Feb/100
Do this and you will succeed
What would you say if I told you that there is one thing so powerful that, if you did it, your local business would succeed? Not only make more money, but become a resounding success. Far more successful than your competitors.
But that’s not all. If you do it right, you can tear up most of your to-do list, because it will soon become apparent that there is little else more important than this. Traditional marketing and advertising will become increasingly less useful and you will be able to fire all but your best customers. You will focus on this because it works and you will worry less about other tasks. Your priorities will be clearer and you will have more time and less stress.
Well, such a thing does exist and it is no secret. What you must do is find your 1,000 true, local fans. The 1,000 local people that love your business, trust you and talk about you to their friends and colleagues. The 1,000 local people that come back and buy from you regularly and enjoy giving you their money. These are the people that you must talk to and find out more about. These are the people you must communicate with and focus on.
Stop for a moment and think about the power of this. What is your average spend per customer? What do your best customers spend per visit? What if you had 1,000 customers that liked your business so much that they came back as often as they could? How much would you make in a year? Just from those 1,000? What do you think their lifetime value to your business would be? And what about all of the friends they would drive to your business?
Do you think you would still need to advertise? Wouldn’t it be great to focus all of your attention on making those 1,000 people happy? That would be the single most important marketing activity and it is quite likely that no other marketing would be necessary. When you get 1,001, fire you worst customer to make sure you have enough time to focus on your 1,000 true fans!
You don’t have 1,000 true fans? So start today. If you own a shop, pick a customer today that you think has the potential to become a true fan. Capture their contact details before they leave and think about how you will entice them back in and delight them when they arrive. If you do this each day, you will have 1,000 true fans within around 3 years.
You can start simply by inviting a person to receive your special offers by email or SMS. Then let them tell you what type of things they want to hear about. Next, tailor your offers to their preferences. And when they use your business, give them a simple way to praise or criticise without fearing confrontation or reprisal.
The magic of this approach is that it will make you focus on the important things, the products and services. In order to delight people and convert them into fans, you will need to do this. In addition, you will be forced to focus on the customers, creating a dialogue, finding out what interests them about your products and what they really think about your service.
The alterative is to follow the traditional path. Pay somebody else to rent their fan club, perhaps the local newspaper or radio station, in the hope that you can shout your message at them and that 2 or 3% of them might be remotely interested in you. This is not only hard work, stressful and distracting but it is also completely unaffordable when you consider that your competitors may be building their own fan club for little cost. The traditional path will make you feel like you’re progressing because it consumes so much of your energy and mind space. But if you want to succeed, you’ll need to take a different route.
Dec/090
The problem with doing nothing
There are many reasons why you should do nothing.
- I can’t use a discount to attract new customers because my existing customers will be upset.
- I can’t change my supplier because it will mean rewriting our menu.
- I can’t send marketing emails or SMSs to my customers because they might find it irritating.
Your job, if you wish to make a difference and grow, is this. Put to one side your comfort with the way thing are today. Then, find reasons why these activities do make sense. Not only why they make sense to you, but also to your staff and customers.
- Create a separate promotion exclusively for your existing customers. Perhaps an incentive to try a new or premium service.
- If you can’t easily change your menu, you are wide open to local competitors who might change their menus daily. Do yourself, your staff and your customers a favour by redesigning your menus to be more flexible.
- Get your customers’ permission to send them messages and make sure you send messages that are relevant and compelling.
The problem with doing nothing is that you are learning nothing. You’re not finding out what works and what doesn’t. The problem with learning nothing is that you are not moving towards the situation where your hard work generates more money.
Nov/090
What to do when you find a gap in your local market
Marketing is not only about reaching prospects and customers and increasing sales. There’s a big chunk of marketing work to be done way before a local business opens. There are a number of questions to be answered. Is there a market? How big is it? Is there a gap?
Many local business people set out to exploit a gap in their local market. We have all come across such businesses. The fine-dining restaurant that aims to provide a unique gastronomic experience to a provincial population; the cocktail bar that intends to bring a uniquely sophisticated and cosmopolitan environment to the inhabitants of a suburban high street; the sandwich bar with a delivery service.
What is not always obvious at first, though, is that the gap needs to be huge – in fact, truly profound. Otherwise the light will not be worth the candle.
A gap is not, in itself, enough to make you money. Yes, when you fill a gap, you create something different and remarkable. But that is worth nothing unless enough people see it as remarkable enough to start spending enough of their money with you.
