Transcript SCORE

SCORE
®
Counselors to America’s Small Business
Marketing
for Success
Describe your Product/Service (or
figure out your product or service?)
Identify Target Market
All this Requires
Understand your Customer
Identify competition
Market Research
Determine your advantage
Set Marketing strategies
Forecast Sales and Margin
Marketing is the process of
Creating the Desire to Buy
Marketing is EVERYTHING
You Do To
Promote Your Business
…and More
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Marketing Includes
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Sales
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Product Packaging
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Customer service
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Distributing
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Price
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Promotion
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Literature
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Advertising
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Market research
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Employees
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New product
development
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Key Points
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Small business success requires the ability
to market products and services
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You can’t be all things to all people
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Key to success:
– Segment, Differentiate, Promote
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Market research reduces your risk
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Key Questions
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What useful thing will you do or sell?
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Who will pay you for it?
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Competitor analysis
Will you make enough to make it worthwhile?
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Target market
Why will they pay you and not someone else?
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Product or service description
Forecasting sales volume & margin + CASH FLOW PROJECTION
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Begin with Market Research
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Definition: Study and investigation into the
characteristics, spending habits, location
and needs of your business’s target market,
the industry as a whole, and the particular
competitors you face.
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Critical to reducing risk, making better
decisions, and improving performance
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Always necessary and often ignored …
…. at your own risk
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Market Research
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Primary Research (bottom-up)
– Experience and informed judgment
– Interviews and questionnaire
– Surveys, focus groups and observations
– Your own records (for existing businesses only)
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Market Research
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Secondary sources (top-down)
– Trade associations, Publications
– Local banks, Chambers of Commerce,
– Consultants
– Census, Government and Industry data
– Libraries, Universities
– INTERNET
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Describe Products/Services
People do not buy things
They buy what things do
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First the benefits, then the features
– Benefits - advantages & desirability
– Features - Special attraction
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How is it different from competition?
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Can buyers easily understand differences?
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Will buyers value these differences?
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Identify Target Market
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Segment the buying public
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Find a segment where you want to play
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Clearly understand and define:
– Major trends in your market
– What drives your product sales
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Discretionary/disposable income; GDP
– Who will buy from you
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Use demographics to define buyer
– What are their motivations
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Understand Your Buyer
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Customers buy results (value)
– What the product will do…not the product itself
– Price is not the only determinant
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Understand their needs, desires, goals
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Maslow’s hierarchy of needs
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Basic life needs - air, water, food, warmth, shelter, sex
Safety-Security - law, order, limits, money, stability
Belonging/Love - family, affection, relationships
Self Esteem - achievement, status
Self Actualization - self growth & fulfillment
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Understand Your Competition
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How many direct competitors?
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How many indirect competitor?
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Can you identify top three?
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What are their strengths and weaknesses?
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Define Your Competitive
Advantage*
1.
Cost
3.
– Buying power
– Distribution
– Technology
2.
Quality/Performance
– Technology
– Features
– Guarantees
Service
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4.
Customer service
Strong sales force
Extra services
Customization
Convenience
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Location
Broad line
Product bundling
Hours of service
* Define this for your target market (or niche)
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Define Your Strategies
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Selling
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Location
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Pricing
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Purchasing
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Promotion
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Selling Strategy
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Wholesale or Retail (B2B or Consumer)
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Direct sales staff or Commissioned Agents
or Manufacturer’s Representative
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Internet Sales or Telemarketing or Catalog
or Direct Mail
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Location Strategy
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Is location important to your customers?
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If customers come to your place of business:
– Is it convenient?
– Is it consistent with your image?
– Is it what customers want and expect?
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Where is the competition located?
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Is it better for you to be near them or far?
Many startups run successfully from home
for a while
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Pricing Strategy
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Key element in determining cash income
Know the industries pricing practices
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Cost plus – designed to cover all costs
Mark-up (keystone)
Bid
Added value
Understand competitors’ pricing strategy
Select a strategy that is consistent with your
image and understood by the customer
Requires constant study
There is a trade off between consistent pricing strategy and
responsiveness to market changes
(such as, Meet competition, Promotional/Seasonal)
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Purchasing Strategy
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Inventory level, mix and buying price is often
key to profits
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Carefully plan inventory mix
– Must meet customers needs
– Utilize vendor information for industry trends
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Determine total dollar of inventory required
= [Gross revenue/ mark up] / inventory turns
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Select multiple reputable vendors
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Move obsolete inventory quickly
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Promotion Strategy
1.
