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Marketing

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Everything You Need to Know to Start a Successful Business!

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Dear Entrepreneur:

Congratulations! By selecting this guide, you’ve taken a very significant step onthe road to starting and running your own business. We thank you for your pur-chase, and wish you every success in your new business venture.

For over 20 years, Entrepreneur magazine has been helping people just like yousuccessfully start, run and grow their businesses. This business guide representshundreds of hours of interviews and research performed by our expert businessstaff. Inside you’ll find practical, step-by-step advice that clearly outlines the basiccomponents of developing a successful business.

To get the most out of the guide, start by reviewing the Table of Contents,which is a good place to start to find chapters dedicated to any subject you’relooking for: finding your target market, writing your marketing plan and yourunique selling proposition, creating exciting ad headlines, and much more.

Plus, we’ve included a number of resource listings in the appendices in theback of the book. These easy-to-use sections will give you names, addressesand phone numbers for a variety of associations, publications and serviceproviders.

We’re sure this guide offers a wealth of information that will be valuable for youtoday and in the years to come. Thanks again for your purchase, and good luckfrom all of us at Entrepreneur magazine.

Sincerely,

Rieva LesonskyEditor-in-Chief

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This publication has been developed with the intent toprovide an accurate portrayal of the general informationrequired to start a business on the subject matter covered.Recognizing that all business opportunities contain inher-ent risks, we suggest that the prospective investor consultan attorney and/or accountant with regard to personalinvestment criteria. This report is sold with the under-standing that the publisher is not rendering legal,accounting or other professional advice. If legal or otherexpert assistance is required, it is suggested that the serv-ices of a reputable attorney, accountant or professionalconsultant be sought.

The editors of Entrepreneur magazine have thoroughlyinvestigated and researched all sources, verifying asmuch data as possible to ensure the accuracy and com-pleteness of the information in this book; however, weassume no responsibility for errors, inaccuracies, omis-sions or any other inconsistencies herein. Quoted finan-cial information and operation data are strictly hypothet-ical. Your local situation may differ.

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MARKETING YOUR SMALL BUSINESS ©2005 by Entrepreneur Media Inc. All RightsReserved. Printed and bound in the United States of America. No part of this reportmay be reproduced or transmitted in any form or by any means without permissionin writing from the publisher, except by a reviewer, who may quote brief passages.This book is the Fourth edition of Marketing Your Small Business and was previously published under the title of SUCCESSFUL SALES & MARKETING. Published by Entrepreneur Media Inc., Business Products Division, 2445 McCabeWay, #400, Irvine, CA 92614.

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Startup Essentials Series#1800 Creating A Successful

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Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Chapter 1

Think Like A Marketing Guru . . . . . . . . . . . . . . . . . . 1.1A BRIEF HISTORY OF MARKETING. . . . . . . . . . . . . . . . . . . . . . . 1.1MARKETING YOUR BUSINESS TODAY . . . . . . . . . . . . . . . . . . . . 1.3THE LOGIC OF MARKETING: LOTS OF SIMPLE THOUGHTS . . . . . 1.5

The Components Of Marketing. . . . . . . . . . . . . . . . . . . . . . . . 1.5Your Business And The Four P’s . . . . . . . . . . . . . . . . . . . . . . . 1.7Your Business And The Four Utilities . . . . . . . . . . . . . . . . . . . 1.9The Customer Is Always Right, Right? . . . . . . . . . . . . . . . . . . 1.10

THE ILLOGIC OF MARKETING: MAKING SENSE OF MADNESS . . 1.10BECOMING A MARKETING GURU. . . . . . . . . . . . . . . . . . . . . . . 1.11

Chapter 2

On A Clear Day…You Can See The Market . . . . . . . . 2.1SELF-DECEPTION: THE ENTREPRENEUR’S

MOST DANGEROUS TRAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1LOOK THROUGH YOUR CUSTOMERS’ EYES . . . . . . . . . . . . . . . . 2.3

What Do Customers Want? . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4LET THE CUSTOMER TEACH YOU: GETTING FEEDBACK . . . . . . . 2.7AVOID FOUR COMMON MARKETING ASSUMPTIONS . . . . . . . . . . 2.8HOW DOES YOUR PRODUCT FIT THE MARKET? . . . . . . . . . . . . 2.10

Product Appeal: Highest Quality . . . . . . . . . . . . . . . . . . . . . . 2.11Place Appeal: Most Easily Available . . . . . . . . . . . . . . . . . . . . 2.11Price Appeal: Cheapest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12Promotional Appeal: Most Highly Visible . . . . . . . . . . . . . . . . 2.12

Chapter 3

Define Yourself And Your Customers . . . . . . . . . . . . 3.1SEGMENTATION: SELECT YOUR BEST MARKETS . . . . . . . . . . . . . 3.3

How To Identify A Market Segment . . . . . . . . . . . . . . . . . . . . 3.4Segmenting For The General Consumer Market . . . . . . . . . . . . 3.6Segmenting For Business Customers . . . . . . . . . . . . . . . . . . . . 3.7

THE POSITIONING STATEMENT: YOU IN A NUTSHELL . . . . . . . . 3.8Your Company’s Market Personality. . . . . . . . . . . . . . . . . . . . 3.10

OVERLOOKED MARKETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10Niche Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10

Entrepreneur Magazine’s

Marketing Your Small Business

i

TABLE OF CONTENTS

Chapter 4

How To Write (Yes, Write) Your Marketing Plan . . . . 4.1MARKETING PLAN TRUMPS FINANCIAL PLAN . . . . . . . . . . . . . . . 4.2PREPARING TO WRITE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4THE INGREDIENTS FOR A TASTY MARKETING PLAN. . . . . . . . . . 4.5

Market Situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5Threats And Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8Marketing Goals: Where The Details Start . . . . . . . . . . . . . . . . 4.9Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11Controls: Tracking Effectiveness . . . . . . . . . . . . . . . . . . . . . . 4.12Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.13

Chapter 5

The Basics Of Selling . . . . . . . . . . . . . . . . . . . . . . . . 5.1FEATURES VS. BENEFITS: THE KEY TO MARKETING . . . . . . . . . . 5.1

Compiling A Key Benefit Inventory . . . . . . . . . . . . . . . . . . . . . 5.3KEY APPEAL, MARKET BY MARKET . . . . . . . . . . . . . . . . . . . . . . 5.4

What’s Your USP? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5SELLING TO THE PUBLIC: THE FOUR PILLARS

OF MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6BUSINESS-TO-BUSINESS: GIVING AN EFFECTIVE

SALES PRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7Get Informed: Know The Buyer . . . . . . . . . . . . . . . . . . . . . . . 5.8Rehearse Your Pitch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9Get Some Sleep And Eat Your Wheaties . . . . . . . . . . . . . . . . . 5.9Sell The Benefits, Not The Features . . . . . . . . . . . . . . . . . . . . 5.10Invite A Dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.10Be Prepared For Any Objections . . . . . . . . . . . . . . . . . . . . . . 5.10Talk Money And Ask For The Business . . . . . . . . . . . . . . . . . 5.11Fill Out A Call Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12

OVERCOMING BUYING OBJECTIONS . . . . . . . . . . . . . . . . . . . . 5.12GETTING TO THE DOTTED LINE . . . . . . . . . . . . . . . . . . . . . . . 5.14

Chapter 6

Selling: Your Next Steps . . . . . . . . . . . . . . . . . . . . . . 6.1SELLING SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1

The Difference Between Marketing Services And Products. . . . . 6.2PRICING: HOW MUCH SHOULD YOU CHARGE? . . . . . . . . . . . . . 6.4DISTRIBUTORS: FRIEND OR FOE? . . . . . . . . . . . . . . . . . . . . . . . . 6.7

Who Are These Distributors, And What Do They Do? . . . . . . . . 6.8Finding A Distributor For Your Product . . . . . . . . . . . . . . . . . . 6.9

UNLEASHING YOUR SALES FORCE . . . . . . . . . . . . . . . . . . . . . . 6.10

Table Of Contents

ii



iii

Training Your Retail Sales Staff . . . . . . . . . . . . . . . . . . . . . . . 6.10On-Staff Sales Force. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11Contract Sales Force. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12

TESTIMONIALS AND CASE HISTORIES . . . . . . . . . . . . . . . . . . . . 6.12

Chapter 7

Targeting Your Advertising To Your Business. . . . . . . 7.1THE BASICS OF A GOOD AD...IN ANY MEDIUM . . . . . . . . . . . . . 7.2

What Makes A Good Ad? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3Creating Good Ad Copy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5Creating Clean Ad Design . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7

DO YOU NEED AN AD AGENCY? . . . . . . . . . . . . . . . . . . . . . . . . 7.8Freelancers Vs. Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11

THE WONDERFUL WORLD OF MEDIA . . . . . . . . . . . . . . . . . . . 7.15Print Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.16

Newspapers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.17Shoppers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.19Consumer Magazines . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.20Business And Trade Magazines . . . . . . . . . . . . . . . . . . . . 7.21

Broadcast Advertising: Radio And Television . . . . . . . . . . . . . 7.22Radio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.22Television . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.24

MEASURING THE EFFECTIVENESS OF YOUR ADVERTISING . . . . 7.26

Chapter 8

Sales Promotions: The Turbocharger . . . . . . . . . . . . 8.1THE TOOLS OF SALES PROMOTION . . . . . . . . . . . . . . . . . . . . . . 8.1

Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1Special Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3Point-Of-Purchase Promotion . . . . . . . . . . . . . . . . . . . . . . . . . 8.4Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4Trade Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5Cooperative Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5

TRADE SHOWS AND EXHIBITIONS. . . . . . . . . . . . . . . . . . . . . . . 8.6SPECIALTY ITEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9

Chapter 9

Public Relations: The Softest Sell . . . . . . . . . . . . . . . 9.1THE IMPORTANCE OF PUBLIC RELATIONS . . . . . . . . . . . . . . . . . 9.1

How A Newsperson Thinks . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4Your Company As A News Resource . . . . . . . . . . . . . . . . . . . . 9.6

THE PRESS RELEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.8The Five W’s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10How To Hook The Media On Your Story . . . . . . . . . . . . . . . . 9.10

Publicizing Special Events. . . . . . . . . . . . . . . . . . . . . . . . . . . 9.11PICK THE RIGHT MEDIA OUTLETS . . . . . . . . . . . . . . . . . . . . . . 9.12TELL THE WHOLE STORY: THE PRESS KIT . . . . . . . . . . . . . . . . 9.12

Chapter 10

Be A Good Corporate Citizen . . . . . . . . . . . . . . . . . 10.1MAKE THE BUSINESS CONNECTION CLEAR . . . . . . . . . . . . . . . 10.3INVOLVE YOUR COMPANY AND ITS CUSTOMERS . . . . . . . . . . . 10.4

Chapter 11

The Internet: Marketing At The Speed Of Light . . . . 11.1THE INTERNET AND THE WORLD WIDE WEB. . . . . . . . . . . . . . 11.2E-MAIL AND THE COMMUNICATIONS REVOLUTION . . . . . . . . . 11.3

E-mail Communication Tips . . . . . . . . . . . . . . . . . . . . . . . . . 11.4How To Set Up A Local Network . . . . . . . . . . . . . . . . . . . . . 11.6“Talking” Via The Internet . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7

ESTABLISHING A WEB SITE: YOUR VIRTUAL BUSINESS ADDRESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.9

Locating And Building Your Web Site. . . . . . . . . . . . . . . . . . 11.10HOW TO BUILD A WEB PRESENCE. . . . . . . . . . . . . . . . . . . . . 11.13

RSS Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.15Web Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.16Affiliate Marketing Programs . . . . . . . . . . . . . . . . . . . . . . . . 11.16

Chapter 12

Customer Service: The Soft Underbelly Of Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1

ALL CUSTOMER SERVICE IS PERSONAL . . . . . . . . . . . . . . . . . . . 12.4DEALING WITH HOSTILE CUSTOMERS . . . . . . . . . . . . . . . . . . . 12.5FIRST-CLASS SERVICE MEANS REPEAT BUSINESS . . . . . . . . . . . . 12.6SPOT-CHECK YOUR SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . 12.7SETTING SERVICE STANDARDS. . . . . . . . . . . . . . . . . . . . . . . . . 12.7

Chapter 13

Stay Strong Through Training . . . . . . . . . . . . . . . . . 13.1TRAIN FOR GOOD SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1TWO KINDS OF TRAINING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3

Training New Hires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3Develop Your Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4

Chapter 14

Database Marketing Expands Your Horizons. . . . . . 14.1GETTING NEW CUSTOMERS FROM EXISTING ONES . . . . . . . . . 14.4DIRECT MARKETING: PRECISION MESSAGE DELIVERY. . . . . . . . 14.5

Table Of Contents

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v

WAGING A DIRECT-MAIL CAMPAIGN . . . . . . . . . . . . . . . . . . . . 14.7CREATING YOUR DIRECT-MAIL MATERIALS. . . . . . . . . . . . . . . . 14.9

The Direct-Mail Package . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.9The Self-Mailer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.15The Postcard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.18Your Other Printed Materials And Catalogs . . . . . . . . . . . . . . 14.18Your Company Newsletter . . . . . . . . . . . . . . . . . . . . . . . . . 14.21

Chapter 15

Keeping On Top. . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1REGULAR MARKETING PLAN REVIEW . . . . . . . . . . . . . . . . . . . . 15.2

Chapter 16

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.1

Chapter 17

AppendixMarketing Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.1

Chapter 18

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.1

So you’ve decided it’s time to getsome marketing under your belt.That’s good. Let’s face it, most entre-preneurial spirits are much more comfortable in playing with theirproduct or service than in doing thehard work of marketing it.There’s nodoubt that the typical marketing ter-rain can be an unfamiliar landscape,populated with alien concepts (likedemographics and segmentation) andexotic languages (like CUME andpush-pull). But the reality is, you don’thave any choice about marketing. Your market will form an opinion about yourproduct or service one way or another. Andthey’ll act on that opinion. Do you want toleave to chance the public’s perception ofyour product…or do you want to play arole in its creation?

Marketing Your Small Business is basedon almost two decades of experience inmarketing on behalf of small businesses,not to mention hundreds of interactionswith colleagues and lots of research. Thisbook will show you marketing as you’remost likely to need it and use it…practical,understandable and affordable. Too manyof today’s marketing texts speak in intel-lectual constructs that can prove very use-ful for a billion-dollar multinational corpo-ration but which deliver precious littlebenefit to the small-business entrepreneurlike yourself, eager for some tips on howto make his/her business more successful.

Many small-business owners considermarketing “soft knowledge,” which they canpick up along the way by trial and error.That is true. But marketing can be a breath-takingly inexact field, and trial and error

gets very discouraging and very expen-sive—and it has sunk a lot of small busi-nesses before they ever ventured out ofport. However, don’t think marketing issomething you just can’t learn or, in fact,get darned good at. Marketing certainly is-n’t a hard science, but some three genera-tions of practice have given marketing animmense track record we can study. Andwe can draw some good conclusions aboutwhat’s worked, what hasn’t and why.

The time you spend educating yourselfabout marketing will deliver a splendid re-turn on investment. While it’s true that youmake money from your equipment and em-ployees, putting some marketing power be-hind your sales and promotional efforts willmultiply your success many times over.

Marketing Your Small Business will giveyou a solid grounding in what you need toknow to grow a small business. No singlebook can make you an expert, but this onewill show you the full range of marketingand advertising tools you can put to workin building your business, regardless ofwhether you sell a product or a service,market locally or regionally, employ a castof hundreds or can fit your entire organi-zation on a single chair.

You’ll learn how to look at your poten-tial market—who’s going to buy your prod-uct and why. You’ll understand how to po-sition your product or service in themarketplace: how you describe it in termsthat will trigger your customers’ buying re-sponse (hint: think benefit, not feature).

Think you can treat all your customersthe same way? If you said yes, think again.You can’t market to all your customers in thesame fashion because they buy your prod-



vii

Introduction

uct or service for different reasons. In thisbook, you’ll learn how to customize yourmarketing to different customer segments.

You’ll also write a marketing plan foryour business that gives you direction, mo-tivation, tactical guidance and a way tomeasure results. You will hone your sell-ing techniques, both personal and in theadvertisements you create to market yourproduct or service. You’ll pick up insightsinto selecting the right media to carry yourmessage. With the increased availabilityof highly accurate mailing lists and de-mographic information, you will learnhow to use direct marketing to bring newcustomers in and keep existing customershappy. And you’ll find out how to usemarket promotion as a short-term tool toboost your sales volume.