Are there a sufficient number of people with sufficient disposable income in your provincial town to fill your fine-dining restaurant not only at the weekends, but also during the week? Or will it crumple under the pressure of having to pay staff to serve a room that is almost empty from Monday to Thursday? Will your business really be so different that it will occupy its own category in the local market? Or will you find yourself competing with several other similar businesses in your local area, constantly fighting to attract customers, continually treading water?
Often, when a market gap exists and is exploited with skill such that a new, remarkable product or service is created, new demand is created at the same time. In other words, people that would not have previously bought that type of product or service suddenly appear on the scene. For an example of this, think of the huge increase in UK red wine consumption after the less stuffy, more accessible new world wines entered the UK. People that would not have bought red wine before suddenly started to do so. There had been a gap in the market for a more accessible red wine and that gap was exploited with skill.
So, before you invest your life savings into exploiting a gap in your local market, ask yourself if you can create new demand. If not, whose customers are you going to poach and how sure are you that they will be game?
Nov/090
Go get em Tiger
Are you a passive marketer or an active marketer? Do you go out and get customers or do you let them find you?
Being passive means waiting for people to walk past your shop, find you in an online directory or search engine, be told about you by friends, come across your advert in the local paper. This is less effort than being an active marketer because you simply pay some money and then hope customers find you.
Once you have some customers, you automatically have the opportunity to become an active marketer. Being active means reaching out to your customers and bringing them back to you again and again using methods such as direct mail, email or SMS. This requires some effort.
Firstly, you’ll need to collect the details of every customer you meet. But shouldn’t you be doing that anyway? You have invested money in premises, equipment, advertising or other things to get those customers in the first place, so surely you must keep in touch to make the most of your investment? Otherwise, wouldn’t it be like buying a box of matches and throwing the whole box away after using just one match? Just as a box will provide you with many matches after the first one, many customers will potentially buy from you several times. That is, unless you let them forget about you.
Secondly, you’ll need to keep customers interested by sending offers that they find compelling. There must always be something in it for them. Yes, it may cost you something to make offers compelling but you are building long-term sales potential, which is no less important than any of your other expenses. If you do this, you will be rewarded with a good response rate each time you actively reach out to your customers.
This is when active marketing really starts to pay. If customers have given you permission to contact them and you have learnt enough about them to send compelling offers, such that you always get a significant response to a campaign, you have effectively built a money-making machine. You have the power to generate sales whenever business is slow, when you have a special event or when you launch a new product. In fact, any time you like.
Nov/090
Should you reduce prices to sell more?
That’s such a huge question that I’m already regretting trying to answer it. As always on Local Marketer, I’ll focus on how this question relates to local businesses.
First of all, raise your hands if your local business is so busy that you don’t have the time or capacity to serve more customers than you already have. Ok, the lucky few with their hands raised can stop reading now – this question doesn’t apply to you guys. Your homework is to find a nice way to raise your prices.
For those still reading, how did you set your current prices? Probably by looking at your competitors, right? If your product or service is a commodity, such that your product is very similar to your competitors’, then there’s not much room to play with pricing as customers can easily get the same thing elsewhere.
However, if there is room for you to add value, perhaps in a way that your competitors don’t, then customers might be willing to pay you more than they do your competitors. Don’t assume that lowering your prices will bring you more business over the long term. Your customers may not be sensitive to your prices.
Alas, for the vast majority of products and services, consumers are sensitive to prices, particularly with the economy as it is today. If you are thinking of lowering price for the long term, you need to consider whether your new prices allow room for profit. Assuming that your number of sales does not increase immediately when you lower prices, how much less money would you make per month and how long can you afford to wait for the increase in sales? If you work that out beforehand, you’ll know how long you can afford to run the experiment for. If your sales volume eventually increases enough to grow your profit, you’ve succeeded. If not, you’ll need to go back to the drawing board.
Of course, the most common type of price reductions are the temporary ones – sales, promotions, last-minute deals and special offers. If you execute them cleverly and selectively, then they can be a great way to generate business in the short term. Although, if you have regular customers, don’t offer them a discount on a service or product that they have bought from you every month for years, such as a standard haircut – you’ll make less money and those customers won’t become more loyal. Perhaps offer those people a discount on a head massage or colour treatment, so that the offer leads to an up-sell.
The truth is that for many local companies, the ability to generate extra business at short notice is essential to survival. To fill un-booked restaurant tables, empty seats, vacant appointments, available time and unused seasonal or perishable stock amongst other things. If this applies to your business, make sure you know how to run temporary offers with style and acquire the tools to execute them quickly at the last minute. Nowadays, mobile marketing and SMS in particular is the best way for local businesses to execute time-sensitive promotions cost effectively.
