Small business marketing tips to profit in ANY economy

Quote from Mr. or Mrs. faltering business owner, “Oh no, the economy is “bad” I better not buy anything. I better cut back on my marketing. I think I should save my money just in case the “bad” economy cuts into my cash flow.”

Does this sound familiar? Let’s move forward 6 months and ask Mr. or Mrs. faltering (soon to be failing) business owner, “How’s business?” They will reply “Oh this economy is killing me. Sales are way down. I’m not getting any new customers and I hear from fewer old customers than I used to.”

I say, “Hmmm, Mr. Owner lets look at a few other factors. Last year in the first quarter, you spent $10,000 on marketing and this year, $1,500. Last year, you sent your newsletter out monthly and this year, you cut it from the budget. Last year, you conducted sales training every week but this year, you decided the trainer was too expensive. Last year, you sent every client a thank you card for visiting the store and also sent out birthday cards. This year, you cut it from the budget.

Now, let’s look for the underlying cause of your sales shortfall. Because the media telling you the economy is bad and people are not buying, you slashed your budget on strategies that brought you clients, sales and profits.”

Hey, I’m a realist! I’m aware that the economy is faltering but the worst thing you can do is to stop marketing. If you are going to cut marketing, cut the marketing that is not delivering a measurable, positive return. If you don’t know your return, you need to calculate it. Drop useless image advertising that doesn’t deliver clients or prospects.

Learn and implement direct response marketing. That’s the marketing you see that has an offer and tells the prospect to act. If it’s good, you get a response and make money on it. If it’s not good, nothing happens and you lose money on it. Set a system to measure and track results. Determine your ROI and remember client lifetime value. If you break-even or lose on the initial transaction but know the client will be highly profitable over the next year, that’s good!

The lesson here is simple. A down economy is a bad reason to cut good marketing and a good reason to cut bad marketing!

Up your profits in a down economy – How to open a cash windfall

Have you ever “mined” your client list? If you have a list of satisfied clients, an email list, a list of vendors and a personal network, you are probably sitting on a gold mine from which you can “extract” a cash windfall.

In my previous couple of posts, I referenced the importance of regularly “touching” your clients. If you’ve been doing that (or even if you haven’t done so regularly), you’ve been building and cultivating a relationship with them since they have been buying from you. You can leverage this relationship for immediate cash.

How do you go about doing this? Sit down in front of your computer and write a letter to your best clients and tell them about your situation, that you need to raise cash to help build and improve your company. In return for their support, you will give them special treatment, special discounts and bonuses just for them.

This is a very powerful technique that leverages one of your most important Hidden Marketing Assets, the relationships you have cultivated over the years. Will it work for you? Only testing will tell but the odds are in your favor because your clients trust you and people enjoy helping people they trust and have given them good service

Now, if you really want to leverage this concept, start thinking about whom you can create a joint venture with and make a special offer to their client and prospect list. I’m not talking about the BS internet joint ventures where a guru gets other gurus to promote their latest and greatest products, without seeing it or having any idea of what it does. You know what I mean. You get the same email from twenty people saying their “good friend” has the most amazing money making system in the world

I’m talking about a genuine relationship with a business owner you know and trust. Somebody who has the same beliefs about quality and service that you do. I’ll go more into structuring joint ventures in another post but start thinking of how you can approach clients and prospects with a very special offer.

Up your profits in a down economy – Increase client value

In this order, these are the easiest people to sell to:

1. An existing client
2. A past client
3. A referred or endorsed client
4. A cold prospect

This list is an established fact. Even knowing this, where do the vast majority of companies spend the majority of their marketing dollars and effort? On number 4, the cold prospect. Nearly every client or prospect I speak with spends little, if any of their marketing dollars strengthening their relationship with their existing clients.

The thing is, most of them realize they should be keeping in touch with customers but still do nothing about it. Very few companies even have any process or method of getting basic contact information like name, address, phone number, email address or a list of the products purchased by their clients. According to a study conducted by the Direct Marketing Association, for every month that passes without your contacting your clients, there’s a 10% reduction in loyalty to your business.

For about $10 to $15 per client per year, nearly any business can build a customer contact program that will dramatically increase their sales and profits at a fraction of cost of obtaining a new client. Ideally, you will have 12 to 14 contacts per year. Rather than looking at this as an expense, look upon it as an investment in the lifetime value of your clients.

The key to success in your client contact strategy is to include an offer, a coupon, a discount or other reason for your clients to contact you and purchase additional products or services from you.

In my next post, I’ll list some of my favorite client contact strategies and tactics you can use to increase your profits.

Till then…
Dedicated to multiplying your sales!