell

Which Advertising Methods Will Work for You?

Q: Do some kinds of advertising work better than others?

A: All types will work if they're used properly and not just "tried." The fact that the various forms of media utilize each other illustrates that no one kind of advertising is superior. Radio stations promote themselves on television and bus cards, TV stations list their programs in the newspaper, and newspapers use outdoor billboards to increase circulation. You've probably also noticed the large number of ads by dotcom companies in these traditional forms of media. To use advertising correctly, the following four requirements must be met:

1. Demographics. You must be able to define your customer base according to the standard age and gender groups used by the media to define their audiences.

  • Gender: Male, female or adults (includes a balance of male and female).
  • Age range: Depending on your business, you may choose more than one of these: 12-24, 18-34, 18-49, 25-54, or 50+

Your customer base can shift with the opening and closing of other local businesses, universities, military bases, or just the natural aging of people in your community, and you need to keep track of these changes. This step is critical because it's the basis of every advertising decision you make. If you're not absolutely sure who your customers are, you can waste money advertising in the wrong places. Which leads us to...

2. Location. Ask your radio, TV or publication reps to define the primary demographic audiences they reach, and spend money only with those that match the demographic groups you've identified as your customers. Never buy advertising according to your own personal taste or because you like a particular rep!

3. Message. You have precious few seconds to tell your story, so squeeze the language. You wouldn't say "Send assistance as soon as possible" when you could yell "Help!" You also need a hook-a reason for someone to come to your location instead of a competitor's. Ask your media reps for copywriting help. Many stations and publications employ copywriters, but a creative media rep can do a great job. Your newspaper, magazine and direct-mail reps will also be happy to lay out your entire ad.

4. Frequency. Without enough frequency, your customers won't see or hear your message. Radio, television and print are three distinct critters and require detailed explanations regarding schedule placement. It's better to place a substantial schedule on one station or in one publication than to spread a small budget out and not achieve effective frequency anywhere.

Whatever you decide to do, don't just try advertising. Use it to get results -Kathy Kobliski

Creating Effective Advertising Materials

Q: I created a flier and sent it to everyone on a 400-name mailing list I purchased from a direct-mail company but saw no results. Then I bought a small ad in a trade magazine and, once again, got no response. How can I get a better response?

A: It's a given that any mailing list has a certain percentage of outdated or invalid addresses. People move, die or change their surnames through marriage. For whatever reason, no list will be accurate by the time it's typed, let alone printed and sold to you. Normal response to a good direct-mail piece is only about 1 to 2 percent, so there's not much point sending out to only 400 pieces to start with. You didn't tell me what your product is, but unless you're selling a really high-ticket item, you just can't recoup the cost of renting your list, printing the piece and postage, let alone make a profit with that small of a list.

You had no response at all, which indicates that one (or more) of the following bloopers was in play:

  • The list targeted the wrong people, and your piece was ignored.
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  • The design/layout didn't attract the attention of the recipients and wasn't opened.
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  • The piece itself was not motivational or clear enough and was tossed.
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  • The offer was badly timed and moot.

If you used the same ad in the trade magazine, you probably had the right audience that time, so the ad itself, both in the magazine and in the direct-mail piece, may be to blame. Ask yourself these questions:

  • What's the product's benefit to the consumer-what need or desire does the product fill? (Did you emphasize that benefit in the ad clearly and in a strong way?)
  • How is the product superior to that of your competitors? Is it higher quality? Less expensive? More convenient to buy or use? Is it one of a kind? (Did you stress those advantages or conveniences in the ad as reasons for consumers to come to you instead of to a competitor)?
  • Does the product have a season or a window of opportunity in which the most purchases are likely to occur? An example would be snow skis or lawnmowers. (Did you properly time your direct mail and magazine ads so you didn't miss the season?) Or is the product one usually purchased on an "as needed" basis, such as a major appliance? In this case, it wouldn't be unusual to see zero response to one magazine ad or one direct-mail piece.
  • Can your product be purchased and used at any time? (If so, did you include a motivator like a coupon or a gift with purchase for immediate use?) If your product is not a high-ticket item, you may have better luck using a ZIP code mailing service such as Val-Pak or Carol Wright which are both reasonably priced and do mailings to local geographical areas all year long.

Next time, consider all the information above, then think about the ideas below:

  • Include a testimonial or indicate that references from satisfied customers are available.
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  • Repeat your ad. You need to be consistent in your advertising whatever form of media you use.
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  • If you did your own design and layout, ask your sales reps to help with that-it should be a free service when you purchase ad space from them. If you're interested in learning how to craft great print ad copy, I recommend Hey, Whipple, Squeeze This by Luke Sullivan.

Take another look at your advertising materials, follow these tips and you just may see more customers knocking at your door. -Kathy Kobliski

PR on a Shoestring Budget

Q: As a sole proprietor just starting out, how much of my capital should I realistically allocate to public relations? How can I secure regular PR opportunities on a shoestring budget?