And don’t kid yourself that your business is too posh or your customers are too wealthy for promotions and special offers. Most people love to save money, particularly those who have been successful in acquiring it.
Oct/090
Customers do not know what they want
A lot of people think marketing is more or less the same as advertising, but it isn’t. Marketing is not only something you do after you’ve opened the shop, built the product or launched the service. It’s something you should do beforehand to make sure there is a genuine opportunity and that there will be strong demand for your business. In other words, to make sure your product or service is sufficiently remarkable to get noticed and that there are enough people who will buy it.
So, if you’re in the process of starting your local business or you’re making changes to improve it, you’re probably spending time wondering: What will people buy? Or: What do my customers want?
There are plenty of business books out there and a great many of them will tell you that the answer is obvious – you need to ask customers. Simply create a survey and ask them.
And that can work fine if the questions are straightforward:
Would you visit more often if our chairs were more comfortable?
Would you buy more from us if we delivered to your door?
Would it be more convenient to order online?
If you’re asking whether they would like to order online, that’s easy because they know your product already and they know generally what is involved in online ordering, so they can give you a pretty reliable prediction, such as: I would buy online if delivery was no more than £5 and lead time was no more than 1 day.
But what if you’re trying to build a remarkable product or service, a revolutionary service, a product that will be successful because it is way ahead of what is already out there? What if your question is: Would you use my new salon if you paid £30 per month and could have your hair cut as often as you wish? Well, the bad news is that your customers or prospects won’t be able to reliably predict whether they would use it.
Why? Because when you invent something remarkable, something that is truly new and different, you change people’s expectations and assumptions. Before your invention exists, your questions will be answered with old expectations and assumptions in mind. Continuing with the salon example, someone might answer ‘no’ because they assume that the quality of your salon staff will need to be low in order to offer such a good deal. Or they might answer ‘yes’, expecting that they will pay £30 and receive the same quality as they do from their current salon. Either way, the value of their answer is limited. To get a worthwhile answer, you’ll need to dig deep below the headlines and paint a complete and accurate picture of the new service or product. The problem is that, if you have that level of detail, then you have already answered most of the questions for yourself. What remains is to go to market and then adapt and evolve.
This is not to say that there is no value in asking questions before going to market. And if you own a crystal ball or are very lucky or both, it may be that you can paint a complete and accurate picture way before your business opens.
My point is that, as the inventor, you must take responsibility for your new service or product. If it is to be a remarkable, runaway success, a great deal of that will come from you. That may mean creating something that is contrary to what the market is telling you and that takes courage.
If you build what the market tells you to build, don’t blame them when they don’t buy it.
Oct/090
Do you know what your customers want?
Have you ever had the feeling that a customer was not entirely satisfied?
In the UK we’re famously bad at complaining, but as a perceptive business owner, you will usually know when someone is less than entirely happy with what you’ve sold them.
So what do you do? You try to improve. Bring their drinks faster, present their food better, try not to keep them waiting for their haircut, show up on time to fix their boiler. But, hang on a second, is that what was bothering them?
It’s not always obvious why people use your business instead of your competitors’ and it is more obvious in some industries than in others. Do people come to your pub because you serve the best pint in town or is it because they want to see, be seen and perhaps flirt a little with your other customers? If the beer was their main motivation, they could save money and time by drinking at home. Do people visit your hair salon because they want their hair to be shorter, curlier or more blonde? Or is it because they want to walk back out into the street feeling like a million dollars?
Some businesses are more functional than others, in the sense that they fulfil a more tangible need. For example, restaurants are more functional than bars since hungry people go there to be fed whereas thirst, as we have established, is not usually the key factor in driving people to bars. For the more functional businesses, the way customers want you to make them feel is still very important, but just not so much of a deal-breaker as it can be for the less functional ones.
So whatever your local business, ask yourself what your customer really want. And when they use your business, make sure they walk away with the feelings they hoped for as well as the products or services.
Get this right and your customers will reward you with loyalty and recommendations. How right do you have to get this? It depends on how good your competitors are.
Sep/090
Using special offers to increase sales without upsetting regulars
Customers love a bargain, yet few people like to buy from a business that constantly has a ‘SALE’ sign in the window. Getting this right can make the difference between increasing sales and acquiring a costly ‘bargain-basement’ image.
All businesses have their ups and downs. During periods of low demand, a business owner needs to find ways to bring customers in or generate sales. Often, this needs to be done at short notice. When it comes to motivating people to buy, a special offer or incentive is a powerful tool. If done properly and regularly, the additional sales that can be generated over a year using offers and promotions can make the difference between scraping a living and making a handsome profit.
