The common misconception seems to be that marketing works as a ‘bolt-on’ and if sales are a little slack you can ‘do’ a bit of marketing to generate some new business.
That is one way to do marketing, but it will contribute little to developing your business over the longer term if its application is limited solely to lead generation exercises.
As with all business investment, there should be a rigorous evaluation procedure before committing to any expenditure. And yes, marketing should be thought of as an investment.
This means that the potential returns need to be carefully analysed and the marketing programme should be developed with a view to maximising those returns over time. Would you spend £5,000 on computer equipment without first understanding the payback? Marketing should be given the same scrutiny.
Before starting on a marketing campaign you need to ask all sorts of questions about the business, many of which might at first appear irrelevant. However, only when there is a thorough understanding of the business can there be sufficient context to produce an effective campaign.
The starting point is establishing the overall vision and underpinning values of the company together with its specific objectives over the shorter term.
This then forms the basis of integrated marketing, the objective of which is to maximise marketing Return On Investment (ROI) by being consistent in three ways:
1. Consistent with the values and image of the company;
2. Consistent with other marketing related activities e.g. brochures, premises design etc.;
3. Applied consistently over time.
All companies have an image. Many businesses decide they want to update their image by, for example, redesigning their logo or repositioning their products. But the identity is actually owned by their customers who ascribe the business with a certain set of characteristics.
So the priority is to understand how customers view your company and ensure that this is in line with your own perceptions and values. If your values are based around providing a friendly, open and honest service but your customers actually find you hard to deal with as they think your procedures are too rigid, there is clearly a mismatch.
This needs to be resolved if you are to avoid your marketing becoming an expense rather than an investment. If your marketing is at variance with people’s expectations from your business, they are likely to be considerably less receptive to your communications.
Planning really is the key to successful integrated marketing. All the different elements need to be thought through and developed to work together in harmony: advertising, brochures, promotions, direct mail, telesales, pricing policy, discounts, PR, websites, email, packaging, design, customer service etc. etc.
This is where understanding the values becomes so important (and most business owners take this for granted, so they are not written down – they need to be). Integrated marketing starts with how you answer the phone; having an appropriate identity for your business which is reflected in stationery, premises signage, branding etc.; the quality and style of your printed materials; and how you deal with customer complaints.
All these elements should reinforce the message of what the company stands for. When this happens, advertising works. It works because it is consistent with the customer’s expectations and experiences of your company.
You also need to consider how you will handle response once your campaign breaks. This is where there has been a backlash against offshore call centres. Too often people phone in and find that no-one knows about the offer. The result: the advertising has actually damaged the brand. Do not be complacent, though. Similar things have happened in the UK, even without using call centres.
An essential part of integrated marketing, therefore, is internal communications: making sure that everyone in the business knows what is happening and how they are expected to respond.
This also has implications beyond reception and customer service. Was production involved in the early discussions to make sure that they are geared up to meet expected demand? Did you check with buying that they could get supplies of the bigger tubes needed for your 50% extra free offer?
Finally, once you have put all that effort into developing an effective integrated marketing campaign, get the most out of it by applying it consistently over time. Think of new and innovative ways of reaching your customers and prospects, but always keep it relevant both to their needs and to their previous experiences of your marketing.
Sunday 27 July 2008
Friday 11 July 2008
How To Package Your Business
On a trip shopping in town recently, it struck me how we buy everything packaged.
The weekend Do It Ourself begins by picking it ourself, packing it ourself and pushing it ourself.
Cars are now available from supermarkets with no test drive. Video recorders and DVDs are sold in sealed boxes and only refunded if faulty. Delivery is always extra. The internet – the next ‘big thing’ in retail – works on looking, but not touching. Lap dancing (male or female) seems to be the nearest we can get to personal service.
The average salary in the United Kingdom is £23,000 a year. Don’t ask why you don’t get that – but it’s true. The average worker is gainfully employed for 2,000 hours or less. The average wage is £11 an hour – forget the governmental confidence trick of minimum wages, only burger joints and cleaners go that low.
The average call-out charge for artisans – plumbers, drain cleaners, electricians – is £65 per hour. They can buy a new DVD hard drive recorder for two hours’ work. A bottle of whisky for ten minutes effort.
The connection between all of the above ramble? Products are cheap, people are not.
Which is why it is so difficult for those in business to figure out how much they should be charging for their services. Here is a simple approach.
As we’ve said, the average hourly rate is around £11. Starting your own business is riskier than employment so pick a rate of twice the average. The minimum return for any labour you bring to your business should be £25 per hour, or around £56,000 per year.
