Build A Better mousetrap and customers will beat a path to your door, right? Wrong--unless you advertise, says Richard F. Gerson, owner and president of Gerson-Goodson Inc., a marketing, management and consulting service in Clearwater, Florida, and author of Marketing Strategies for Small Businesses (The Crisp Small Business and Entrepreneur Series, $20. To order, call 813-726-7619; mention this article for free shipping and handling).
"You must promote that mousetrap," Gerson says. "To do that, you must first know your unique selling position. What is different or special about your product or service that will make the customer want to buy it? Then, determine your unique marketing position--such as being the friendliest florist in town, or the most service-oriented or the lowest-price provider. After you have defined your niche, then define your customer base."
Brian Senjem, Minnesota's 1996 Young Entrepreneur of the Year and co-founder of Senjem Enterprises, a Mankato, Minnesota, accounting and computer-consulting business, says, "It's important to give high priority to marketing and advertising when you draw up your business plan. You should have marketing goals and know your target market (including its demographics), your industry, and the economy. Small Business Development Centers (SBDCs) and Small Business Administration (SBA) offices nationwide will provide materials and resources. Know the psychology of your target market. Brainstorm with marketing professors and graduate students."
"Target your market very specifically," Senjem advises. "Business executives and owners look in specific journals, not in general media or at direct-mail pieces. People don't want to receive junk e-mail. In some businesses, people are successful with `cold calls,' but I prefer to use a soft sell, sending a specialized brochure with a personal letter after meeting the potential customer at an event or being referred by someone."
From the start, keep a detailed database of customers, Senjem advises. This helps you to be specific when sending out a flier or newsletter about a new product or service.
Businesses typically allocate two to 10 percent of an annual budget to advertising. Retail businesses usually spend near the top of that range, because it's easier for service businesses to use word-of-mouth referrals and networking as promotion. Senjem says entrepreneurs must view advertising and marketing as an investment, not as an expense. "As soon as you can handle more business, spend the money to get it," he advises. "If you follow the tradition of putting a cap on the advertising budget, you may sell yourself short."
If your business is seasonal, your advertising costs should reflect that ebb and flow, says Dean Otto, a small-business advisor and business management college instructor at the South Central Technical College in Man-kato, Minnesota. "Research the typical peaks and valleys inherent in your business; reduce your advertising a month before the valleys, and increase it a month before the peaks," he advises. If your drive-thru restaurant in North Dakota specializes in Jumbo Freezies, transfer your ad budget for January to June and close during the coldest months--or expand your menu.
"You can be creative with a small budget," says Riley Harrison, a Minneapolis consultant for new entrepreneurs. "A Twin Cities company that manufactures and sells garage shelves sent a letter to a local radio personality, who hosts a political talk show called `Garage Logic,' asking him to be the company's official `interior decorator of garages.' He read the letter on the air, including the company's phone number, and the manufacturer received numerous phone calls. The company gets frequent mention on the radio and free posters of the radio personality to use as eye-catchers at trade shows."
All entrepreneurs should look at nontraditional ways of advertising and marketing their businesses, but it is particularly important for small businesses, according to Senjem. "Make a list of ideas and keep adding to it," he advises. "You can prioritize the list for each target market and then work it into your budget.
"When marketing, always keep in mind who your audience is and where they spend their time. To reach business executives and managers, place advertising on country club bulletin boards. Give away promotional items, such as golf balls, with your logo on them," Senjem suggests. "Try the newest advertising medium--signs in public bathrooms (advertising posters under a plastic pane, positioned for easy contemplation in each toilet stall). These are more appropriate for a sports-oriented product or a cosmetic-sales business than for, say, a business consultant."
Cut ad costs in half by purchasing a joint ad with a business that's complementary to yours; a florist might make an arrangement with a candy shop, for example. Barter your product or service for print-ad space or broadcast time--a common arrangement with many media, according to Jane Wesman, founder of Jane Wesman Public Relations Inc. in New York City, and author of Dive Right In--The Sharks Won't Bite (Dearborn Financial Publishing Inc., $19.95, 800-621-9621, ext. 3650).
A business such as "Teriyaki Take-Out" might place coupons on car windshields, supermarket bulletin boards, and neighborhood doorknobs; a Scout troop or church youth group may do the legwork as a service project, or for a small donation.
"The World Wide Web is a very good way for many small businesses to advertise," Senjem says. "It's available 24 hours a day to the entire world. Annual cost for a Web page can be much less than one month's worth of TV or newspaper advertising. As with all advertising, look at how the Web fits into your overall marketing plan. It's obviously more beneficial to a specialized retailer or a business analyst than to a maintenance mechanic."
Take a Test Run
"Many new entrepreneurs overlook testing an ad before spending too much money on something that may not get the desired results," Harrison warns. "For a direct-mail piece, you should test with a small sample (5,000) and act based on the results. To gauge the response of newspaper, TV and radio advertising, use coding or special offers."
"Advertising is nothing more than an experiment," Gerson says. "That's why testing is important. Ask yourself questions. Did the ad pay for itself? Did it achieve your purpose or objective, such as generating sales or leads?"
Wesman lists several reasons an ad may not get results: the ad is running in the wrong medium; it does not offer the right product, service or benefit; or the ad itself is wrong in design, text or appearance. Wesman advises checking weekly and monthly to track the increase in profits generated by each advertising effort.
In every community, the doers are perceived as the movers and shakers. To build your business's identity and enhance its image--and yours--become active in local Kiwanis or Rotary clubs, join the chamber of commerce, do some public speaking, write informational articles for magazines, publish your own newsletter, or offer to serve on the United Way board. "It takes time to create an image without doing image advertising, but your efforts will produce results," Gerson says.
You can get free publicity by doing something newsworthy. "Apply for business awards," Senjem advises. "Publicize your awards and achievements with a news release to newspapers, and make a public service announcement to local radio and television stations."
Earn Free Advertising
The best advertising is free, but you and your employees must earn it. "A small business must provide exemplary service," Gerson says. "It's not an option, it's a requirement. You must train your employees to provide great customer service. The response is the best kind of advertising you can get--word-of-mouth."
You can even reward your best advertising mediums. As Harrison suggests, "Offer a gift certificate to any customer whose name is mentioned by a new customer."
Sales and advertising principles are the same for all businesses: know your market and what you can provide it, deliver your message clearly and creatively, monitor the results, and work at becoming known as the best in your field.
Entrepreneur Magazine: Successful Advertising for Small Businesses by Conrad Berke, John Wiley & Sons, $19.95. To order, call (800) 225-5945.