Discovering the 20% that works
Someone once said that they knew that only 20% of their advertising was working, they just didn't know which 20%! There is a lot of truth in that statement and the first thing I would urge you to do is keep a record of where every lead comes from. This is really simple; every time you get a lead - ask them how they heard of you. Using a chart like the one below, add all the ways people can find out about you and then mark down every contact you get. At the end of the month add the totals and you will see which of your advertising efforts is working and which is costing you money. Give it a few months before making a change to your advertising strategy.

This chart gives a clear indication that the seminar you gave worked well, as did the press coverage, but the newspaper advertisements proved a poor return on investment. Remember, you are not IBM! One of the biggest problems I see is that small business owners try to reach too big an audience. If you are IBM you can place ads in newspapers, magazine, on television and radio, on buses and subways and reach the world. But, unless you have several million dollars to spend you need to carefully target your market and spend your budget wisely.

Do print ads work ?
Let's take a look at print advertising. There are many schools of thought with regard to advertising in newspapers and magazines, and what might apply to one type of business may not apply to another. You may have to use trial and error to see what works for you. I have been consulting with small businesses for more than a decade and this is what I have observed in the area of print advertising.

In general, for small businesses, print advertising does not show a good return. If you are promoting something that is time-dated such as a sale, a well placed ad can bring people to do your door as they have to make a mental commitment at the time they see the announcement. If your ad is generic and promoting your range of products or services, then you are looking farther than just bringing people to your door for a specific sale - you are looking to build brand awareness. In order to accomplish brand awareness, you will have to commit yourself to advertising in every edition for at least a year tomake it effective.

When would you consider brand awareness as opposed to sales? Imagine that someone sees your ad. If they don't need what you are selling immediately and urgently they are likely to file it at the back of their mind, and we all know what that means - it will be forgotten by the time they finish their next coffee! On the other hand, if they see the advertisement continually, over a long period of time, it sinks into their sub-conscious and when they eventually need what you sell, your name is at the forefront of their minds. The trouble is, it is costly to advertise continually - so watch your budget and make sure it's brand awareness you're after, not a specific time-dated customer draw.

Will your customers let their fingers do the walking?
Yellow Pages ads can work well for certain businesses and poorly for others. The question you need to ask yourself is, "are the Yellow Pages the logical place my potential market is likely to look for the type of product or service I sell?" For instance, if you have a leak in a water pipe you may reach for the Yellow Pages to find a plumber quickly. If you want a lawyer you may peruse the ads and see which law office specializes in what you need. But if you want someone to tutor your son or daughter in math, you are more likely to ask at the school, or speak to other parents. If Yellow Pages will reach your potential customers then it is often best to buy the biggest ad you can afford. In this market, size really does count. Not everyone equates ad size to credibility, but many people do - at least enough of them to make a difference in your investment vs. return.

Radio and television - are they the answer?
Television is too expensive for a lot of small businesses, and in my experience, to be successful you have to commit to it for the long term. Once again it is a brand-building exercise rather than something that will spur people to immediately call you and make a purchase.

Local radio can be successful as each station appeals to a specific demographic (i.e. under 30's, 50+ etc.) within a relatively small geographic area, and is especially successful in smaller communities where radio tends to be the primary information source. If you are going to try radio, I would suggest you sit down with the station sales staff and negotiate more than just straight forward ads. Discuss running a competition where you give away cash or your product or service. The more imaginative you can get the more likely your advertising dollars are going to work for you. Even small radio stations have a creative department who will work with you to come up with something that will meet your budget and your needs. It's in their best interest to give you a high return on your investment so you'll keep advertising with them!

In Part II of this article next month, I am going to talk about how to get your business 'out there', how to educate your target market about what you sell, and how to become a magnet company. Look forward to the January issue for that and a whole lot more!

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Negative or sloppy work habits

It might seem like you've earned the right to sit back and take it easy after all those years of hard work. But remember, others are watching. If they see you cutting corners or getting sloppy with your work habits (coming in late, leaving early, taking long breaks for no reason), they will eventually emulate what they are seeing in you, and your credibility will suffer.

Failure to commit to ongoing self-improvement

Sure you know everything there is to know about your business . . . or do you? Are you regularly taking advantage of training and opportunities to learn more about your industry? If you're tempted to stop getting better at what you do - you'll start moving backwards. You can't expect your staff to be committed to personal and professional growth if you don't demonstrate it to them.

Negativity toward clients and customers

It might be easy, after a while, to start getting chummy with your staff and to begin to talk negatively about those customers who drive you all crazy. That is gossip; plain and simple. And although your staff may seem to enjoy what appears to be camaraderie, you are steadily losing credibility in their eyes. Your customers are always number one - and by speaking ill of them - even if they deserve it from your perspective - never gains you respect. And, if by some chance, your customers get wind of it, you'll be spending a lot of time and energy trying to repair the damage.

