Word of Mouth

One of the most effective types of promotion is free — it’s called word-of-mouth. Happy customers tell approximately three to five friends or relatives about their good experience with your business, and as those friends or relatives tell their friends or relatives, the positive buzz for your business begins to build. Unfortunately, however, word-of-mouth advertising has a dark side too. A dissatisfied customer will likely tell nine or 10 others about his or her unhappy experience, and they in turn will not only tell others verbally, they might even decide to post it online in a blog or review site. Yikes!

The moral of this story is twofold: (1) provide the best possible products and services so there’s no reason for customers to complain; and (2) don’t limit your advertising to word-of-mouth; take control of your message by creating an actual advertising plan.

 

Branding

First Impressions Do Count

A company’s brand epitomizes the business and communicates to the public exactly who and what you are all about. It’s the image you want to create, the impression you want to make.

A good logo is the basis of any business identity package, but it is just the beginning. You’ll want to use it practically everywhere — on your business cards, letterhead, signage, website, boxes, bags, receipts, advertising, etc. It needs to be clean, well-designed and professional in appearance. If ever there was a time when you should not cut corners or go for the lowest bidder, this is it. Hire a skilled professional to design and execute your logo.

Aside from the look of your business, the words you use matter too. Your language, whether as a slogan, the copy on your website or the recorded message on your answering machine, should reflect and enhance your company’s culture and personality.

Advertising Basics

Set a Budget

One way to develop an advertising budget is to set aside a percentage of estimated annual sales. As a brand new business owner, research your industry to find out what other businesses are producing annually in sales. Ask local business owners operating similar firms that are not in direct competition with yours or speak with owners in the same business that are located outside your service area. When you arrive at an estimate, multiply that figure by the percentage of sales you plan to put toward advertising, which might be as low as 2% if your business is well-established with a loyal customer base or as high as 10% if you’re brand new and eager to let customers know you exist. Keep in mind that this percentage can vary from month to month depending on cash flow, actual sales and changing market conditions. In a traditionally slow sales month, for example, you might want to boost advertising expenditures in order to increase sales.

Decide WHAT to Promote

Some products and services have greater promotional appeal (money-making power) than others or lend themselves to being promoted during a particular month of the year. To determine which products to promote and when, check the month’s heavy traffic items and seasonal sales charts; give extra emphasis to new and expanded departments; take advantage of cooperative (co-op) advertising programs that divide advertising costs with the manufacturer under certain guidelines.

Decide WHEN to Promote

The most effective advertising offers customers what they want, when they want it. With that in mind, your advertising schedule should allow plenty of time for you to order stock, prepare copy and layout for ads and coordinate in-store display materials before the ad appears in any media. This typically means deciding a month or more in advance of the date your ad will run and working backwards from there to ensure that all materials are ready to go in plenty of time.

Decide HOW to Promote

Incorporate as many types as possible: paid advertising, public relations, social media, personal sales, telemarketing. Regardless of the promotional vehicle you use, keep in mind that frequency and continuity are more important than size/length of the ad or the amount you spend on it.

Media Placement

Choosing a Vehicle

There are dozens of advertising vehicles competing for your consideration and, unless you have unlimited funds, you must decide where best to place your advertising in order to reach your target market in the most cost effective way. Your choices include traditional vehicles such as print and broadcast media, outdoor advertising, specialty advertising and direct mail as well as a rapidly growing list of nontraditional vehicles such as websites, email marketing, social media and mobile apps.

In making your media selections, evaluate the various options available from your potential customer’s perspective. You may not read the daily newspaper, listen to NPR or follow anyone on Twitter or Facebook. But your target market might and, if so, that’s where your message needs to be.

One more important rule to remember: Avoid spreading yourself too thin. A successful advertising campaign relies on consistent exposure and frequent repetition. Twelve quarter-page ads, placed once a month in a single magazine, are more effective than a 60-second television commercial airing just twice in one week.

Newspapers
Evaluate large circulation daily newspapers as well as small circulation dailies, weeklies and shoppers to determine which vehicles best reach your target market.

Magazines and Periodicals
Magazines are typically more targeted than newspapers in both subject matter and audience. Ad space and production costs are generally higher due to their high-quality format and effective use of graphics, color and typography. Before placing ads in any one magazine, study its circulation numbers and reader demographics to be sure that your message will be reaching your desired target market.