With Marketing Your Small Business,you’ll learn some of the subtler aspects ofmarketing your business: how to use pub-lic relations to raise your profile in thecommunity and your trade marketplace,and how to promote yourself as (and ac-tually be) a good corporate citizen. You’llgrasp the importance of using the Inter-net, and you’ll learn how to judge whetherit’s a good fit for your business. Finally,you’ll appreciate the value of a trainingprogram to enhance your own skills andthose of your staff.

To make this book even more useful, I’veincluded five types of tip boxes, short asidesdesigned to help you by focusing on ideasand practices that I want to highlight or thatdeserve a little more explanation. Here’s adescription of each type:

Introduction

viii

How ToEvery field has its

tricks of the tradethat those in the

know take advantage of.Use the ideas in this box to simpli-fy the tasks involved in effectivelymarketing your product or service.

Jargon AlertEvery discipline

has its specialterms. Those thatare unique or of special impor-tance are highlighted and ex-plained in this box.

InsightThis box is de-

signed to give youanother perspective

on the principles and practicesI’ve covered. By giving an exam-ple or an analogy, these boxescan help you get to that “ah-ha”point where a particular ideacomes into better focus.

DangerMistakes and

miscues are al-ways a possibilityin creating and executing yourmarketing plan. This box alertsyou to what might go wrong andhow to minimize that possibility.



ix

Finally, at the end of the book, you’ll findan appendix filled with marketing resourcesto help you in your business, from books andpublications to associations and Web sites.

When you are done with this book, you’llunderstand the way you need to look atyour product or service, your sales forceand your marketing from the most impor-tant viewpoint—your customer’s.

Marketing Your Small Business will giveyou a set of tools that will work for anybusiness, an approach that focuses on the

customer in terms of defining your productor service, targeting your advertising, andthinking about often-unconsidered issueslike product distribution and the selectionof a sales force.

At its heart, marketing is a high-energymental game. Since you’re likely smallerthan a lot of your competitors (and your financial pockets may not be as deep),you’ve got to out-think ’em.

Pull up a chair, then, because here’swhere you’ll learn how.

If you can develop true marketingvision, you’ll transform your business.You’ll establish a tight bond with yourcustomers that will be impossible foryour competitors to break.

Look around us in turn-of-the-millenni-um America. The marketing concept is thedynamo of our consumer culture: It’s therealization that pleasing the customer is cen-tral to business success. The success of mar-keting is a large part of why we and the restof the developed world enjoy theabundance that we do.

We tend not to realize theenormous impact marketinghas made on us, and it’s easy toforget that marketing, the carefulunion of the consumer’s needsand the products and servic-es that satisfy those needs,has not always existed asit does today. We arevery fortunate. Weenjoy high-qualityand affordable foodsand exotic taste treatsfrom around theworld. For amodestexpenditure,we can buy elec-tronics unimaginablea generation ago.Through books,magazines, televi-sion and the Inter-net, we browse inan evening more

information than Horatio ever dreamt ofin his philosophy. Marketing is one of thekey catalysts of this abundance.

A BRIEF HISTORY OF MARKETING

It’s helpful to take a quick look back tosee how this has all come about. In the ear-liest times, people only made what theywould use. The countryside was largely self-sufficient, with families and small commu-

nities generally making everything theyneeded. The customer had not yetbeen invented. As time passed, peo-ple began to barter and trade amongthemselves. It was a simple ex-change: You give me some of whatyou make or grow, and I will give

you some of what I have. Even-tually, community marketplaces

sprouted up where thisbartering could takeplace, and as barteringbecame complicated

and unwieldy, moneywas used as asubstitute for thedirect exchange

of goods. Middleper-sons emerged (as they al-ways do): They wouldbuy from lots of different

growers and makersand then distribute arange of those prod-

ucts to everyone.People now be-came customers as



1.1

Chapter 1

Think Like A Marketing Guru

well as producers, and as societies grewand the process continued, people beganto specialize: They would produce onething to sell, or they would sell their serv-ices to a company, and with the money theymade they would purchase everything theymight need or want.

Fast-forward to the Industrial Revolutionin the mid-19th century. Technological advances made production easier; trade increased among a growing number of nations. Machinery spit out goods quick-ly—much more quickly than people coulddo manually. Despite the well-chronicledproblems of this time, people welcomedthe wide range of new and improved prod-ucts and inventions that came on the mar-ket. You couldn’t make enough. In this rapidly changing era, the truism that “a goodproduct sells itself” was born. It was industrialists’ heaven!

Direct marketing was born at this time,as manufacturers mailed lists of their prod-ucts to customers at home and had them

order through the mail. Toward the end ofthis period, mail order catalogs invaded theliving rooms (and other rooms) of ruralAmerican homes.

Over the next century or so, as moreand more factories kept cranking outgoods, the market became flooded withmany different types of similar items. Busi-nesses found they had to “push” goodsharder to get them bought. This processushered in the era of the salesperson, alongwith advertising and advertising baubles(most advertising memorabilia come fromthis era). It wasn’t enough anymore just tomake something; you had to differentiateit from all the other products around. Rolesbecame more defined: It was manufactur-ing’s job to make stuff, and it was the salesforce’s job to sell it. No one bothered muchabout the customer at this point. Demandwas still great enough that real customersatisfaction wasn’t a vital issue.

Selling proved to be very successful, butat first it was one-sided: It was all about theproduct. And eventually overexuberantmanufacturers made too many products that

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1.2

InsightI once hosted a

visiting professorfrom Magadan, a

small city in the Russian Far East.She had made very limited trips tothe “West” before and wanted tovisit an American grocery store.We’ve all heard stories of visitorsseeing our stores for the first time,but it’s stunning to see the impact.She was mute and breathless aswe wandered the produce aislesand freezer cases. It’s seductivelyeasy to forget the immensity ofour prosperity. And marketing—the effort to satisfy customers’wants and needs—is a driving fac-tor behind that prosperity.

InsightYour “product” is

what you offer toyour customer. Itcan be a physical item (tennisracket, enchilada or sump pump),a service (trip to Paris, tax prepa-ration, delivery services or fire-place cleaning), or most usually,a combination of the two. By theway, the individual or companythat uses your product can be aclient, customer, consumer, visi-tor, partner, constituent or mem-ber. Usage depends on industryor company practice.



1.3

didn’t really meet people’s needs. Customersbecame wiser, more discerning, more de-manding. A new approach was needed.

Marketing, as we know it today, cameof age in the late 1950s. Customers maytire of a product, but they never tire ofthemselves. Salespeople realized theyneeded to build their offerings around cus-tomers’ needs and desires. The market-ing era was born when manufacturers be-gan to consult the customer first, tailoringwhat they made and how they deliveredit to meet customer demand and expec-tation. Retailers converted to a marketingorientation first, and the industrial and serv-ice sectors followed.

Today we have a new revolution: com-puters. They have affected the selling environment in two major ways:1. We can gather and manipulate enor-mous amounts of data for direct-market-ing efforts, market research, product test-ing and so on.Historically, selling has gonefrom personal, through mass marketing, andnow increasingly back to personal again.Computers let marketers focus their effortswith stunning precision.2. The Internet has emerged and grownmore quickly than anyone could haveimagined. No one knows how this willchange the marketplace, but almost every-

one’s convinced the decades to come willbe computer-exciting.

MARKETING YOUR BUSINESS TODAY

You’re in a small business. You’re the topperson or one of the key players. Or maybeyou’re the entire company. With the mar-keting revolution, with computers and withsimple and powerful communications, thisis your time. Just as the mammals took overthe world from the dinosaurs, so small busi-nesses have the nimbleness, the resourcesand the energy to make great advances, nomatter how intimidating the large compa-nies may appear.

It’s important for you to think of yourbusiness from a marketing standpoint:You’re not a company making a productand looking for customers to buy it. Youare a company with an understanding ofa particular class of customers—their needsand problems—and you are developingproducts and services that fill those needsand solve those problems. This is the keymarketing insight.

The ramifications of this idea are many,but in itself it is very simple: Your focus isthe customer, not the product. You are apeople-pleasing company (as all companiesare today) and your main goal is, well,

You’ve got to market internally as well as externally. The marketing con-cept for your business must be believed by your employees as well as con-firmed by your customers. Everyone in your company should share the samemarket insight. Talk to your team about how marketing works, how to turn salesinto marketing-driven operations, and how to use the customer to teach youmore about the market. Conduct some training lunches—you provide thelunch, they provide the ears and eyes. Photocopy good articles and circulatethem. Use the company bulletin board to disseminate marketing messages.Announce your marketing activities internally before they take place. Build upunderstanding and enthusiasm for marketing throughout your company.

Spread The Word

pleasing people. Get beyond the productyou are manufacturing or the service youare providing, no matter how excellent oressential it may seem, and instead figureout what the needs of your customers areand how to best fulfill them. Successfulcompanies forget about their products asproducts; their products are only the meansby which they satisfy customers.

As a small business, you are in the bestposition to do this. Marketing a small busi-ness is fun and exciting because it requirescreativity, resourcefulness and flexibility.Being small, you can adjust more quicklyand be more responsive. The communica-tion between you and the customer can bevery direct and immediate. Put together theright mix of product and market, and yourprofits will increase and your company willgrow. The challenge of marketing a smallbusiness is more than compensated for bythe satisfaction you’ll feel as you succeed.

In fact, you’ve been marketing all yourlife. It’s part of being human; every day,every one of us is creating messages thataddress the specific needs of particular au-diences. Remember when you brought

home a bleak report card from school? Re-call when you met your partner’s parentsfor the first time? Or your early job inter-views? What product were you marketingthen? That’s right, your favorite product:you. You were tailoring your product, your-self, to meet the expectations of the cus-tomer—your parents, your in-laws or yourfuture boss. That’s the short-form answerto “What’s marketing?”

Is it really that simple? Well, yes and no.It really is that simple. But here’s how theAmerican Marketing Association definesmarketing more formally:

“Marketing is the process of planning theconception, pricing, promotion, and dis-tribution of goods and services to create ex-changes that satisfy individual and organi-zational objectives.”

The key thing to notice here is how inclusive marketing is. It’s not just sales.It’s not just promotion. And if you re-member anything from this book, it’s notjust advertising.

Let’s define marketing as the planned ex-change between buyer and seller, in whichboth the customer and the product-makerare satisfied. Think of it as a pure exchange

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DangerDon’t wait to

market. Fight thetendency to paytoo little attention to your cus-tomers and to resist marketinguntil you’re in trouble. Too muchsmall business marketing takesplace when the steely aroma offlop sweat fills the air. Marketwhen times are good, and you’remore likely to keep the goodtimes rolling. So make marketinghay while the sun shines!

InsightMarketing is get-

ting frighteninglypersonal. Computer

databases allow marketers to create mailings with our namesand addresses printed throughoutthe sales material. “Hey, FredGarnes, won’t your neighbors on Magnolia Lane be surprisedwhen you tell them you’ve won$10,000,000!” Some wags predictthat we’ll soon each have ourown personal magazine deliveredeach month…with every articlehand-picked to please us.

1.5

of stuff, almost like a barter. The manufac-turer or retailer or service provider has theproduct or service, while the customer(whether another business or the final con-sumer) has the money.

You should also take to heart a few other truisms about marketing and smallbusinesses:● The customer is both judge and jury, andyou’re the one he or she is making deci-sions about.● It’s just you, the customer and the “exchange.” ● Even a little marketing is a good thing.● You’re never finished marketing.

Learning and applying the fundamentaltools of marketing will change the way youdo business. If you can take the concept ofmarketing into your business personality—if you become a real marketer—good thingswill happen with your company and theproducts and services you offer. You mayeven have some fun along the way.

Of one thing you can be sure: The mar-keting approach is the central engine thatruns and maintains so much prosperity inthe United States, and it can lead you toprosperity in your business, no matter whatyou do for a living. If you develop mar-keting vision, if you’re able to look at theselling terrain with the eye of your customer,you’ll avoid 90 percent of the mistakesmade by small businesses.

THE LOGIC OFMARKETING: LOTS OF

SIMPLE THOUGHTSLet’s start with a basic proposition: On the

scale of human knowledge, marketing liesprecisely midway between science and art.

On the one hand, top marketers can tar-get and define an unexplored or underex-plored market segment, develop a productto fit an unfulfilled need, and move thegoods. We have lots of data on consumerbehavior in the market, and we can often

use that information to deliver predictableresults. This is the science part.

On the other hand, marketing can beunpredictable and unscientific, subject tothe whimsy of human desire. Some of thesmartest marketers in the world have shak-en the marketplace with their flops: NewCoke, Edsel, IBM Home PCs, Sony’s Betamax and many others. All the resourcesin the world can’t keep marketers frommaking inept decisions, nor will marketersever turn into mind readers. Marketingdeals with human psychology on a veryfundamental level. And despite all theyears of serious study, the human mindand how it works remain a mystery. Thisis the art part.

Let’s start our lengthy journey togetherby defining some terms.

The Components Of MarketingMarketing includes market research,

advertising, sales, public relations, directmarketing, product promotion, pricing anddistribution—as well as lots of otherthings. Some say it includes the seeds ofthe decline and fall of Western civilization.



Jargon AlertIn an “exchange,”

your customers giveyou some of theirmoney (at least usually) for your[fill in the blank]. When it’s done,both you and the customer mustleave feeling the exchange provid-ed fair value. The customer has toget his or her “money’s worth”;you have to get a “fair price.” Ifboth sides of the exchange comeout satisfied, chances are good for another exchange. And sobusiness happens.

But you’re busy, so we won’t take time todiscuss that here.

Here are marketing’s key elements:● Market research helps you form and re-fine your understanding of your audience.How does the market feel about you andyour competitors? What are the markettrends? Market research doesn’t have tobe complex and expensive. But it shouldbe systematic.● Advertising helps most businesses gettheir message to their customers. Once youhave your message, you embody it in anadvertisement, align your media with yourtarget audience, and cross your fingers.● Sales is the intimate “closing” part of mar-keting. It’s where the exchange actuallytakes place. You make the sale. You satis-fy the customer. You scratch the itch. Andyou take the steps to make sure that cus-tomer stays happy. Think of sales as theendgame of the marketing process. You’veselected the market, you’ve established theprice, you’ve settled on a mode of business

(mail order, international sales, retail andso on), you’ve developed the product orservice, you’ve picked an advertising mes-sage, and you’ve decided how to send thatmessage out to your audience. It worked.Your audience has responded. There theyare in front of you, fingering their wallets.Now it’s sales time. ● Public relations helps make the story ofyour success a news story. And this worksto make you even more successful. Peo-ple like to see a positive tale, and themore you can spread the upbeat story ofyour business, the greater the results. Pur-chasers like to buy from successful com-panies—they feel validated in their buy-ing decision.● Direct marketing or database market-ing are other elements of the marketing puz-zle. Some businesses, especially those thatsell to other businesses, lend themselvesvery well to building (or buying) a databaseof prospects and “working” it with sched-uled contacts.● Product promotion gives you options forpushing your product into the marketplace,generally over a short period of time.Coupons, special offers, event tie-ins andcelebrity endorsements are all types of pro-motions. You can even send a van aroundwith a team of people to give out $10 mil-lion checks. Product promotion can boosta new product, announce a new location,fight off a competitor or take advantage ofa special purchasing opportunity.● Pricing pulls together all the costs thatgo into delivering your product and thendetermining how much your customers willbe willing to pay. Many small-business peo-ple don’t see this as a part of marketing.But doesn’t price impact the “buyability” ofyour product? It sure does. It’s part of themarketing mix. Incidentally, high price does-n’t equal bad, nor does low price equalgood. A coffeehouse owner in GreenwichVillage in the ’70s offered a range of elab-

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DangerWatch out for

“dangerous pric-ing.” Building a

business on low price is a time-honored custom. But it has abuilt-in danger. Price breeds dis-loyalty. If you succeed by lowprice, you can also fail by lowprice. Every new gunslinger drift-ing into town will want to takeyou down by shaving a few centsoff the price. What customerslong for is value, which includesnot only a good product but ac-companying services as well. Payattention to price…but pay evenmore attention to value whenbuilding a loyal customer base.



