Download rm-marketing guide 2

Introduction
Perhaps because of this, marketing is much
misunderstood. Marketing is not the murky practice of
persuading people to buy things that they do not need,
or which companies would otherwise be unable to sell.
Back to basics
Marketing is all around us. It is in
every product we buy, every store
we visit, even the magazines and
newspapers we read. Every choice
we make in our consumer society has
been shaped to a greater or lesser
extent by the forces of marketing.
In fact, marketing is so prevalent for
precisely the opposite reason. It
forms a vital link between
businesses and their customers.
Done well, it is crucial to the
success of companies large and
small. It addresses the most
important aspect of competition
and success - assessing demand
so that firms can produce, promote
and sell only products that people
want to buy, when and where they
want to buy them, and at a price
they are preparedto pay.
That might sound simple, but there
are a number of elements to
successful marketing - some of
which are often overlooked:
Insight: It is vital to truly understand
customers - their wants and needs.
Is this something that you can really
claim to do? How well do you really
know them, and when was the last
time to you asked them what they
thought of your products? Are you
sure they are 100% happy?
Competitiveness: You can have the
best product on the market, but if it
is not priced competitively, it simply
won't sell. When was the last time
you looked at the competition?
Are their products similar to yours?
How do they compare on price?
Awareness: People will not buy
your product if they are not aware
of it or cannot find it. What are you
doing to publicise your business
and its products and where are
they on sale? How do you know
that this is working? Are you getting
value for money?
These are just a few of the things
that you should think about when
setting out to market your business
and its products. Depending on
your line of business, there could
be a lot more, but that shouldn't put
you off.
It's important to understand just
how important marketing is. Only
when all the elements of marketing
are in place can you create, price
and promote products with any real
confidence. Anything else is simply
guesswork - and very risky when
your livelihood depends on the
outcome.
Paul Gostick
International Chairman
Chartered Institute of Marketing
Marketing your business and
products need not be difficult or
daunting. It is likely that much of the
work you need to do in order to
market effectively is already done
under another name - which is why
it is important that marketing should
form part of wider business
planning.
There follows a series of articles
offering practical guidance on every
aspect of marketing. They will help
you recognise the good work you
are probably already doing, and
identify the extra things you can do
to turn this into an organised
approach to marketing that will
really pay off in the long term.
We hope that this guide will answer
most, if not all, of your questions
and give you plenty of food for
thought. If it leaves you wanting
more, please visit www.cim.co.uk
where you will find a wealth of
information on all aspects of
marketing, or contact Royal Mail's
small business team on
[email protected].
Paul Gostick
International Chairman
Chartered Institute of Marketing
Chapter One
But this process is of course never that simple. The
conditions in which we operate are constantly
changing, and many of these changes are beyond our
control. We face competitors, anxious to lure our
customers with better, cheaper versions of our
product. New technologies can quickly make today's
must have product look well past its sell-by date.
Suppliers of raw materials come and go, staff leave,
legislation changes. Then of course, we are battered
and bruised by the wider economic issues - the
prevailing financial climate that can bring a healthy
business to its knees.
Research & planning
The principle of the market has not
changed since time began - those
with goods to sell chase those with
money, and those with money chase
those with goods to sell. Marketing
is what brings these two groups
together. All you have to do is find
out what your customers want, and
give it to them.
But many factors we can control.
Identifying, understanding and
dealing with these factors starts
with market research, which is a
critical part of marketing and
business planning:
Market research
Many people who have made
their fortune in business attribute
their success to entrepreneurial
flair and an instinctive ability to
spot an opportunity. But business
is not like betting on a horse race
- backing a horse because it has
a sparkle in its eye and then
crossing your fingers is not often
a successful approach.
For most successful businesses,
research is crucial. Whether you
undertake organised market
research or a straw poll of friends
and family, it is critical that your
understanding of customer
demand is based on real feedback
rather than gut feel or guesswork.
That's not to say that there is no
room for innovation. Creativity,
bravery and sound instinct are all
vital when making decisions about
your business. But your plans will
be much more likely to succeed if
these decisions are supported by a
good grasp of the facts. This is
where research comes in.
What do I need to know?
Businesses do not operate in
isolation. Management must be
aware of what is going on in the
wider world and respond
intelligently to those
changes. The activities of
competitors (such as price
reductions or new product
launches) or changing tastes and
emerging trends can have a
significant effect on the
competitiveness and success of
your business. Gathering
information about these factors
should be central to business
planning.
launched all the time, detail will be
important. But if your business
operates in a relatively mature
market, with well-established
competitors and predictable
product release timetables, it will be
less vital.
In general, market research should
focus on some or all of the
following key areas
The product: Assess how your
products compare with those of
competitors. Research in this area
could also cover possible
improvements and development
plus an assessment of how new
technologies could present an
opportunity or a threat
But research is not something that
you can do once and then forget
about. The business climate can
change dramatically and rapidly - it
is easy to be caught unawares.
Market research should protect you
from these changes, by providing a
continuous flow of information - a
system to provide early warning of
challenges and opportunities
around the corner.
The customer: Find out who you
are selling to and look into what
other groups of people might be
interested in your products. This
research could cover levels of
satisfaction among existing
customers, or help to identify new
markets for existing or new
products
How much is enough?
The amount of detail you should go
into depends on whether you can
afford to pay for professional help,
and the nature of market you are
in. For instance, if you have lots of
competitors and new products are
Promotion: Look at your
promotional activities to assess
how effective they are at raising
awareness of your products
amongst potential customers and
whether they are actually driving
your customers to buy. This
research could assess general
awareness, the use of the sales
force or the image and reputation
of your business
Price: Look at the wider market to
see if you can charge more, or if
you need to cut your prices. This
research could include a study of
perceived value for money amongst
existing customers, or the prices
charged by the competition
Distribution: Analyse the way your
products reach the market. This
research could examine packaging
sizes, the effectiveness of
wholesalers or the cost of transport
How do I know what to ask?
Before embarking on lengthy (and
possibly costly) research, identify
which questions are crucial, and
what is merely 'nice to know'.
Remember, while the answers to
certain questions will be reliable
(such as 'how many people live in
Birmingham?'), some questions
(such as 'how many people in
Birmingham want to join a fitness
club?') are less easy to answer with
certainty - answers will be subject
to interpretation and will change
over time.
Those definite questions offer an
obvious starting point, and can
often by answered for free by
looking on the Internet (try the Office
of National Statistics at
www.statistics.gov.uk). CIM's
information and library service also
has a wide range of market
information and research.
The information you gain from
these questions should help you to
build a better picture of your market
and decide precisely what other,
perhaps less definite, information
you want to find. Taking this
approach will help to ensure that
you don't waste time and money
looking for information that may not
be any use and that you don't end
up with more information than you
know what to do with.
Finally, a word of warning.
Remember that whilst market
research is a vital business
planning exercise, it does not give
you a crystal ball or a failsafe
business plan. People sometimes
can't or won't anticipate how they
will behave, they may simply
change their minds - and market
conditions can change overnight.
However, whilst no amount of
research will enable you to see the
future; effective, targeted research
provides a firm foundation for
today's decisions - and should
allow you to plan for the future with
much greater confidence.
Market planning
It's a sad fact that a great idea or
the best product is not the
guarantee of success that it might
be in an ideal world. There are
plenty of examples of technically
superior products losing out
simply because they were not
marketed effectively. Whilst the
businesses behind may have had
a clear view of what they were
selling to whom, they lacked a
plan that sets out how they will
sell it, where, when and why.
This is a very common complaint.
Many, especially smaller,
companies don't have a clear vision
of their future, are uncertain about
how to plan, and are put off
subjecting their business to the
calculated scrutiny that would
ensure that they met their goals. On
the face of it, marketing planning is
a difficult and time-consuming task.
But it need not be.
What do I need to do?
First you need to look at the health
of your business. Think about
where you want to be in two, five or
ten year's time. Your objectives may
be to turn a loss into a profit, to pay
back a loan, or to increase turnover.
The next job is to take a look at the
way your business currently
operates, decide whether or not
each function that you perform is
up to the task, and put a plan in
place to ensure that you can
achieve your objectives. Areas that
you might want to look at would
include your distribution systems,
your financial procedures, your
staffing levels and of course your
marketing.
