Target your marketing messages to the clients you want to reach
In this, my inaugural column for Small Business Times, I want to share some of the basic premises of advertising and how they apply to small business.
You’ve probably heard the old marketing maxim that says 50% of all advertising is wasted. Don’t believe it. It’s a lot more than just 50%.
Traditional mass media advertising is a monologue aimed at the purses and pocketbooks of a passive audience. No wonder more than half all advertising is wasted. It’s amazing the percentage isn’t higher.
Imagine for a moment that fully half of all the television viewers who saw a Ford Motor Co. commercial actually bought a Ford. Or were even interested in buying a car at all.
Imagine if McDonald’s actually sold a cheeseburger to half the folks who watch each of its television commercials.
Reality is much different. Ford and McDonald’s are huge companies with huge advertising budgets. McDonald’s, for example, has been known to spend up to 14% of its total gross sales on advertising alone. The company can afford the inefficiencies of mass media advertising.
Your small business can’t.
Well-intended marketers begin each new year by carefully drafting a budget. After hundreds of hours of research, arithmetic, discussion and evaluation, they all sit in a room and thrash, nit-pick and hack away until everyone exits with radiant smiles, self-adulation and the satisfaction of a job well done.
Then POW! A competitor suddenly introduces a rip-off of their leading product, and the whole program is thrown out the window.
In small business, nothing is permanent. Special situations must be met as they occur. It is precisely that flexibility that gives small business a big advantage over big business.
Effective promotion and advertising tactics do not take careful planning. Rather, they respond to market opportunities. They focus on the needs of your customers. They reflect the times in which we live. Not last year. Not yesterday. Now.
Simply put, there are better ways to make the most of every dollar you spend marketing your product or service.
Notice I use the word "marketing" rather than "advertising." They are not interchangeable. Advertising is only one form of marketing.
The marketing mix, however, encompasses a vast array of disciplines, including product design and packaging, channels of distribution and inventory levels, personal selling and public relations, warranties and discounts and, yes, advertising.
To compete, today’s small business must use that entire array of disciplines effectively and efficiently.
Small businesses don’t have the budgets of their bigger brethren. They can’t afford to spend millions on television in order to achieve awareness or build market share.
Small businesses must substitute cleverness for cash. Being in the right place at the right time is more important than inundating a customer with witty phrases and catchy jingles.
The secret is to know your customer. Segment your target as tightly as possible. Determine exactly who your customers are, both demographically (age, sex, income level) and psychographically (lifestyle, buying habits).
Eighty percent of your sales come from 20% of your customers. If you know the buying habits and demographics of that 20%, you can target others with similar characteristics.
Then if you decide to use media advertising, you can match your customer with the media. Choose only those media that reach your potential customers – and no others. Reaching anyone else is waste.
For example, many media now segment their audience. A syndicated cable television show may appeal to an extremely limited segment; trade magazines and hobby magazines may appeal to very small groups of people; some direct selling and research services can even predict buying habits city block by city block.
For instance, radio is ideal when targeting your customers based upon their attitudes and lifestyle. Every radio station worth its salt publishes a list of both the demographics and the buying habits of its audience. Listeners of country-and-western music have very different buying habits than listeners of classical music, or rhythm and blues, or heavy metal.
Billboards are an ideal way to target your market geographically. If your customers are principally in Waukesha County, you can blanket the area without wasting a lot of money on people who will never come west to shop for your product or service.
Don’t use the expensive billboards on the interstate. Use the ones on major streets, the ones that serve as feeder routes to the interstate. Much better bang for the buck, and much less waste.
If you decide to use advertising as a part of your marketing mix, choosing the right media will help you maximize your advertising dollar, firmly establish your market niche, and avoid that wasted 50%.
Robert Grede, author of "Naked Marketing – The Bare Essentials," is an adjunct professor of marketing at Marquette University and a marketing and strategic planning consultant. He can be reached at www.thegredecompany.com.
