Archive for February, 2013
To grow your business you need to sometimes think and act counter intuitively and this begins with choosing your target market.
Rather than trying to be all things to all people (which is impossible) you need to first narrow your focus and niche. This is a very powerful marketing strategy which most business owners fail to understand and use.
They fear that cutting their market out will mean they will make less sales. However, they are jumping the gun; the first thing you need to do is get an opportunity to sell. And, if you are trying to be all things to all people you will be seen as a generalist and less interesting than the specialists.
Even if you get an opportunity to sell you will find you experience more price pressure because you are not perceived as an expert.
By focussing on a niche you make your business a perfect fit for a specific segment of the market and the expense of turning you back on the rest of the market.
But, keep in mind that when you have one segment of the market under your belt you can easily widen your target market. So, rather than be a small fish in a big pond you start as the only fish in a very small pond and grow the size of the pond.
For example, if you wanted to launch an Estate Agency in your area how would you stand a chance against the existing providers? Well, if you specialised in family homes with four plus bedrooms you would be able to identity where your target market is and develop a proposition which they would find better than the competition.
In terms of doing what we say, Sackmans specialises in small owner managed business. This means we develop our knowledge to help these clients. I am no longer attending Inheritance Tax planning training. If a client needs this help I will bring in a specialist and work with them. They client will end up paying less and get a faster result.
The research you do before choosing your niche is probably the most important part of developing your business. If you have not done this then I strongly recommend you take one step back before looking at ways of moving forward.
The research will cost some time but not a lot of money and will give you information you can build into your marketing. The time you spend on research will be the best investment you will ever make.
You need to research:
1. Existing Customers (if you are already in business)
2. Potential Customers
3. The competitors
The next article we will consider how best to research existing customers.
Remember, Sackmans are Accountants for North London for small businesses so if you know anyone looking for free business advice suggest they sign up to our newsletter.
There are broadly two types of marketing; Image Marketing (branding) and Direct Response Marketing.
The goal of Image Marketing (branding) is to remind customers and prospects about your company and the products and/or services you offer.
The idea is that the more times the market hears from you the more likely people are to have your company’s name at the top of their mind when they go to make a purchasing decision. The majority of advertising falls into this category, especially from national and international brands.
There’s no doubt that Image Marketing is effective, however it takes a lot of money and time. It requires you to saturate various types of advertising media e.g. TV, print, radio, Internet on a very regular basis and over an extended period of time. At the time of writing this post a good example is “ee” who have been advertising on the TV with Kevin Bacon.
The money and time involved are not a problem for big businesses as they have massive budgets. However, a problem arises when smaller businesses try to imitate big brands.
They tend to run very small campaigns which have no chance of working because they do not have have enough money to get into the mind of their target market. Keep in mind the same target market are being bombarded with thousands of marketing messages each day from national and international brands.
The common feeling amongst small businesses is that “marketing doesn’t work”.
It’s not that small businesses don’t have a good brand, image or weak adverts…it’s just they do not have enough money to run their adverts enough times to make them stick.
Unless you have millions of pounds (or more likely tens of millions) in your marketing budget, you have a very high probability of failure with Image Based marketing. This is why we recommend all small/medium sized businesses should only be using Direct Response Marketing.
Direct Response Marketing is an approach to marketing based on getting an immediate response from prospects. It can be online, offline or a mix of the two.
The response can be to buy the product, requesting more information or signing up to a mailing list. The types of response include picking up the phone, completing a coupon, returning a form in a pre-paid envelope or completing a form on a web page.
This form of marketing is different from other marketing for a number of reasons. I will be covering the various elements in future posts but the first is that responses can be measured and attributed to specific adverts or promotion.
This allows the business to assess and improve marketing with ongoing testing. Again, this suits small/medium sized businesses because is is lower risk.
As Accountants for North London we use Direct Response Marketing so sign-up for our newsletter and discover how your business can increase sales, improve profit margins and boost cashflow.
