The American Dream never starts small. Business-minded people all over the country hope to enter into a venture that is sustainable, self-sufficient, and successful. These plans may begin with a simple whim, but the long-reaching goal is wide-sweeping and long-reaching.
A parent making cupcakes for a birthday party envisions franchised bakeries throughout the state. A customer frustratedly punching numbers through a call tree foresees a massive customer service training facility in which no one must speak to a robot again. A teenager writing code devises a plan for a new operating system solely for gamers. All of these dreams are possible. All of these dreams have happened. However, they have all started with wise planning, of which marketing is integral.
As a small business there are three basic milestones to success:
– Establishing a Business Model
– Developing a Marketing Strategy
– Maintaining Customer Loyalty
Before the business can open its doors, before any money can be earned, these steps must be thoroughly researched and refined. This is true whether the business owner operates virtually or in the real world. No business is sustainable without a solid plan.
Milestone 1: Establishing a Business Model
Naturally the first step, establishing a business model means taking a good idea and turning it into a great one. How this is accomplished is by measuring the need for the product or service against the expected outcome. One cannot open a high-end clothing store in the midst of a depressed neighborhood and expect to see tremendous results. Likewise, a small town with 12 coffee shops may not need another, unless number 13 has something wildly different to offer.
Along with establishing a business model is determining financing. How much capital will it take for the business to get off the ground? How long can the business operate without realizing a profit? Keep in mind, most small businesses do not see a profit for the first three to five years. However, this does not mean one should avoid business ownership altogether. It simply means that entrepreneurs must develop smart strategies to spend their money wisely.
The top priority in spending and saving is marketing. Every entrepreneur, regardless of their business type, must have name recognition to be successful. If a potential customer is unaware that the business exists, it will cease to do so.
Developing a smart marketing strategy or plan does not mean a huge investment in money, though it does involve a significant investment of time. Arguably, at least at the beginning, as much time should be spent on marketing the business as is spent on the business itself.
Some business owners choose to outsource marketing. Others hire a marketing strategist. Still others choose to create and carry out all marketing strategy on their own. Regardless of the choice, if you want to know how to develop a wise marketing strategy for your small business, the basics remain the same.
1. Determine Key Demographics
Marketing to mass audiences is a mistake made by too many small business owners. Choosing a broad-sweeping message may appear to have greater appeal, but this type of advertising typically only works for already established business with significant profit margins.
While brands like Microsoft and Coca-Cola might be able to get away with a general message, small businesses cannot function in this way. Instead, determine who is most likely to be interested in a particular business and market to that group.
Start by looking at the marketing used by similar businesses. Find who they focus their efforts on, determine if that is applicable to the emerging business, and strive to find groups that have yet to be singled out by others in the field.
2. Market Specifically to Those Demographics
Once the demographics have been pinpointed, it is time to market specifically to those groups. Who are these people, what do they want, and which message works best for them? Empathy goes a long way when choosing demographic-based marketing strategies.
Is the key demographic busy moms? Focus on how the product or service can simplify their lives or save them time. Is it working singles? Find a way to show them that the product is needed for more productivity at the office. Knowing what each group’s needs are is the ideal approach in marketing.
3. Choose Marketing Medium Wisely
Radio and television ads are pricey, but can be effective if they are well-produced and aired during the right time frame. If footpower and neighborhood regulations allow, some business find that door-to-door flyers are effective marketing techniques. Online marketing is arguably the best bet for small businesses. It costs very little to have well-made website that is rich in keywords. Updating a blog or social media keeps the business current without incurring extra cost. Ads that are bought online are inexpensive and powerful.
4. Avoid Marketing Pitfalls
The two biggest marketing mistakes made by small businesses involve money. They either spend too much or not enough. While it is important to set a budget for marketing, it is unwise to spend it all at once. Make sure to allow ample time and money to determine if a marketing strategy is working. If it is not, and budget allows, it can be changed. Not every business gets it right on the first try.
Conversely, relying only on free advertising is a mistake as well. Having a blog with keyword rich entries may get a few hits for those customers who were already looking for a specific service, but what about the ones who are unaware these products exist? Word should be spread through print ad and online to reach everyone within a given demographic. This does require a financial contribution.
Milestone 3: Maintaining Customer Loyalty
Once a business model and a marketing strategy is firmly in place, entrepreneurs need to determine how to maintain customer loyalty. Excellent products or services at reasonable prices are naturally desirable, but they are typically secondary to customer service expertise and a targeted loyalty program.
Incentives, rather than products, keep customers returning. Stores do this through loyalty programs, like earning points toward free merchandise or getting cash back on successful referrals.
Another way to create small business loyalty is to have top-notch customer service. Building relationships with clients is vital to growth and stability. This requires serious dedication to customer service. Ask questions of the customers and really listen to what they have to say instead of simply waiting for an opportunity to sell. Provide real solutions to their problems, whether it is what sandwich to order or which tile looks best in a bathroom.
Regardless of the type of business, customers always want to spend time and money with those who take their needs seriously. This requires open lines of communication and a service-oriented attitude.
Those who are unsure of how to accomplish this can perform the following steps: Walk into a car dealership, speak with a salesperson, and do the exact opposite. Though it may sound like jest, the fact is that customers grow frustrated with the hard sale techniques often employed at businesses such as these. They generally only return when they feel they are getting the lowest possible price. However, most will spend more, even on large ticket items, when they feel a relationship with the salesperson.
It is also wise to give customers promotional items. Imprinted refrigerator magnets and ink pens are popular choices with service providers. However, unique promotional items may have a more lasting success rate. Consider items like hand sanitizers or reusable tote bags. Look for those promotional items that can be used, shared, and seen by others.
Living Out the American Dream
As a marketing expert, I took my own advice. My current vocation and my greatest passion is writing. I have many clients and feel very fortunate to have my dream career. I was able to build a portfolio through continuous marketing. I crafted a website, a blog, and even worked for free at times so that I could continue building my own name. At the beginning, when clients contacted me, I jumped on any opportunity to prove myself, no matter how large or small. Now, I have more work than I can handle and am happily living my own American Dream.
However, I also decided to start a side business selling hand-made hair accessories. This business, which was more of a hobby, served as an excellent way for me to test my marketing skills in the real world. Though there are many other businesses with similar models, my marketing was targeted to a specific group I thought was left untapped in this arena: child photographers and beauty pageant coaches. I was quite surprised when I broke even on my investment within three months, turning a profit in the first year.
By my second year in business, my hobby had turned into a full-time job. I was getting more orders than I could keep up with on my own. I had to face a choice: Do I hire part-time help or do I shutter the website?
I had employed a blog, steadily created keyword rich posts in which I spoke of the importance of accessories, caring for items, and the best times to purchase. Each post was a marketing piece, but it also added value for clients. When I decided to take the website and blog down, I still had my hands full with orders from happy customers thanks to my loyalty programs that allowed for free merchandise with referrals and regular giveaways through my Facebook page.
A full year after I have ceased operating the side-business altogether, I simply had no more time to keep up with demand, I still get calls from former customers. I owe all of this to wise marketing and customer loyalty programs.
What are your customer loyalty success stories? Did your small business start from a hobby of yours? Let us know in the comments!