A: Ah, the shoestring budget. Most of us entrepreneurs know it all too well.

Even if you don't have much to spend, take heart. There's no rule of thumb on how much capital you should allocate to PR. Besides, you can more than make up for a shortage of cash by promoting yourself creatively, and if you're doggedly persistent, you'll sell more products and services than if you spent thousands of dollars on advertising.

Here are some guidelines that should help you and other start-up entrepreneurs determine where to spend your PR money and energy:

  • Marketing material basics. Buy good-quality business cards, letterhead and a marketing piece such as a brochure. The brochure should concentrate more on how you can help people than on the specific tasks you perform.
  • Paid advertising. Don't spend money on paid ads early in the game. They're usually very expensive and sometimes not effective. There are far better ways to promote yourself, as you'll see in the following tips.
  • Speak, speak, speak. Speak for free to audiences who are part of your target market. That could include Rotary clubs, chambers of commerce and trade associations. Public speaking engagements give you instant credibility.
  • Write, write, write. Write how-to or advice articles for your weekly and daily newspapers, local business magazines, trade publications, and print and electronic newsletters. Be sure you maintain the copyright so you can offer the same articles to other publications. If you can't write, hire a freelancer who can ghostwrite them for you under your name.
  • Teach classes. Your local adult education program might need your services. You won't get rich, but teaching will give you valuable exposure.
  • Do media interviews. Call local reporters who write for publications read by your target audience. Invite them to call on you when they need background, commentary or story ideas about your industry. Small-business news is hot right now. Tell reporters you're willing to discuss the challenges you're facing in your business. Position yourself as a helpful source.
  • Start a newsletter. Publish an e-mail newsletter, and pack it with helpful information and special offers. This is much cheaper than a paper-and-ink newsletter because you don't have to pay for printing or postage. When you eventually get a Web site, be sure to link the newsletter to your site.
  • Build strategic alliances. Introduce yourself to other businesspeople who don't compete with you but who sell products or services to the same target audience. Offer to promote them if they promote you. Make sure they're people you like and trust.
  • Do pro bono work. Offer your services free to an influential nonprofit group. It will give you a chance to get in front of their board members, who may be in a position to hire you for their own companies.

Keep doing what works and stop doing what doesn't. Then look forward to the glorious day when someone says, "I see your name everywhere!" -Joan Stewart

Get More Press Coverage From Your Local Newspaper

Q: My competitor, the owner of a gourmet catering service, has had four stories written about her in the past year in various sections of our local metropolitan newspaper. What should I do to get the same kind of coverage she's getting? Or should I assume the newspaper isn't interested in me since they haven't called?

A: It sounds as if your competitor has mastered the fine art of tooting her own horn. From where you're sitting, it probably looks as if the newspaper is playing favorites. But I'll bet your competitor is busy cooking up story ideas about her business, keeping in touch with the food editor, and piggybacking her ideas off holidays and seasonal events.

It's time for you to create your own recipe for publicity success. The most important thing you can do is place the media's needs first. Help them do their jobs by giving them timely, compelling story ideas or photo opportunities. Don't assume they aren't interested if they haven't called. Reporters don't like to keep writing about the same people or quoting the same sources.

Here are nine strategies you and other small-business owners can adopt to claim your share of news space:

1. Introduce yourself. Call the reporter who covers your industry and invite him or her for coffee or to tour your business. In your case, that would be the food editor, a food columnist or reporter, or the small-business reporter. Let this person know the areas in which you're an expert. Encourage him or her to call on you for background, commentary or story ideas about the food industry and catering.

2. Get to know local freelancers who write about food and small business. If you're not sure who they are, call the publication you want to get into and ask.

3. Ask what information your media contacts need and then provide it, whether it's a source for another story or a suggestion for Web sites where reporters can find statistics about your industry. Position yourself as such a valuable source so that the next time the reporter is looking for a story, your name will come to mind.

4. Tell the reporter about a trend you're seeing. Are more customers calling on caterers to prepare and serve family dinners during the week because of hectic lifestyles? Are people hiring you for their children's birthday parties?

5. Suggest yourself as the local angle to a national story. If the price of fresh tuna has skyrocketed, for example, and you've created recipes that help make tuna go farther, let the media know. Be sure to share the recipes.

6. Piggyback on a holiday. Are people hiring you to serve mom breakfast in bed on Mother's Day? If the newspaper doesn't want the story, they still might want a photo.

7. Talk about your business problems and how you solve them. For example, if you use clever recruiting strategies to find employees during a labor shortage, share them.

8. Discuss your mistakes and what you've learned. Reporters crave sources willing to share free advice that will help their readers avoid the same mistakes.

9. Write letters to the editor and opinion columns. When I worked as a newspaper editor, I often assigned reporters to cover stories that were brought to my attention through a letter to the editor.

Now get going. Somewhere out there is a reporter who's just waiting for your call. -Joan Stewart