1.7

orate coffee drinks at high prices. His topcoffee was $6.25 a cup; the second mostexpensive was $4. A friend once asked himwhy he offered such an expensive coffee,since no one was going to spend $6.25 ona single drink. “You’re right,” he replied witha smirk, “but it sure helps me sell a lot moreof my $4 cup.”● Distribution covers how you get yourproduct into the customer’s hands. Do youdeliver? Does the customer come to you?Is there a middleperson? It’s not uncom-mon for businesses to use many differentdistribution systems. Lands’ End clothing,for example, built its business on catalogsales. But they did a market research studythat revealed that a significant portion oftheir target market remained skeptical ofordering clothing over the phone. So theyopened several varieties of retail outlets:overstock stores and some special “comein, try the clothes on, and then order overthe phone” stores.

Marketing includes a mix of complicat-ed variables, not to mention the obscuritiesof the consumer mind. Harnessing all theseelements to work together demands a surehand and quick feet. But not to worry—youwill need no more skill and courage than,say, the average lion tamer.

If you find yourself continually puttingoff your marketing duties, look at them asnecessary homework. If you have kids,you know what it’s like trying to convincethem that they should get started on theirsociology paper before the day it’s due.You present them with your logical ar-guments—if they wait, they’ll only makelife harder on themselves and increase therisk of getting a bad grade—but still theyresist. We all do. When faced with dull orunattractive chores, we procrastinate. Butfail on enough papers, and we begin tobecome believers in homework. Once youget started and keep at it, you’ll developyour marketing skills more rapidly, and

they’ll become more intuitive. You’ll soonfind yourself naturally adopting a mar-keting perspective.

Most people start their business becauseit’s something they love. They don’t neces-sarily like the selling part of the business,and they often don’t know much aboutmarketing. On the other hand, most mar-keters don’t have much detailed knowledgeof their products…especially technical oneslike infrared spectrometers, electrical dis-tribution or protein analysis.

If you’re in the position to hire profes-sionals to do your marketing, great. If youare not—and most small-business ownersaren’t—then you’ll just have to wade intobattle and master marketing yourself.

Your Business And The Four P’sThe “Four P’s” provide a lens through

which you can look deeply into your busi-ness and see how to improve it. They’re acornerstone of marketing-oriented thinking.They apply to every business in the solarsystem. And they’re relevant to yours,whether you’ve thought of them before ornot. They are: 1. Product2. Place3. Price4. Promotion

Jargon Alert“Marketing mix”

is the blending ofthe Four P’s (prod-uct, place, price and promotion)to deliver the highest value to cus-tomers at the lowest cost to you.Think of it as the recipe for suc-cess, although the recipe alwayschanges in response to customerdemand and competitive pressure.

Wash your hands and tie on an apron fora moment. Let’s put you in the pizza busi-ness and demonstrate how you can usethese ingredients to create what’s called a“marketing mix.”

Each of the Four P’s is a variable that youmanipulate until you get the right balancefor a profitable business. It’s much like tak-ing pictures with a 35mm camera—you ad-just the shutter speed, exposure and focusevery time you take a picture, and everytime the light or your location changes, youhave to adjust them again. The Four P’s arenot static either, and you will have to con-tinually adjust them to keep your businessat its most profitable.

If you’re in the pizza business, just thinkof the things that can compel you to changethe way you operate:● Growth on the edge of your prime market● New competitors● The passing of old competitors● External factors: the cost of gas, tight labor pool, property tax increase● Cost of ingredients● New product introductions

Now let’s consider your options basedon the Four P’s:1. Vary the Product: Offer thick-crust piz-za, asparagus and tuna fish pizza, sauer-kraut and boysenberry pizza or maybesome hero sandwiches? And how aboutsalads and soups?2. Vary the Place: Offer sit-down meals, adrive-thru window, free lunch delivery tooffices, a fax line, catering for office parties,a pizza wagon outside factories and so on.3. Vary the Price: Cut the price, raise theprice.4. Vary the Promotion: Buy a pizza and getconcert tickets, two for the price of one,special child discount, newspaper couponsand so on.

We’ll talk a lot more about the Four P’sin the chapters to come (they’re absolute-ly key to your marketing plan). At this

stage, just be aware of them. They controlthe details of your business, and every timeyour business picture starts to look fuzzyor underexposed, you adjust them till itlooks right again.

Every marketing writer talks about RalphWaldo Emerson’s famous dictum that if youcreate a better mousetrap, the world will beata path to your door. Emerson’s remarkmakes several assumptions that we shouldreflect on: The world has to know aboutyour mousetrap (promotion), it has to knowwhere you live (place), it has to have enoughmoney to buy your mousetrap (price), andit has to have a mouse problem (to whichyour product is the solution). If all this does-n’t come together, you won’t make your for-tune and go down in marketing history forsolving the vexing Mousetrap Enigma.

When Henry Ford was conquering theautomotive world with his Model T, would-be drivers asked whether they could or-der vehicles in special colors. “You can or-der a Model T in any color,” sniffed Henry,“as long as it’s black.” It’s so easy to assumeyour product can dictate to the market. Inthe ’20s, General Motors decided customerscould have lots of different colors alongwith cars that were more mechanically

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1.8

How ToBankers are im-

pressed by marketingplans. While yourbanker knows littleabout your business beyond op-erational ratios, he or she willrecognize a serious-minded mar-keting plan. The next time you’replanning to visit your local bankfor a financing chat, take alongyour marketing plan. It may helpyou get the dough.



1.9

sound, and it nearly killed the Ford MotorCompany. Later, all of Detroit learned a sim-ilar lesson when the Japanese started de-livering high-quality cars at reasonableprices. Only recently have American carscaught up in quality with those of their in-ternational competitors.

The market delights in teaching expen-sive lessons to arrogant manufacturers andservice providers. Eventually someone willfigure out a way to meet an unmet need.And then those black cars get harder andharder to sell. Only the companies that learnto evolve and change survive.

Your BusinessAnd The Four Utilities

There’s another way to look at your re-lationship with your customers. It’s kind ofa parallel universe: the customer side of theFour P’s. The Four Utilities remind us thatwhat customers value and what they buyare not products or services themselves butthe utility they expect to derive from theirpurchase. Consider what you are selling interms of the Four Utilities to decide whetherwhat you are offering will actually appealto your customers.

The Four Utilities are form/function,place, time and ease of possession.1. Form/function corresponds to the prod-uct of the Four P’s, but it’s from the cus-tomer’s perspective. Is the product easy touse? Is it attractive? Is it durable? Does itsolve my problem? In terms of services, howdo I receive them? Is getting the service apleasant experience in an attractive atmos-phere? Is receiving the service convenientand memorable?2. Place means where or how the productis received. Do customers come to you? Doyou go to them? Do you mail it to them? Dothey download it? Do they pick it up at a re-tail store? Making your offering available ina convenient place has value to customers.3. Time means customer convenience interms of hours of operation, quick ship-ping, large inventory (so no back order-ing) and so on. This has grown increas-ingly important: Today’s customers, retailand commercial, are short on patience. Ifa product is available when customerswant it, this has value to them. If it’s not,they’ll likely go elsewhere.4. Ease of possession is connected withprice, which includes the initial cost andtwo other issues as well: 1) financing terms,interest rates, lines of credit and/or accept-ance of credit cards, and 2) warranties—will the customer’s VCR break down sixmonths from now or can he or she expectit to operate trouble-free for several years?If it does break down, do you stand behindit? The assurance this utility provides alsohas value to customers.

The point of outlining the Four Utilitiesis to focus on what it is that customers val-ue about what you offer. If your offering iseasy to use, attractive and durable, if it’savailable at a convenient location, if it isavailable when customers want it, and if itis reasonably priced and you stand behindit, customers are more likely to want to dobusiness with you. And they’ll be willing to

InsightScience or art?

Young people payup to $10 extra for a

simple T-shirt with the Nikeswoosh on it. Let’s not even talkabout sneakers. Or about Cab-bage Patch Kids. Not logical, butvery successful. Many people pay$2 for a liter of water shippedfrom Evian, France. Science orart? For years, purchasers boughtIBM-brand personal computerslong after their technological infe-riority was evident. Science or art?

pay you a reasonable price for offeringthese different utilities.

The Four P’s and the Four Utilities pres-ent slightly different but complementaryways of looking at the exchange betweenyou and your customers. They representthe perspectives of the company and thecustomer on what the company offers.There is a famous line attributed to CharlesRevson, the founder of Revlon cosmetics.He is reputed to have said, “In the factorywe make cosmetics; in the store we sellhope.” His customers weren’t buying cos-metics, but a more attractive self. That ideais true in a million different contexts. TheFour P’s are the means by which you canannounce and deliver the Four Utilities.

The Customer Is Always Right, Right?

Now that you’re thinking like a marketerand paying attention to the customer’swants and needs, does that mean that, asthey say, the customer is always right?

In fact, they usually are. You’re in busi-ness to deliver products and services thatcustomers believe they need and want. Ifthey don’t believe you’re doing that, they’renot going to do business with you, no mat-ter how great you think your offerings are.If you go out of your way to satisfy a cus-tomer, you’re more likely to retain that cus-tomer and to sell him or her more stuff to-morrow. In other words, you’re building abase of satisfied customers on which togrow your business.

Another way to look at it is this: It costsa lot less to retain customers than it doesto attract new ones. And if you lose cus-tomers who are dissatisfied, they’re likelyto tell all their friends, so who’s to say howmany additional customers you may havelost as well? When firms talk about “satis-faction guaranteed,” they’re marketing theirwillingness to go all out to please the cus-tomer. Of course, they have to live up to

this promise, or else they’re going to sufferthe consequences.

THE ILLOGIC OF MARKETING: MAKING SENSE OF MADNESSIn battle, they call it the fog of war. Try-

ing to read the market is rarely a simplething. You never have enough information.The market’s always packed with contra-dictions. You constantly have more optionsthan you can deal with. Your competitorsaren’t playing fair. Your employees couldbe more helpful. And your customers arejust so unpredictable!

After all the talk in this chapter aboutthe Four P’s and the Four Utilities, I don’twant to leave you with the impression thatmarketing is always logical. It certainly isn’t. It can be satisfying to chart out all theaspects of your business rigorously, but

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1.10

InsightShould you al-

ways satisfy thecustomer? As I saidearlier, the customer is “usually”right. If you have a customerwho simply wants to take advan-tage of you or pay you less thanyour costs, or who makes unrea-sonable demands, then that’s acustomer you don’t need. Thegoal in any exchange is win-win.Both the customer and the com-pany should feel good about thetransaction. In this case, politelyexplain that you’re unable tomeet this customer’s demandsand that the customer should,unfortunately, look elsewhere.Always assume good faith on thepart of your customer, but if itproves to be otherwise, showhim or her the door.



1.11

there will always be an element of art inthe mix that can make a folly of all yourplans. Many seemingly good products andservices have failed. And many troubling-ly stupid products have made their inven-tors millions. Odds are, you and I are cer-tainly smarter than at least a few of thosemillionaires—so what gives?

If your best thinking doesn’t appear topay off, don’t despair. Learn from the ex-perience. For whatever reason, you did-n’t connect with your customers in thatinstance. Think about what they’re tellingyou. Go back to the drawing board, anduse the experience to refine your mar-keting expertise.

BECOMING A MARKETING GURU

If you are new to business or to mar-keting, the whole endeavor can seem veryintimidating. Who are these “marketing gu-rus” who come in and wave their wands ofbusiness success? Back in the ’50s and ’60s,they used to be called “marketeers.” And

new terms creep in every day to deepenthe mystery: database marketer, Web mar-keter, affinity marketer, nonprofit marketer,public information marketer. Does the term“marketer” have any meaning left? Howdoes any of it apply to the small-businessperson who just wants to give his or hercompany a boost in sales, a change in prod-uct direction or a shift in market focus?

You will be glad to know that, despiteall the trendiness of names and definitions,marketing at its core is simple and easy tounderstand. Large corporations have mar-keting departments full of “marketing gu-rus” who sit around every day thinkingabout how to advertise, promote and movetheir products. But the typical reader of thisbook probably has a marketing departmentof one: himself or herself. You may be theowner, manager, clerk and chief floorsweeper as well. Whether you’re ready ornot, you now have a new title to add toyour stationary: Marketing Guru.

This book will help you earn that title—and even enjoy it. You are the expert in

How would you market the products and services listed below? Whowould you talk to and how would you reach this audience? How might youcombine the Four P’s? What combination of the Four Utilities might be mostrelevant and generate the most success? As you think about your answers,consider what they have in common and what’s different about how you approach each of these challenges.

● Casinos/lotteries ● Building signs for large corporations

● Weight-loss programs ● Pipe coating to reduce rusting

● Body-piercing services and leakage

● Personal trainer ● A Victorian bed and breakfast on

● Soft drinks with extra caffeine the south Jersey shore

● Wearing seat belts while driving ● Getting companies to site new

● A new type of tennis racket facilities in South Dakota

● PC system maintenance ● Cemetery plots

● Chemicals for flavoring processed food

Pop Quiz

Here’s a work sheet for you to fill out about your business. After reading this chapter, you should have basic answers to these questions, but don’t worry if you stilldon’t have answers to all of them. As you go through the book, I’ll present the samework sheet a few more times with slightly different questions. You’ll be able to refineyour answers, becoming ever more sophisticated in your understanding of how youcan use marketing to increase your sales and profitability. You’ll also understand howto improve your customers’ satisfaction and grow your business.

1. What’s your product?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2. Who do you sell your product to?_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

3. Why do customers want to buy your product? (What problem does it solve for them?)________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

4. Why do some people decide not to buy your product?________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

5. Are you satisfied with the sales of your product?_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

6. What other markets might exist for your product?________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Talking About Your Business (Stage 1)

Chapter 1


1.12



1.13

your business, at least the technicalities ofit, and this book can help you approachyour business with a marketing frame ofmind. This is essential for your ultimate suc-

cess (unless you are one of the extremelylucky ones). In fact, most small-businesspeople know their companies pretty well,but they run into trouble in one of threeways: either with money (undercapitaliza-tion has many notches on its six-shooter),with people, or with marketing.

Basically, in order to think like a mar-keter, you need to talk to your customers.If you don’t have regular contact withthem, you’re working by hunch. And ahunch is a dangerous basis for a businessand for risking the financial future of your-self and your family. Pick half a dozen ofyour main customers and take them tolunch over the next couple of months. Tellthem you’re doing a market check. Youwant to know what’s going on in theirbusinesses. You want to know their prob-lems. You want to know how you can helpthem do whatever it is that they do. You’renot just looking for larger orders but togain an understanding of the challengesthey face in their businesses or their lives.If you’re sincere, this is how you build re-lationships, and it’s how you learn how todeliver what customers want. Replacehunches with lunches.

Now let’s begin building up your mar-keting knowledge to support your business.

InsightDominance

doesn’t last. Timeschange, needs

change, competitors change. Mar-ket dominance comes and goes.If you’ve followed the wordprocessor wars over the last 15years, you’ve seen a string ofpopular favorites overthrown asthe business standard. I startedwith the quaintly named Volk-swriter Deluxe. Remember Word-Star? It owned the market at thebeginning of the ’80s. It fell toWordPerfect, which became evenmore dominant until it was de-throned by Microsoft Word fromthe juggernaut Microsoft. Whatword processor will we be using10 years from now? Will BillGates remain the colossus oftechnology? Stay tuned.

Let’s start by talking about one of theentrepreneur’s greatest dangers:“mar-keting myopia.”Theodore Levitt coinedthis term back in 1960 in a well-knownarticle in the Harvard Business Review.He pointed out that exactly the samepersonality traits that create a strongentrepreneur also make someone vul-nerable to a large dose of self-deception.Like the gap between madness and ge-nius, the distance between hard-charg-ing entrepreneur and self-deceivingbusinessperson is a narrow one.

SELF-DECEPTION:THE ENTREPRENEUR’S

MOST DANGEROUS TRAP How would you describe your basic

entrepreneur? Strong-willed, full of perse-verance and certainty of vision, hard-working, a born leader, and never afollower. These are great qualitiesfor business leadership, butthey can make for a lackof objectivity that canstrip a business ofthe perspectiveit needs.

Sometimes it’s easy to understand. You’vegot a product or service you think is ter-rific. It’s better than the competition’s, de-spite their ridiculously high prices. You’vegot an armful of testimonials and a trackrecord of pleasing certain clients who arewell-known terrors. Your company is mov-ing ahead of projections. Maybe you’ve gar-nered a few awards. And you’re driving abrand-new Mercedes, which doesn’t exact-ly foster self-doubt.

In a scenario likethat, is it any wonder thatentrepreneurs begin to feelinfallible—to feel they havea special and unique un-derstanding of the marketthat renders them com-petitively unbeatable? It’s

only natural, given theself-affirming per-

sonality of mostbusiness leaders. These

strengths predispose entrepre-neurs to feel they know the



2.1

Chapter 2

On A Clear Day...You Can See The Market

market. If they were strong doubters, theynever would have even tried to climb tothe top of the hill.