Television
Many small-business owners shy away from television ads even before evaluating the cost/benefit ratio. Television does cost more per thousand potential customers reached, but some products and services can be promoted effectively using television’s unique features.

Radio
Radio offers many of the benefits of broadcast advertising without some of television’s high costs. The benefits of radio include its intrusive nature (you’re captive if listening while driving), targeted/specialized audience and local market appeal. Like TV, however, radio ads may have a short life span or low audience comprehension; people often listen to radio without paying attention.

Direct Mail
Brochures, fliers, newsletters, postcards and coupons sent by “snail mail” give small business owners the opportunity to have direct, personalized contact with their customers. Mailing lists can be rented from direct mail companies or compiled from lists of existing customers to provide a pool of prospects with common demographic characteristics and needs.

Outdoor Advertising
Billboards, transit advertising and on-site signage reach selective geographic markets, but since exposure time is short, it must be attractive, readable and to the point.

Specialty Advertising
Giveaway items such as pens, pads, coffee mugs, paperweights, baseball caps and T-shirts imprinted with your company name and logo function as free “gifts” for customers and as business advertisements. For best effect, they should be inexpensive but not cheesy, useful and reflect positively on the image of your business.

Online Options

Consider Nontraditional Media

Company Websites
Many media consultants believe that a company website is the face of a business. At the very least, your website should be a place where potential customers can go to learn about your business and management team, the products/services you offer and how to contact you for more information. Depending on the nature of your business, your website also may provide a mechanism for existing and potential customers to shop online (e-commerce). A good website designer can help ensure that your website is mobile friendly from the start.

Email Marketing
Using an email distribution list, you can quickly send out promotions, newsletters or coupons. Just remember to abide by the CAN-SPAM Act; failure to do so can result in hefty fines. Be sure that every person on your distribution list has given permission to be on the list and has the ability to easily unsubscribe from your list if desired. Email marketing services can provide templates, help maintain your list and connect to your social media sites.

Social Media
Entrepreneurs who successfully utilize Facebook, LinkedIn, Twitter, Pinterest, Instagram and YouTube often find that in addition to an Internet presence, they’ve created a fan base. Beware, however; it’s easy to get so caught up in the social media frenzy, you waste precious time that could be better spent on other business-related activities. If you’re serious about utilizing this social media for business purposes, develop a strategy and determine upfront the amount of time you are able to commit to social media efforts.

Review Sites
A website that gathers customer reviews about businesses, products or services and location information can be your best friend if you offer quality merchandise and exceptional service — or your worst enemy if you don’t. Restaurants, hotels, retail shops and businesses providing personal service may find review sites like Google Plus/Local, Yahoo Local, Yelp, Urban Spoon and Angie’s List quite useful in drawing attention to their businesses. Consider adding links to your website and/or Facebook business page. Be sure to include contact information, a physical address and phone number, photos and a directional map if possible.

Measuring Results

Is Your Advertising Effective?

As you’re putting together your promotional plan, be sure to build in measurements of success. Determine an acceptable return on investment (ROI) and put methods in place to track the role of your advertising in helping your business reach desired goals. Ask customers how they learned about your product and/or services, so you can determine which advertising vehicles were most effective. Use online metrics (such as Google Analytics) whenever possible, but don’t neglect the value of printed registration forms and questionnaires or a friendly face-to-face chat with customers. You may be amazed at what you learn!

 

Public Relations

PR Has Value, Too

While it’s likely that your promotional efforts will center on advertising, you should consider including some public relations activities in your plan. Standard PR tools include press releases, feature articles, white papers, fact sheets, speeches and public service announcements.

As a promotional device, public relations is similar to advertising, but without the guarantees. When you advertise, you buy a particular space or time slot and you get to fill it with exactly what you want to say. With public relations, you take your chances by simply sending a story or PSA to a media outlet in the hopes that it will be used in some form.

So why bother with public relations? Two reasons: (1) preparing a public relations message costs less than creating and placing an ad; and (2) public relations activities carry a kind of credibility that ads do not. Everyone knows an advertising message was bought and paid for; a story that appears in the editorial columns of a newspaper, on the other hand, is perceived as being unbiased and, therefore, more credible.