Business

Monday 23 April 2018

Part Three: Marketing strategy on a shoestring budget

Start your own business: a six-part series

Three: Marketing on a shoestring budget
Three: Marketing on a shoestring budget

Thomas Cooney

Recently I received a request to advise an entrepreneur about the difficulties that they were having in promoting their business. Their product was for use in new houses and so the entrepreneur was contacting builders throughout Ireland.

Part of the email contained the following information: "I have sent out a large number of emails and letters all over Ireland, but did not get a single reply. I have also distributed over 8,000 flyers. I have placed ads on four websites, on my own car and by the building where my office is. I can't understand what I'm doing wrong. Maybe you could help me solve this problem and show me where I'm making a mistake."

Possibly the most important marketing element of any small business is to break your market into small segments. Do not think that everyone is your potential customer, but instead focus your attention on the small market segments (groups of customers) from which people are most likely to buy your product or service.

In this particular example, the entrepreneur is operating in the building industry and while builders will ultimately pay for the product, it is architects and quantity surveyors who will actually decide whether the company's products will be used (or not). A database for all architects and quantity surveyors in your local county can be developed quite quickly and cheaply, because anyone outside of these two groups is not the primary market.

The next marketing question that you need to address is: why should somebody do business with you? Alternatively stated, what is your UNIQUE Selling Point? Usually, the answer is based around one of three propositions: (1) you are the cheapest; (2) you offer something that nobody else locally is offering; or (3) you look after a specific group of people better than anybody else. There are two pieces of advice to answering this question: (1) you cannot be everything to everyone so focus on a small target market; and (2) it is difficult to be the cheapest when you are a small company and people who buy from you on price are not loyal customers.

Having decided on your target market and your USP, you must work out the best way to promote to potential customers. Mass advertising is too expensive and generally does not work unless the target market is quite large. In this situation, distributing 8,000 flyers is a waste of money because they are not hitting the target market effectively. Ads on a website will only work if architects and quantity surveyors professionally use these websites (which I suspect will not happen). And almost all unsolicited emails and letters get dumped immediately, while advertising on one's car does not offer a professional image.

In the situation highlighted, the better option would be to take two targeted actions: first, take a stand at an exhibition/show/conference in which many of these people will attend. This is a great way to build leads as you get the opportunity to meet them face-to-face. Second, if you want architects and quantity surveyors to adopt your product then the most effective method is to meet them in their offices and explain the benefits of your product. Whatever business you are in, promotion works most effectively if it is highly targeted towards your market segment and you are meeting people face-to-face.

Another consideration is your website. A website will only ever be useful if it acts as a positive promotional tool for your business. Please ensure that your website has perfect English, that the contact details are clearly stated, that the benefits to your customer are clearly shown (not just what you do) and that the website is professionally presented.

While working with owner-managers, I spend a great deal of my time getting them to focus. Entrepreneurs start a business with one idea but as soon as they have the business up-and-running, they have a million other ideas. This usually means spreading their resources and time far too thinly and doing nothing properly. Again, think of good business practices and you will see that they are the firms who focus on being the best in a particular market and who do a small range of activities really well. Good marketing does not need lots of money but it does require you to be smart.

Thomas Cooney is Professor of Entrepreneurship at the Dublin Institute of Technology and Chair of the ICSB World Entrepreneurship Conference which will take place in Dublin from June 11-14. More details on the conference can be found at www.icsb2014.org.

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