You must protect yourself against self-deception. Without sowing the seeds of self-doubt, be skeptical of what you know anddon’t know. Test your assumptions. Avoidstumbling into the trap of believing there’snothing to be learned about the market-place, and that all you need to do is keeppumping out the message and your cus-tomers will eventually respond.

In business and in life, things are notalways what they seem, so it’s healthy tohave a little doubt about almost everythingyou know. Long-running, established busi-nesses that know their markets very wellare surprised all the time, even thoughthey are supposed to be run with con-summate professionalism and layers ofsafeguards. Roberto Goizueta, the CEOwho introduced New Coke, learned thatthe hard way. So have the producers ofany number of big-name, big-budget Hol-lywood flops. The largest, most sophisti-cated businesses in the world—with thou-sands of very smart people and hundredof millions of dollars to spend—still some-

times make catastrophic marketing mis-takes. Both comforting and scary, isn’t it?

After all, you may be right. You mayknow your market exactly and intuitively.But if you don’t, if your seemingly clearsense of what the market is actually look-ing for is wrong, even slightly, you may bein for a very difficult time. You will put yourcompany’s message into the market (andbattle against the messages of the compe-tition) based on false assumptions, andthere’s a good chance you’ll be disap-pointed with your results. The only way tofind out before you put your money on theline is to talk to your customers.

That was the point of Levitt’s article. Hewrote about the railroads and their man-agement. They thought they were in therailroad business. They thought their com-petition was other railroads. They didn’t rec-ognize that they were in the transportationbusiness and that trucks and other forms oftransport could take business away fromthem. Entrepreneurs often make the same

Chapter 2


2.2

InsightThey say that one

good definition ofself-delusion is doing

the same thing over and overagain and expecting different re-sults. Unless you’re dealing witha random-number generator, lifedoesn’t work that way. If some-thing’s not working in your mar-keting efforts, re-examine yourthinking and try something differ-ent. Recall that marketing is onlyhalf science.

InsightIn 1974, Rolling

Stone magazine didan interview withlegendary rock guitarist EricClapton. At one point the inter-viewer asked him why, given histremendous talent and success,he’d lost so many years to drugproblems. Clapton replied thatboth the heroin and the musicwere different ways to take awayhis pain. “And I enjoy the pain ina way because I can make use ofit. And I knew that it was some-thing I had to go through.” Thepoint for the entrepreneur:Sometimes our strengths are also our weaknesses.



2.3

mistake. They focus on the product or serv-ice they’re offering rather than the benefitthat customers are buying. Remember, cus-tomers don’t buy products and services;they buy the benefits or the value they ex-pect to derive from those items. Entrepre-neurs with marketing myopia forget this.

You have to stay in touch with your mar-ket and your customers, and you must con-tinue to do so. Avoid thinking that the mar-ket will remain the same indefinitely.Restaurateurs will tell you that—with rareexception—they have to change their menusevery two years and change the look or con-cept of the place every five years. And thisis just the successful restaurants. The un-successful restaurant owners change careers.

Of course, you want to be humble aboutwhat you do and don’t know without be-ing completely insecure or lacking in con-fidence. In fact, by admitting your lack ofomniscience, accepting your limitations, andgoing to school on understanding your cus-tomers, you’ll emerge with more genuineknowledge of your marketplace than youever had—and your entrepreneurial egowill get a boost in the bargain. If you knowyour customers, if you know the benefitsyour products or services offer, and youhave access to your market, then you’reprimed for success.

LOOK THROUGH YOUR CUSTOMERS’ EYES

How do you know what your customersthink—and how can you learn to think likethem? Every businessperson has to ask thisquestion. It’s key to the marketing process.

While Chapter 5 talks about how toframe the description of your product’s ca-pabilities in terms that address your cus-tomers’ needs (which is pretty easy to do),what you need to do here is harder andmore subtle. You need to examine the wayyou think about customers, and this mayentail changing your attitude.

You may have gone into business tomake a lot of money. Nothing wrong withthat. But the way you’re going to achievethat—at least the most certain path—is togive people what they want. If you makean excellent product that no one wants,you’re not going to get rich. The samehappens if you make a great product,which everyone might want but that theydon’t know about. The adjustment thatsome businesspeople have to make is re-alizing that caring about your customers,putting them first, is the most importantway to improve and protect your compa-ny’s bottom line.

This is not just some exercise in positivethinking. When a business really cares aboutyou and what you think, you know it. It’sreal. It’s an attitude that affects nearly everyaspect of the business exchange, in big andlittle ways. We’ve all had hotel experiences,both good and bad, that tell us more aboutthe quality of the hotel than any brochure,travel agent or Web site. Perhaps it was theconcierge who was able to get your drycleaning back a day before schedule. Thecourteous waiter who took a personal in-terest in getting the steak returned to thekitchen and prepared correctly. The frontdesk person who took extra time to sort outan error in phone charges. These are the

InsightThis book

speaks of market-ing both productsand services. There are differ-ences between these, to be sure,but most of the marketing advicein this book applies to either.Whether providing a product orservice, you are still focusing oncustomers and their needs.

times when you are treated not like a cus-tomer but a person.

You’ve got to capture that same person-al warmth in the way you conduct yourbusiness and relate to your customers. Be-cause if you don’t, customers will know itimmediately. You know it—when the drycleaning is late, and your dinner is burnt,and the desk person couldn’t care less thatyou didn’t understand the phone chargesbefore you made all those calls.

Every marketing book ever written re-lates the insight that the customer lookingfor a drill is not really looking for a partic-ular piece of equipment. He or she needsa hole in something. Your customers arelooking for the end result. And there maybe many ways to achieve it. In the business-to-business marketplace, this end result ismost often very specific and concrete; inthe consumer marketplace, it can sometimesbe just the desire to possess somethingbeautiful, cute or impressive. It may be anemotional end result that doesn’t dependon a specific product.

It is also often the case that after a whilebusinesses forget about the customer. Theybegin strongly enough, paying attention toeach customer’s needs, but then they getcaught up in their own operations, dealingwith their own suppliers and employees,waxing paranoid over the competition, fret-

ting about insurance and legislation and soon. Left behind in all this lies the customer,the ultimate guiding star of the business.

It’s not unlike what happens to many par-ents who get involved in their children’s ath-letic activities. You encourage little Jimmyor Jane to get into his or her sport becauseyou know from your own life that it will bea character-building experience. You prob-ably remember how much fun it was foryou and how sports helped your develop-ment. But once the league or competitionsbegin, the child’s desires and developmentcan slip into the back seat while you getcaught up in the amount of playing time,won-loss records and inept referees. Beforetoo long—and with the best of intentions—your focus is entirely on the game, not thechild, and no one is having much fun any-more. Certainly your child isn’t.

Especially with small businesses, the in-volvement is so emotionally intense thatyou have to make a conscious effort to con-stantly refocus yourself and your compa-ny on the customer. If you’ve chosen yourmarket and your product wisely, focusingon your customer will always serve you bestin the long run.

What Do Customers Want? No matter what business you are in or

what you are selling, your customers always

Chapter 2


2.4

The key systemic advantage a small company has over a larger competi-tor is its lack of a corporate infrastructure. For a customer trying to get some-thing done, a corporation with rules, gatekeepers and protocols can seem likenothing more than a set of hurdles blocking the way to the finish line. Use thisentrepreneurial advantage to its fullest by keying in on your customers’ needs:

● Read your customers’ trade publications.

● Become an associate or supplier member of your customers’ trade organizations.

● Share your marketing plan in draft form with major customers for their insights.

Keep In Touch

2.5

want the same thing: value. This is the qual-ity you want your business to project. Val-ue is extremely subjective, but it can still becalculated with some exactness. Value is abalance between a fair price, a quality prod-uct and a convenient, service-oriented en-vironment. The right combination of thosefactors triggers the mutually beneficial ex-change between buyer and seller.

Another way to look at it is the old busi-ness quip that you can get our product fast,good and cheap—pick any two. If you wantyour product quickly and of good quality,it won’t be cheap. And if you want it goodand cheap, you won’t get it fast. On somelevel, almost all of us make our calculationsof value based on this formula.

Where I live, the local all-night conven-ience store sells a 2-pound chunk of ched-dar cheese for $1.10 more than the exactsame product at a Sam’s discount super-store. Why, then, would anyone buy theproduct at the convenience store and throwthat money away? Because the conveniencestore is convenient. It’s four minutes from

my home (vs. 20 minutes to Sam’s). It’sopen whenever I feel like going. And it’sdesigned for quick in and out (parkingspace to cheese to register to parking spaceis probably a total of 20 yards). I buycheese at both places at different times de-pending on what seems like a better val-ue: Can I afford the extra time and effortto get it cheaper, or is it worth it to spendmore and get it faster?

People don’t spend their money foolish-ly. They calculate an equation every timethey open up their wallets. And the equationis almost always the same: If something costsmore, is the extra price worth the savings intime or hassle? Or is the quality that muchbetter than a cheaper, inferior product?

Federal Express has built its businesson the calculation that you’ll think it’sworth spending $10 or more to send apackage overnight—guaranteed. Fancymail order catalogs charge premiumprices, wagering that people will pay apremium for the convenience of shoppingat home—calling in an order and havingit arrive in a matter of days. Stores onRodeo Drive in Los Angeles and the



Jargon AlertMarketers and

economists usethe paired terms“elastic” and “inelas-tic” prices to talk about the sen-sitivity of a market to pricingchanges. An inelastic price isone that, when raised or low-ered moderately, doesn’t havemuch impact on sales. An elas-tic price impacts demand signifi-cantly when it changes—the demand snaps along with theprice, like an elastic band.

Jargon AlertYour customers,

everybody’s cus-tomers, want to

think their money is well spent.They want value. The Four Utili-ties (form/function, place, timeand ease of possession) arewhat feed into the customer’sdecision on value. A thirsty cus-tomer at a hot farmers’ marketwill pay a premium price for atall glass of lemonade. It hasmore value when the weather ishot and the customer is parched.Change that lemonade to a hotcoffee (alter the form/function),and its value plummets.

Magnificent Mile in Chicago know thatlow price isn’t what brings in customers.Customers pay more for the excitementof shopping in a glamorous place, for thepleasure of saying “I got this at Gucci,”and for the perceived (if not always ac-tual) superior quality. Prices at these storesare very inelastic; they can charge far morefor items without losing customers thancan stores in small towns 50 miles away.

All companies, self-consciously or not,place themselves in the minds of their cus-tomers at a spot in the “value triangle” (seediagram on page 2.7).

Let’s go back to my cheddar cheese. Theconvenience store sits firmly in the serv-ice/convenience apex of the triangle. Qual-ity and price are satisfactory, but the pri-mary appeal is convenience. Sam’s primaryappeal is price, with satisfactory qualityand service/convenience. Some 10 miles

away, there’s a Whole Foods store thatmakes (in my judgment) credible claimsfor the superior wholesomeness and nu-tritional value of its dairy and produceproducts. It’s in the quality apex of the tri-angle, with satisfactory price (it’s a bit moreexpensive) and service/convenience (it’snot 50 miles away, after all).

In terms of the value triangle, where isyour company in the minds of your cus-tomers? Are you more expensive than mostof your competition…or cheaper? Do youprovide higher product quality than yourcompetition…or lesser quality? Do you pro-vide more service with your product…orless? Remember, you decide this. You’renot a slave to your product. You shape yourproduct to the market you target.

However, an even more important ques-tion is this: Do you like your current posi-tion in the minds of your customers? Is your

Chapter 2


2.6

Every product of every company occupies a position in the value triangle.Changing your position within the triangle can present a challenge. Everymovement alters your position relative to all three points. So changing your po-sition in the minds of your customers gets complicated.

If you want to move further into the price apex—making your pricing moreattractive—chances are you’re going to have to yield on quality orservice/convenience. The trick is to try to maintain the impression of sus-tained quality and service/convenience. Several of the major cereal manufac-turers recently cut their prices significantly. Their challenge is to keep youfrom thinking that they’ve also dropped their quality—or that they’ve beenovercharging you for years.

If you look to increase quality, you’ll probably need to raise your prices,since markets generally equate quality with price. But if you’ve been low-pricedfor some time, the market will need some convincing that you’re worth the ex-tra money. A restaurant that moves upscale will lose some business initially…at least until public perception reacts to the restaurant’s promotion of its newmenu and ambience.

Moving further into the service/convenience apex means you can probablyraise your prices, since the public is comfortable paying for better service. Butthey’ll expect you to deliver.

Shifting Gears



2.7

current position the best position for thelong-term success of your company? Again,talking to your customers is one of the bestways to find out.

LET THE CUSTOMER TEACHYOU: GETTING FEEDBACK

If you learn nothing else from thisbook, remember this: Talk to your cus-tomers. Most customers are only too hap-py to talk to vendors who ask for theiropinions. They’re flattered, they’re not “re-sponsible” for their opinions, and they fig-ure they may get better deals in the futureby speaking frankly with you.

You can have your customers train youin a number of ways:● Informal interview: Whenever you aredealing with customers yourself, ask themwhat they are thinking about your prod-uct and the competition. Make it casualand not inquisitorial—just a friendly con-versation in which you are asking theiropinion. This works for both retail andcommercial customers.

● Formal market research: You can con-tract with a company that specializes ingetting information from current andprospective customers. These firms haveused computers to grow very sophisticat-ed in recent years. Chapter 14 will tell you more about how they can help youmarket and sell smarter.

InsightPsychoanalyze

your competitors.They’re smart peo-ple, probably just as smart andcommitted as you are. Why arethey acting the way they are?What’s the reasoning behindtheir product and market deci-sions? What does your competi-tor think about you, and whatdoes he or she say about you topotential customers?

Price

Service/Convenience Quality

The Value Triangle

Sam’s

Convenience WholeStore Foods

● Focus groups and informational dinners:These events fall between an informal in-terview and formal market research. Hosta dinner or group interview to get morestructured information from your customers.Explain that you are soliciting their insightsinto the market, reactions to a new prod-uct, feedback on existing products and soon. You will have the best luck withevening events, away from your workplace.Marketing and research firms also havetrained “facilitators” who specialize in run-ning such events, developing event pro-grams and formalizing results.● Annual customer meeting: You shouldbe meeting with your key customers at leastonce a year to discuss how you’re treatingthem. Use this opportunity to learn how toserve them (and others like them) better.● Independent researcher: Call a local col-lege or university with an advertising or mar-keting department and ask if some of theirstudents will take on your business as a classproject. For the experience, they will gen-erally work without pay and under the su-pervision of a faculty member. If you give

them the right guidance and familiarize themwith your particular marketplace, you canget valuable insights into marketing yourproducts. And your cost will be minimal.● Your national trade organization:Everyprofession has a trade association, andthey’re generally eager to justify their ex-istence. In addition to the normal legisla-tive lobbying, they often produce reportson the state of the industry, coming trendsand market demographics. Scour these re-ports for market information you can use.● The trade press:This country has a largeand vigorous business press, with thou-sands of publications from Forbes and For-tune to the most microtargeted journalsyou can imagine…and some you can’t.Review every trade publication you canget your hands on. Some you’ll drop be-cause they don’t repay the time to readthem. But the good ones are absolutelyinvaluable. Learning about your customersfrom a national perspective makes yousmarter and more strategic in your think-ing. For a comprehensive list of magazinesin every field, go to the largest library inyour area and look for Standard Rate andData Service’s red-covered volumes ontrade media. Also see the “Appendix” inthis book to learn about more sources formarket information.

AVOID FOUR COMMONMARKETING ASSUMPTIONSLet’s eliminate four false ideas that are

poison to intelligent marketing. This quar-tet of fatal marketing assumptions can doomeven the most ambitious marketing effort.The hard-driving entrepreneur is especial-ly prone to these errors of judgment. Sweptup in the kind of enthusiasm that’s essen-tial to starting or running a small business,the entrepreneur loses perspective, mis-places a sense of irony, and falls victim toungrounded prophecies of success. Guardagainst these four cancers of the small busi-

Chapter 2


2.8

How ToIncrease what you

know about yourmarkets and your

customers by spending anevening with your industry’s besttrade publication. Read every ar-ticle. Review every advertise-ment. Study the schedule of up-coming trade events. Check outthe publication’s masthead andsee who’s running things. Sendaway for free reports. Major tradejournals are a gold mine of infor-mation, yet busy entrepreneursdon’t often find time to get to allthe good stuff.