An analysis of your marketing will
require a clear view of the external
factors that affect your business.
This means the opportunities for
future expansion and the threats
that could hinder your progress much of this should already be in
place if you have done your
research right.
At this stage, you may also need to
make a number of assumptions.
For instance, a restaurant owner
may order extra ice-cream in
anticipation of a hot summer and a
crèche operator may well take on
extra staff to prepare for the
relocation of a business to the area.
The trouble with assumptions,
however, is they can be wrong. Be
careful to make as few as possible
and be very wary of 'convenient'
assumptions that enable you to
duck out of difficult decisions but
have no basis in fact.
What should I do next?
Once you have assessed your
business and your position in the
wider market, you can go on to
think about your marketing
objectives and the strategies you
can put into place to meet them.
You will be able to create a realistic
but effective plan that creates an
effective link between your
marketing activity and the
opportunities before you.
But first, you will need a better
understanding of the marketing mix
and the promotional mix you can
employ to market and raise
awareness of your products and
services.
Chapter Two
The combination of activities you identify as offering
the best way to market your products or services
effectively to a particular set of potential customers
group is known as the marketing mix. It is also
referred to as the seven Ps - Product, Price, Promotion,
Place, People, Process and Physical Evidence.
The marketing mix
Creating an effective marketing plan
is about more than researching the
market and creating a wish list for
the future of your business. It is
about using the insight gained from
research, and the goals identified as
you look into the future, to put some
practical marketing activity in place.
This means making some very definite
decisions about exactly how you are
going to market your products now,
in order to put your business on the
road to those five year goals.
Why is the marketing mix
important?
Quite simply, you need to be sure
that you are marketing:
• The right product
• To the right people
• At the right price
• In the right place
• At the right time
For example, if you manufacture
pens, and have decided to target
schoolchildren, it would be more
appropriate to market coloured
ballpoint pens (product) at a low
price (price), sell them through
newsagents and stationers (place)
and promote them through posters
and other 'point of sale' materials in
shops (promotion).
Conversely, a marketing plan that
tries to sell children gold fountain
pens at a high price, selling them
through specialist outlets and
jewellery stores and promoting
them in glossy magazines and
Sunday supplements, would almost
certainly be doomed to failure.
If you are selling a service, or even
offer services linked to your
products, you also need to pay
close attention to the final three Ps who sells or delivers your services,
by what process are they delivered
and what physical evidence of their
value can you offer to prospective
customers?
What you should do
Make sure you have identified each
of your target customer groups.
Who exactly do you think will want
to buy your products? Can you
divide them into groups with similar
needs, e.g. parents, teenagers,
professional people or pensioners?
With each of these groups of
customers in mind, work through
the steps outlined below:
Product
Marketing is about identifying,
anticipating and satisfying customer
needs. Good marketing should start
with identifying a consumer need
and creating a product to meet it,
not seeing if you can fit your
product neatly into a consumer
need. Your market research should
have identified whether your
products are meeting the needs of
your customers and what they
really think of them. If you can, try to
build on that:
1. Create a system for collecting
and analysing feedback from
your customers so that ideas and
criticisms are fed into any new
product development activity
2. Ask yourself what stage of the
product life cycle your products or
services have reached. The
product life cycle is one way of
looking at how the marketing mix
links together. Products are said to
go through stages - an
introductory stage, a growth
stage, a mature stage and a
decline stage. At each stage a
slightly different mix is appropriate
3. Analyse the profitability of each
product/service you offer. Which
products/services make the
biggest contribution or provide
the highest profitability? Could
they be improved, adding value
with little cost?
Place
The means of distribution you select
will depend on the type of product
or service you are marketing. Your
choice will impact on pricing and
will help determine the best way to
promote them:
1. Are the people who buy your
products and services consumers
or businesses? If they are
consumers you will have three
main options:
a. Sell to wholesalers who will
sell to retail outlets who will
sell on to the consumer
b. Sell direct to retail outlets
c. Sell direct to the customer
If your customers are businesses
you will probably sell to them direct
through your own sales force
2. If you sell through wholesalers
and retailers, remember when
you price your products, they will
each want their own mark-up to
cover their overheads and make
their margin. You will also need
to promote your products and
services to this sales 'channel'.
Wholesalers and retailers will
have to be persuaded to stock
your products
3. If you are selling to businesses
you will have to cover the cost of
a sales force. This can be an
expensive overhead and will
again impact on your pricing
Price
Price generates profit and is an
important element of the mix. You
need to consider 1. What your target group of
customers will be prepared to
pay for your product or service. It
is important not to set the price
too low as customers may think
there is something wrong with
the product. Equally, if you set the
price too high, customers may
think that it is too expensive for
the benefits offered. Think about
how you have positioned your
product in terms of quality. This
will help you to decide how to
price it
2. What it costs you to produce it.
You'll need to include fixed costs
like rent and rates, and variable
costs such as materials and
labour. This will show you what
you need to charge and not
what you could or should
charge. Remember, if you do not
calculate what it costs you to
produce your product correctly,
the more you sell, the more you
could lose. Don't forget to make
an allocation for costs such as
selling, which are usually treated
as a fixed, regular cost
3. What your competitors charge.
Look at your competitors' web
sites, or simply phone them and
ask for a price list or quotation
Promotion
The promotional mix is made up of
five elements - advertising, sales
promotion, public relations, direct
marketing, and personal selling.
The combination of tools you use
depends on how much you can
afford to spend, the message you
wish to communicate and the
group of customers you are
targeting.
This is the stage at which many
businesses struggle. Research and
future gazing are relatively easy. So
is deciding who you think should
buy your products. But finding a
way to reach them, making them
aware of your product and
explaining its benefits is often less
simple.
Each of the elements of the
promotional mix is a multi-million
pound industry in its own right.
However, there are lots of things
you can do to promote your
products, without significant cash
outlay - if you know how each
element of the mix works, and how
to strike the right balance.
People
Any person coming into contact
with customers can have an impact
on satisfaction. Whether as part of
a supporting service to a product or
involved in a total service, people
are particularly important because,
in the customers' eyes, they are
generally inseparable from the total
service. This means that they must
be appropriately trained, well
motivated and the right type of
person:
• The level of after sales support
and advice provided by a
business is one way of adding
value to what you offer and can
give you an important edge on
your competition. This will
probably become more important
than price for many customers
once they have started to use you
• Take a look at your products that
account for the highest
percentage of your sales. Do
these products have adequate
after sales support, or are you
being complacent with them?
Could you enhance your support
without too much additional cost?
• Take a look at each of your
people, particularly those
interacting with customers and
write down what each has to do,
whether they are adequately
trained for this, what you do to
motivate them, (or better still find
out what motivates them), and
whether they are the right type of
person for the job.
Process
The processes involved in providing
a service and the behaviour of
people can be crucial to customer
satisfaction:
• Do customers have to wait? Are
they kept informed? Are your
people helpful? Is your service
efficiently carried out? Do your
people interact in a manner
appropriate to your service?
Physical Evidence
Unlike a product, a service can't be
experienced before it is delivered,
which makes it intangible. This
means that potential customers
perceive greater risk when deciding
whether to use a service:
• To reduce the feeling of risk, you
can help potential customers to
'see' what your service would be
like by providing physical, i.e.
tangible evidence such as case
studies, testimonials etc.
• Physical evidence, such as the
appearance of where you deliver
your service, will also have an
influence on the opinions of
customers, particularly potential
customers. It must be consistent
with the type of service offered.
Chapter Three
By taking the time to develop and implement an
appropriate mixture of promotional activities, you will
stimulate potential customers to buy your products or
services - and manage this within a budget you can
afford.
What you should I do?
To recap, the promotional mix is
made up of five elements advertising, sales promotion, public
relations, direct marketing, and
personal selling. The combination
of tools you use depends on how
much you can afford to spend, the
message you wish to communicate
and the group of customers you are
targeting.
Promotional mix
If customers don't know what
products and services you provide,
then your business will not survive in
today's competitive marketplace.
Effective communication with your
customers is vital if your business is to
generate sales and profits.
A successful promotional mix uses
a balance of its five tools in a
planned and structured way - a
single tool rarely works well in
isolation. The challenge is to select
the right mix of promotional
activities to suit your particular
business at a particular time and to
then use it correctly to achieve a
result.
