Why is this important? Marketing is really letting people know about your product or service [...]]]> During my last two blogs, I talked about the importance of getting to know your target market, and more essentially, understanding what makes them tick.  There’s one more important thing to understand about your target market.  Where do they “hang out”?

Why is this important? Marketing is really letting people know about your product or service and why it’s beneficial to them. In order to tell them, they have to be able to “hear” you.  It was easier in the earlier days of advertising—options were limited. Now you have everything from newspapers (which are dying) to Twitter. And, of course, you have people who are glued to their television close to 24 hours a day.

The simplest way to find out how to access your target market is to ask. You can pick a few of your favorite clients and ask them. Or you can use something like Survey Monkey to do a survey of your email list. Be careful though, you want to learn about a particular segment of your target market – the people who actually buy things.

Based on what you learn you can build a marketing strategy to reach your target market. Depending on the media, you’ll either be telling them about your company (newspapers, magazines, television, etc.) or engaging them in a relationship (internet marketing, some radio, networking, etc.). When you’re having the conversation, don’t forget the research you’ve done on your target market. Remember it’s about them and not about you.

Be aware, too, of the etiquette of the medium you’re using. People who Twitter are quickly bored by people who want to sell them something all the time. Twitter is about sharing information and developing a relationship. Offer to help someone and you’ll get much more traction with that particular medium.

Marketing can be a creative learning experience.  The more you move away from your pre-conceived notions, the easier it will be to develop relationships that lead to sales.

Good luck!

One of the most recommended marketing strategies over the last two to three years [...]]]> Last week, I talked about how to determine return on investment (ROI) for small business marketing activities. That’s somewhat easy when you’re looking at money you’ve spent vs. money that’s come in. But how do you determine the ROI of your time?

One of the most recommended marketing strategies over the last two to three years has been the use of social media and networking. This is a broad term that can include everything from blogging to creating a video for You Tube to tweeting on a regular basis. These activities can be real time eaters, particularly if you find it difficult to write or create stellar sound bites.

It also can be difficult to count the sales that actually come from these activities. If you ask most people where they’ve heard of you, you’re most likely get a vague answer of “the Internet,” if they found you through any of the social media channels.

Let’s assume that you are getting a substantial number of sales from the Internet. You have a sales page on your web site that converts your leads to sales. And, let’s say, that 10% of the people who visit your website (unique visitors) purchase a $25 item from you each month.  You’re getting 1000 hits a month. So you’re earning $2,500 a month from your web site.

Once you’ve built your web site, your costs should be negligible. If you can increase the number of people showing up at your website, you should be able to increase your sales.

The next thing you’ll need to do is assign an hourly wage to your efforts. Let’s say $50 an hour is the minimum wage you want to pay yourself for your time. Spend two hours a week on social media, and you’ve spent about $400 per month.

You’ll need to make 16 more sales a month to break even. Remember, breaking even isn’t good enough.  You’re really looking to get close to more than 100 sales a month to make the effort worth your investment.

Social media is a long term strategy. You’ll have to invest several months of time up front before you receive the results you want. Through a use of Google Analytics, analysis and careful record-keeping, you’ll be able to get an idea if your time investment is worth it!

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From the example on Tuesday, we determined that the imaginary lead from In Style cost $2 per person.

Suppose you converted 10% of those people to buy a product worth $50 each.  Ten percent of 500 [...]]]> On Tuesday, I talked about determining cost per lead. The next step is to determine how much a sale costs you.

From the example on Tuesday, we determined that the imaginary lead from In Style cost $2 per person.

Suppose you converted 10% of those people to buy a product worth $50 each.  Ten percent of 500 people is 50.  Fifty people times $50 is $2,500.  The ad cost $1000. To determine your sales ratio, you need to divide the revenue by the cost of the ad.  The result is 2.5.  That means that for every dollar you spend with In Style, you get $2.50 of revenue. The sales ratio is 2.5 to 1.  That ratio is o.k., but ideally you want a 5 to 1 sales ratio or better.

A sales ratio of 1 to 1 is no good.  If you only ever earn $1 for every $1 you spend, you will have no profit. No profit means no growth, salary or return on investment for you, a business owner. It may seem preposterous that business owners would ever do something like this—but I see it all the time as a business coach, particularly with women. “Well, at least I made my money back,” is a phrase you should never, ever utter.

Let’s examine the same scenario for the lead from O.