The most common concern I hear from local businesses with regard to special offers is ‘I don’t want my regular customers to find out’. This is a genuine concern. If you have a base of customers that use your service every week or month at the current price, won’t you lose money by offering them a special? However, this is not a reason to deny yourself the extra money you could make. Let me explain:
Can you think of even one customer that could not spend a little more money with you than they do now? My point is that, no matter how good a customer, there is always an opportunity to sell a premium service or to add another product to their shopping basket. A salon can offer their regular ‘cut and blow-dry’ customers an incentive to try a colour ‘25% off all colour treatments next Tuesday’. The salon should send this only to customers that don’t usually have colour treatments.
Is that unfair to those good customers that regularly pay for both cuts and colour treatments? Of course not, because the salon can offer those customers a different incentive, such as ‘Book your next colour treatment this week and get 30% off our new advanced conditioner for coloured hair’.
To make special offers work without appearing cheap, a business needs to separate customers into different groups according to what they buy and prefer, then send special offers that appeal to those groups. This does not take a great deal of effort and the benefit is that those customers will spend more. Plus, your quieter periods will get a little busier. Quiet periods not only hurt your pocket, they are also bad for staff morale.
In addition, running offers and promotions in a targeted way is appreciated by customers. Your customers receive offers that interest them rather than blanket discounts that make you seem like a bargain-basement operator.
So don’t shy away from using special offers and promotions. They are an essential money-making tool for all local businesses.
I’ll end this post with a shameless plug for my own business. Many local business need to bring customers in at short notice. For example, to fill empty tables in a restaurant this weekend or to sell produce that has a limited shelf-life. To generate sales at short notice, there is no better way to deliver special offers than to the mobile phones of your customers. And there is only one service that is 100% dedicated to helping local businesses do that: Visit Sendster.co.uk to find out more.
Sep/090
Help people remember your local business
You know how difficult it can be to get people to visit your local shop or try your service for the first time, right?
You have probably experienced this yourself as a consumer. You decide to try something new, perhaps a new exercise class or a new bar. You have a great time and end up telling some of your friends about it. Then, six months down the line, you realise that you haven’t been back. You’ve been really busy, your schedule has been tight, you didn’t get around to it and then you completely forgot.
As a consumer, you have to ask yourself – how eager were they to get you back? Even though you found them initially and spent some time with them, they didn’t take time to capture your details. If they had done that, they could have sent you a message or offer to invite you back.
As a business, do you really do enough to capture new customers and turn them into loyal customers? Sometimes, the reason people don’t return has less to do with the quality of your product or service and more to do with how good you are at helping people to remember you.
Sep/090
How customers can help grow your local business
If you have been trading for any length of time, at least a few people will have bought your product or service. These are your existing customers. In one way or another, whether it’s time, money or some other resource, you have invested something in acquiring those customers. So, it’s worth thinking about how to get the most out of that investment.
Most businesses have some great customer and some, well, not so great, with plenty in the middle. Who spends the most money? Who cost the least to service? Who most often talks about you to their friends, thereby creating new business? Customers that love your business will grow it for you each time they talk about it. In short, who are your most profitable customers? Take a look at these customers and provide incentives for them to reveal some personal information.
Once you have worked that out, ask yourself what this group of customers have in common. It’s easier said than done, but if you can work out which characteristics define your best customers, you can look for similar people locally. The answer could lie in simple things such as age and gender or more complex factors such as occupation, education, and family status.
It’s worth looking at your worst customers too. Do you have customers that spend little and demand a lot of attention? Customers that ultimately cost you money? In deciding who these people are, do you want to consider opportunity cost? For example, if you own a restaurant that is over-booked every Saturday, are many of your tables occupied by people spending too little? Perhaps your biggest spenders are also the busiest, so they never get round to booking until there are no tables remaining. It’s a difficult thing to do, but it can be worthwhile finding polite ways to filter out your worst customers.
Another thing you can figure out by studying your best customers is how to improve your service to attract more people like them. When your bank balance demands that you increase sales, it can be very tempting to continually change and tweak your product or service to bring more money in. If you don’t know who your best customers are and you make the wrong changes, it’s easy to alienate the very people you need to keep.
My advice is this. Know who your best customers are. Invest in finding out why and then finding more people like them. Evolve your business over time to suit those types of people. And be patient – if your business appeals strongly to a part of the population, such that those people are true fans, they will help grow your business through word of mouth, but it takes time. Changing your business because you need to grow is natural. But doing so without understanding the impact on your customers can lead you into a spiral of decreasing sales or profit.
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