The combination of tools you use
will depend on the target audience,
the message you wish to
communicate and the budget you
make available. There would be
little point in advertising new gas
boilers in a fashion magazine. It
would be much more appropriate
to advertise in a trade magazine for
builders and gas fitters. Here is a
10-step checklist for developing and
managing your promotional mix:
1. Work out how the products and
services you provide can be
'packaged' together to create a
compelling proposition. The
image of your business is formed
by the way you promote the
elements of the marketing mix your products, their prices and
the places through which you sell
them. It is often helpful to think
about promoting the business as
opposed to a single product or
service
2. Develop a picture of the people
you want to communicate with.
Who are they? This goes beyond
a simple customer list. Is it
consumers or businesses
(including those that sell your
products)? Are there other
groups to take into account,
people who don't necessarily
buy your products, but influence
the purchasing decisions of
others?
3. Be clear about what you want to
say. Are you trying to set your
business or products apart from
the competition, remind or
inform people that you exist, or
persuade them to buy your
products? Set some objectives
and be clear about the benefits
that you want to promote
4. Decide what image of the
product/service/business you
want potential customers to
retain
5. Set a budget. This is often how
much you can afford based on
projected sales for the product or
service
6. Consider how the message
should be delivered. To help you
to decide what aspects of the
promotional mix to use, think
about taking your customers on a
journey that starts by creating
awareness about your business,
through obtaining information
about the products and services
you provide, and ends by
generating a sale. Each
component of the mix will
achieve a different result, so your
choice must be based on real
objectives for your business.
What promotional tools should
be used? When should
communications happen? How
often? Is the message consistent?
Advertising programmes Can be
expensive and need to be planned
ahead in order to meet publishing
deadlines
Public relations A campaign will
only be a success if it has been
planned, coordinated and
measured against a desired set of
results
7. Think about what actions you
want your audience to take as a
result of receiving your
communication. It isn't always
'place an order'
Sales promotions Must be
effectively managed. Set objectives
for each promotion and evaluate
the results after the event
8. Put in place a means of
measuring and controlling the
plan once it is developed. Who
will be responsible for checking
that promotional activity happens
as planned?
Direct marketing Weigh up the
benefits of using your own mailing
list against a bought-in list.
Whatever choice you make, be
prepared to follow up your activity
to create the sale
9. Implement your promotional
plan
Sales representatives A sales force
needs to be motivated and
managed to achieve sales targets.
They require time and resources for
training, motivation and personal
development before they become
fully effective
10. Measure what you have
achieved against your original
objectives
What do I need to know?
Once you have decided your
promotional mix, you need to plan
and undertake specific activities
and make sure they happen when
you want them to and deliver the
results you want. It is useful to bear
the following in mind:
Chapter Four
A lack of understanding of exactly how to carry out
advertising, public relations and direct marketing, for
instance, can lead to unfortunate misunderstandings.
Sadly, these mistakes can have a huge effect on the
reputation and success of the companies behind them
- causing damage that might be hard to undo.
The dark arts?
The promotion element of the
marketing mix is perhaps the area
that has gained an unjust reputation
for questionable practices. The fact is
that vast majority of promotional
activity is carried out for the right
reasons and is perfectly trustworthy.
Unfortunately, a small minority of
promotional tactics are not. They are
usually carried out by the
unscrupulous, but also by the
uninformed.
It pays then, to learn a little more
about the ins and outs of each
element of the promotional mix,
before going any further:
Advertising
Advertising is a powerful tool. It
can turn a new kid on the block
into a nationally recognised
brand, revitalise an ailing product,
and blast competition out of the
water.
But it can, and does, go wrong.
A glance through marketing and
advertising trade magazines reveals
many examples of leading
companies, employing experienced
marketers and big-name ad
agencies, who don't quite get it
right.
If you are trying to create your own
advertising campaign without the
benefit of professional help, the
chances of making costly mistakes
are even higher. The following
guidance should help you to put
together a simple but effective
advertising campaign:
Where should I advertise?
The element that is perhaps easiest
to get wrong is the selection of
advertising media. Getting it right is
a question of balancing the best
means of reaching your objectives
and the money you can afford to
spend.
• The first choice for many small
businesses is local or national
newspapers and magazines. An
ad in a prestigious national daily
brings with it kudos and credibility,
while a local ad can reach a very
specific audience. If you want to
show your product in all its
glamorous glory, a colour
supplement or other magazine
would provide the ideal vehicle.
Clearly, the more prestigious or
widely read a publication is, the
more expensive it will be to buy
advertising space
advertising space on TV has fallen
in recent years, and some local
packages are relatively cost
effective, don't forget to think
about the cost of creating a
broadcast quality advert
How do I know which is right for
my business?
There are a number of
considerations to take into account:
• The Internet can offer a very cost
effective way of advertising your
products - for instance by creating
a website and linking it to other,
more popular sites, or paying for
advertising space on other
people's sites. The advantage of
the web is that, providing your
company and product are suited
to people who use the Internet, it
can offer an opportunity to reach
potential customers in all corners
of the globe
• Radio is an intimate medium that
reaches listeners often when they
are at their most receptive. It is
possible to repeat the ad when
you choose, exposing the
audience to your product at the
exact time of your choice.
Advertising on radio is often more
expensive than print or online
advertising, but can be more
effective
• Cinema adverting can create
enormous visual impact, and
catches its audience in a relaxed
mood. The cost of creating an
advert in the correct format for
cinema can be very high, whilst
the cost of buying the adverting
space is often quite low. Make
sure you take both costs into
consideration if planning a
cinema advertising campaign
• Television creates mass impact,
and an immediate response. It
also allows for a product to be
demonstrated. The use of a TV
campaign can generate trade
support, encouraging retailers to
stock your products. However,
although the cost of buying
• Budget is likely to be the first
consideration. Expensive does not
necessarily mean better - for
instance there is little point in
advertising a restaurant in
Liverpool with a TV campaign
shown in London. Repeating an
ad more frequently at a local level
would yield better results
• The cost of production will also be
important. A high quality TV or
cinema ad will be out of the reach
of most small businesses, but a
simple black and white
newspaper ad is relatively easy
and inexpensive to create.
However, don't dismiss any
media as too expensive until you
have checked out the costs. Many
publishing or broadcasting
companies will offer a package to
help you produce your ad for
relatively little cost
• The age, interests and lifestyle of
the people whose attention you
want to attract will also be a
factor. The trick is to match the
media to your target market, so
that none of your precious budget
is wasted on advertising to
people who are not likely to buy
your product. For instance, the
cinema, where audiences are
mostly young people, would be
the ideal place to advertise a
product aimed at the under 30s. If
you have any doubt about what
kind of people listen to your local
radio station or read a particular
news paper, ask their advertising
sales teams who can usually
supply you with the relevant facts
and figures on their likely age,
income, job title and so on
• The complexity of your message
may be an issue. Daily papers
are read by people in a hurry,
and are not the most appropriate
choice to convey a lengthy
message. The Sunday papers or
regional weekly publications,
which are read at leisure, might
offer more scope for explanation
• Finally, make sure you are
included in any directories or
guides that offer free entry. These
are useful vehicles for any small
business - no matter how tiny
your budget
Sales Promotion
This activity is best described as a
specific, usually short-term,
promotion that is 'over and
above' what you would normally
provide to the customer (e.g. buy
one, get one free).
When used effectively, sales
promotions can help to move old
stock, counteract competitor activity,
merchandise new products,
encourage repeat buying and
motivate your staff. They can also
be monitored, so the success of a
particular sales promotion can be
measured over time.
Sales promotions are a good way
of attracting new customers.
However, on their own they are
unlikely to build customer loyalty or
change their longer term buying
habits. The type of promotion
selected also has to be relevant to
your target customers as well as to
your own marketing objectives.
What do I need to do?
First of all, it is important to be
realistic. Remember, even if your
product is better, the first on the
market will usually take the largest
share of it. Sales promotion will
help to introduce your product giving customers an opportunity to
try it and compare it with
established competitors - but it
won't win you a larger share of the
market overnight.
When shaping your sales
promotion activity, it is important to
consider the wider market. Take the
following factors into consideration
before developing your promotional
strategy:
• Who do you want to buy your
product?