2.9

ness. You’re especially vulnerable to themwhen you’re doing well.1. “My competitors are stupid!” You canlearn from your competitors, both their suc-cesses and failures. Let them waste theirtime dismissing you. You’re more insight-ful than that. Two heads are better than one:Study your competitors and try to dissecttheir strategy.

Study the printed literature of your com-petitors. What can you learn?

● Customer benefits you’ve over-looked● A new technology or service being introduced● A new market being explored or anew office opened● Revised terms of sale● Strategic alliances with other com-panies● New ways of handling serviceand/or reordersScrutinize competitors’ client lists and

compare them with previous ones● New personnel on board or estab-lished stars no longer there● Market expectation for literature—do you need to upgrade your ma-terials?Think of yourself and your competitors

as fellow explorers searching for the samepot of gold. No matter how sure you maybe of your own path to the treasure, itdoesn’t hurt to keep one eye on the direc-tion the other people are taking.2. “My customers won’t know the differ-ence!”Your customers are specialized at onething: being customers. They use yourproduct or service in running their own livesor businesses. You can’t know everythingabout how they use your product. Nor—inmost situations—can you know how theyview your company and your product intheir heart of hearts. It pays to be a little in-secure about this. They may be talking toother suppliers. They may not understand

the actual value of your product. They maybe looking to close out the inventory linefor which you supply key components.They may be the target of a major accountdevelopment pitch by a competitor.

As for the quality of your product or serv-ice, you have to remember that your fo-cus on your product is typically production-and cost-related. You’ll naturally tend to fo-cus on the aspects of your product relatedto its manufacture and delivery. These arethe aspects of your product you controlmost easily. Unfortunately, your client looksat your product from precisely the oppo-site direction.

Once they’re satisfied your productionexpertise is up to snuff, they turn their at-tention to what’s most important to them:How they can use the product to make moremoney or lead a more comfortable life.3.“My product is vastly superior!”Every en-trepreneur, especially every entrepreneur-ial manufacturer, considers his or her prod-uct to be truly astounding.

Some marketers feel the engineeringmind and the marketing mind are anti-thetical, that they can never occur in thesame person. It’s true that engineering andtechnical types tend to get more wrappedup in the mechanical specifications of their

How ToIf your product is

truly superior, canyou come up with ahead-to-head demon-stration that makes you No. 1?Someone’s product has to be thebest. How can you prove to anobjective observer that yours isthe one? If you can develop sucha demonstration, your sales forcewill be eternally grateful.

products. This can take place even at thetop of an organization. People can gettrapped in the details of the product’stechnical superiority, completely losingthe customer in the process. In some busi-nesses, every competing company maymake a claim of superiority, and theseclaims can tend to cancel each other outin the mind of the customer, who some-times does not have the knowledge or ex-perience to truly understand the shadesof difference. Even if your product is su-perior, don’t become complacent: The cus-tomer has a wider range of concerns thansimply quality.4. “My people are special!”Few companiesin the country don’t feel this way. Unlessyou can quantify their specialness, this claimwill hold no water with most clients. Howare they special…more awards, more de-grees, more training, more experience, morepatents? This is the service company’s ver-sion of “My product is vastly superior.”

I once sat in a meeting between a largefinancial services provider and an adver-tising agency to talk about beginning amarketing and advertising campaign. Thismeeting took place some years ago, be-fore financial services did any advertising.The campaign was going to be revolu-tionary in the local market, and they allknew that they had to come up withsomething super while at the same timenot looking “too retail.”

The head marketing person for theclient said they’d done a lot of thinking in-ternally about the issues involved, and hethought they’d zeroed in on their uniqueappeal to the market: “It’s our people.They’re just the best.”

When he was asked what he meant, itsoon became clear that there was nothingobjectively special or unique about the setof skills they possessed. They were bright,personable, darned good-looking peo-ple—just the sort of folks prospective

clients would like to work with. Hardlya marketing focus, and not something thatwould stupefy clients with your market-ing acumen. The major competitors hadcomparable people, who were probablyeven more good looking.

Don’t overestimate the impact of yourpeople. There are millions of bright andadept people in this country, no matterwhere you do business. If you’re going toclaim your staff as a key selling benefit,you’d better have something genuinelyspecial to talk about, or something specific that quantifies their expertise, suchas more training, more degrees or moreexperience.

HOW DOES YOUR PRODUCT FIT THE MARKET?

To figure out how your product fits themarket, let’s go back to the Four P’s in Chap-ter 1: product, place, price and promotion.You can combine those four aspects in dif-ferent ways to position your product in themarket. That is, you can manipulate the FourP’s so that when your customers evaluateyour product using the value triangle, theywill see it the way you want them to. This

Chapter 2


2.10

DangerSociologists

have latched ontoGarrison Keillor’smonologues on his radio show,“Prairie Home Companion.” Hetalks about Lake Wobegon,where “all the children are aboveaverage.” All children, of course,can’t be above average. And allproducts can’t be superior, nomatter how hard parents or en-trepreneurs wish them so.



2.11

is the end result of thinking like your cus-tomers: adjusting your product or service toappeal to their desires and expectations.

Product Appeal: Highest QualityQuality is the loftiest appeal, and the

one to which most companies aspire. Thisis, after all, where the money is concen-trated. But in the real world, not every-one can make a product of the highestquality. Not every product in a categorycan be tops.

If you create this perception in the mindof your customer, the rules of the capitalistgame say you’re allowed to charge a pre-mium for your product. There are manyways to define quality:● Most technologically advanced (Intel)● Supported by the best service (Sears)● Dominant in the market (Microsoft)● “Produced by artisans” (Wisconsin cheese,Amish furniture, pottery)● Most expensive—yes, in a circular sort oflogic, most expensive leads to a perceptionof quality (Rolls-Royce, Jaguar, Rolex) ● Simply promoted as quality—yes, thevigor of the message can overwhelm thereality (Häagen-Dazs, Godiva chocolates)● Connected with other quality itemsthrough endorsements, celebrities, awardsand so on● Independently tested as superior in qual-ity (Consumer Reports tests and so on)

Each of these definitions of quality—themore objectively supported, the better—canbe used as the basis for crafting a market-ing message of quality for your product.

Place Appeal: Most Easily AvailableWhen you’re selling to consumers, the

lower the price of the product, the greaterits distribution should be. Since each individual piece of merchandise contributesminimally to your profit, you must sell alarge quantity. Consider the newspaper. It’scheap, so it has to be accessible at every

corner: The more newsstands and kiosks atwhich it’s available, the more copies thatwill be sold. The Internet gives newspapersboth a great challenge and a wonderful alternative distribution possibility. Time willtell how skillfully they handle it.

Making your product “most easily avail-able” doesn’t mean it has to be everywhere.It just has to be able to get everywhere…and fast. Mail order clothiers like Lands’End, J. Crew and L.L. Bean make a livingon the convenience of at-your-door serviceprovided by reliable shippers.

In industrial markets, place appeal canmean carefully planned deliveries to meetproduction deadlines: “just in time” inven-tory. It can also mean drop-shipping from thesupplier’s factory to multiple client assemblysites across the country. In the auto industry,suppliers frequently put up large plants rightnext to their clients’ auto plants.

Place appeal also applies to service busi-nesses. Look how many tax preparers openmall offices when tax time looms. The phonesex industry (it is a “service,” after all) has be-come successful because it has made sex (ora version of it) more easily available: simplydial a number from home. The medical pro-fession has come to understand the compet-itive importance of place: Consider the grow-ing number of urgent care and nonemergencyclinics spreading across our cities. Colleges,universities and trade schools are also mak-ing their classes more accessible through satel-lite campuses and Internet study programs.

Do you want to give your product max-imum exposure in your region? In the coun-try? Do you want to deal only with cities,or is the rural marketplace worth the dis-tribution efforts? How about overseas—willother nations be interested in your product?How can you be every place your cus-tomers want you to be?

You decide the relative availability ofyour product. Chapter 6 will give you someideas on how to work with distributors.

Price Appeal: CheapestIf you’re selling household nails or soda

in the consumer market, cheap is probablya good place to be. There’s rarely an up-side to taking the high-price, high-qualityroute with many commodities. People don’tparticularly care about quality here. They’reonly looking to get the most nails or sug-ar water for their dollar. It’s no different formany commodity-type products in the in-dustrial marketplace. With some exceptions,copper wire is copper wire.

The trick is figuring out which productshave the possibility of an upside pricing strat-egy. Automobiles, for example, have a greatopportunity to charge high prices for luxury,for perceived sophistication, for legendaryengineering. Not so with nails. They’re acommodity. People will tend to pay the low-est prices for those items that they perceiveoffer no difference from brand to brand.When was the last time you paid attention tothe brand name of the spices in the super-market, of toilet paper, or of gasoline at theconvenience store?

Manufacturers often try to instill brand loy-alty (and the ability to charge higher prices)in products that don’t actually deserve it.You’ll occasionally see advertisements forbranded gasolines, for example, but thesecompanies are hard-pressed to point out anyreal difference. And unless they can attacha “style” cachet to the product (like bottledwater), their advertising dollars are wasted.

If you’re in a market that lives or dies bypricing, you have two choices:1. Cut your prices to the bone and competeon value. Find a way to instill greater per-ceived value in your brand—with a specialingredient, a fashionable allure, a “used bythe big guys” claim and so on.2. Develop personal relationships that tran-scend to some degree the dollars-and-centsbasis of buying decisions.

Part of the magic of marketing is the abil-ity of some talented marketers to instill qual-

ity in products simply by charging highprices. This is one area where the percep-tion of value can be strange indeed. Manyupscale shopping districts are filled with topname-brand merchandise that’s grossly over-priced related to its actual “value.” But thefact that it’s high-priced makes it seem de-sirable and a good buy. Try and figure thatout! The fact is, people with too much mon-ey have to spend it on something.

Promotional Appeal: Most Highly Visible

In the late ’80s and early ’90s, if you hada child between 8 and 16, you were prob-ably besieged with gift requests for Swatchwatches. These bright and cheery littletimepieces, favored mostly by young girls,served as both timekeepers and fashionstatements. Developed and manufacturedin Switzerland (a wry comment on how farthe Swiss have come in timepiece market-ing), they came in scores of styles, and thehigh-profile advertising made it clear thatyou didn’t simply buy one and wear it allthe time—no, you simply had to have arange of different styles to go with what youwere wearing (or your mood) at the mo-ment. They made a killing.

Heavily promoted products in the con-sumer marketplace benefit from spur-of-the-moment purchases, based on general brandfamiliarity and remembered advertising. Inthe commercial marketplace, most highlyvisible products develop a reputation forsolidity and reliability, which enables pur-chasers to select them without anxiety.

You develop high visibility as part of yourmarketing effort. The more money you haveto market your business, the sooner it gainsvisibility. To a large extent, you can replacemoney with knowledge and tenacity. A smallbusiness starts out invisible—no one knowsit. You grow in visibility by a combination ofadvertising, promotion, public relations andthe praise of satisfied customers.

Chapter 2


2.12

It’s a proven fact: Using the toolsof marketing, you can spur cus-tomers to action. But you can’t besuccessful unless you are specific.You must first define the need thatyour product satisfies as well as thecustomers who have the ability to ac-quire it. Only then can you pointyour advertising and promotionalmachinery at the marketwith any success.

Some 150 years ago,mass production andimproved commu-nication led to massmarketing. If you had the capital toset up a factory and the knowledgeto manufacture a product, youcould turn out a vast quantity ofbells, books or candles and sellthem throughout a region. Thiskind of mass marketing, wheremanufacturers make a whole bunchof the same thing and sell it to every-one in the same way, is called undif-ferentiated marketing. Common examplesare toilet paper, gasoline, tuna fish, rice,pencils, extension cords and so on.

The opposite of undifferentiated mar-keting is differentiated marketing. In dif-ferentiated marketing, you focus on a va-riety of submarkets and sell differentproducts to those different markets. Con-sider the automobile market. If all we want-ed was transportation, we wouldn’t needall those car models, would we? Nor would

we need station wagons, vans, recreation-al vehicles, sport utility vehicles, Jeeps orpickups. We have the different car com-panies and their different car models be-cause different people want different things.By using differentiated marketing, smallmanufacturers and retailers can successful-ly compete with the big boys.

To work in a dif-ferentiated market, you scout out an audi-ence segment that will be interested in aslightly different product, and you sell tothat market. Sometimes those new marketswon’t be large enough to merit the atten-tion of the big guys. Then you and someother little businesses have the smaller mar-ket (a “niche” market) all to yourself.



3.1

Chapter 3

Define YourselfAnd Your Customers

Chapter 3

Define Yourself And Your Customers

3.2

The chart below illustrates the different approaches your company mighttake in marketing its product or service.

● In an undifferentiated market, you sell almost the same product to every customer (such as paper towels).

Undifferentiated Market

● In a differentiated market, you can:1. focus all your energies on a particular submarket (Porsche), in an all-for-one strategy, or2. sell several different products to different markets (GM cars), selling seg-ment by segment.

Differentiated Market—All For One

Differentiated Market—Segment By Segment

Mix ‘N’ Match

CompanyMarketing Mix

Sum Market

CompanyMarketing Mix

Market Y

Market X

Market Z

Market Y

Market X

Market Z

Market Y

Market X

Market Z



3.3

Of course, if that niche market grows toobig, you will hear and feel the Jurassic foot-steps of the approaching corporations. Butif you’ve built solid customer relationshipsthat rely on service as much as they dependon the product itself, the big guys will havea hard time eating your lunch. Small com-panies also frequently prove smarter thanthe big guys. They often possess more mar-keting agility and can adjust to changingconditions quickly.

Large companies have their own way towin in differentiated markets. They do thisall the time, using line or brand extension.Remember when there was just one “Coca-Cola”? No? That was several marketing gen-erations ago. Coke has since differentiated itsown market to embrace more customers (notto mention capture more shelf space in thesupermarket). Now they make regular Coca-Cola, Coke Classic, Diet Coke, Cherry Coke,and caffeine-free Diet Coke, each targeted inits advertising toward a slightly different mar-ket segment. When you have the manufac-turing capacity to make a lot of something,why not vary it a bit and make a lot of sev-eral similar things? After all, Baskin-Robbinsdoesn’t make all those flavors just for fun, dothey? Look at all the different plastic bags inwhich you can store food. They began as a

simple item, but now you can purchase themin different thicknesses and sizes, with placesto write, with holes so produce can breathe,with special plastic for freezers, with lockingzippers, pinch-locks and fold-overs. It’s allbrand extension.

SEGMENTATION: SELECT YOUR BEST MARKETSSegmentation means analyzing the dif-

ferent submarkets within your overall mar-ket—and then giving selected segments theright level of marketing attention. The seg-mentation process is a refinement of thegeneral marketing approach:● Define your overall market to include allsegments.● Pick the segments that offer the great-est opportunity.● Research those segments in detail.● Describe the target customers withinthose segments.● Start your market planning to addressthose segments.

You can sell your product line to sever-al different segments within the same overall market, but your marketing planshould address each of these segments sep-arately. And one segment shouldn’t see thematerials speaking to the other segments.

Look out for the wolf in sheep’s clothing. Since product differentiation ishot these days, big companies like their share of it, too. But they can’t alwaysdo it under their own names. Many small companies have successfully posi-tioned their products by saying, “We’re not big guys. We’re little guys just likeyou, and we take a personal interest in our product.” We all like underdogs,and there’s a marketing undercurrent at play today that smaller is better. Thiskind of market approach can’t be taken by the large companies directly. Butthey can assume it by buying small, feisty companies and staying behind thescenes. And that’s just what they’re doing. In fact, many of the most visible andsuccessful microbreweries are owned by the largest brewers. Think you’requaffing a crafted-by-artisans small-company brew? Probably not.

Undercover Products

Kodak sells high-end film to photo profes-sionals, and it also markets low-end printfilm to Joe and Jan consumer. It is a rarecompany that sells to only one market;those that do generally sell to superlargecustomers. For example, some suppliers sellonly to the government. Some provide spe-cific products almost exclusively to a hand-ful of particular customers (such as com-puter screen manufacturers or makers ofautomobile headlights). Such a situation isinherently very risky. One car crash, as theysay, can decimate your customer base.