Out of the 1000 people who responded, 10% bought a product worth $100. The total revenue was $10,000.  (10% of 1000 times 100). The ad cost $5000.  The sales ratio is 2 to 1.  (Revenue divided by ad cost.)  For this example, every $1 spent in advertising $2 in revenue was received. In the In Style example $2.50 was received for every $1 spent in advertising. Which is the better deal?

But what about time invested?  We’ll get to that next week.  (Don’t want to miss this information? Sign up for this blogs RSS feed on the left.)

Now it’s your turn. Look at the sales ratio you received for your advertising efforts.  Based on that information, figure out which advertising you need to increase and which you need to abandon.  Let us know the results in the comments below!

Sometimes marketing for small [...]]]> Small business marketing can be a great big hole that sucks your money into the vortex. How much do you need?  What do you need to do? How much time do you need to spend blogging, twittering and networking? What if you think you don’t have a creative bone in your body?

Sometimes marketing for small business can make you feel like you’re in an endless rerun of Mad Men.

Many marketing people will tell you that you can’t really measure return on investment (ROI) with marketing. After all, how do you track the money you paid a PR firm to get you “placed” in Oprah’s magazine? If image is important, how can you track the impression that polished walnut furnishing, fresh flower arrangements brought daily or a perky receptionist make on your clients?

The truth is, that you can’t. But there are places that you can track ROI and you should whenever possible. I see women continue to advertise in magazines for the prestige, or continue to invest in networking groups where they’ve never gotten a sale.

Let’s look at magazines and how you could go about tracking an advertisement.

Say you advertise in two magazines – O and In Style.  You can have the person reading the ad respond to you for a free sample.  In O, you ask them to respond to Dept. O and for the magazine In Style, you have them respond to Dept. S.  You get 1,000 leads from O and 500 leads from In Style.  On the surface, it looks like the ad from O is better.

However, let’s say that the ad from O cost you $5,000 and the one from In Style only cost you $1,000.  What is your cost per lead?

Cost per lead = Cost of strategy divided by number of leads returned.

So, cost per lead for O is $5 ($5000/1000) and the cost per lead for In Style is $2 ($1000/500).  So, even though you received more leads from O, your cost per lead is higher.

Cost per lead isn’t the only determining factor. Cost per sale is actually where the rubber meets the road. I’ll talk about that in Thursday’s blog.  (Sign up for the RSS feed to the left if you want to be sure you get every valuable tip that we offer on our blog.)

Now it’s your turn.  If you can, determine the cost per lead for every marketing strategy that you had in the past year. Let us know what you find in the comment section below!

One thing this article did not mention, however, was what I consider the most critical part of selling–research.

Once you have an idea that someone is a prospect, it’s a good idea to qualify them. What that [...]]]> I recently came across an excellent article about the sales process on Women Entrepreneur entitled, “Stop Closing and Start Selling.”

One thing this article did not mention, however, was what I consider the most critical part of selling–research.

Once you have an idea that someone is a prospect, it’s a good idea to qualify them. What that means is to make sure that they have a need for what you offer, or think that they have a need for what you offer or that what you offer will fit the need that they think they have.  I know that’s a little convoluted.  But many times, for example, people aren’t looking for a business coach. What they are looking for is someone who can help them make more money, keep more money and spend less time doing it.  My job is to help them understand how my services can help them do just that.

Once you find out that they have a need for your services, it’s important to see if they can afford your product or services, as well as the likelihood that they will choose to purchase from your company vs. finding doing it in house or working with firms they already have a relationship with.

Where can you find out that information? Using a search engine such as Google, you can find out a great deal of information about a company, including their financials if they are a publicly held company.  Understanding how to use social media as effective research tool, will show you how Linked In, Facebook, Twitter and even You Tube can yield in-depth information about a company or prospect. (Sign up for my class on using social media for your business to learn how.)

For example, leverage Linked In to find out who you know who knows someone in the company you’re targeting.  Get introduced so you can talk to them directly and find out a few key pieces of information that will help you help your prospect. Remember, building relationships over time is what matters in business. By doing your homework first, you’ll show you respect your prospect’s time. You’ll also be able to quickly demonstrate how your product or service exactly fits their need.

Why?

I also apply the same discipline to myself. Tax time is a great time to clean out old inventory, files [...]]]> When I coach a woman entrepreneur, I encourage them to apply a laser focus to their lives and business, eliminating what is no longer serving them and embracing the things that will help them move forward.

I also apply the same discipline to myself. Tax time is a great time to clean out old inventory, files and thoughts.  This year, my cleanliness is your gain!  Over the next few weeks I’ll be putting good products on sale–products that can help you manage your business more efficiently, become more profitable, embrace new relationships and find joy in your life.

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