• Why do they buy competitors'
products or services?
• How does your product compare
with the competition?
• What kind of promotional activity
are your competitors carrying out?
How can I get customers
interested?
Most sales promotion uses three
techniques that are known to attract
target customers. They are based
on:
• Price
• Free gifts
• Prizes
These tactics entice the consumer in
subtly different ways. It is important
to understand how they work
before deciding which is right for
you:
1. Price promotions are an excellent
means of persuading
competitors' customers to try out
your product. A lower price or
buy one get one free promotion
is an incentive to take a 'risk' by
moving away from an 'old
favourite'
2. Free gifts and prize promotions
work in a similar way. However,
it is vital that you select a gift or
prize that is relevant and
attractive to your potential
customers - there is no point
offering a cuddly toy to single
men aged 18-25 for example.
There are a number of other
things to bear in mind when
setting up a gift or prize
promotion:
• Prize promotions are legally
complex. Seek professional
advice before proceeding. It is
not acceptable to link free prize
draws to purchases. This is not
the case with other
competitions
• A competition should
incorporate an element of skill
such as questions and a
tiebreaker. Instant win
promotions are technically free
prize draws, so customers must
be offered the option to take
part without making a
purchase
What will it cost?
Promotional activity can be
extremely cost effective if you have
a specific objective in mind.
However, although budgets tend to
be smaller than those for
advertising, exact costs become
clear only once the activity has
been planned in detail.
Remember that it might be hard to
predict how much your promotion
will cost. Whilst a free gift promotion
can be worked out according to the
number of gifts you give away and
the cost of each, the cost of a
competition will depend on the
number of responses.
Do I need to be aware of any
legal issues?
It is advisable to seek professional
advice before running a promotion.
You can get this from the Institute of
Sales Promotion. It can offer all
kinds of advice, including legal
advice and general guidelines as
well as more detailed information
on competition registration, judging
and coupons.
Public Relations
A good image is a valuable asset.
Effective public relations (PR)
creates good publicity, building
your reputation with customers
and others whose opinion matters
to you. However, while
advertising can be purchased
immediately, generating positive
publicity can take time. On the
other hand, good PR has greater
credibility and often has more
lasting impact than advertising.
What do I need to do?
Since PR is often a longer-term
activity, it helps if you have a plan in
mind before you start. This should
cover the following elements:
1. Decide what your objectives are.
Most PR aims to build a
favourable reputation with
customers:
• Positive comments by
journalists about your product
are more credible than the
same claims made in your own
advertisements. Even a single
mention in a national paper
can generate a large number
of enquiries
• Equally, PR can be used to
reinforce advertising
campaigns and other
promotional activities. For
example, local newspapers
may be more willing to write
about businesses that advertise
with them
• You can also use PR to
publicise events, such as
product launches, through the
media. Trade publications often
have sections for this kind of
announcement
• You can use PR to influence
people who matter to your
business - and sometimes to
get them to change their
minds. For example, suppliers,
trade associations, local
councils, MPs, community
groups, regulatory authorities
or investors
2.PR usually brings long-term
benefits, rather than immediate
sales, so start well in advance of
when you need the results. For
instance, you cannot control the
timing of media coverage and
may have to send press releases
to a publication over a period of
months before it pays any
attention to you.
Equally, some publications plan a
long way ahead. Many monthly
magazines operate four months
ahead of publication, while
guides (e.g. for hotels) are
published annually. Both will
need to be contacted months in
advance.
Don't be put off if the results are
not immediately obvious.
Although a single mention in the
local paper may have an impact,
good PR will create a cumulative
effect, as your publicity builds up.
3. Choose media that reach your
target audience and are likely to
give you coverage. It may simply
be a question of asking your
customers what they read, hear
and watch - but you can also get
this information by calling the
advertising sales teams of most
publications and broadcasters.
It is important that you don't miss
out relevant publications,
especially local ones. Use
directories such as BRAD, Hollis
or Willings Press Guide to find
details of publications in your
area.
Give yourself the best chance of
success by looking at
publications to see if they cover
stories that are relevant to your
business. It is usually possible to
find out what features the
publication plans to publish well
in advance. If you manage to do
this, it may be possible to contact
the journalist writing them to tell
them your story - but only do this
if you have something genuinely
interesting or relevant to say
4. Be realistic about the time and
costs involved. The largest cost of
PR is often management time,
rather than cash. Using a PR
agency can increase the
effectiveness of your PR and
reduce the demands on your
time (but will increase the cash
costs)
How should I go about writing a
press release?
Although the press release is not
the be all and end all of PR, it is a
useful way to summarise your story
and make sure it is explained to
journalists in a short, impactful way.
Press releases, however, should not
replace actual personal contact.
A good press release can give you
a head start when you call a
journalist and, a bad one will leave
you with an uphill struggle. Follow
these simple guidelines when
writing a press release:
• Aim your press release at the
journalist responsible for the
section in which you want to
appear
• Like an advertisement, it will need
a good headline to encourage
the journalist to read the whole
release
• Include all the key points of the
story in the opening paragraph,
but keep it short and sweet
• Put the paragraphs in order of
importance
• Draw attention to your story by
promptly following up the press
release with a phone call
It is important to make sure it is
obvious that your document is a
press release, using a standard,
widely accepted press release
format:
• Use your letterhead paper, with
'PRESS RELEASE' across the top of
the page
• Use double spaced lines, with
wide margins, to make the text
easier to edit
• Keep the text short - typically a
total of 300 words, at most. Put
any detailed or background
information in a separate 'note to
editors'
• Keep your credibility. Read
through and check spellings and
all checkable facts
• Include contact details, so
journalists can easily call if they
need further information
• Write in the style of the publication
you are targeting - use short
sentences and short paragraphs
(no more than 60 words per
paragraph), use similar language
(e.g. avoiding inappropriate
jargon)
What else should I know?
Public relations can sometimes
involve a lot more than putting out
press releases and talking to
journalists. You may have important
objectives that cannot be achieved
just by gaining press publicity:
• You may need to reach small,
select groups of individuals
directly, to talk about complex or
sensitive issues. Bear in mind that
advertising tends to simplify
issues - with carefully targeted PR,
you can tell a subtly different story
to each of the audiences you
need to address
• You may be able to influence key
'opinion formers' to think well of
your company and mention or
use your products. The opinionformers you decide to target will
depend on your markets. For
example, councillors, MPs and
MEPs, local politicians, pop or
sports stars, celebrities, authors or
business leaders may be willing
to endorse your company or its
products if there is a good reason
to do so. In addition, you may be
able to lobby and influence trade
bodies, or even the government,
to adopt policies favourable to
your business
When is PR most effective?
In the simplest terms, PR only works
when you have a genuine story to
tell:
1. Most businesses generate
natural opportunities for PR
activity. For example, the launch
of a new product, the opening of
new premises, the appointment
of new staff, large or interesting
orders or customers, and
milestone events (e.g. your 1000th
customer or your company's
anniversary) all provide obvious
opportunities for publicity
2. However, it is also possible to
create publicity opportunities. For
example:
• Submit articles for publication in
your local press or trade
magazines, or on relevant
websites which are looking for
content
• Commission a survey that is
relevant to your business or
customers (serious or frivolous)
that can be written up as a
news release
• Promote yourself as an expert
and offer yourself for public
speaking or comment on
topical issues
• Suggest a local newspaper
competition with your products
as prizes
3. Getting involved in events and
stories which are already in the
public eye is another way to
create news:
• Send 'letters to the editor' about
local or industry issues
• Help with, or donate products
to, charity events
• Sponsor a local sports team or
exhibition
4. Another option is to get involved
in organisations that are likely to
attract future publicity:
• Team up with suppliers or
customers to work on attracting
joint publicity
• Become a figurehead in an
organisation, so that its
publicity brings you publicity
However you go about creating a
story, you must package it in such a
way as to make it interesting or
'newsworthy'. There are a number
of tricks to 'creating interest':
• Make your story controversial,
new, surprising or funny, or
directly important to the
readership
• Tell a story that is confidential or
secret
• Link your story to famous people
or places, or to conflict or
romance
• Be prepared to compromise, if it
will improve your chances of
getting media coverage - your
first priority is to provide a story
that will be published. A press
release that reads like an
advertisement for your business is
unlikely to be interesting
How should I handle the media?