Develop a clear, consistent, believable
message
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Differentiate your product from competitors
Emphasize benefits first, then features
Support it with credible facts
Make it easy to remember and understand
Motivate the buyer to buy now
Select the right media - must reach target customers and
deliver your message
3.
4.
5.
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Communicate quickly, cleanly & concisely
Repeat it often
Do not Stop & Start - Develop affordable, annual budget
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Annual Budget
start-up + maintenance
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Avoid start / stop advertising
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Set affordable ad budget as % of revenue
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Perform cost/ benefit analysis
– Track sales outcome from each ad strategy
– Compare it to the cost
– Decide if it is worth it
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Low Cost Marketing
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Easy to remember Company name/Tag line
Business cards
Website
Brochures
Flyers
Thank you notes
Signage
Samples
Guarantees
Newsletters; e-mail blasts
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Creating your Brand
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What’s in a name?
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Make sure you can legally have it; register it
Visualize it in a headline “Your Name here” Reports Rapid Growth
Make sure your name tells what you do
Make it easy to remember
Do you want to be listed first in the yellow pages?
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Convert your differentiating points to
customer benefits … This can become a slogan
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Design your logo …. This can becomes your identity
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Consistency is beauty
– Your Name, Logo and Slogan appear on everything!
– Your Benefits appear wherever practical
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REMEMBER
A brand
without an
image is
only a name22
… About Service business
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Service is customized and tailored to meet
customer’s specific needs
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Service provider sells on performance
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Often difficult for customers to value service
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Service providers must educate customer
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Key differentiators
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Credentials; Experience
Evidence of performance to satisfy the customer
Ease of communications
Support facilities; Technology
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More Low Cost Marketing
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Networking
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Word of mouth
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Referrals
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Testimonials
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Recruit cheerleaders
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Public relations
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Alliances
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Marketing Strategies
Quickest to slowest results
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Direct contact & follow up (telephone, cold canvas)
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Networking-Referrals
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Public Speaking
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Writing-Public Relations
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Promotional events
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Advertising
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Service business Marketing
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Keep track of leads
Follow up (But do not be pushy)
Keep in touch
Establish chemistry
Don’t criticize competition
Limit range of options or choices; know how to say no (without losing
prospect)
Keep client SOLD after the sale
– Don’t Over-Promise; Over-Deliver
– If you exceed estimate let client know in advance; not after the fact
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Keep good records: discussions, decisions and correspondence
Five commandments
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3.
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5.
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Listen to the prospect
Ask Questions that uncover real needs and concerns
Prepare what you will say
Demonstrate experience and need
Be flexible in your presentation to reflect reaction and concerns
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Internet
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Communicate
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Educate
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Advertise
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Sell (e.g. ebay)
Easy to navigate
Relevant and concise
An information source
Links
Promote web address in all communication
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Forecast Sales & Margins
Educated view of the future with data which can be defended
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Start with Market Research
Disaggregate product lines or services for
improved estimates
Make reasonable assumptions (list them)
– Census data
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Demographics & competition
Spendable income and growth patterns
– Industry data
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RMA, D&B, Bizstats, Trade Association data
Vendor input and own or other data
– Constructive estimates
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Pre-sold contracts / Commitments from buyers
Market research and focus groups
Historical experience – own or others
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Sales Volume-Margin
Forecast
Month 
1
2
3
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5
6
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12
YEAR
Number of units you
expect to sell
Average sales price
Average cost of sale
Gross margin
= price - cost
Gross Profit
=Sales units x gross margin
Develop it here and reuse it in the
Cash Flow Forecast in the
Financial Section
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Customer Buying Fears
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Can I get the product/service cheaper some
where else? Money’s worth.
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The product won’t do the job as promised
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What other people think
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Procrastination
Overcome them with proof,
testimonials, and guarantees.
Answer in your presentation
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Close the Sale
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Buyer must understand your message
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Briefly summarize the benefits
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Quote your price and ask for the order
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Be clear and direct - then shut up
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When you get your order - LEAVE
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Sell honestly and with integrity
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Success Marketing
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You can’t be all things to all people so
Segment, Differentiate and Promote - Find a
niche and become known for it
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Choose simple, effective strategies and do
them over and over and over
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Rely on Persistence Effect, not on Wishes
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Market the RESULTS of your work, not the
process you use
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Ask the people you already know for help
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Use Free Counseling from
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Our mission is to help small businesses
succeed.
We accomplish this mission by
Educating
Counseling
Mentoring
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SCORE
®
Counselors to America’s Small Business
Congratulations
&
Thank You!
Keep in touch.
www.scorehouston.org