‘They’ll never pay that. No one can ask £25 per hour for cleaning or caring.’ So don’t give a price per hour – give a price for the total job: ‘To clean this room weekly to our gold quality hygiene standard will be £25.’
You now have a target income projection for your business. Will whatever I sell or do provide an income of £25 per hour? Do I need to sell 20 burgers at £2.50 to provide that amount? How many boilers must I service to produce £25 return for my labour?
Now on top of this add an amount to cover your costs and expenses, the amount of profit you require and also some return on your capital employed.
Add all the yearly insurances, rentals, leases, stationery, vehicle expenses, repairs and advertising. Add anything you spend on running the business. Divide this by the number of items or services you anticipate selling. ‘I service 800 boilers each year, and my expenses are £8,000 – so each job carries a premium of £10.’
A business is not buying a job. A business is an investment made with your funds and in view of the risk demands a return. Be generous and stick on an extra 15 per cent return on any capital you yourself have put into the businesses. ‘I have invested £25,000 and I want 15 per cent return per year, which equals £15 per week.’
‘I will charge £25 for one hour, plus £10 fixed costs for my expenses, plus a 15 per cent return on my capital of £4 per hour means I want £39 per hour. Let’s say £40 for cash! So if it comes down to twiddling my thumbs for 60 minutes or working for just my expenses – what do I do?’
Simple – work for just your expenses, because you are spreading the costs over a wider base.
You have now realised the first principle of ‘No Jet’ economy airlines. Fill the craft with passengers at any price. As long as the plane is full, the profit will come. Maybe only a few quid per flight – but any profit is a good profit.
The weekend Do It Ourself begins by picking it ourself, packing it ourself and pushing it ourself.
Cars are now available from supermarkets with no test drive. Video recorders and DVDs are sold in sealed boxes and only refunded if faulty. Delivery is always extra. The internet – the next ‘big thing’ in retail – works on looking, but not touching. Lap dancing (male or female) seems to be the nearest we can get to personal service.
The average salary in the United Kingdom is £23,000 a year. Don’t ask why you don’t get that – but it’s true. The average worker is gainfully employed for 2,000 hours or less. The average wage is £11 an hour – forget the governmental confidence trick of minimum wages, only burger joints and cleaners go that low.
The average call-out charge for artisans – plumbers, drain cleaners, electricians – is £65 per hour. They can buy a new DVD hard drive recorder for two hours’ work. A bottle of whisky for ten minutes effort.
The connection between all of the above ramble? Products are cheap, people are not.
Which is why it is so difficult for those in business to figure out how much they should be charging for their services. Here is a simple approach.
As we’ve said, the average hourly rate is around £11. Starting your own business is riskier than employment so pick a rate of twice the average. The minimum return for any labour you bring to your business should be £25 per hour, or around £56,000 per year.
‘They’ll never pay that. No one can ask £25 per hour for cleaning or caring.’ So don’t give a price per hour – give a price for the total job: ‘To clean this room weekly to our gold quality hygiene standard will be £25.’
You now have a target income projection for your business. Will whatever I sell or do provide an income of £25 per hour? Do I need to sell 20 burgers at £2.50 to provide that amount? How many boilers must I service to produce £25 return for my labour?
Now on top of this add an amount to cover your costs and expenses, the amount of profit you require and also some return on your capital employed.
Add all the yearly insurances, rentals, leases, stationery, vehicle expenses, repairs and advertising. Add anything you spend on running the business. Divide this by the number of items or services you anticipate selling. ‘I service 800 boilers each year, and my expenses are £8,000 – so each job carries a premium of £10.’
A business is not buying a job. A business is an investment made with your funds and in view of the risk demands a return. Be generous and stick on an extra 15 per cent return on any capital you yourself have put into the businesses. ‘I have invested £25,000 and I want 15 per cent return per year, which equals £15 per week.’
‘I will charge £25 for one hour, plus £10 fixed costs for my expenses, plus a 15 per cent return on my capital of £4 per hour means I want £39 per hour. Let’s say £40 for cash! So if it comes down to twiddling my thumbs for 60 minutes or working for just my expenses – what do I do?’
Simple – work for just your expenses, because you are spreading the costs over a wider base.
You have now realised the first principle of ‘No Jet’ economy airlines. Fill the craft with passengers at any price. As long as the plane is full, the profit will come. Maybe only a few quid per flight – but any profit is a good profit.
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