However, the more individual segmentsto which you market, the more campaignsyou’ll need, which, of course, increasesproduction and media costs. This maytempt you to use the same campaigns forseveral different markets. Don’t do it—it’sa false economy. If your campaign lookslike it speaks to two different marketsequally well, it probably doesn’t addresseither market effectively. You can’t be allthings to all people. Heck, you can’t evenbe all things to two people. Remember,one campaign per market.

To be worth addressing, a market seg-ment has to have certain characteristics.It must be: ● Identifiable: Can you describe the cus-tomers in this segment with several char-acteristics in common? If not, you don’thave a segment.● Reachable at an affordable price: Howmuch will you need to spend in media ad-vertising to generate the buying impulse?You must be able to fund your necessaryadvertising and promotional expenses.● Large enough to merit the effort: Think-ing about opening a Greek-language art filmtheater in Iceland? Think again.● Self-sustaining: Either your product hasto: 1) be desired by many people, 2) be cycli-cal or wear out quickly, or 3) have new cus-tomers arriving regularly. You don’t want topick a market that will become saturated im-mediately. That’s why satellite dish and ca-ble providers sell you programs monthly foran indefinite period; if they just sold you theequipment and let you watch what you want-ed, they’d be out of business.

How To Identify A Market SegmentYou can identify a market segment in two

major ways: either survey the marketplaceor survey your customers.

Your marketplace is your selling area,both current customers and potential cus-tomers who may buy from you in the fu-ture. Generally, it’s easier to have a mar-ket research firm study your marketplacerather than undertaking the task yourself.It’s time-consuming and complicated, andthere’s just no sense in reinventing thewheel. Good research firms have lots ofuseful data right on hand.

To learn more about your customers(and to identify market segments amongyour customers), the only road is research.You’ve got to get your customers to tell youabout themselves. A survey is the easiestway to garner information for most small

Chapter 3


3.4

InsightThink of segmen-

tation as a four-lanehighway, with all

the lanes heading in the samedirection: to your consumers.You can’t set your own pace ifyou go in the lane with the bigrigs. They call the shots. But notall lanes are in use all the time.Look for an empty lane. That’swhere you want to put yourcompany…where the fewestcars are driving. If necessary,drive on the shoulder for a fewmiles until you find the bestlane to cut in to.

3.5



This is an example of a customer marketing survey, which you can adjust to accurately reflect the needs of your business. When you conduct the survey (eitherwritten or over the phone), begin with your rationale for doing it. Such as “We’re looking for ways to serve our customers better. We value your business and want todo an even better job in the future. Could you give me just a few minutes of yourtime to answer some questions?”

Name _______________________________________________________________________

Address _____________________________________________________________________

Phone ______________________________________________________________________

Age ________________________________________________________________________

Who else is in your family? _________________________________________________

What is your educational level? _____________________________________________

Can you place your family income in a category?

❑ $20-35,000 ❑ $35-50,000 ❑ $50-75,000 ❑ $75,000 or more

Why do you use our product/service? ________________________________________

Did you consider any other options? __________________________________________

How often do you purchase our product/service? ________________________________

Would you make any changes to our product/service? ____________________________

Any other comments that would help us? ______________________________________

What is your job?_________________________________________________________

Which local magazines or newspapers do you read? ___________________________

________________________________________________________________________

Which local television or radio stations do you watch or listen to? ___________________

________________________________________________________________________

This short survey provides information on how your clients fall into the followingsegments:● Why your customers are choosing you over the competition● The type of work they do for a living● The frequency of repeat purchase● How best to reach them through advertising● How old they are

You can gather all the responses and distribute them into categories or submarketsby occupation, frequency of purchase, age and media.

Current Customer Marketing Survey

Chapter 3


3.6

businesses. You can have your customersfill out such a questionnaire, or you cancall them at home and fill it out yourselfwith their answers.

Consider, for a minute, that you’re thedirector of marketing of Market Hills Coun-try Club. Your main job—since the restau-rant under Chef Raoul seems to be tak-ing care of itself—is to promote activity onthe golf course. So you take on the taskof identifying your market segments: Youread the vast golf trade press, you handout customer surveys, and you simplywatch what kinds of people are hitting thelinks on your course and on other golfcourses. You assess all this information anddiscover that your golf market consists ofseveral segments:● Business golfers: largely males 25 to 60,not afraid of playing during the week. Priceis no object. High-volume golfers.● Retirees: older golfers who’ll continueto golf at Market Hills as long as the pricesstay reasonable.● Female golfers: some overlap with boththe previous markets but also a segmentby itself.

● Golf tourists:avid golfers who like to com-bine travel with their sport. Many states haveactive plans promoting tour packages witha golf and sightseeing orientation.● Youth market: tomorrow’s golfers mustcome from somewhere. This market canuse your links at unusual times, but theydon’t have much money.● Event market:many organizations like touse golf events as fund-raisers and for pub-licity drives. You need to have your mar-keting finger on the pulse of this market.● Professional market:Market Hills is largeenough to host an occasional profession-al event. You have to bird-dog this marketyears ahead to get yourself on the shortlist for selection.

Each of these markets, of course, is look-ing for slightly different things in a golfcourse. By segmenting your market, youcan very specifically address the needs ofeach of these groups. Your marketing to theprofessional market, for example, will bevery different from your approach to thebusiness golfer.

Segmenting For The General Consumer Market

To segment a market for the consumermarket, you have to do some research. First,look no further than your own business: ● What do you know about your currentcustomers and how do you know it? ● Which of your current customers do youwant more of?● Where can you find more of them…these nice customers?

You can analyze your market segment ina variety of ways, trying to create the mostspecific picture possible of who these cus-tomers are:

1. Geography2. Urban, suburban, rural 3. Demographic

● gender● age

DangerDon’t just open

the bomb baydoors: Use the

bombsight. It’s important to defineyour target market as accurately aspossible. All your marketing willbe based on your conception ofyour market, so you have to get itright. Be specific: What’s their in-come? What’s their gender andage? Where do they live? Howmuch education do they have?How much does the average cus-tomer buy from you in a year?



3.7

● income● occupation● education● household size● family life cycle—empty nesters,DINK (dual-income, no kids) and so on

Segmenting For Business Customers

You can break down business marketsinto two main subsets:1. Industrial:companies that buy products(frequently raw materials) and then usethem as part of other products. For instance,a company that buys plastic to make au-tomobile bumpers or pigments to make wa-tercolor paints.2. Commercial consumers:companies thatbuy products or services as end-users.These are usually companies that either

make capital purchases from you—big-tick-et items that aren’t factored into the costof producing their product—or standardoperational buys for ongoing productionsupplies or services.

For business markets, the government(for a change) has actually made your jobeasier. The government’s Standard Indus-trial Classification (SIC) breaks down Amer-ican business as a whole into a system ofcategories and subcategories. Most busi-ness-to-business marketers and marketingsuppliers (mailing lists, research compa-nies) use this system as a basis for organ-izing their activities.

First, the SIC system breaks everythinginto 10 large categories, each of which car-ries a series of two-digit numbers—exceptfor numbers 68 and 69, which are not used(see the chart on the following page).

You don’t want to survey only your current customers. That’s too restrictedand doesn’t tell you anything about the world at large. You also want to devel-op an understanding of the demand for your product or service in the broadermarketplace.

A survey of the general public will tell you how many people have heard ofyou and your competitors, whether they’ve ever used your type of product orservice, and whether they are ever likely to. This is valuable information to have.

This type of survey is probably best conducted through a random phone sur-vey. You can do this yourself (using the services of a temporary agency), hire amarketing consultant to do it for you or hire a marketing firm. Those choicesare in order of increasing cost.

Here are some sample questions you can ask of the general public, whichcan guide you in selecting market segments for your attention:

● The standard demographic data (as in listed in the current customer survey)

● Have you ever used [product category]?

● Which brand of product in this category are you personally familiar with?

● On a scale of 1 to 5 (from low to high), how personally satisfied are youwith the different brands?

● How often do you use this product or service in a given year?

● How much do you spend on this product or service in a given year?

Survey Says...

Chapter 3


3.8

To refine a company description, youadd more numbers. The standard SIC (pro-nounced “sick”) classification code in-cludes four digits. The third and fourthnumerals tighten the focus of the de-scription. This brief selection from House-hold Appliances Manufacturing shows youhow it works:

*nec = not covered elsewhere

Of course, once you identify your potential customers—whether consumer orbusiness—the question becomes, “How canyou reach them?” And once you know howto reach them, how can you convince themto be your customer? From here we go backto the marketing basics outlined in the first

two chapters. We’ll apply your marketing vision to a subset of your market and increasethe accuracy of your message.

THE POSITIONING STATEMENT: YOU IN

A NUTSHELLPositioning: staking a claim in the mind

of the consumer. You plot the positioningof your competitors, and then you lookfor an open spot for your own product toassume (or a spot currently taken by aweak competitor). You’re going to posi-tion your product there. The grounds forpositioning are legion: You can claim tobe the technological leader, to have thelowest price, to be tops in convenience,to be the classic choice, the luxury choice,the choice of the big guys, the alternativeproduct and so on.

Your positioning statement doesn’t haveto be absolutely, verifiably accurate, but itdoes have to be believable. You shouldn’tposition yourself as the finest bake shop inthe universe; it’s more believable and con-vincing to say you’ve got the freshestdoughnuts in town. It’s more credible to sayyou offer the biggest selection of tools inthe county, not that you carry every toolever made. Don’t go overboard with yourpositioning statement, lest you be seen asoverreaching and boastful, without thegoods to back it up.

Don’t confuse your positioning statementwith an advertising tagline. They have to beconsistent, but they shouldn’t be identical.They differ in several important aspects (seethe chart on page 3.9).

Once you decide how best to positionyourself, develop a positioning statement—a brief description of how you want yourcustomers to see you. The goal of your ad-vertising and marketing is to drive that po-sitioning deep into the mind of the con-sumer. When someone asks a consumer,“What do you think of XYZ Corporation and

01-09 Agriculture, forestry, fishing

10-14 Mining

15-19 Contract construction

20-39 Manufacturing

40-49 Transportation, communica-tions, electric, gas

50-59 Whole and retail trade

60-67 Finance, insurance and realestate

70-89 Services

90-98 Government and nonprofit

99 Other

Major SIC Classifications

36 Electronic & Other Electric Equipment

363 Household Appliances

3631 Household cooking equipment

3632 Household refrigerators and freezers

3633 Household laundry equipment

3634 Electric housewares and fans

3635 Household vacuum cleaners

3639 Household appliances, nec*

its products,” you want that consumer’s re-sponse to mirror your positioning statement.

Here’s a sample positioning statementfor a small catering firm:

“Kaycee Catering provides value-priced, full-featured catering serv-ices for wedding receptions, busi-ness meetings and other socialevents throughout Lane County. Weprepare hearty home-cooked Mid-western fare (without borrowingfrom fancy, exotic cuisines) de-signed to appeal to the broadestpossible audience.”

A portion of Kaycee’s business focusesexclusively on the wedding marketplace.So this area has its own positioning statement:

“Kaycee Catering provides person-al, full-service catering for wedding re-ceptions throughout Lane County. Wework closely with the bridal party toselect from our popular menu of rea-sonably priced Midwestern favorites,all designed to make the reception aworry-free success.”

As you do your research and developyour positioning statement, you may well

find a new category in which to positionyour product. A new product category islike the western Oklahoma territory on April22, 1889, when settlers lined up at the bor-ders of the state. The western part of thestate held no settlements at that time. It wasunowned land, open for the taking by thefirst person to put a stake in the ground.The guns went off at high noon, and theyall rushed into the open territory togetherto claim the best land.

But there aren’t too many new productcategories around. The terrain of the Amer-ican marketplace is a very crowded place



3.9

External focus Internal focus: directed toward your own marketing people as a target perception to “plant” in the cus-tomers’ minds

Very short…like all good Can be a long sentence or twoadvertising copy

Changes occasionally Changes rarely; think of it as your company’s coreto keep it fresh definition

Speaks to end-user Speaks to marketing orientation of company

Can speak to competition Must speak to competition

Tagline Positioning Statement

Jargon AlertA “tagline” is a

short phrase orsentence that’s typ-ically connected with your com-pany name. It’s a positioning“nugget” that describes the wayyou want customers to see yourcompany. Some examples:● “Just leave the driving to us.”● “When it absolutely, positivelyhas to be there overnight.”● “It’s the real thing.”● “It does a body good.”

indeed. Almost everywhere you want to set-tle down and establish a business home-stead, you’ll find someone already thereputting in crops and raising chickens.

You can fight with the existing landhold-ers, or you can choose another method. Workthe same land in a different way. Or leavebehind the homesteading metaphor—instead,consider the marketplace as an array of choic-es, and you must offer a different, more com-pelling benefit to the same market to drawconsumers from the competitor.

Your Company’s Market Personality

Positioning is a sophisticated way to por-tray yourself to the marketplace. But there’san even more subtle aspect of that, whichworks right along with your positioningstatement and its reflection in your adver-tising and marketing efforts. It’s your com-pany’s market personality.

Leaving aside the benefits your compa-ny offers to its customers, what personali-ty do you want your company to project inthe marketplace?● Cool, professional and unflappable, nomatter what’s happening

● Folksy, small-town, trustworthy● The biggest and the best—very confident● Always on the edge, a fountainheadof innovation: If there‘s something new,we’ve got it ● We have everything, from the sublime tothe ridiculous

These types of comments are similar topositioning, but they’re really establishinga psychographic profile for your company,a “personality” that goes beyond its posi-tioning. Think of Martha Stewart, Ben & Jer-ry’s, Smith & Hawken, Lands’ End, Disney,and Allstate Insurance. Each of these com-panies (yes, Martha is a company) uses itsestablished personality to influence a cus-tomer’s buying decision. Even though thesecompanies are large and successful, theyperceive the need to be recognized as a“character”—they want to portray them-selves as more than just a corporation. Youneed to do this, too.

OVERLOOKED MARKETSNot all markets are obvious. It’s easy to

fall into the rut of selling to your tradition-al customers. Then one day you get a re-quest from someone who’s come up withan entirely different application for yourproduct or service. Pay attention to suchodd requests—with some fast-footed ex-ploration you may discover niche marketsin the most unlikely of places.

Niche Marketing A niche is a small—sometimes very

small—market segment. By nature, largecompanies are prone to overlook nichemarkets or to judge them not worth theirattention. You can beat the big guys withclear-thinking nichemanship.

Little shipping companies like Mail Box-es Etc. are a good example. These quick-ship firms realized that going to the post of-fice was an unpleasant experience for mostpeople, especially when it involved ship-

Chapter 3


3.10

DangerIf you think

you’ve found a tru-ly unique position-

ing in your market, one that noone has even considered, take adeep breath. Sometimes what ap-pears to be a great opportunity isactually a graveyard of shattereddreams. Ask yourself the ques-tion: Why has no one tried thispositioning before? Is there some-thing fundamentally wrong withmy thinking?



3.11

Here’s a second work sheet for you to fill out on your business. Now that you’ve donesome thinking about markets and submarkets, about segmentation and market niches, you should have some fresh ideas about your business.

1. What is your product and are there different categories of products?

2. Do you sell your product in differentiated or undifferentiated markets?

3. Which different markets do you sell your products to?

4. What is your positioning statement for each of these different markets?


ping something more than an envelope.They also noticed that there were no con-venient places for people to buy smallamounts of packing materials. If you need-ed only 10 or 12 of a particular box, youcouldn’t go to a cardboard box manufac-turer—because they wouldn’t sell you any-thing less than their minimum order of Xnumber of boxes for $1,200. They weren’tset up for sales to the general public. So,following the growing trend of service busi-nesses in the ’90s, these companies creat-ed a place where you could simply showup with your stuff and leave it there forprompt dispatch. They would provide awide range of boxes and packing materi-als, quick computation of shipping costs,and reliable delivery through the U.S. Post

Office, UPS or the express delivery com-panies. It became a desirable service for thebusy American consumer with disposableincome—and a very nice niche for UPSstore franchise owners and stockholders.

We talked earlier about going with yourbest market first. That’s still good advice. Butniches lend themselves to quick exploitationwithout damaging your main markets.

What niches might exist for your prod-uct or service? There are four ways to discover niches:1. Stay in touch with your business col-leagues across the country, and if they havenew ideas that have proven successfulwhere they are, be bold enough to use theirbrain power. You don’t have to inventsomething to benefit from it. Just take anidea that’s worked elsewhere and apply itto your own geographic market. This is atried-and-true route to success, and it’s perfectly honorable, too. 2. Talk to your customers. They are the experts and probably have far more time andenergy to experiment with your product thanyou do. How do they use your product? Dothey all use it in ways you’d expect?