Unlike advertising, where you buy
space to publish what you choose,
effective PR means selling yourself
to the media. This should not be
difficult, if you bear in mind some
simple guidelines:
1. Give the editors what they need.
Send them interesting stories they
will want to publish
2. Make sure your press releases
reach publications before their
deadlines. Some publications
have very tight schedules. You
may need to act immediately to
utilise a PR opportunity
3. Get the email addresses of
important media contacts. Many
journalists now prefer to receive
press releases by email
4. Find out the names of the
journalists and make personal
contact
5. Build relationships with individual
journalists. Invite them to your
events, or to lunch to meet
interesting people
Direct Marketing
The direct marketing industry has
some passionate critics. The
shoddy practices of the few who
send junk mail that is scooped
from our doorstep straight into
the waste paper bin and clog our
PCs with spam have damaged
the reputation of the reputable
majority.
But good direct marketing allows
you to open a conversation and
create a relationship from which
both you and your customers
benefit.
What is so good about direct
marketing?
Direct mail can be an extremely
cost effective marketing method.
You can use it to get details of your
company and its products directly
into the hands of the people who
are most likely to want them. Not all
customers buy for the same
reason, and unlike any massadvertising campaign, direct
marketing allows you to deliver
messages that are specifically
designed for specific groups of
buyers.
Furthermore, in a world crowded
with marketing messages, where
consumers are becoming
increasingly resistant (even irritated)
by traditional advertising, direct
marketing may be the only way to
cut through the clutter.
Is direct mail right for my business?
Direct mail can generate enquiries,
build long-term customer
relationships, and lead to increased
sales. Use these methods to
maximise your chances of success:
1. Identify the people you want to
target. The more similar they are
to your existing customers, the
better the response will be:
• Build your own mailing list for
the best response rate
• Targets for business products
are often easier to identify than
targets for consumer goods
2. You must be able to make a
profit, after accounting for all the
costs associated with carrying
out direct mail:
• You can calculate the costs of
an individual mailing very
precisely
• Do not underestimate the costs
of building up a good mailing
list, administering marketing
activities, and fulfilling orders
• Repeat orders are the most
profitable. It costs between
three and 30 times more to
acquire a new customer than
to sell to an existing one
3. Build up your response rate. With
direct mail, you can quickly find
out if there is a market for your
product, who will buy, and what
you can afford to charge. The
size of your mailing depends on
how many responses you need,
and what the expected response
rate is - which in turn depends
on the people you target and
what incentive you offer
• Provide some incentive for
customers to respond. For
example, by offering a prize
• You can tailor your mailing to
seasonality. For example a
conservatory company might
focus on April and May, ahead
of the usual summer sales
peak. You should know if your
product is viable and where to
direct your efforts within a week
of mailing. With an
advertisement, it could take
months
4. You can use direct mail to
establish a mail order operation.
Decide whether your product is
suitable:
• Customers need a reason to
buy this way. The reason might
be convenience, product range
or prices. Some specialist items
are not available in stores. Mail
order (to a well targeted list) is
the only way to make them
available
• One drawback is that the
customer cannot try out the
product
• Your product needs a high
enough margin per item to
cover all the costs involved
Who should I target with direct
mail?
The quality of your database is
critical to achieving a good
response rate. The following
guidelines will help you create a
mailing list that maximises
response:
1. Create your own list. The
response rate will always be
better than the response from
any bought-in list:
• Your existing customers (if any)
are always your best source of
new orders and leads. Include
a form when you mail them,
asking if they know anyone else
who might want your services
• Ask suppliers and other
business contacts about
potential customers
• Train staff to obtain full details
from telephone enquiries
• Never throw away a name.
Gather leads from customer
lists, trade show visitors,
responses to ads and warranty
cards
2. Small 'mailshots' can be done
using word processing software
and spreadsheets. If you plan a
significant volume of mailings, use
database software:
3. Decide how much information
you want to hold, and how to
organise it, before choosing your
database package. Even a small,
specialised mail order business
could have 50,000 names on file.
A larger business could have ten
times as many:
• You might want to include
details such as telephone
number and email address
• Consider having a field for
'function', as well as a title. You
could then run off a whole list
(for example, 'finance'), rather
than having to select by
individual titles (e.g. 'finance
director', 'accountant' and
'treasurer')
• You need to know when each
name was last checked or
amended
• You need to know when you
last mailed each name and
how often the prospect has
been approached in the last
year. Regular mailing improves
response, but duplicated
mailings alienate customers
4. Your database is one of the
business's most valuable assets
and must be managed:
• Data inputting must be checked,
or it could ruin the mailshot at
the outset
• The quality of the database
declines unless it is regularly
'cleaned' and added to.
Cleaning eliminates the names
of 'returns' (letters returned to
sender). Experts say an
uncleaned list is unusable in
three years. Many email
addresses are out of date in six
months
• Consider including a reply-paid
card in your mailshots, so your
customers can confirm or
amend their details. Always
print a 'return to sender'
address on the back of the
envelope, or in the case of
email, ensure there is a clear
method for recipients to
unsubscribe
• Even if all 'returns' are
eliminated immediately, the
database should be checked on
a regular basis. You could
combine this with telephone
follow-up to a mailing
5. Make sure you comply with the
Data Protection Act. For example,
you cannot sell or exchange your
customer mailing list without your
customers' permission. Visit
www.CIM.co.uk to find out more
about Data Protection
What makes a good mailshot?
A good mailing package will create
a better response rate. You are
competing with all the other mail
that members of your target groups
receive
1. The letter should explain the offer:
• If possible, it should be
personalised, by addressing it
to a named individual
• You have less than two seconds
to convince the reader it is
worth reading. The first halfdozen words are crucial
• You should usually include a
brief, relevant headline
• In the first paragraph, describe
the benefits to the reader
• The bulk of the letter should
then explain and amplify the
first paragraph. It should be
clear, simple and convincing.
Avoid being flamboyant or
patronizing
• Avoid jargon or technical terms,
unless you are writing to a
technical audience
• In the final paragraph, explain
just how to respond to the letter
(the call to action)
• Sign the letter. If you are mailing
in bulk (more than about 500
letters each time), get your
signature laser printed
• Always have a P.S. that restates
the benefits - everyone reads it
2. Include relevant enclosures. For
example:
• A well-designed brochure will
help to establish your credibility
• If possible, include a sample of
some kind
• If you are selling a range of
products, enclose a price list
3. Make it easy for people to
respond. For example, you could
include:
• A self-mailing order form for
the reader to tear off and return
• A pre-printed reply card
• A well-designed 'fax back' form
• A pre-printed business reply
envelope with a Freepost
address
Make it clear to the reader exactly
what you want him or her to do
4. Give readers an incentive to reply
promptly. For example:
• You might offer them 10 per
cent off, as long as they reply
by a specified date (up to three
weeks away)
• Cost out any incentives you
offer carefully, to avoid making
a loss
5. Mailings to businesses will
usually be opened as a matter of
routine by a secretary. But when
mailing to consumers, the first
hurdle is getting them to open
the envelope:
• Using branded Smart Stamps,
rather than franking, will make
your letter stand out, and raise
your letter-opening rate
• An unusual size or colour of
envelope may attract attention.
Avoid brown manila envelopes,
which always look like bills
• With a small-scale mailshot,
consider getting the addresses
written by hand
• If you overprint the envelope free gift or special offer - the
message must be justified by
the contents or it will disappoint
people and backfire badly. Do
not mark the envelope 'private'
or 'confidential' unless this is
really justified
people, though Saturday
morning is ideal for leisure and
gardening products
• Avoid main holiday periods mid-July to early September
and the Christmas break. Early
January is a good time for
many businesses
• A mailing promoting an event
should generally be sent six
weeks beforehand
What should I do next?
Once you have sent out your
mailing, you must be ready to deal
with the response:
When should I send out my
mailshot?