Abdicating your leadership responsibilities

Although delegation is a great leadership attribute, if you are simply passing off tasks because you've become too lazy to do them yourself, your business will suffer. It should be your job to lead in certain aspects of your business - visioning, planning, watching the financials, ensuring quality control, making sure customers are being well taken-care of. Empower your staff to take on responsibilities within the company, but don't give them responsibilities that belong to you as the business owner. No one wins in that scenario - especially when mistakes are made. Who gets the blame? The person who took on a role he/she wasn't meant to hold, or you? Either way, someone loses, and in the end - it will be your business.

Not acknowledging the efforts of your team

Don't run your business like the man whose wife was complaining that he never told her he loved her. He responded by saying, "I told you I loved you when we got married, and if I change my mind I'll let you know." Your staff do their best work when you are affirming them for it. Don't ever think that they've worked for you long enough not to need it, or that they should just know that you appreciate their efforts.

Acting in ways that lacks integrity

If your staff or your customers find you cutting corners, not being true to your word, or saying one thing and doing another, your credibility is instantly shot. Be a person of integrity in everything you do, and be a model of integrity for those who work for you. Then you'll have an unbeatable staff who will take your business far.

You can't evaluate your attitudes too often to ensure that you aren't developing habits that might hurt your credibility. It's a slow insidious slide sometimes that begins with just one choice and goes downhill from there. If you've already developed some bad habits, make a concerted effort to bring yourself back to a place where you are a leader worth following! If you do, everyone wins!

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Your gut feeling is not enough!

I used to assess business plans for a living and the one thing I often heard was business owners telling me that people would be lining up for what they were about to offer. They had not carried out extensive market research. In fact most had only asked a few friends and family what they thought - and of course they thought it was the best idea they had ever heard of! Very rarely do people line up to buy something unless that something is very limited and already proven; tickets to see the Rolling Stones comes to mind, or gasoline when there is a shortage. In the real world most of us have to fight for our market share.

Carrying out comprehensive market research makes sense. Done correctly it will tell you whether people will actually pay for what you are selling in sufficient numbers for it to be profitable.

A few years ago I was stopped on the street by a man who politely asked whether he could ask me a few questions about my pets, as he was planning to open a warehouse selling pet food. Every day for an entire week this entrepreneur stood at various spots downtown and interviewed dozens of people. Over the seven days he was there he must have spoken to several hundred people. His questions ranged from what pets you owned, to where you currently purchased their food. He asked whether you fed them canned or dry food and what brands. He wanted to know the size of your dog, how many cats you had and how much you spent on average per month on their well-being. He also asked what you liked about your current supplier. On this point he was clever, he never asked what you didn't like - nine times out of ten people can't tell you what they like without using the word "but". By the time he opened he knew exactly what brands to stock and in what quantities; he also knew the likes and dislikes of his potential customers and a whole lot about his competition. Needless to say his business was a great success.

Market research is not just about customers, but if you don't have enough of them willing to buy what you sell the rest of it is pretty pointless. Make sure you create a market survey for your potential customers and talk to as many strangers (not family or friends) as you can. The number will depend on your product or service but it should not be less than 50 unless you are in a very small market.

Ask yourself what you need to know, then go out and find the answers

Below are a list of questions you should be able to answer before you go into a new business venture, launch a new product, change your brand, or any other major change in your business strategy. Devise a survey based on the information you need the most, and then start asking people for answers!

1. Is there a market for what you are selling?
2. Who is your ideal customer and why? Lots of people could buy what you sell, but who needs it most?
3. Do you really understand who you are selling to? Get to know your potential customers intimately.
4. Do they really need AND want what you are selling?
5. How can you reach them? What do they read, watch, attend etc.?
6. What price will the market bear for what you are selling?
7. Can you produce what you are selling at a cost that will allow you to be competitive and make a profit?
8. Do you have access to reliable suppliers?
9. Are raw materials readily available and are prices stable in the short, medium and long term?
10. If you are successful can you keep up with the orders?
11. What competition is there for your customer? Look at both direct and indirect competitors.
12. Which of your competitors are doing well and which are suffering - find out why.
13. How will you differentiate yourself from the competition?
14. What is happening in the industry you are entering? Look at the trends, is it growing, maturing or declining?
15. What is happening in the market you are entering (locally, provincially, nationally, and globally)?
16. How much is it going to cost you to enter the market?
17. What are all the things that could go wrong? Carry out a risk analysis and develop strategies in advance of problems arising.

Knowledge is power. The more information you can gather about every aspect of your business the more likely you are to succeed. And remember, if your market research tells you there isn't a market - pay attention! You'll be grateful you were able to walk away from that idea without a huge loss, to get ready for the next one, which, depending to your market research, may be a big hit!

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