Advertising Smarts

Marketing and advertising can become a black hole in your business, drawing in money and resources and giving little back - Domini Stuart looks at smart planning that targets your market and makes advertising dollars work hard to grow your business

If you fail to plan, you’re planning to fail. It’s an old chestnut, but one many small businesses overlook when it comes to marketing. And so they don’t get the returns they could, and the money and time wasted can seriously impact on growing the business.

"Advertising is what they buy when a sales rep calls with something that sounds like a great offer," says Matthew Byrne, lecturer in Communications at the University of Technology Sydney. "While $10,000 might buy you a good deal for a radio commercial, it won’t if you have no idea what you want to say, who you want to say it to, or even whether your target market listens to radio.

"Planning forces you to think strategically and to focus on what you want to achieve. That way, when a rep calls, you’ll be well-placed to judge whether the offer is appropriate for you."

Many SMEs think of advertising only in terms of TV, press, and radio, but Per Edwards, director of The Bakery communications, says the marketing plans he creates for his clients may not include any traditional advertising. "It depends on your target market," he says. "Your first step in creating a plan is to establish who you want to talk to. How you talk to them will grow out of that.

"Think about the characteristics of good customers. What are their needs? How do they get their information? Remember, you’re not necessarily your own best customer. The magazines they read and the TV programs they watch might not be the ones you choose.

"Where are your sales actually coming from? You may have 500 clients but nearly every business follows the 80–20 rule, with 80 percent of profits coming from 20 percent of customers. What are the qualities of that 20 percent?"

And the best way to find out about your customers is also the most simple: ask them. "Create a little survey—just three or four questions—and train your receptionist or sales people to ask these every time someone buys something," Edwards says. "We’ve all heard the saying that ‘50 percent of my advertising is wasted, the trouble is I don’t know which half’. But if you ask every customer ‘where did you hear about us?’ you’ll be able to see exactly what’s working for you."

Every business should have a database, and you can start entering contacts from day one. "Use it regularly," says Edwards. "Remember it costs seven to 10 times as much to attract a new customer as to retain an old one.

"One of my clients has a database of some 30,000 customers. His website does at least three to four times as much business as his kitchenware shop. Sending out a newsletter each month is extremely inexpensive, as are friend-get-friend type promotions. If you can use the web it’s extremely cost effective."