Monthly Archives: August 2009

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Starting A Business? Consider Your Marketing Strategy Part II

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The marketing plan integrates all activities that are required to reach the customer,  from defining the position,  image and promise of  value that form the brand identity, to the style of  product packaging, to where and how the product or service is sold.  It can be argued successfully that the marketing portion of your business plan is the most important.  Investors and lenders will surely take an in-depth look.  Let’s float some ideas on how to create some buzz for what you’re selling.

THE ADVERTISING AND PROMOTIONAL STRATEGY

The time tested way to get the word out to broad swaths of potential customers about the debut of your business and the advantages and benefits offered by your products and services is through advertising. The advertising methods that you choose will depend upon the customer, the business you will enter and your budget.  Think carefully about how you can reach customers in cost-effective ways.

Be prepared to do an advertising roll-out, step by step, to introduce your business to potential customers.  You’ll start with business cards and a brochure or contact sheet (for Freelancers). You may also have a website, or you may wait a few months until you can budget that project.  Depending on your business, you may do a leafleting campaign to announce your opening and place promotional fliers in selected locales.

You might do an open house. You might offer discount coupons. You might give away an inexpensive branded promotional item to your first 50 customers. You may take out a small ad in a local newspaper or in a business group newsletter, or place a banner ad on a website that is popular with your target customers. You could start a blog! Brand identity will guide your advertising and promotional activities.

If you have some money to work with, you may decide to hire a PR firm.  If you can find a PR person who 1). has contacts in your industry and 2). will actually produce the results they promise, then by all means sign on.  Getting articles written about you in print and online publications or even a coveted guest spot on local TV is a wonderful way to spread the word, establish credibility and expertise and bring in clients.

But be advised that PR people often oversell.  In all likelihood, if you sign up for the economy plan, they’ll do nothing for you except take your money.

So create your own PR.  Networking will be a big part of your promotional activities, so read the article in this blog and work on your Expert Elevator Pitch. You would be wise to join a few professional and business organizations like the chamber of commerce and at least one or two others. You need to get the word out about your business and start filling your sales pipeline with clients.

You need info on happenings in your industry and business environment. You need to meet colleagues and yes, competitors. This latter group can be very helpful. They can tell you pitfalls to avoid. They can tell you the backstory about suppliers and vendors.  They know your customers better than you do.  If they’re nice, don’t be too proud or too shy!

Social networking will also be an important part of your promotional strategy.  Depending on your business  MySpace, LinkedIn, Twitter and/or Facebook will give you an online presence in addition to your website.  See the article Your Personal Brand Part II for tips on creating the right online presence.

Finally,  developing an advertising calendar will be very helpful.  It looks good in the plan and is a practical way to budget advertising dollars and ensure that you include all advertising options that both reach your target customers and make sense for you.  It will remind you to place seasonal ads when appropriate and meet advertising deadlines.

I’ll be back next week with Part III of Marketing, the final segment.

Kim

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Starting A Business? Consider Your Marketing Strategy Part I

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Once you have identified your customers, done some detective work to check out your main competitors and positioned yourself relative to them, thus claiming a niche for your company, you are ready to devise a marketing plan for your business venture.

The marketing plan supplies the road map that you will use to reach the target customers.  Sales strategy, pricing, product or service positioning, advertising and distribution channels must all be accounted for in relation to what target customers will accept.  The idea is to convince customers that buying your services or products will give them benefits that are worth the cost.

PRODUCT/SERVICE STRATEGY

Describe how your products or services offer more advantages to the customer than what  is offered by competitors.  What’s the hook that will bring customers to your door?

Research the product features and attributes that are important to target customers and what they are willing to pay for them.  Dig a little deeper and brainstorm the benefits—those unspoken and often emotional motivators that will drive customers to buy from or hire you.

What is the challenge or need that customers  face, what is the “pain” that they’re in? Your company must provide solutions that customers determine to be useful. Think about what customers might value in the long run, but remember that tastes and perceived needs are fluid and therefore subject to change

PRICING

Pricing is a tricky issue, especially for consultants and professional service providers.  It may be difficult to find out what competitors charge,  so there is no framework for  comparison.

If you have relationships with those who hire for similar services,  inquire as to what they pay so that you can set your price points.  Competitors are unlikely to help you with pricing, but colleagues who offer similar services may give some guidance.  If you plan to sell a tangible product, canvass the marketplace and learn how similarly positioned products are priced.

Be advised that  it is risky to underprice.  In general, it is not a great way to rapidly build a client list or gain market share.  In services especially, clients may wonder why your rate is so cheap—are you unqualified?  You don’t want to give the impression that you’re less than first rate.  Moreover, raising prices in the future may be met with customer resistance.

Underpricing will also negatively impact your cash flow.  You could find yourself spinning your wheels like mad, overwhelmed with lots of orders, but losing money overall because you have not fully accounted for the cost of goods sold, be it product production and marketing costs or the time and creative energy it costs you to fulfill a contract assignment.

Unless you’re in the grocery business, where profit margins are traditionally thin, make sure that your pricing strategy builds in a profit margin that will sustain the business and eventually you too.

