As we near mid-year point, it’s another point of reflection for many business owners. How has the year gone so far and what should we do in the second half? Not quite such a navel-gazing period as New Year, but perhaps the next biggest.
At this point our one piece of advice would be – experiment a lot. Try a lot more ways of marketing and promoting your business than you did in the first half of the year.
Many businesses only use one or two ways of getting new business. Having spoken to a lot of smaller businesses, a worrying number spend no money at all on marketing and advertising and rely completely on word of mouth. There’s no getting away from the fact that word-of-mouth and its cousin, business networking, are powerful business generation tools. The difficulty is that they’re not scaleable – you have to be out there doing it. It’s certainly not a waste of time, but it is time consuming.
I’m not advocating not networking, but I am advocating leveraging that activity with other marketing and promotion. What is difficult is working out what strategies and approaches will work for your business. And that’s where experimentation comes in.
Experimenting – or ‘testing and measuring’ to use another popular term – is critical. The truth is nobody – not even highly paid marketing and advertising consultants(!) – absolutely know what is going to work and what isn’t, so you have to test. The general concept applies across the board, with one caveat – never bet the entire farm on any one approach.
Mike O’Hagan, founder of Minimovers, has one piece of advice for people wanting to set up a personal services type business – print up 1,000 leaflets advertising your new service and distribute them in your local area. If you get a response and a sale, you have a business. If you don’t, you haven’t.
It’s also reflected in an approach to tech startups suggested by Eric Ries – originator of the Lean Startup. Get a product out there quickly and see if you have any takers rather than spending a lot of time and money perfecting a service that it turns out nobody wants. If you don’t get the response you’re looking for, pivot – that is tweak it to fit with what people do need and/or what people are prepared to pay for.
I went through this process with a particularly well funded tech startup many years ago which chewed through $10M in funding before finding out it didn’t really have a market for its product. I was the top salesman with ~$500 in sales.
So, here’s a suggested approach:
1) Ringfence 5%-10% of your turnover for marketing
Large successful consumer businesses spend 20% of their turnover on marketing, although the average across the board is apparently ~6%. If this is too much, swap this amount of money for your time, in which case also ringfence one day a month to be dedicated to marketing activity.
2) Pick three marketing strategies you have not used before to test
Here are a few suggestions…
- printed material distribution (a letter, postcard or flyer distributed to your own list, a bought list, or simply distributed to local households)
- joint venture with a non-competing business targeting your market
- email marketing
- online advertising (eg Google AdWords, Facebook advertising)
- cold calling (yes, it’s worth testing)
- events/workshops/webinars (put on your own or piggyback on others)
- speaking at events/meetings
- business networking (including online networking such as LinkedIn)
3) In each of the three strategies you choose, decide on a budget and a way of measuring whether the strategy is working or not
In some cases, you’ll be able to make an instant decision and in others you will have to give the strategy a little time to tell if it’s working.
Within each strategy work out a way of having a few different approaches, such as different wording or different offers, and a way of tracking which are generating responses*.
UK based small business expert Chris Cardell says that the day he discovered testing and measuring was the day his business really took off.
4) Review where things are at once you have exhausted your budget, or a set amount of time has elapsed
If you have found a mechanism that is effective, ramp up the spend/focus on that mechanism.
5) Continue to experiment – don’t stop!
As we’ve mentioned before, relying on one marketing mechanism is not just inadvisable, it’s dangerous. Keep experimenting and make sure you have many ways of driving sales in your business, not just one.
*Readers Digest relentlessly test their sales letters by producing different versions and seeing if new approaches get better responses. Any version doing better than the previous best version (called ‘the control’) automatically becomes the new letter, although the testing process continues to find an even better wording.