An entrepreneur listens to numbers, not words.
If we don’t know how well we are doing now how can you improve?
Entrepreneurs understand accounts and want to know the numbers behind the numbers that drive the financial performance. Think about Dragons’ Den, if the business owner doesn’t know their numbers they usually don’t last very long.
An entrepreneur is familiar with the difference between gross and net profit. They understand what Return on Investment and Woking Capital is and why they are so important.
They look to develop key performance and key predictive indicators which drive their business.
An entrepreneur bases decisions on numbers rather than feelings or mood.
When it comes to marketing they want to be able to prove a positive return on investment on every penny. They know things like:
- The number of customers they have
- How often they buy
- The average order
- The lifetime value of a customer
- The cost of acquiring a new customer
- How many people visit their Website
- What percentage makes an enquiry or buy
- Their sales won rate
The first number I recommend you find is how much you are worth to your business. To do this you need to know:
- The lifetime value of a customer
- How much time you need to invest in marketing to win a new client?
Divide one by the other and that is what you are work to your business (when you operate in a sales/marketing capacity). Now compare this to what you are worth generating working in an operational capacity generating revenue.
This mindset can give you massive leverage because you’ll be focussed on “investing” your time in sales and marketing rather than “spending” it doing work.
Here is a checklist you can use to improve every piece of marketing collateral you have.
- Are you using Direct Response Marketing?
- Is there a well defined market?
- Is there an irresistible offer?
- Is there a compelling headline
- Does the opening sentance pull you in?
- Have you included your Unique Perceived Value?
- have you focussed on benefits rather than features?
- Is there a guarantee?
- Have you explianed why you are making the offer?
- Have you out a deadline on the response?
- Have you included Social Proof?
- Do you have at least one call to action?
- Do you have a response devise?
- Have you used sub-headlines?
- Have you used high quality images?
In future posts I will write about each element of the checklist.
Sackmans are Chartered Accountants North London.
In business we will all experience failure and our biggest fears will be challenged, whether that is public speaking, cold-calling, negotiating, dealing with complaints or sacking someone.
It’s important to acknowledge that fear is dangerous; it can paralyze and stop us doing what needs to be done. The fear of being not good enough is the driver of procrastination and perfectionism.
I recently read that we are actually only born with two fears; loud noises and the fear of falling. This is not the same as the fear of heights, just the fear of the sensation of falling.
Everything else is learned. And, we can unlearn it.
Humans fear what we don’t know and often over-react to pain. For example, if someone complains about our prices we lower our prices to everyone, when actually only 15 or 20% are unhappy. This can cost us our business.
Being successful in anything means learning to be comfortable outside our comfort zone. An Olympic Athlete does not win gold without constantly pushing themselves past their pain barrier. In the end they get used to it.
We can look at fearful things as an opportunity to open new doors and grow as a person. And, remember what we are fearful of is probably what our competition is too weak to do; it’s where we have a competitive advantage.
Here are a few things to keep in mind:
- Profits come from risk
- Everything is a test
- There is no failure, only feedback
- Everything is relative
To make a profit we must take a risk. We need to manage our risk but not look to eliminate it.
Having the attitude that everything is a test takes the pressure off.
Expect 80% of what you do not to work. That way you can get it done quickly and without risking much. If you are going to make mistakes do them quickly and without wasting much time and money.
Also treat failure as feedback. If you make a cold call and get rejected look at this as an opportunity to learn what doesn’t work so you are closer to finding out what does. Failure is defined by a timeline and tomorrow is a new day.
Everything is relative because we are always comparing when we make decisions.
So, it is worthwhile asking ourselves is what you fear really worth worrying about?
What is the worst that can happen?
Whether it is a new positioning strategy, new logo, higher price, cold call or anything else how does that compare to being in Afghanistan dealing with the Taliban?
I think our soldiers have the right to be fearful, we don’t and if we are fearful of business then perhaps we are wasting our time and should go and get a job.