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Promoting
your business can be as tricky as launching one.
But our experts, including business consultants and entrepreneurs alike,
have strong words about how you can make your special promotions work.
Here are six big ideas that shine.
On a drizzly November afternoon, more than 200 people are gathered at
a New York video shop, awaiting the arrival of a local pro football
star to celebrate the store’s grand opening. It’s easy to
spot the owner among the crowd. He’s the one pacing the room,
glancing at his watch every 15 seconds and muttering a stream of unprintable
curses.
“He’s already an hour late,” says the owner, as the
first potential customers begin to trickle out into the rain. “You’d
think with all the money I’m paying this guy just to show up and
sign some autographs, he could be on time!”
Another 30 minutes pass before the celebrity linebacker finally arrives,
having been delayed in New York City traffic. But half the crowd has
departed. Although the NFL star is gracious and accommodating with the
fans, one look at the store owner tells you that he wishes he’d
found an easier way to herald his grand opening.
“Celebrity promotions and endorsements can help attract traffic
to a store,” says Gary Wright, a retail marketing consultant in
Denver, Colo. “But they tend to work best when the celebrity is
tied in some way to the product you’re selling. Otherwise, people
are only coming to see the celebrity, not to buy from you.”
Bill Glazer, another retail sales consultant (www.bgsmarketing.com)
and owner of Gage Menswear, a small apparel chain in Baltimore, Md.,
agrees that celebrities can boost sales. But he cautions that these
events require careful planning and, even with the most meticulous attention,
are subject to the vagaries of weather and transportation. Moreover,
adds Glazer, small-business owners often end up paying more than they
can afford for big-name celebrities, when cheaper local talent such
as radio deejays and TV weather forecasters are just as effective in
building traffic.
The same can be said about all types of sales promotions, whether they’re
special discount offers, contests, giveaways or Barnum-esque publicity
stunts. Although they can help retain existing customers and lure new
ones, they also can backfire in disastrous ways.
For those adventurous and fun-loving small-business owners inclined
toward the unconventional, consider these tips for running successful
promotions:
1 Treat special promotions and events as part of an
ongoing, well-orchestrated marketing program. “This is the number-one
mistake that small companies make,” says Glazer. “They assume
that one or two marketing stunts a year are enough.” But they’re
not. You can’t ignore the fundamentals of direct-response marketing—a
compelling headline, a deadline to respond, testimonials and, most important,
frequent messages. According to one major study of 1,000 retail consumers,
on average, customers want to be contacted by their suppliers every
20 days. Every month that you ignore them, you lose 10 percent of your
customer base.”
2 Collect information about your customers and create
a comprehensive customer database. Reason: It’s much easier to
keep customers than develop new ones. “Wherever you have a contact
point with the customer, collect information,” says Randy Lisciarelli
of Vera Pax, a direct mail/Internet marketing firm. “Too many
small companies don’t bother capturing customer data and instead
depend on rented lists, which don’t work at all. ‘Retention
marketing’—building a campaign around an existing customer
database—yields the best returns for smaller firms without big
marketing budgets and name brands.”*
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David Frey, author
of The Small Business Marketing Bible, says a simple way to start is
by co-sponsoring free monthly lunch giveaways with restaurants in your
area. To enter the contest, all restaurant patrons need to do is toss
their business cards into a jar. One small business-to-business supplier
that ran such a promotion with seven local eateries got an average of
350 to 400 business cards a day and ultimately wound up accumulating
a database of thousands of potential customers.
3 Remember, timing is everything. Jan Huffman and her husband
Vance, the former owners of Strasburg Pharmacy & Gift Shop in Strasburg,
Ohio, ran an inventory liquidation sale between Thanksgiving and mid-January,
which coincided with the national shopping season. Their promotional
efforts included lots of giveaways (a big-screen TV was the grand prize),
in-store scavenger hunts and special discounts. They sold their entire
stock and actually generated a healthy profit on the inventory. “We
would have been happy with a 75 or 80 percent sell-through,” Jan
says. Moreover, the liquidation sale brought in a slew of new customers
for the new store owner, Mike Dennis. Jan Huffman, who is now an employee
of the store, says she and Dennis took extra pains to capture as much
data as possible on all those new shoppers.
4 Partner with other local firms. Chuck Rankin, the
owner of eight Chuck’s family restaurants in the Dallas/Fort Worth,
Texas, area, is a big believer in partnering. He partners to defray
the rising cost of marketing and to leverage another company’s
brand identity. Recently, Chuck’s hooked up with the Blue Bell
ice cream company to create “Blue Extreme,” a blue confection
with a vanilla flavor.
“To the kids, it became ‘Chuck’s blue ice cream,’”
says Rankin, whose chain runs two special promotions a year. “The
aim is not to give off a buzz, but to get families and kids to come
back again and again. I’ll hook up with any legitimate firm or
local institution that will help me generate repeat business.”
5 Be careful what you discount. One of the worst small-business
mistakes, according to marketing experts, is running specials on the
poorest-selling stock (“If nobody wants to buy a product, discounting
it 15 percent is not going to help boost sales,” says Gary Wright).
“If you’re not careful, you can wind up setting an expectation
of a lower street price,” says Andy Paul, managing director of
the Carmel Valley Group, a San Diego, Calif., sales consulting firm.
“It’s better to take a packaged approach, and discount installation
and training on a bundle of products.”
6 Don’t overdo giveaways. In the business-to-business
space, the aim of a special promotion is to generate a sales lead rather
than an end-customer sale. Bob Bly, a veteran B-to-B marketing consultant,
says you have to be careful not to give away incentives that are too
generous, resulting in unqualified leads. Example: a firm that gave
away hardwood baseball bats to everyone who requested a catalog. Many
people sent in the catalog form just to get the free bat.
Met/Hodder, a Minneapolis film-production company, is one business-to-business
firm that has mastered the art of special promotions. “We look
for any opportunities to keep our card near the top of [our customers’]
Rolodex,” says CEO Kent Hodder. The company created a “Go
Fly a Kite” promotion, which urged existing and potential clients
to take time out from their hectic schedules and fly a kite in the park;
and a “We Can See Exactly What You Need” promotion, which
featured a pair of novelty X-ray glasses. Both events highlighted the
film company’s design creativity and its customized approach to
client relations. The promos also gave clients a chuckle.
“Remember that companies don’t buy, people do,” says
Ruben Melendez, CEO of Glomark, a Columbus, Ohio, sales consulting firm.
“A thank-you box of Christmas cookies, a pair of tickets to a
sporting event—these kinds of promotional things help cement a
relationship. Just make sure that whatever you give away comes from
a position of honesty and trust.”
In other words, run the promotions the same way you run your business.
Contributing Editor By Mark Mehler
| Promotional Web |
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Cyberspace
can be a wonderful place to run wild with promotions, but as in
the bricks-and-mortar world, the rules of marketing are in force.
Case in point: the now-discredited strategy of throwing in free
shipping and handling on Internet purchases. Because shipping
and handling constitute a healthy chunk of the cost of most Internet
orders, a rise in sales didn’t mitigate the impact of falling
profit margins.
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*Be aware that maintaining
a database of customer information means establishing security to protect
it. California recently passed a law that requires you to notify your
customers located in California if you suspect you have suffered a computer-security
breach.
