Q: What are the marketing needs for the average small business? Do you consider working with marketing consultants and, if so, what would you go to one for?
I’m looking to get thoughts from those who are in/ run a small business (i.e., sole-proprietorship to a place with fewer than 20 employees)
(Linked In posting, Aug 14, 08)
A: My Top 10 rules for Small Business Marketing? At least some good guidelines:
First, you asked about the marketing needs of the “average small business.” There’s no “average business.” Very different marketing/selling needs for a retailer, personal services, business services, and manufacturer/distributor.
• Marketing is essential, and it is expensive. You know what they say about owning a yacht? “It’s a hole in the water you throw money into.” Marketing can be the same way.
For a small company on a shoestring budget, the question is, how can you get the most from every marketing dollar you spend? And for every hour you spend on marketing and selling?
• Separate marketing and selling in your thinking. People who lump selling in with marketing often have lousy sales.
• Do you have more time, or more money? For the shoestringers, it’s time. So you need a time-centered marketing strategy.
• But then you must balance bringing in the work with doing the work. This leads to the eternal entrepreneur’s dilemma: You get a project; you stop marketing. The project ends; you have no work because you stopped marketing.
• Look at your marketing/selling at 3 different levels, and have a plan and budget for each:
1. Shortest route to cash flow. What sales can you bring in within 30 days?
2. Business development. How can you cultivate relationships that turn into sales within, say, 6 months?
3. Strategic development. How can you take advantage of big opportunities over the next 2 years or so?
• The “Goldilocks principle.” What size jobs/customers are just right for you?
1. Boulders. Big, lots of competition (thus lower margin), dominates your time if you get it, devastating if you lose it. They may view you as a contract employee.
2. Rocks. Solid, profitable, appreciative, no single job is more than 20% of your revenue
3. Pebbles. Tiny. Takes as much time to get as a larger job, low margin, demanding, slow pay
Aim your marketing at your “rocks.” If other good ones fall into your lap, take them.
• What works for you? Do more of what works, and stop doing the rest. To find out: List everything you already do (or might do) for marketing. For each one, estimate
…How much time you spend on it (per month, say)
…How much money you spend on it, per month
…What results you’ve produced so far: number of customers, size of jobs, type of work, desirability of prospects, etc.
…Lead time, sales cycle. How long does it take to pay off?
Ideally, you’d like to compare this ratio for each:
Gross profit from the sales produced, divided by . . .
Marketing/selling cost (including time)
When I do this for myself (I sell small business services) here’s what I learn:
…DOESN’T PAY OFF. Networking groups (wrong kind of prospects), display ads, yellow pages, PR campaigns, direct mailings or cold call campaigns
…PAYS OFF. Referrals from clients (remember to ask for them!), mutual referral sources, public speaking, writing books, writing articles (like this one), getting interviewed, professional organizations
…SHOULD PAY OFF BETTER. Website (search engine optimization)
Your list may be exactly the opposite of this.
• Get your face out there. Esp. for service businesses, people buy you. “80% of selling is just showing up!”
• Stick to it. The other 80% of selling is consistency and follow up. Have a regimen for marketing and selling, and get a coach to help you stay on it. Your coach is your de facto sales manager.
• Get needed help. Are you a great marketer/seller? Then hire someone to do the work for you. Are you best at doing the work? Then hire a marketer AND a sales person. (Rarely are these two skills combined in one head.)
Should you hire a consultant? For a shoestringer, be wary! Remember the yacht!
…Hire specific expertise: web designer, graphic designer, copywriter.
…Hiring someone to do a marketing plan for you is a waste of money. Find a FREE marketing advisor, e.g., through SCORE or your local Small Business Development Center. I could email you a page of questions, and if you answer them, you have a marketing plan.
…Hire someone to sell for you, and pay them mainly on results ($$$$) produced. Good sales people are rare and expensive. Ask one: “I’d like to pay you obscene amounts of money. How much is that for you? Now give me a plan of how you’re going to produce it.”