Marketing Basics – What type of marketing are you doing?

Marketing is more than sales, marketing is about growing your business

In the article ‘Marketing Basics – 10 Questions you should be asking of your marketing’ we asked the question What is the goal of the marketing? That is, what do you want to see as the outcome of your time and expense of doing the marketing. Of course the answer that most people say is ‘to make money.’ That is true but only a small part of the picture, and sometimes a business will choose a style of marketing for a situation with no expectation of increased income. While we did give a very basic explanation of the most common goals of marketing in that article, in one we will be looking at in more detail and why you would choose to do each one.

Everyone would say that an increase of sales or growth of market share is what you are doing when you’re marketing. The reality is that it is more than that. Sometimes you have to accept that you might not make a noticeable change in your business revenue in the shorter term for what you’re spending your time or money on. What you are doing is investing in your business’s future with the long term goal of growing the business.

This should be the goal of all the marketing you do, to increase your market share. There is a finite amount of revenue in any market so the larger the share you have the better. The long term goal of increasing total revenue over time. You are trading off higher costs in the short term which will be balanced out by the higher income in the long term. Because you are focused on the long term growth of the business, this will dictate the choices of marketing methods you use.

Customer Interaction

Given that the primary way that businesses are found these days is through internet searches and social media, this is where you should put the largest effort into. A well designed website doesn’t cost a lot these days, and basic social media activity does not take a lot of time to do. Customer feedback and interaction  should consume the majority of your effort for market share growth. Good reviews, prompt responses to customer queries, even putting things right after a bad review, all add to how highly you get rated on search engines and in social media sites.

It will take time to get into the habit of doing interactions like this and you might have to get some software setup on your website to display such feedback. It is worth the effort. Current marketing trends point to customer interaction and feedback is the primary way that people decide on who they will give their business too. This is especially true for anyone of the younger  Millennial and Gen Z age groups.

Increase of Sales

This is what most people think of when they picture marketing. An increase of sales, most commonly through a discount of a price, will improve turnover in the short term but it’s no solution to long term growth. The people who are most likely to respond to a discounted price are only driven by that so are very unlikely to become long term customers, they go where the best deals are. So you get a short term turnover boost, though the net profit is less, and after it’s over you are no better off as you have eaten into that extra profit with the marketing costs.

That being said, this doesn’t mean it’s not useful as a marketing strategy.  What you should do is combine it with the encouragement of looking at other services or products you provide to both recoup the loss in revenue from the offer. This is the cornerstone of the concept of Loss Leader. The example I like to cite for this marketing method is a supermarket heavily discounting a brand name soft drink knowing that when most people buy snack food along with the soft drinks. This allows them to recover those revenue losses from the drink sales with the increased sales of the normal priced snacks. While this isn’t as easy to do if you are an accountant or building inspector, the method can still apply.

The key to this style of marketing is to use products where you have the greatest profit margin to start with, or adding items where your internal costs are minimal to boost total revenue per sale. You can also introduce them to loyalty or spending reward programs to encourage them to return to your business outside of the sales promotions.

Name Recognition

Sometimes you just have to do marketing to get your name out there so people know you exist. This is a problem that Copy Express has a continual struggle with, leading to us saying that ‘we are Petone’s best kept secret.’ And you don’t have to be a new company to have the problem, Copy Express has been around for more than 20 years. Add to the mix that now with the globalised economy thanks to the power of the internet you’re not just competing with businesses in the same city or region but nationally, and even internationally.

Given this situation you have to spend a bit of your time just promoting the business without any expectation of growth in revenue. The idea that when people think of the products or services a business like yours provides, they associate your company with it. We all think of Watties when we think of baked beans (Hinze for any overseas readers.) It’s also fairly easy and low cost to do it these days thanks to the internet. Some social media, some free online material, maybe an instructional video or two. These are all things you should be doing as a matter of course to keep your name active online and high in the search results.

If you want to go further than that, you can do a bit of ‘traditional’ advertising. Get yourself listed on the local chamber of commerce or business associations promotional sites. Ads in the local paper or on local radio. Perhaps do a little sponsorship of a local sports team or group. Doing a letterbox drop of flyers or some useful item like a fridge magnet. Going to the last three options is a greater expense and you will be essentially writing off the spending in the hope that you lodge your company name in people’s minds enough that they think of the business when they have a problem to be solved.