The timing of direct mail activity is
very important. You must catch
people when they are at their most
receptive if you are to maximise
responses:
• Depending on the nature of your
mailing, you may follow it up with
a telephone call. Make this call
part of your overall sales strategy
• Be ready to react quickly when
orders come in. Poor service puts
customers off
• Decide in advance what you will
do if the response rate is two or
three times what you were
expecting
• Equally, have a plan in place for
what you might do if you get little
response
• For business targets, do not
send out mail just ahead of a
public holiday
• Tuesday and Wednesday are
generally the best days of the
week for a mailshot to reach
How can I be sure that my direct
mail activity will work?
As with any marketing activity, you
can never be certain of success.
However, you can significantly
increase the odds by testing a
range of possibilities quickly and
simply:
1. Split the mailing to get different
information. Send out mailings
with different messages, or
change one item on each
successive mailing. For example,
change the price, the offer, the
writing style or the stated benefit
2. Test different sectors of the
market and monitor the
response so you can measure
how effective different mailings
are
3. Print order forms in various
colours, add a key or code or
ask for replies to be sent to
different departments (possibly
invented)
What if I don't have, or can't
create my own mailing list?
Many lists can be rented or bought,
on computer tape or disk:
• Specialist magazines, and
conference or exhibition
organisers are a good source
• Most directories rent out their lists.
Copying the names and
addresses to add to your
database is a breach of copyright
• Some trade associations allow
access to member lists. Look in
the Directory of British
Associations
• Most Business Links offer a wide
range of lists. For small mailshots,
such lists are often cheaper than
those provided by other sources
If you are going to buy or rent a list,
it is important to choose the right
one. Be methodical about selecting
and negotiating the use of external
lists:
• Identify your needs clearly, in
writing
• Shop around to check prices. A
good business list of people who
have previously responded by
mail - i.e. they are mail
responsive - will cost at least £150
per 1,000 names. Business to
business databases, from
sources such as Dunne &
Bradstreet, will be cheaper
• Ask for the lowest minimum order
from the list and test part of it
• If there is a high minimum order
(e.g. 5000 names), you may be
able to negotiate this down
• Knock out flaws in bought-in lists,
for example, duplications of
branch offices
• Insist on exclusive use for your
type of business while you are
doing your mailing
• Do not re-use a list you have
rented for one-off use. The list
owner will have seeded it, to
check that you do not abuse the
agreement. However, you may
re-mail everyone who responds
to your original mailing. These
names become yours
• Agree a refund if a high
percentage (say, more than five
per cent) of your mail packs are
returned because contacts have
moved on
Personal selling
If you are having problems
planning your direct mail activity,
visit www.dmonline.co.uk. This free,
online resource from Royal Mail will
help you plan every aspect of your
direct mail campaign.
• Listen to their needs, promote
product & company benefits on
an individual basis, answer any
questions, resolve any problems
and get their feedback before
clinching a sale
This is the most effective form of
promotion because it allows your
approach to be tailored to the
needs of an individual customer.
Getting a sale is ultimately
extremely important, but the
process involves a lot more than
this. It is about having a
constructive dialogue with
customers to:
• Build a relationship with the
customer - understand their
changing needs and feed back
this knowledge to improve
products, customer service
standards and competitor
knowledge
Do I need to employ a dedicated
sales team?
Employing a sales person is a costly
exercise in the first instance, but it is
one that will provide a pay back,
usually within 1-2 years. However,
owner/managers of small
businesses who may not have
sufficient resources to employ such
staff, it is worth remembering three
things:
• A personal approach to
customers is still appreciated and
is an important part of any
business development strategy
• Active networking with existing
customers, suppliers, business
associations and specialised
industry groups can also play a
valuable role in promoting your
business to a wider target
audience and the value of this
activity should not be
underestimated
• Sales is not purely something
done by salespeople. Every
person within a company plays a
part in selling to a client. There
are an estimated one million
people working formally in sales
in Britain today - 400,000 in
business-to-consumer selling,
and 600,000 in business-tobusiness selling. In the shadows
of this million, there are many
more millions whose support to
their dedicated sales teams is
vital in making each sale
How should I organise my sales
efforts?
Sales teams tend to be organised
geographically; or when
geographical organisation isn't
compatible with the customer base,
through key account managers.
The classic example of
geographical organisation is the
pharmaceutical industry where
doctors have to be visited. At the
other end of the spectrum groceries
are now entirely sold through key
account managers - who sell to
head offices.
Whilst sales is very different in a
small business environment, these
two broad approaches are worth
bearing in mind when you are
organising your sales efforts whether you employ a sales team
or not:
Geographic This is about making
efficient use of timer and resources,
and especially important if you
have to keep in touch with large
numbers of customers. Break your
sales region (whether it is a local or
national area) into manageable
chunks and visit them in turn,
meeting with all available
customers and prospects in a short
time. This will help to:
• Cut down on your travel time
• Spot any local trends, issues or
opportunities and act on them
quickly
• Key account manager:
Depending on the nature of your
business, you can take this
approach alone or combine it
with a geographic approach. If
your customer base is small, and
like to remain so, a key account
manager approach is probably
all you need. However, if your
customer base is large, or has
potential for significant growth, a
hybrid approach may be
appropriate. The key account
manager approach is about
building relationships, whether or
not you employ a sales team:
• Keep in regular contract with key
customer contacts (this could be
all your customers or a select few,
depending on your market). Build
relationships with them and get to
really understand their needs.
• Seek to involve them in some
decisions about the future
direction of your products - this
will help to ensure they feel that
your products are designed with
them in mind
Chapter Five
Branding
It is tempting to think of 'a brand'
as something that only matters to
the multinational giants in
business. Understandably, many
people running smaller
companies dismiss branding as
the preserve of the likes of Tesco
or Toshiba and other companies
that have big advertising budgets
to match their big names.
Other Marketing
disciplines
A wide range of activities fall outside
those set out in the core marketing
mix. However, that does not diminish
the role they could play in the success
of any small business. Two such
activities are branding and corporate
hospitality:
But a small business can be a
powerful brand in its area. The
high-street patisserie with an
excellent reputation or the specialist
technology company that is a
leader in its field can both offer the
same reassurance and guarantee
of quality that customers can get
from choosing an internationally
recognised brand name. Having a
strong brand could have a number
of benefits:
• In a competitive marketplace,
brand identity may be all that
separates one company from its
competitors
• A strong brand inspires loyalty. It
prompts a customer to return time
and time again. It is worth
cultivating, no matter what the
size of your business
What is branding?
Branding is more than a corporate
colour and pretty packaging. A
brand is the consequence of a
user's experience of a product, and
is gained over many years. This
experience is comprised of a
multitude of separate experiences good, bad and indifferent. These
could range from the pleasant
smile of a sales assistant, to a
piece of unfavourable press
coverage. A brand is not what the
owner of a company tells his
customers, it is the genuine
sentiments in those customer's
hearts.
What is a brand?
Creating a brand is not about
creating hype. Today's savvy
consumer knows when the truth is
not being told. In the past, a brand
provided customers with a product
they could trust - the Volvo that was
safe, the Persil that washed whiter.
Then, as we began to take quality
for granted, branding became
about making an emotional
connection with a customer - Mini
sparked the affection of those
nostalgic for the sixties, and Oxo
created a family that we all wanted
to join for Sunday lunch.
But now consumers are becoming
increasing sceptical about the
artificial lifestyles portrayed in
carefully filmed TV ads, and they
are looking for something that has
real relevance and real meaning.
The beautiful young things
cavorting in sand dunes have been
rejected in favour of ordinary
people who have the same
concerns and problems as us
lesser mortals. The campaign to
promote Dove Body Firming Wash
starred 'real' women with real
curves, and its strap line explained
that there would be little challenge
in smoothing the thighs of size eight
super-models.
How do I create a brand?
Escapism will always have a role to
play. We all want to believe that we
can become more gorgeous if we
use a particular shampoo or dream
of wafting around a home filled
with designer furniture and
exquisite objets d'art rather than
one littered with the children's toys
or piles of unopened mail. But we
recognise the difference between
fantasy and reality. By tapping into
the true needs and concerns of our
customers, we can create a brand
that will strike a chord.
In many ways the small
organisation is better placed to do
this than the conglomerate that is
separated from its customers by
layers of management and
cumbersome bureaucracy. The
business owner who is in close
day-to-day contact with customers
can quickly find out what they really
want from a brand. It might not be
important that an office products
supplier carries the largest range of
printers in the south of England, but
next-day delivery could be crucial.