DISTRIBUTION CHANNELS

Think about how your products or services will flow from their source and reach the target customers.  Examine how customers currently buy your type of product.

Do they buy primarily online, from catalogues, from a physical location, by referrals from trusted sources, by contract bids or at trade shows?  Can you access the preferred distribution channel?  How much will it cost you?

Service providers and Freelance consultants must also develop a distribution strategy, so that potential clients and referral sources can be reached.  If you work in professional services, you are on the coattails of the firm’s marketing efforts.  However, these days even junior associates are expected to bring in clients.

Networking and other relationship building strategies will be helpful here.  Put yourself in the places where clients and good referral sources can be found.   Work an expert elevator pitch and see who you can meet.  Visibility counts, so speaking opportunities and leadership roles in business groups will also be important for self promotion.

I’ll be back with Part II of Marketing Strategies next week,
Kim

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Starting a Business? Consider Your Customers and Competition

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Once you’re clear on the difference between an intriguing idea and what may be a genuine business opportunity and you’ve chosen what product or service you will offer,  it is then time to carefully consider who your customers will be.

The entrepreneur must define the customer well,  by using demographic and psychographic (lifestyle) data. The more specific the customer profile that is created, the better the ability to deliver what the target customer wants and will pay you to obtain.

When an entrepreneur fully understands who the customers are,  then he/she can understand what compels them to buy,  how to sell to them (on line or bricks and mortar?),  how to market to them,  how to price the product and how much time and money it will take to win those customers over.

This is why it is always preferable to enter a business in which you have experience.  The best way to know customers is by talking and interacting with them.  That allows you to tailor your services to meet their perceived needs and expectations.

If you’ve already done business with your target customers,  you will have a significant advantage and are better positioned to create a profitable venture.

Be sure to flesh out your customer info by speaking with others who do business with your target customers.  Suppliers and Freelance vendors  can provide lots of useful info. Speaking with your competitors will likewise be very helpful.

Visiting conferences and trade shows that are frequented by your target customers is a smart move,  as those are forums where information is shared.  Competitors may be more forthcoming in these settings.

Analyzing the competition will be a key success  factor for the business.  This is how you’ll find out what customers want from businesses similar to your own,  what benefits they think they’re getting and what price they’ll pay to have what they want.

A thorough competitive analysis allows the entrepreneur to refine the market niche and identify additional competitive advantages.  Good competitive info sets the stage for your marketing and sales strategies.

Visit the stores,  the restaurants and the websites of your direct competitors.  Check out where and how they advertise.  Study their message and methods of interacting with target customers.  Are your competitors making money? How do they make that happen?

Make sure that you have a critical mass of advantages that will improve your chance of success,  be it a hot product,  strong relationships with target customers,  experience in the business,  influential friends or a healthy budget to spend on start up costs.

You probably don’t  hold all of the cards, but before you take the leap  make sure you have enough to give yourself a good chance of winning the game.

More later,
Kim

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Starting A Business? Consider This

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Like millions of people around the world, over the past few months you’ve given some thought to ensuring your economic survival.  How to make money is at the top of the list for many and we’re all exploring our options.  A yard sale or two can help in the short run, but most of us need a steady and healthy income stream.

Polishing up your resume might no longer be a viable option, given that employment statistics have been dismal for several consecutive quarters and the global economy continues to shed jobs.  What little employment exists tends to be at at the bottom of the pay scale.

This cruel reality has lead some of us to decide  what the heck, I’ll go out on my own.  I’ll start a business or become a Freelancer and do some consulting.  That’s why I went out on my own.  Employers did not give a damn about transferable skills, work ethic, strategic thinking or anything else.

All they knew was that I was  too expensive to hire (or keep) and so they didn’t.  To have a roof over my head and food on the table I had no choice but to become a Freelancer. Thank God  I had a few desirable  skills that I eventually learned how to package and market!

This blog is all about sharing knowledge and experience as a way to help readers become more successful Freelancers, business owners and even employees.  My objective is to help you avoid time-wasting mistakes and obstacles and get you into your definition of success,  faster.

First of all,  becoming an entrepreneur requires  objective thinking and creativity.  You’ll need to take a cold hard look at your skill set and figure out what you can possibly do.  Next, you need to analyze the marketplace.  Who will pay for the product or service that you’re able to offer? Does it appear that you can eventually persuade enough clients to pay you enough money to live on?
Also, what relationships can you rely on to help ease your way into the business—refer clients, provide expert advice, hook you up with good deals on equipment or a space to set up shop?

Oh, and BTW, can you afford the start-up costs? Every business requires up front money to get rolling, so the financial requirements of the business you choose need significant consideration.  Banks are making very few loans these days and those who do get funded have near perfect credit.

On the upside, going out on your own during a difficult economic cycle can be a smart  move.  The economy will force you to distinguish between the magical thinking of an intriguing idea and a real business opportunity. You’ll be in the planning and learning stages while the economy lags.  When the inevitable upswing comes around, you’ll be prepared to take advantage and make some money.

Over the next few weeks, I’ll help you take a look at a few basic things you’ll need to consider before you take the leap.

Much more later,
Kim