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Find the Marketing Match That's Right for Your Business The technology revolution has changed the way business is conducted in the 21st century in some significant ways, but entrepreneurs should never lose sight of the fact that the basics of starting and running a company still apply. Chief among these "business 101" principles is the importance of marketing, a fact underlined in dramatic fashion by some research done at the University of Central Arkansas. The study was based on two surveys of businesses that had filed for bankruptcy during two separate periods, the first in 1995 and 1996, the second in 2001. The objective was to gauge the impact of technology and the Internet on marketing planning, and the results were conclusive. Even though many of the failed businesses in the second survey made extensive use of new technology in their marketing planning efforts, the technology itself had virtually no impact on their ultimate success or failure. Most of the failed businesses had done little preparation in target marketing and information gathering, which led to poor planning and poor marketing implementation, the study concluded. The following examples illustrate how a variety of small businesses have avoided those mistakes and the important role marketing plays in their continued success. Brothers Strong is a six-employee company that was founded in 1990. With annual sales of about $1.5 million and a yearly marketing budget of $70,000, the family-owned business operates in the competitive residential remodeling industry and has recently expanded into the commercial segment. Brothers Michael and Tommy Strong got their first exposure to the business working for a home builder while attending college. Don Strong, their father and the company's president, joined forces with them after they graduated, and they incorporated as Brothers Strong in 1990.
"Marketing is a key component of our strategic plan that gets reviewed every month," he says. The management team reviews the number of sales leads generated, their sources, number of appointments, number of proposals and number of projects initiated. All are tracked based on the cost of the marketing tactic involved, which lets the company know the number of projects and the average project size being generated by each of its marketing techniques. Brothers Strong utilizes four primary tactics in its marketing efforts:
Strong believes the company's collateral packages are one of its most effective marketing tools. Other marketing successes include a recent redesign of the company logo, the detailed tracking of lead sources and cost-per-lead it conducts, and one-on-one networking with designers, realtors and architects. "That kind of networking is a precise, rifle-shot kind of marketing, as opposed to a shotgun strategy like Yellow Pages advertising," he says.
TRIAL AND ERROR The company has also learned from past marketing miscues. While direct mail pieces with coupons generated a lot of calls, the tactic was deemed a failure because the calls were not the type Strong Brothers wanted. Billboard advertising proved similarly unproductive. "Folks looking to spend upwards of $150,000 remodeling their kitchen ask friends and professionals for referrals," Strong says. "They don't copy down a company name they see on a billboard or a coupon."Strong Brothers has had a formal marketing plan for several years and reviews it regularly. "We have had to radically alter the plan based on available cash flow to carry it out," he says. "Our 2004 goal includes a 15% increase to try to capitalize on the coming economic rebound, which we believe will start to take shape in the first quarter."
With more than $500,000 in sales and an annual marketing budget of about $25,000, Jubilant Cargo's primary marketing objective is growth, and the challenge it faces is communicating its ability to deliver high-grade customized products on short notice. It relies on a variety of marketing techniques to do that, including referrals, customer-traffic advertising, Yellow Pages listings and an e-commerce option it has developed that customers can offer their own employees. "The major driver for us is repeat business from satisfied customers, which accounts for about three quarters of our sales volume," Lepka says. "Referrals generate about 20 percent, but the remaining 7 or 8 percent is where the growth comes in, so our marketing tactics are predominantly geared to growth. That gives us manageable growth and has allowed us to improve over the years." One growth-driving marketing strategy that is working for Jubilant Cargo is technology-based. It has developed a Web site where it maintains a catalog store for its customers' employees. Management chooses which products it wants to offer its workers, and employees are given a password that gives them access to the site but only to the items the customer has specified. The company uses advertising in magazines and trade journals to generate customer traffic. "Yellow Pages can also be effective if you use it right," Lepka says. "It is important to qualify the source of all new sales leads so you can keep track of how effective your various marketing techniques are."
ASK FOR HELP Lepka's favorite source of new business is referrals from existing customers, and he says other business owners should not be afraid to ask for them. Referrals are simple and easy to track, and an important part of using them as a marketing tactic is remembering to thank the people who give them to you, he adds. Marketing techniques that have not worked well for Jubilant Cargo include mailers and cold canvass calls, with both providing very little return for the effort, Lepka says. For Christine M. Levin, owner of a COMPUTERTOTS/COMPUTER EXPLORERS franchise, marketing is a multi-level endeavor. The main thrust of 10-year-old business, which employs seven people, is to market to preschool and private school directors. From there, she says, it is "a whole other sell" to the parents of students. COMPUTERTOTS/COMPUTER EXPLORERS provides computer education and training programs for childcare sites, preschools and public and private schools, as well as a parent program that is offered as an extracurricular class. Levin's first marketing challenge is to get face time with decision-makers who can her program into the school. Once it is established at a site, she has to find an effective way to showcase the extracurricular program to parents.
Houston-based ICED is well-known in the franchise world for the successful marketing programs it has developed for the other eight franchise brands in its stable, and Levin hopes it will do the same for COMPUTERTOTS. However, she expects a marketing tactic she currently relies on-direct mail-will continue to play an important role. No matter what type of business you have or are thinking of starting, take the time to find the right marketing plan to meet your needs.
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