NFIB

Build Advertising Success One Step at a Time
04/ 03/ 2002


Word of mouth is great but it can't do everything. Learn about the different aspects of advertising available to you and carefully select your choices. Then make a plan and stick with it for a while. Learn how in today's workshop with help from Workshop contributor Pamela Mills.

Small businesses often make the same mistake: placing too much faith in the power of word of mouth. Great word of mouth is an important part of any business's success, but it has limitations, says Bob Lupinacci, founder of Pencraft Communications (Stamford, Conn.) a marketing and communications service geared toward small business. Consequently, he says, you simply must advertise your business.

Larry Oskin, president of Marketing Solutions, a marketing services agency headquartered in Fairfax, Va., agrees. "To remain competitive, owners must invest in marketing and advertising. Advertising is not a cost," he says, "it is a critical business investment to ensure future success."

Though putting together an advertising plan may seem intimidating, taken step-by-step the task becomes less daunting.

Set a budget:

Earmark at least three to five percent of your total annual gross sales for advertising, marketing and promotions, Oskin says. During the first two years, be prepared to budget slightly higher, but no more than 10 to 12 percent to protect profits.

Lupinacci suggests that you think about what you want to accomplish. Is the goal to attract new customers, to make higher sales from existing clients, or a combination? Marketing methods will vary depending on the goals. Once you have figured out your objectives, it's easier to determine a budget.

Educate yourself:

Whether you decide to use a marketing consultant or go it alone, knowledge of basic marketing and advertising principles is essential.

Learn from others. Create a library of marketing and promotional ideas that appeal to you, says Oskin, and keep this handy for easy reference. Also, figure out your target customer. Imagine your "ideal" client (looking to your present customers can help you flesh out this ideal) and then determine the best way to reach these new prospects.

"Research all the likely advertising sources such as yellow pages, community newspaper, billboards, radio, cable and direct mail opportunities," Oskin says. "Ask a salesperson to present demographic research about their audience and request a specific proposal for reaching this audience, with your budget in mind. They will provide free research and information based upon marketing to your desired target."

Select the best advertising vehicle

This will depend upon a combination of budget and objectives and will usually involve a measure of "trial and error", as you test the waters. You may want to try:

* Direct mail. The advantage of direct mail is that it can be geographically targeted (by zip code) to reach your likeliest customer. The downside is that solo direct mail can be costly. One way to lower costs is through cooperative direct mailings. However, says Lupinacci, cooperative direct mailings often focus too much on price, making people think they have to discount in order to get business. This also conditions customers to expect low prices. For these reasons, he thinks it is best to hire an independent direct mailing company and do a solo direct mail.

* Newspapers: Can be more affordable than direct mailings. The downside is they are usually not able to geographically target who will be seeing the ad. Also, the positioning in newspapers tends to be bad. Small business ads often are placed towards the back sections or other less-than-desirable spots.

* Radio: This can be an effective venue, says Lupinacci, but finding the right audience can be tough, especially in large metropolitan areas. Oskin advises that you avoid radio advertising at first, unless you are in a very small community and the rates are extremely cheap.

* Cable TV: Can be a good choice, especially if your business is a visual one. The pricing can be very reasonable in many areas. The fact that cable TV spots can be targeted to specific areas and to a variety of viewer demographics is also a plus.

Whatever the advertising vehicle chosen, it is best to focus on no more than two or three each year. This will allow you to manage the frequency and saturation needed to cover your targets. Advertising requires repetitiveness and consistency (even if your business is seasonal) to be effective.

Measuring success

Each medium has its own response time, and though it is possible to manipulate people's responsiveness to advertising via time-limited promotions or coupons, advertising is still a waiting game.

Give advertising a chance to work. Avoid counting newspaper or direct mail responses. Your campaign's success can not be calculated in this way. "Success should be measured in how big your gross sales and your net profits are, not by how many people bring in copies of your ads," Oskin states. "If the ads help your business to grow to a higher level of sales each time, then you are achieving success. If you are bringing in new clients, and selling more products and services to your regulars," he concludes, "then your advertising has been effective."

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