January 2003 Issue #4
IN THIS ISSUE
- Marketing feature: Back to Basics - Part 4 - Putting it all together
- Winter 2003 classes announced
- Entrepreneurship feature: How to survive an economic slowdown
- We want to hear from you!
- Pass it along
Marketing feature: Back to Basics - Part 4 - Putting it all together
One of the cardinal rules in successful marketing is "Know thy customer." The better you know their needs, desires, characteristics - in other words, what motivates them - the better you will be able to craft a marketing campaign that works.
Most companies gather information based on the needs of their invoicing system: key contact person, department, name of company, billing address, shipping address, phone and fax numbers, amount owed and amount last paid. Many go one step farther and keep records on recent purchases. This is a good start but this information does little to tell you what customers need or what motivates them to buy. A database that is marketing driven will include prospects as well as clients and will include:
- History of purchases (what and when do they purchase)
- Description of the business: products & services, distribution area, number of employees, other locations, business structure, management structure
- History of contacts including phone calls, letters, newsletter and other mailings, meetings, etc. and what transpired
- Professional associations and interests of key contacts
- Personal interests of key contacts as well as birthday, anniversary, family information if and when available
Remember in the second installment of this series when "marketing by the numbers" was explained? To recap:
- Individuals need about 6 or 7 exposures to a product or service before they are ready to make a "buy" decision.
- You will usually need to demonstrate or explain your product or service to 5 people in order to make 1 sale.
- To get 1 person to listen to your "pitch" you will need to approach 40 people. In other words, you usually need to reach 200 people to make one sale.
To have a truly efficient sales system, you need to know exactly how many prospects have been contacted and how many times they have received information about your product or service.
If you have a good system that keeps track of your contacts and you are "working your list,"you can quadruple your results and get four sales for every 200 contacts instead of just one. This is accomplished by providing well thought out marketing messages to qualified prospects at regular intervals. Remember, you are building relationships and that takes multiple contacts with a prospect. Aggregating information from your data base into management and tracking reports will enable you to determine if enough contacts are being made for you to reach your sales goals and if your marketing program is being effective. If you are "hitting the numbers" but not closing sales, then you need to re-examine your approach and your message.
A complete marketing infrastructure will include record keeping, a follow-up and tracking routine, management reports (tracking), procedures that take a prospect from "cold" to "client" status, tools to measure customer satisfaction, and routine communication designed to cultivate customer loyalty and generate repeat business. And remember that your job is not finished once the sale is made. The fastest, easiest sales are to individual who are already customers. By maintaining these relationships, you are effectively reducing your cost per sale. This is an "ecological" system. You remember the environmental mantra: Reduce, reuse, recycle. Well, that is exactly what a good marketing infrastructure does.
Winter 2003 classes announced
Registration for winter classes, which begin in February, is now underway.
At Lakewood Community Recreation and Education Department (216/529-4081) you can register for: So You Want Your Own Business? (Feb. 3), The Nuts & Bolts of Starting & Operating Your Own Business (8 weeks starting Feb. 10) and Power Marketing for Small Businesses (4 weeks starting Apr. 28).
Register at Polaris Career Center (440/891-7750) for: So You Want Your Own Business? (Feb. 6), The Nuts & Bolts of Starting & Operating Your Own Business (8 weeks starting Feb. 13) and Write Your Own Business Plan Workshop (6 weeks starting Apr. 8).
Course descriptions and additional information is available at www.businessodyssey.com and in Lakewood and Polaris catalogs.
Entrepreneurship feature: How to survive an economic slowdown
by Ann Rusnak
Running a small business is tough. It requires hard and detailed work and long hours. It comes with serious problems and heavy responsibility. You need to be self-disciplined and persistent while putting your ego on the back burner. This is during good times. If you've never been through a recession or a down economy, you're in for a real surprise.
Despite all the drawbacks, I would rather be my own boss than work for someone else for a paycheck. There's nothing like being in control of your own career and financial fate.
How do you stay alive during a recession?