The customers of a high-street
boutique might care that a shop
stocks a wide range of sizes rather
than trendy labels.
Corporate hospitality
Back in the eighties, the corporate
jolly was an established part of
business life. During fun-filled
summers, the banks of the Thames
groaned beneath the weight of
hospitality tents at Henley,
strawberries were gorged by the
tonne at Wimbledon, and the traffic
came to a standstill in Ascot as
revelling race-goers staggered
through the streets. The hospitality
industry boomed and Champagne
sales went through the roof.
However, little thought was given to
the amount that was spent, the
suitability of the event, or the results
achieved, and the justification for a
beano was simply the belief that a
guest well-entertained is a client
retained.
Smart branding is about going back
to basics. It means giving your
customers something they can rely
on, stripping away the glitz and
glamour of glossy ad campaigns. A
brand that delivers its promise and
has real meaning for the way
customers live their lives, is one that
is genuinely powerful.
Things have change a lot since
then. Companies large and small
have rethought how much they are
prepared to splash out on wining
and dining guests. Corporate
hospitality is no longer just an
excuse to give company directors
the chance to over-indulge on
expenses, it must to deliver real
and measurable results.
For the small business where
budgets were even tighter, getting
a return for expenditure became
even more important. But today
corporate hospitality can still be an
essential part of the marketing mix
- but only if money spent
entertaining clients is well invested.
How do I know if corporate
hospitality is money well spent?
Measuring the value of corporate
hospitality is tricky. It is not easy to
link a full order book with a good
day out, and corporate entertaining
is not about clinching deals - any
scent of hard selling will prompt
clients to stay away from your next
event. Formal evaluation such as
sending guests an assessment
form could give an indication of the
success of the event, but is not
always appropriate.
However a warmer relationship
with clients is clearly something
worth having. In an increasingly
competitive environment, it is ever
more important for businesses to
do all that they can to retain the
customers they have, and there is
no doubt that entertaining a client
can provide an unrivalled
opportunity to cement a
relationship.
It is much easier to do business
with people that you know. Yet few
people these days have time to
linger over meetings, and as much
communication with clients is now
handled via the highly impersonal
medium of e-mail, a chat over a
dinner or at a sporting event can be
a rare chance to get to know
business partners on a personal
level.
But even if the benefits of corporate
hospitality are difficult to measure,
you should still make sure that you
understand what you want to
achieve from the event. You may
want to thank your key customers,
raise the profile of a new product,
discuss a particular issue, or
remind the customer of your
activities. When the day is over,
stand back and ask whether or not
you achieved these objectives.
What makes good corporate
hospitality?
Whatever your objectives, hosting
the right event for the right people
will help to ensure that it is a
worthwhile marketing activity.
Linking an event with your business
can be a useful way to build
awareness of your brand - if you
make car parts for example, a
driving day or a trip to a race track
event might be the thing. A small
gift to mark the occasion will
underscore your message in your
client's mind.
Matching the event to the client is
also key to getting the best value.
Just because you like swinging a
club, it does not mean that your
clients will enjoy a day at
Wentworth, and there is no point in
taking a Tottenham fan to an
Arsenal match. Many people have
already been to Henley, Wimbledon
or Silverstone - a more unusual
event such as a day white water
rafting or lunch on a luxury train
might have more appeal.
If you want to use the event to talk
to the client, choose something like
a tennis tournament or a polo
match where there will be plenty of
opportunity to chat. If you want to
take a client to the theatre you may
need to organise a dinner before
hand to provide time for
conversation.
Even if you are keeping an eye on
costs, a shoddy event does no one
any favours. Warm beer and nasty
food leave a bad taste in the mouth
in more than one sense. Your event
must be slick, and a stressed host
is not good company. If you do not
want to engage the services of a
professional event company, make
sure that the organiser you do
appoint is up to the job.
With careful planning, corporate
hospitality can reap rewards in the
short and the long term. Done
properly, it can be very worthwhile
indeed.
Chapter Six
When should I think about using
an agency?
While it is fair to say that anyone
can turn out a brochure or design
an ad to go into the local paper,
there comes a point when the
difference between doing the job
and doing it well becomes all too
apparent.
Using an agency
Whilst most people in business would
not hesitate to turn to specialist help to
sort out a tax problem or to solve a
legal issue, when it comes to
marketing, many are perfectly happy
to roll up their sleeves and have a go
themselves. In some circumstances,
however, it is worth thinking about
using a specialist agency.
Few small businesses need to hire
specialist agencies. However, if the
complexity of your marketing gets
to the point where you are
spending too much time on it and
not getting the results you want, it
may be worth looking at hiring an
agency.
What can a consultant do that I
cannot?
If the circumstances demand it, and
budgets allow it, the help of a
consultant or an agency can be
invaluable.
An external consultant will bring a
wide range of expertise often from
a broad spectrum of different
industries. Compared with
employing a skilled professional,
using a consultant can provide
access to high levels of experience
for a lower cost. A consultant can
be called upon to help manage
particular projects or seasonal
peaks in activity. They will also be
able offer objective and unbiased
advice about your business,
unhindered by internal politics.
Outsourcing some of the
responsibility for your marketing will
free up your time, leaving you to get
on with the business of running
your company.
How do I choose the right
consultant?
The marketing challenges you face
will be many and varied - you may
want to improve market
penetration, win customers in a
new location, or launch a new
product. The consultant you choose
will need to have the right
experience for the task - they may
need to be an expert in consumer
marketing, promotions, event
management, or have a good
understanding of the market in a
particular country or region. You
may need a consultant with a
strong track record in a particular
industry, or you may want a fresh
approach.
Then you need to decide whether
you wish to employ a large
consultancy or an independent
consultant. Larger consultancies will
offer a wide range of services and
can call upon the experience of a
number of professionals with
different types of expertise.
However, it is worth remembering
that costs can be high.
Smaller agencies or independent
consultants can offer good value for
money, although a narrower array
of services. Make sure however that
the consultant you employ has the
right level of experience, the time to
give your business the attention it
deserves and appropriate support
to achieve professional results.
Once you have decided which sort
of consultancy you wish to use, it is
time to start putting together a
short-list of suitable companies.
Find out as much as possible about
the reputation of any firms you
consider.
Are they members of any
professional body and do their staff
have the right qualifications? What
do their current clients think about
them, how long have they been
working for them and how long do
their clients tend to stay? How are
they perceived in the industry?
If you feel that you need someone
who is well known in your sector,
make sure they are not already
working for your competitors.
Spend as much time as possible
with your short-listed companies - it
is important that the chemistry is
right between you and your agency.
While it is reasonable to expect the
agency to give you some idea of
what they can do to help you,
detailed proposals take much time
to prepare and it's not fair to expect
the agency to do too much work
before they are appointed, without
paying for it.
What about fees?
Agree a budget with the agency
sooner rather than later. It is a
waste of everyone's time to give the
consultancy a set of objectives and
expect them to come up with a
plan to achieve them. The cost of
different marketing activities will
vary considerably, and the
consultancy will need to know what
your budget is in order to make
sensible recommendations.
The consultancy may be employed
on a fixed fee per month or on a
project basis - expect to pay more
for project work as the agency will
need to cover the cost of managing
fluctuating work loads. Agree in
writing what is and is not covered
by the fee. As with all business
activities that you undertake, you
need to evaluate the effectiveness
of the person you use, to ensure
you are really getting value for
money.
Chapter Seven
The five golden rules below might help remind you of
some of the key principles behind the guide:
Putting it into
practice
So now you know the theory it is time
to put it into practice. It is necessary to
work out a process by which you will
plan and then execute your marketing
to ensure you remain on track and
achieve your objectives. The following
section suggests some practical ways
you can go about this, and provides
some tools that you can use for your
own planning.
1. Information should be the
foundation for your marketing
activities - make sure you know
as much as you can about the
market that you are entering, and
keep on top of it
2. Be sure of what you want to
achieve before you start thinking
about how you will achieve it this clear direction is critical to
achieve your objectives
3. Always keep your customer front
of mind - the marketing you
chose to undertake must strike a
chord with them personally
4. Evaluate whatever you do on an
on-going basis. There's no harm
in admitting an activity hasn't
worked, just in ignoring it and
carrying on regardless
5. From the boss down, everybody
in the company must buy into
and support your marketing
activity - this will guarantee your
customer really lives the
experience
The image illustrates the way you
should go about your marketing
planning - develop your strategy
first (what you want to do), then
work out which tactics to
implement (work out how best to
do it based on markets, budget &
customer needs).