Single Product or Service Highlight

Do you ever have clients saying to you ‘I didn’t know you did that?’ Then you need to do some marketing to highlight that area. The goal is twofold; one – to let existing customers know that you offer that service or product, two – to tell people who are not your customers who have used other companies for it that you offer it too.

For your existing customers you only need to do a simple email blast, or better still a social media post highlighting that product to everyone and giving a little explanation about it. Getting new customers requires more work but can still be done in a way to get it out there with a minimal cost. Adding a bespoke landing page on your website is a good place to start. A landing page is where you have a sub page to your website devoted to your service/product, it has special search terms for google to find and index on, you have more detailed information on it and include testimonials of people who have used it. Have a membership of a local business group? See if their newsletter supports articles highlighting business and do a piece on that service you offer as the main point.

Competitor Motivated

A competitor is offering a deal on a product or service that you also offer and you’re matching to avoid losing sales. The normal reaction to a competitor is to do a price match and promote it. Personally I consider that sort of response can have extra costs to you with no real gain. If you are following them in offering the deal, the majority of people who will pick up the deal because of that price/offer will have already gone to the competitor. Those who you already supply the service or product to will not be motivated to change to the competitor because that takes effort and people are lazy unless the deal is really that good at which point you’re not stopping them anyway.

Better to wait and see what happens. If the competitor keeps offering that same deal, then it will become the market standard and you will have to match them. If it was a one time offer, then you don’t have to respond and you’re not cutting into your existing profits. If it is successful then you could offer a matching or better deal at a later point when it suits you. You might find the supplier that gave them the deal might offer it to you or you might be able to get a better deal from a competitor supplier so letting you offer a more effective promotion in return.

Clearance

Clearance is a form of marketing that must be considered if you have products that have a ‘shelf life’. Fashion is a classic example. At the start of a season the majority of that season’s fashion is sold. By the midpoint the price reductions are made to free up rack space. Towards the end you have to put them on clearance as it costs them more to have them sitting on the racks than what they would lose by selling at or below cost. For a business it’s never ideal to be in the situation of needing to do clearance, but it’s sometimes a necessity. You must consider that your goal is to minimize loss and any new customers you might get through this type of marketing are motivated by price not service.

While this might seem like the same situation as Increase of Sales the goal is different. In this case you are trying to: reduce ongoing costs of no longer viable stock, and to make room for products that have a better potential ongoing revenue. It does still give the opportunity to make some new loyal customers if you also provide some other incentives for them. Loyalty programs or spending rewards are tools to encourage customers to come back and spend with you again in the future.

Some other Marketing Options to consider

Market testing

Not sure if a new product or service would be viable as an addition to your existing package. Set Up a one time or exclusive deal for your existing customers to try. As they use it, get their feedback to modify the offering to better suit their needs. After the time period is up you can take the overall responses to judge if it’s worthwhile as a permanent addition.

Cross promotions

Have another business you frequently share customers with? This is where cross promotion works. Have each other’s promotional material in the business and offer a special discount for using their services. This also includes things like business associations and sponsorship’s of local groups or organisations.

Maintaining Interest

While it could be considered part of Brand Recognition, I like to consider Maintaining Interest as its own unique form of marketing. Consider a Bar or Restaurant, their business depends on keeping an interested clientele who can quickly get bored going to the same place frequently. This is why you see these time limited menu items at takeaway chains, people get bored of the same choices every time but offer something new then people will come in to try it and in the process buy the regular items along with it. Maintain a changing roster of offerings or events, with a seasonal change over to keep that interest level up.

So what kind of marketing are you doing?

You will be using any of the styles listed above, but when you do it, how often you do it, and which ones will give you the best return for the effort and expense depends on the business you are in. There is no easy answer that can fit into a 1500 word article. So how do you know what is the right one to use when?

One way is looking at the articles in the Copy Express blog as we cover all different types of marketing and go into more detail on them. You can also book time with us at Copy Express and we can step you through the options and come up with a plan to make the most effective use of them to help your business grow.