You need to focus... Focus on the basics of running your business.
First...this slowdown should not have caught you by surprise. Newspapers and business magazines have been forecasting a downturn. The signs have been unmistakable if you know how to read them. Orders and projects have been placed on hold or canceled. Prices are being lowered to entice buyers and competition has become tougher.
Get into habit of keeping up-to-date regularly. Read the business section in your local paper, business magazines and or receive news through the Internet. Knowing in advance where the economy is heading, you'll be able to adjust your business plans and prepare.
CASH IS KING
Understanding the cash flow of your business is critical. Cash flow is simply the money that continually goes in and out of your company. Your profit and loss statement and your balance sheet may show your profitable because it includes assets. That doesn't mean your business will survive just because it's profitable. It also needs to generate cash.
This is an area most entrepreneurs don't like unless they are an accountant. Me personally, I hate this part too. Fortunately, I have a good accountant who takes time to help me understand my numbers. Twice a year we analyze together and identify which products and services have a higher profit margin, unnecessary expenses, the cost of acquiring customers, the effectiveness of marketing dollars and anything else to keep the bottom line "in the black". I also review my books every month.
If numbers still leave you in the dark, I recommend the following books: Finance and Accounting for Nonfinancial Managers by William G. Droms. Any books by Robert T. Kiyosaki and if you have a college near you, pick up a used book on small business management.
CASH FLOW STRATEGIES
The most obvious - spend less but spend wisely.
Resist temptation to chop your marketing and advertising budget. A down economy is not the time to eliminate marketing dollars just wasteful marketing dollars. Competition is going to get fierce as customer spending shrinks. You need to keep your name out in front. Track your results and then cut unproductive efforts. More marketing dollars get wasted because they're targeted at the wrong market. Know your target market and track your results.
Bartering is a great way to get goods and services for your business without spending cash. The barter must be a win-win for all parties involved. I have been able to grow my company and keep it solid using this method. Bartering is also an excellent marketing tool.
Ask for a deposit before starting a job for a customer. This will give you operating money while you are doing the job.
Stay on top of your Accounts Receivable and get invoices out right away. Also deposit checks and cash immediately. Don't let them sit in your office.
Be conscious of where every dollar goes in your business. Don't spend until your business is making the money to support the purchase. This is the No. 1 operating principle in this company. No Cash... No Buy. I keep the minimal operating expenses for the year on hand. Until that is met, there are no purchases.
When you make a purchase, ask yourself how is it going to improve your company's bottom line. Will it help you operate more efficiently, increased sales, and or improve customer retention? I'd love to have a new computer but purchasing one isn't going to help my company right now.
The dreaded "B" word...Create a budget. An accounting program like QuickBooks or Peachtree will make dealing with figures a lot easier.
STILL LEAKING CASH?
Still operating in the negative? Look more closely at your business plan. Do you really have a viable business? Do really have a market for your product or service? Do you even have a business and marketing plan? For better or worse, a recession will weed out bad business models.
A down economy means survival of the fittest!
You will have to work harder and smarter. You must stay focused, targeted and get your message out effectively.
Do it right and you'll find that you will be one of the survivors. Your business will be in a better position when the good times return.
And they will return.
Ann Rusnak is the owner of Marketplace Strategies Inc. Can You Really Boosts Profits by Working Less? Yes with her new book "Too Busy To Get Anything Done." Learn How to Have More Fun in Your Business, Spend More Time with Your Family, and Make More Money Than Ever Before -- Online or Off -- Without Struggling...Guaranteed!!!
Just 15 minutes a day will do it. Here's how...
We want to hear from you!
We would like to spice up our content with some real-life stories from our readers. The subject this month - goals for 2002 that you reached or exceeded and how you accomplished them. We will publish your story along with the name of your business, a brief description of your business and contact information. Please submit items to
by January 20, 2003
Pass it along
Please pass this newsletter along to anyone you think might find it of interest. If you do, be sure to forward it in its entirety and include the copyright notice.
Copyright 2003 Kathleen Thompson