SWOT
Step 1:
Step 3:
A simple and effective way to
illustrate where you stand in your
chosen market is to create what
is known as a SWOT chart (a
mnemonic for 'strengths,
weaknesses, opportunities &
threats). This will help you be
clear on how you stand out in the
market, areas of weakness,
opportunities to exploit and
threats to be aware of.
The background Write a brief
description of the market segment
of your business that you are going
to do a SWOT on. This will help you
focus on what you are reviewing.
What does your customer think? Consider the importance of these critical
success factors in the minds of your customers - which ones will they care
about the most, in priority order:
The SWOT is designed to help you
understand, based on objective
evidence, what it is about what you
are offering your customers that will
make them want to buy from you,
rather than anyone else in the
market, and how strong that
position is. If there are a number of
segments to your business you may
wish to complete a SWOT of each
separate segment to ensure the
content is not too generalist and
therefore meaningless.
You may also wish to get a number
of your managers to complete a
similar task - this will ensure you
are not deluding yourself on any
points, and give you an idea as to
where your staff see your company
to be heading.
The following section is a step-bystep guide to building your SWOT.
Weighting Out of 100
Critical Success Factors
1.
2.
3..
4.
5..
Step 4:
Step 2:
What are your critical success
factors? Why will your customer
chose you? These are usually
based on relatively few factors i.e.
product performance, breadth of
services, speed of service, low
prices etc..
Critical Success Factors
1
2
3
4
5
You against the world! Consider how your customers would score you
against all of the competition you have identified for each of the critical
success factors, marking out of 10. This will give you a clear idea of where
you stand in the market and the areas that you need to improve on.
You
1
2
3
4
5
Competition A
Competition B
Competition C
Step 5:
Opportunities and threats You should now consider the external
marketplace and list out the factors that you think will impact on your
business or offering in the future. These might include issues such as falling
demand, changing technology, regulations and so on. Be careful to only
consider factors that you can respond to, not filling up space with
meaningless generalities.
Opportunities
1
2
3
4
5
Threats
1
2
3
4
5
For the full overview, if you find it helpful, you can now combine all that you
have learnt in one visual diagram. This might be beneficial if you plan to
share your findings with staff or advisers to ensure these findings are used to
implement changes to your marketing or offering.
Strengths
1
2
3
Weaknesses
1
2
3
Opportunities
1
2
3
Threats
1
2
3
The Process
One of the easiest ways of
understanding how to apply all
this theory is to see how one of
your peers has done it. The case
study below highlights how the
ParcelForce Small Business of the
Year XXX of XXX company came
to truly understand her market
and how best to break into it:
Keep your staff engaged. Developing a plan to secure
your customers and keep them can be a great way to
engage with those working for you, helping them
understand why you are doing what you are, and how
best to go about it. Use your marketing plan to
generate a real enthusiasm for what you do.
Conclusion and
call to action
Marketing must be continuous. XX
small businesses closed down in the
last year. A large percentage of that
will be because they lost track of their
customers, what they wanted, or how
best to deliver it to them. To make sure
this doesn't happen to you be sure to
constantly review your marketing
strategy, how you're implementing it,
and whether or not it is still the best
approach.
Tailor your approach. This guide
has made a number of
recommendations as to how to
market your company, but if you've
done your research effectively then
nobody knows better how to reach
your customers than you do. Don't
try to do it all at once but chose the
methods that will reach out to your
customers most effectively, that fit
your budget and your skills. Having
evaluated your successes you can
always develop your plan as you
go to encompass greater activities
in the future.
Good luck.
A company (data controller) is
subject to the law if it:
• Holds personal data (more than
contact name)
• Processes data in the UK
• Rents data from a number of
different sources
Data Protection
The 1998 Data Protection Act
formalized in law exactly how
customer data can be used via which
media. The Act, which updated the
1984 Data Protection Act, means that
the UK is now in line with The
European Union's Data Protection
directive.
Companies that rent lists from a
number of sources have special
responsibilities.
When buying names from different
sources they have a duty to ensure
that the proposed list of contacts
does not contain any duplicated
names, or the names of existing
customers or people who have
requested that they do not receive
communications. The codification of
these conditions into law enforces
good marketing practice.
Companies sending more than one
copy of the same communication to
a consumer, or sending a
communication to someone who
has specifically requested that they
do not receive it, were alienating
people and lessening the chances
of a response. They are now
breaking the law.
Permission Marketing works.
If people request information on
certain areas or about certain
products, then their stated interest
obviously makes it more likely that
they will buy that product. To
alienate customers who have
happily supplied their details
expecting your brochures, by
passing those details on to a
company who intend to send
communications that the consumer
has not requested, is an abuse of
the trust that consumers place in
you. And in an era when the values
of a brand are integral to its
communication with customers, the
destruction of that trust is not a
prudent move.
Consumers must be asked
for permission to process their
personal data.
Crucially they must be asked for
permission for two actions. While a
consumer may object to receiving
mailings from third parties, they
may be interested in receiving
further communications from the
company that attracted their
interest. This is commonsense. If
you are happy with the quality of
two new shirts purchased in
January, you might be grateful to
find out that three new shirt designs
are available in June. Receiving
further details from the same
company would therefore be
acceptable. Receiving mailings from
completely unrelated companies
might be unacceptable. When
seeking permission to mail
customers it is vital to ask not only
whether customers are prepared to
receive further mailings from your
own company, but also whether
they are prepared to receive
mailings from other companies.
Brand trust is a major issue here.
Consumers recognise that your
database has a commercial value.
They might deliberately allow any
charity to sell their name because
they know the charity can derive
income from that sale. They might
also trust a company enough to
know that what they receive from
other companies will be
worthwhile. When a list is rented to
another organization the lender is
putting their reputation on the line.
If a company allows inappropriate
organizations to send mail to its
customers, its reputation is
damaged by association.
The onus to provide
information about where
information has come from
lies with the data controller.
Where individuals have responded
to a magazine advertisement they
know themselves how a company
has obtained their details. Where a
list has been rented from another
company this isn't the case. The
source from which a company has
obtained a person's details must be
disclosed to recipients, hence the
trust that rests on the way that
companies rent lists.
The Act has given consumers
significant rights that they
can invoke.
Besides the right to object to the
use of their personal data - a right
which allows them to dictate to
companies the terms on which they
are communicated with - they also
have the right to ensure the
accuracy of the information that is
held about them. They have the
right to access the personal data
that is held about them, and to
have any information that is
inaccurate corrected. Marketers
need to think carefully about the
implications that this has. If a
company holds records that
comment on the profitability or
characteristics of a customer they
must be prepared to give that
customer access to that record. The
repercussions of that have the
potential to seriously damage the
reputation of an organization.
where every company is subject to
the same regulations, and within
the European Union where
standards on data protection are
universal. Outside the EU
companies have to consider the
security issue carefully. It is their
responsibility to ensure that they
are not passing data into
environments where data
protection standards cannot be
guaranteed.
Disclosure to the subject of the
data is an obligation, and rental
to other companies is a decision
to be made on trust.
Accidental disclosure is another
matter completely. Responsibility for
confidentiality and security rests
with the data controller. Their own
high level of security must be
matched by that of any companies
that they rent data lists to. That may
be safe within the United Kingdom,
• Process data lawfully
• Collect data for specific purposes
• Maintain accuracy of data
• Only hold data for as long as is
necessary
• Respect the rights of individuals
with regard to their data
• Protect data against loss or
unlawful usage
• Take advice before sending data
outside the EU
Compliance with the terms of the
Data Protection Act not only offers
legal protection to businesses, it
also stimulates behaviour
consistent with best practice.
Legality is one thing, developing
trust in your brand among
consumers is another. Those
complying with the act will do both,
and prosper as a result.
Action Check List
For detailed information check out
www.dataprotection.gov.uk
The home page for the Office of
the Data Protection Commissioner