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3.12

InsightWhy are there so

many brands ofsoap? Because

people buy it for reasons havingnothing to do with dirt: ● On sale● Most expensive soap ● Smells best● Has different scents● Largest/smallest bars● Neat color or variegation● Deodorizes● Contains skin cream● Packaging ● Comes from Europe● On end display ● Environmentally safe● Used by celebrity

That’s why there are so manybrands of soaps. Because thereare so many brands of people.What’s important to one is insignificant to another.

DangerWho’s not your

customer. It’s easyto say that “any-one” is a potential customer, es-pecially in the consumer market-place. But try thisexercise—define your productmarket negatively, by the people(or companies) that most likelywould not be interested. Thismakes it easier to rule out mar-kets that probably won’t justifyyour expense in reaching them.Go for your best markets first.



3.13

3. Use sheer human inventiveness. Thinklong and hard about your core product attributes and how they might work in to-tally different situations. Who would haveever thought of biodegradable packingpeanuts? Who was the first person who puttogether the concepts of “car” and “radio”?What about low-power lasers as pointingdevices and staples for closing surgical in-cisions? None of these are obvious appli-cations that spring first to mind!4. Look for bigger niches based on shiftingdemographics.What about specialized mar-kets for seniors and for ethnic populations?

Latinos are now the largest minority groupin the country. Baby boomers continue theirgraying, and services for the seniors willdoubtless be a boom industry in the nexttwo or three decades. Is there somethingabout your product with a special appealto these markets?

Use your marketing nose to find out-of-the-mainstream niches that provide oppor-tunities you can’t get from your main au-dience. Niche marketing offers a way toboost your sales volume, meet new cus-tomers, maintain production and billing lev-els, and make some unanticipated money.

You should now be at a pointwhere you can put your marketingvision for your company down on pa-per. Firms that are successful in mar-keting invariably start with a mar-keting plan. Large companies haveplans with hundreds of pages; smallcompanies can get by with a half-dozen sheets.Put your marketing planin a three-ring binder. Refer to it atleast quarterly, but better yet, month-ly. Leave a tab for putting in month-ly reports on sales/manufacturing;this will allow you to track perform-ance as you follow the plan.

The plan should cover one year. For smallcompanies, this is often the best way tothink about marketing. Things change,people leave, markets evolve, cus-tomers come and go. Later onI suggest creating a sectionof your plan that ad-dresses the medium-term future—twoto four

years down the road. But the bulk of yourplan should focus on the coming year.

You should allow yourself a couple ofmonths to write the plan, even if it’s only afew pages long. Developing the plan is the“heavy lifting” of marketing. While execut-ing the plan has its challenges, decidingwhat to do and how to do it is marketing’sgreatest challenge. Most marketing planskick off with the first of the year, or withthe opening of your fiscal year if it’s dif-ferent. So if you are going to unveil your

plan by the new year,you should be wellinto putting it togeth-

er by Thanksgiving.Who should see your

plan? All the players in the com-pany. Firms typically keep their

marketing plans very, very private forone of two very different reasons: Either

they’re too skimpy and management wouldbe embarrassed to have them see the lightof day, or they’re solid and packed with information...which would make them extremely valuable to the competition.

You can’t create a marketing plan with-out getting many people involved. You wantto draw on the best thinking of all your peo-ple. No matter what your size, get feedbackfrom all parts of your company: finance,

manufacturing, personnel, supply and soon—in addition to marketing itself. Thisis especially important because it will

take all aspects of your company to makeyour marketing plan work. Your key people



4.1

Chapter 4

How To Write (Yes, Write)Your Marketing Plan

can provide realistic input on what’s achiev-able and how your goals can be reached,and they can share any insights they haveon any potential, as-yet-unrealized market-ing opportunities, adding another dimensionto your plan. If you are essentially a one-person management operation, you’ll haveto wear all your hats at one time—but at leastthe meetings will be short!

What’s the relationship between yourmarketing plan and your business plan orvision statement? Your business plan spellsout what your business is about—what youdo and don’t do, and what your ultimategoals are. It encompasses more than mar-keting; it can include discussions of loca-tions, staffing, financing, strategic alliancesand so on. It includes “the vision thing,” theresounding words that spell out the glori-ous purpose of your company in stirringlanguage. Your business plan is the U.S.Constitution of your business: If you wantto do something that’s outside the businessplan, you need to either change your mindor change the plan.

Your company’s business plan providesthe environment in which your marketing

plan must flourish. The two documentsmust be consistent.

MARKETING PLAN TRUMPS FINANCIAL PLAN

Don’t misunderstand the title of this sec-tion. Financial plans are critically importantfor every business, big or small. Especiallyto bankers. But a financial plan is a houseof cards. What makes the house stable ismarketing. Without successful marketing,down come the cards.

We all know the seductions of spreadsheetgames. Hmm, let’s see...if I can increase mymargin to 11 percent, then, wow!, look at theimpact on the bottom line! What if I add 20percent to my sales in Cincinnati? Holy cow,we’ll have plenty of money to expand thatStoughton Road store! The gods of businesslaugh at mortals and their spreadsheets. Rootyour plans in reality, not in the wonders offormulaic calculations. Every time you makea change from what is to what might be, askyourself three questions 1. Can this really happen?2. How can I make this happen? 3. Where will this change (more sales orwhatever) come from on the ground?

Your financial plan depends on the ef-fectiveness of the marketing effort to ren-

Chapter 4

How To Write (Yes, Write) Your Marketing Plan

4.2

DangerWhile demo-

cracy in a smallcompany is a

wonderful thing, if you are theboss, you have to make the deci-sions. Marketing plans can leadto arguments and fundamentaldisagreements about where thecompany should be heading. Beprepared for this. Before you talkto people, check your gut feelingabout how much you’re willingto yield in your vision…andwhen you will draw the line.

InsightYour business

plan and your mar-keting plan have alot in common, but make sure tokeep them separate. Your busi-ness plan should show how youplan to support the operation ofyour marketing. At the same time,your marketing plan should be aconcrete working out of the ideasimplicit in your business plan.



4.3

der it meaningful and realistic. Without suc-cessful marketing, the financial plan is justa what-if spreadsheet—interesting histori-cally, but with no practical application.

A marketing plan, on the other hand, isplump with meaning. It provides you withseveral major benefits. Let’s review them.● Rallying point:Your marketing plan givesyour troops something to rally behind. Youwant them to feel confident that the cap-tain of the vessel has the charts in order,knows how to run the ship, and has a portof destination clearly in mind. Companiesoften undervalue the impact of a “market-ing plan” on their own people, who wantto feel part of a team engaged in an excit-ing and complicated joint endeavor. If youwant your employees to be committedmembers of your company, it’s importantto share with them your vision of where thecompany is headed in the years to come.People don’t always understand financialprojections, but they can get excited abouta well-written and well-thought-out mar-keting plan. You should consider releasingyour marketing plan—perhaps in anabridged version—companywide. Do it withsome fanfare and generate some excitementfor the adventures to come. Your workerswill appreciate being involved.● Chart to success:We all know that plansare imperfect things. How can you possi-bly know what’s going to happen 12

months or five years from now? Isn’t put-ting together a marketing plan an exercisein futility...a waste of time better spent meet-ing with customers or fine-tuning produc-tion? Yes, possibly, but only in the narrowestsense. If you don’t plan, you’re doomed,and an inaccurate plan is far better than noplan at all. To stay with our sea captain anal-ogy, it’s better to be 5 or even 10 degreesoff your destination port than to have nodestination in mind at all. The point of sail-ing, after all, is to get somewhere, and with-out a marketing plan, you will wander theseas aimlessly, sometimes finding dry landbut more often than not floundering in avast ocean. Sea captains without a chart are

InsightCure yourself of

spreadsheet narco-sis by running somedismal numbers. Every businessowner gets giddy over runningwonder scenarios, where salesexceed projections by a ton. Butwhat if the opposite takes place:Suppose you sell only half ofwhat you’re supposed to? Just asobering thought to keep onefoot on the ground.

Ask some of your business colleagues and professional friends if theyhave marketing plans and whether you can see them. While their businesseswill be different than yours, you’ll benefit from getting a close look at the mar-keting mind of a local company. What suppositions are they making about localconditions? How comprehensive is the plan? Is the plan good enough thatyou’d ask the plan writer to consider reviewing your marketing plan in draftform for comments? As much as people talk about marketing plans, most en-trepreneurs have seen very few of them.

A Little Help From Your Friends

rarely remembered for discovering anythingbut the ocean floor. ● Company operational instructions:Yourchild’s first bike and your new VCR came witha set of instructions, and your company is farmore complicated to put together and runthan either of them. Your marketing plan isa step-by-step, concrete guide for what yourcompany needs to do to be successful dur-ing the year. It’s more important than a vi-sion statement. To put together a genuinemarketing plan, you have to assess your com-pany from top to bottom and make sure allthe pieces are working together in the bestway. What do you want to do with this en-terprise you call the company in the com-ing year? Consider it a to-do list on a grandscale. It assigns specific tasks for the year.● Captured thinking:You don’t allow yourfinancial people to keep their numbers intheir heads. Financial reports are thelifeblood of the numbers side of any busi-ness, no matter what size. It should be nodifferent with marketing. Your written doc-ument lays out your game plan. If peopleleave, if new people arrive, if memories fal-ter, if events bring pressure to alter thegivens, the information in the written mar-keting plan stays intact to remind you ofwhat you’d agreed on. ● Top-level reflection: In the daily hurly-burly of competitive business, it’s hard toturn your attention to the big picture, es-pecially those parts that aren’t directly re-lated to the daily operations. You need totake time periodically to really think aboutyour business—whether it’s providing youand your employees with what you want,whether there aren’t some innovative wrin-kles you can add, whether you’re gettingall you can out of your products, your salesstaff and your markets. Writing your mar-keting plan is the best time to do this high-level thinking. Don’t get so caught up inthe beauty of individual trees that you for-get to look at how the entire forest is grow-

ing. Some companies send their top mar-keting people away to a retreat. Others goto the home of a principal. Some do mar-keting plan development at a local mo-tel, away from the phones and the faxes,so they can devote themselves solely tothinking hard and drawing the most ac-curate sketches they can of the immediatefuture of the business.

Ideally, after writing marketing plans fora few years, you can sit back and review aseries of them, year after year, and checkthe progress of your company. Of course,sometimes this is hard to make time for(there is that annoying real world to dealwith), but it can provide an unparalleled ob-jective view of what you’ve been doing withyour business life over a number of years.

PREPARING TO WRITEBefore you begin to write, pull togeth-

er some information you will need to havehandy. Get it first, so you don’t have to in-terrupt the thinking and writing process:● Your company’s latest financial reports(profit and loss, operating budgets and soon) for the current and the last three years

Chapter 4


4.4

DangerYou can’t put

together a market-ing plan withoutgetting the input of those whosecompensation depends on itsoutcome. Salespeople are espe-cially given to loud grumblingunless they’re in the marketingplanning loop early. They don’talways have good ideas (some-times salespeople focus too muchon sales over marketing), butthey can add a real-world gritti-ness to the plan.

4.5

● The latest sales figures for the currentyear and the previous three years, by prod-uct and by region● A listing of each product or service in thecurrent line, along with target markets● An organization table (If you can countyour employees on one hand, you canprobably omit this.)● Your understanding of your marketplace:your competitors, geographical boundaries,types of customers you sell to, existing dis-tribution channels, latest and most usefuldemographic data, any information ontrends in your markets (both demograph-ic and product-related)● Ask each of your salespeople and/or cus-tomer-relations people to list the six (nomore) most crucial points, in their opinion,that need to be included in the comingyear’s marketing plan. Give them two weeksto come up with their best thoughts. Youdon’t have to include all these, but you dohave to take them into account.

THE INGREDIENTS FOR A TASTY MARKETING PLANEvery how-to book on the market has

a different take on the essential elementsof a marketing plan. Those geared towardthe big corporate crowd talk in a languagefew human beings understand. However,the words you use are much less importantthan how seriously you approach the task.

This section outlines the key elementsyou will need to include in your marketingplan. However it’s ultimately organized,your marketing plan should be a straight-forward, easily understood company doc-ument. It will provide you with a clear direction for your marketing efforts for thecoming year, and it will give an incisive lookinto your company for all readers.

Market SituationThe “market situation” section should

contain your best and most clear-headeddescription of the current state of the mar-ketplace (this is no place for hunches). ● What are your products/services or prod-uct/service lines?● What is the dollar size of your markets?● What is your sales and distribution setup?● What geographic area do you sell to?● Describe your audience in terms of population, demographics, income levelsand so on.● What competitors exist in this marketplace?● Historically, how well have your prod-ucts sold?

Your market situation section might readlike this:

Sumners and Associates is a book-keeping and accounting firm start-ed in 1981. We provide tax servicesto individuals and to businesses un-



First, some terminology, so we all know what we’re talking about:

● Marketing objective: This is a marketing task you want to accomplish. It shouldbe relatively independent, easy to grasp and measurable.

● Marketing goals: You set goals to enable you to reach the objective. They’rethe rungs on the ladder. Achieve the goals and you’ve reached your objective.

● Marketing tactics: You develop these basic action steps to enable you toreach your marketing goals.

Lingo Lesson

der $500,000 in annual sales. Weprovide bookkeeping and payrollsupport to those same businesses.Our market area is Boulder, Col-orado, and its northern suburbs.

For the personal market, our clientstypically are in the $75,000 and high-er income range, or they are retiredwith assets of $200,000 or more. Forthe business market, most of ourwork is for restaurants, service sta-tions, independent conveniencestores and a large courier service.

With the exception of a slumpfrom 1988 through 1991, Sumnersand Associates has grown steadilyfrom its inception. Gross sales in2002 were $545,000.

Our competition for our immediatemarket is a group of eight firms rough-ly comparable to ourselves. Only oneof these firms, Acme Bookkeeping,has an interest in marketing itself. Webelieve we rank second in the groupof competitors behind Acme.

We have a strong position in therestaurant portion of our business.

Much of this information exists in theheads of the management team, but inmany companies it’s never written down.Now is when you write it down. For ex-ample, how much information do youhave in your office—right now—on yourcompetition? The marketing plan gives youa chance to pull all this relevant informa-tion together in one place, to spur ideasand justify actions.

Consider each of your products or serv-ices up against the matching products orservices of your competitors. How well doyou stack up? Is there any significant mar-ket opportunity for you that neither you noryour competitors are currently exploiting?

You’ll also find that the best thinkers inyour company may well have different ideasabout elements of the current situation. Themarketing plan provides a good arena totest different snapshots of the market againsteach other.

Threats And Opportunities The second section on “threats and

opportunities” is an extension of the “mar-ket situation” section, and it should focuson the bad and good implications of thecurrent market:● What trends in the marketplace areagainst you?● Are there competitive trends that areominous?● Are your current products poised to suc-ceed in the market as it now exists?● What trends in the marketplace favor you?● Are there competitive trends working toyour benefit?● Are the demographics of your marketin your favor? Against you?

There are lots of places to go to get information on the trends in your market.City and state business publications fre-quently publish overview issues; you cantalk to local business reporters; and local chambers of commerce publish

Chapter 4


4.6

Jargon AlertSometimes the

current marketanalysis is known as

a SWOT analysis: strengths, weak-nesses, opportunities and threats.You start by looking internally(and objectively) at the strongand weak points of your business(the “market situation” section),and then you move externally toreview the market opportunitiesavailable to you and the threats toyour business (the “threats andopportunities” section).



4.7

projections, as do associations of manu-facturers (the names are different in various parts of the country). Talk to yourprofessional association and read yourtrade journals.

Here’s an example of what a “threats andopportunities” section would look like forSumners and Associates:

Threats:The company faces four identifi-

able threats in the coming year:1. Our computer system needs up-grading to the latest version of our accounting and tax software. To dothis with all of our machines will betoo costly. We’ll need to work withthe existing version of our softwarefor another 10 months. This may putus at a service disadvantage withsome clients.2. Two of our clients, Porkie’s Car-ryout and the Magnus Group, arefacing difficult business prospectsin the short term. We will likelyneed to replace this business beforethe end of the year.3. Acme Bookkeeping, our majorcompetitor, has hired one of ourstaff members. We have to assumethey now have a current client listof ours and will make solicitations

based on their greater size and serv-ice capabilities.4. Growth on the south side of townis outstripping growth on our northside. We’ll need to consider openinga south-side office or look into waysto use couriers or electronic commu-nications to make ourselves fully com-petitive in providing our services.

Opportunities:1. Morrissey’s Inc., a long-time client,has purchased three significantrestaurants in the adjoining countyand has expressed an interest in hav-ing us take over the accounting workfor these operations. This should pro-vide us a great chance to hire oneand perhaps two additional people.2. Changes in the tax laws havemade many small businesses un-easy with handling the bookkeep-ing by themselves or through a one-person bookkeeping service. As thedetails of these revisions becomemore public, we anticipate increas-ing calls for help.3. We have been asked to partici-pate in several educational venuesin the coming year, which includethree presentations at a small-busi-ness forum, an evening class at the

If you’re new to the notion of a marketing plan, how do you set a quantifi-able goal? Start with your past. Review your past sales numbers, your growthover the years in different markets, the size of typical new customers, and hownew product introductions have fared. If over the last five years you’ve grown a cumulative 80 percent in gross revenues, projecting a 20 percent to 25 percentincrease in the next year is reasonable; 45 percent is not. Make a low but rea-sonable projection for what you’ll be able to accomplish with marketing supporttoward your new marketing objectives. Set modest goals to start, until you geta feel for the terrain.

Goal For It

university on starting a small busi-ness, and a role in the Boulder En-trepreneur Club. These will provideus good exposure and strong busi-ness prospects. 4. The local economy continues tobe strong, and we believe our typ-ical clients will continue to flourishin this growth cycle.

Marketing ObjectivesIn the “marketing objectives” section,

you paint your picture of the future: Whatmarketing objectives do you want toachieve over the course of the plan? Eachof your marketing objectives should include both a narrative description of whatyou intend to accomplish along with num-bers to give you something concrete to aimfor. Just to say you want to make a first entry into the Swiss screw machine mar-ketplace isn’t providing much guidance.Saying you want to go from 0 percent to8 percent of the local market in two yearsis easier to understand—and verifiable. Ifyou are not sure of the size of the localmarket, then aim at a dollar figure in sales.Your accountant will let you know whetheryou have succeeded or not.

You should make it a point to limit thenumber of marketing objectives you takeon in a given year. Let’s face it, changecan bring stress, disorient staff and some-times even confuse your target market.Keep your objectives challenging butachievable. Better to motivate yourselfwith ambitious but worthy targets than todepress yourself by failing at too manyoverenthusiastic goals.

Here are some typical marketing objec-tive categories:● Introduce new products● Extend or regain market for existingproduct● Enter new territories for the company● Boost sales in a particular product, mar-ket or price range. Where will this businesscome from? Be specific.● Cross-sell (or bundle) one product withanother● Enter into long-term contracts with desirable clients● Raise prices without cutting into salesfigures● Refine a product● Enhance manufacturing/product delivery

This third section of your plan should include perhaps a half dozen such objec-tives, spelled out with specific goals. Someexamples:● Objective: Introduce our accounting andaudit services to Blankville. By the end ofthe first year, we want to have six clients ofsignificance and billed time of $75,000.● Objective: Reverse the decline in ourpackage Caribbean winter tour sales inChicago, Detroit and Minneapolis. Sales overthe last three years have declined 11 per-cent. We intend to increase sales 4 percentthis year and 8 percent next year.● Objective: Introduce lunch fax businessat the west side restaurant and deliver 420lunches per week by June 1.● Objective: Demo updated X-ray crystal-lography at selected trade exhibitions in the

Chapter 4


4.8

How ToYou can get other

people excitedabout and involved

in your plan by givingthem a marketing objective totackle. Choose some employeesyou can delegate to, assign theman objective and have them develop the detailed goals andtactics. You’ll probably get somefresh ideas, and you’ll certainlyget enthusiasm.



4.9

summer of 2006. Capture 250 leads pershow and secure 75 on-site demos.

To repeat, make your objectives sim-ple, concrete, countable, ambitious andachievable.

Marketing Goals: Where The Details Start

Here’s where you come down out of theclouds and spell out how you are going tomake things happen. While your spreadsheethas shown increasingly stunning profits eachtime you bump up the market gains, nowyou are in the real world, partner. Gains mustbe earned by marketing brains and brawn.

Each marketing objective should haveseveral goals (subsets of objectives) and tac-tics for achieving those goals. In the ob-jectives section of your marketing plan, youfocus on the “what” and the “why” of themarketing tasks for the year ahead. In theimplementation section, you focus on thepractical, sweat-and-calluses areas of who,where, when and how. This is life in themarketing trenches.

When Eisenhower and the Allies decid-ed to invade Normandy in 1944 to open upa mainland Europe offensive against theAxis powers, they developed detailed plansfor victory. While successfully landing inNormandy and holding it were the overallobjectives, many intermediate goals wereset to make this possible: lining up theneeded boats, air cover, behind-the-linesparatrooper drops to cut off communica-tions, feints at a Calais landing to fool theenemy and so on. And, of course, each ofthose steps had its own list of details.

The key task is to take each objectiveand lay out the steps you intend to taketo reach it. As an example, let’s take the firstmarketing objective mentioned above:

Objective:Introduce our accounting and

audit services to Blankville. By theend of the first year, we want tohave six clients of significance andbilled time of $75,000.

How can you make this happen?Let’s suppose you’ve assigned this ob-

jective to a group of people, and they’veworked up some plans on moving intoBlankville. Here are what some of theirgoals might look like:● Since accounting and auditing servicesdon’t work well at a remote site (exceptfor the very largest companies), we’ll prob-ably need a local office in Blankville. Weshould schedule for this new office to openby June 2005. (Always include target dateswhen possible.) ● If we are going to talk about our expert-ise, we have to have some of our professionalstaff there. We’ll probably want to detail twoor three of our experienced people in thatnew office, as well as hire local support staff.● We may want to do some direct-mail ad-vertising to companies in Blankville. Ourmessage might talk about special expertise

How ToGet involved in

the back-channelbusiness communi-

cations that take place inyour community. Tip groupsserve as informal gatherings ofbusinesspeople to help one an-other get ahead. Service clubs,like the Key Club or the Jaycees,exist to perform charitable workin the community, but they aretypically made up of business-people and they’re an excellentnetworking tool. With both,you’ll make friends, expand yourbusiness contacts and better un-derstand your market.

Chapter 4


4.10

Target Goal: Blankville Direct Business AssociationDate Blankville Staffing Marketing & Editorial Contact

Office Space Advertising Contact

Jan 2005 AL: Work BF: Advertisewith broker for staff;

to match interviewneed with and hire

availabilities

Feb 2005 BF: Interview and hire

Mar 2005 AL: Commit MT: Train to space by staff here

end of month

Apr 2005 CF: Finalize MT: Train JY: Make furniture staff here contactand decor

procurement

May 2005 CF: KL: Bugle JY: MakeComputers in notice of contact

7/1 opening

Jun 2005 MT: Orient KL: JY: staff there Invitations Recontact

to opening aboutevent opening

Sample Marketing Matrix



4.11

in certain areas of business. We’ll targetthose types of businesses in Blankville.● We’ll talk to the business editor of the lo-cal paper and let him or her know we’recoming to town. We might contribute a “taxtips” article or two for the exposure.● We’ll approach several business associa-tions in town and offer to give a talk onsome specialized topic in which we can of-fer some expertise.● We’ll ask our clients in other cities ifthey’d be willing to give us some referralsin Blankville.● We may run some modest advertisingin the Blankville Bugle (a fine and respect-ed newspaper) announcing our arrival andexplaining our special expertise.● We’ll have an open house to which we’llinvite a number of the local business celebs,political people, potential clients and media.● We might look early on to get ourBlankville office involved in some high-pro-file charity or public service work.

You get the idea. If your objective is tobuild a business in Blankville, you haveto put together concrete goals to make ithappen. Each of these actions makes sense.You might come up with others (there’s nolimit to human creativity, after all—espe-cially in marketing). The point is that eachgoal should consist of concrete actions.

Each of these goals needs to have itsown series of steps formalized. Who’s go-

ing to check on the advertising rates for theBlankville Bugle? And when should thoseads run? Which professionals are moving toBlankville and how do they feel about it?How do we get a list of companies inBlankville? Lots of work to do.

One of the best ways to handle such de-tails is through an activity matrix. A matrixis a grid table that lets you plot actionsacross time. When you’re developing amarketing plan, you’ll soon reach the pointwhere you have to turn to your calendarand see when things should happen. A ma-trix provides you with a clear and very us-able framework for such timeline plotting.

See the sample marketing matrix on page4.10, covering some of the activities we justpresented for Sumners and Associates. Youcan make the matrix as detailed or as big-picture as you want. It should, however, in-clude everything that’s scheduled, when it’sscheduled and who the responsible partyis. And don’t forget to delegate responsi-bility as you go.

One of the best things about working witha matrix is its adaptability. Each block on thematrix lends itself to another chart, provid-ing more detail. For example, in April 2005,Marge Turner (MT) will train staff at thehome office. Marge, dutiful planner that sheis, constructs her own matrix to help her stayon track. However, her itemized matrixwouldn’t appear in the marketing plan. Thatlevel of operational detail would gum up the“big picture” overview the marketing plan ismeant to provide.

BudgetsBusiness activity costs money. If done

well, it also makes money. But whetherdone well or poorly, it always costs mon-ey. Your marketing plan needs to have asection in which you allocate budgets foreach activity planned. This informationshouldn’t appear on the activity matrixsince there is enough detail there already.

InsightBlow up the cur-

rent activity matrix ata local copy shop

and use it as an easy-to-followwall chart of your marketing ac-tivities. Use different color high-lighters to draw attention to keyelements of the campaign.

But it should be given in writing to the in-dividual carrying overall program respon-sibility. People responsible for portions ofthe marketing activity should know exact-ly what funds are available to them. In fact,you would be wise to involve them in plan-ning those budgets.

Be as objective as you can about thosecosts you can anticipate. For things withwhich you have no budget experience, add25 percent to your best estimate. Your budg-et should allocate separate accounting for internal hours (staff time) and external costs(out-of-pocket expenses). Make sure to enter the budget on a Lotus or Excel spread-sheet so you can manipulate it during con-struction to see which variant works best.

For help planning your budget, get acopy of The Almanac of Business and Financial Ratios (Prentice Hall) by Leo Troy.This useful volume gives you representa-tive ratios for marketing and advertisingspending (along with many other generalbusiness categories) for hundreds of industries. This will give you a benchmark.

Your budget section might look like thechart below.

Controls: Tracking EffectivenessTo track progress on your marketing plan

throughout the year, establish a regularschedule of meetings, and spell this out inwriting. How will you make adjustments toyour plan midstream? How will you moni-tor progress in sales/costs to make changesduring the year? You can’t leave yourselfwithout this capability.

The reason you pick measurable mar-keting objectives is to have the ability totrack your progress toward reaching them.Too many marketing efforts aren’t quan-tifiable, with the result that the achievementsof your marketing campaigns aren’t satis-factory, or they’re just plain illusory.

All your marketing efforts will benefitfrom the classic feedback loop: act, observe,adjust, act again. Scheduling quarterly meet-ings is best. At these meetings, responsibleindividuals should report on what they’veaccomplished in the last quarter, includ-

Chapter 4


4.12

Gross Sales $142,000

Budget for Annual Marketing Efforts $7,045

Yellow Pages $2,600

Sales letter mailing to prospects $625

Clerical help on mailing list $125

Advertising in local business magazine $500

Advertising in newspaper biz section $1,200

Brochure design and copywriting $380

Brochure printing $315

Registration for business exhibitions $145

Attend training session in Chicago $930

Purchase new mailing label software $225

Sample Budget



4.13

ing how much of the budget has beenspent. Reports should be oral, with a print-ed summary for the record.

As your activities move forward overtime, you’ll doubtless find the need to adjust the timing, the budget or the tasksthemselves. At these points you must decide whether to intensify your efforts,add more tactical steps to pick up thepace, or scale back your objectives. Makeyour changes in an organized manner, ad-justing all the dependent tasks so that theplan shifts as a whole. Whatever your de-cision, make sure to update your market-ing plan document. Put in writing yourunderstanding of why you didn’t reachyour goals. Keep the original, and dateand number all changes. Your plan mustbe dynamic, but it should not lose itssense of history. All this information willbe extremely useful when you create nextyear’s marketing plan.

Your progress plan section might looklike the chart above.

Executive Summary Put a brief summary at the front of your

marketing plan binder. On a single page, sumup (with key financial numbers) the contentsof your marketing plan. Use bullet points,short sentences and bold type for majorpoints, and be sure to stay focused on the

big issues. What does someone have to knowabout your plan to have any sense of it?

This summary gives plan readers a concise description of what your companyplans to do in the coming year. It also forcesyou to boil your thoughts down to their richand flavorful essence, which is always agood thing.

Here’s a sample marketing plan sum-mary:

The 2005 marketing plan for Sumnersand Associates has four main elements:1. We review our existing competitivemarketing situation. Overall, prospectslook good for our company. Boulder isgrowing at a steady 4.2 percent rate, withnew businesses starting at roughly 750a year. No competitive bookkeeping andaccounting firm has made significant mar-keting efforts, although Acme Bookkeep-ing did run a series of advertisements inthe business section of the Boulder Daily Camera. Our gross sales were$145,000. We’ll have to upgrade our soft-ware sometime this year, and this will costus about $20,000, with associated hard-ware costs. Our supplier will let us spreadthese costs over three years.2. We plan on marketing ourselves aggres-sively in the coming year. In addition tospeaking and training engagements, we’llprepare a series of three half-page ads to

1. Annual gross sales from the previous year $865,000

2. Marketing expenditures planned during the current year $40,000

3. Anticipated impact of marketing expenditures on gross sales $110,000

4. Actual marketing expenses during the current year $32,500

5. Annual gross sales at the end of the current year $971,000

6. Percentage of the actual difference between this year’s sales and last year’s sales that can be fairly attributed to the marketing effort 60%

Progress Plan

run on a six-time schedule in late summerand early fall in the Boulder Business Bulletin. We will also produce our first com-pany brochure, which we’ll use as a hand-out at the training venues. Costs for pro-duction of the ads and the brochure and forplacement of the ads will be $8,500.3. We foresee the following results for thecoming year:

Gross Sales $603,000Net Profit $47,200

4. In the long term, we will explore the pos-sibilities of opening a second office in thecity. Over the next two to four years, weanticipate maintaining our historical growthof 5 percent to 7 percent per year. Towardthe end of that period, we’ll hire at leastone other employee and consider expand-ing our leased space.

Your plan must address two differenttime frames: the short-term (one to 12months) and the long-term (more than 12months). Most of your document shouldfocus on the coming year, which is themost important for the majority of smalland medium-size businesses. Marketingtypically demands the performance of anumber of short-term actions planned in

unison, which together bring aboutchange. Once you have outlined the ma-jor year-end goals, the analysis will large-ly focus on the mechanics of media, mail-ing and promotion. But you shouldn’t stopyour serious thinking at year-end. Stretchbeyond your business’s immediate needsand envision the next two or three years.What are you ultimately reaching for?

Write this down, briefly and in generalterms. Questions you might answer couldinclude: How many employees do you en-vision adding over the next few years? Willyour need for office space stay the same?Will there be major equipment purchases?Will you be able to hire a manager? Are therespecific training courses or certificationsyou’d like to put your staff through? Will yourprofit margin stay constant, or do you thinkyou’ll be able to better it? Will you becomeactive in local, regional or national tradegroups? How will market demographics af-fect your business in the coming years? Keeptrack of how your larger vision changes overtime as well.

Chapter 4


4.14

InsightDream the dream.

Your marketing planshould include a

“blue sky” section in which youput your feet back and look towhere you think you’ll be in acouple of years. Especially insmall businesses, it’s a waste oftime to formulate marketingthoughts that go out more thantwo or three years. But dreamsare important—and they can be fun, too.

How ToIf you have a lot

of marketing activi-ties going on, youmight benefit from us-ing project management soft-ware, a sophisticated tool forkeeping track of scores ofevents, people and budgets overtime. There are a handful of pro-grams available for both the PCand Macintosh platforms. Someare relatively simple; others verycomplex. But this type of soft-ware is only necessary for plan-ning junkies…or for those witha sizable effort to run. For thosepeople, it’s indispensable.

OK, so you love your product.Youhave been around this market for awhile, and—quite honestly—youhave never seen a product so useful,so inexpensive, so long-lived and sovisually attractive. Unfortunately,you are suffering from a conditionthat affects many businesspeople. Its

principal symptomis a blinding lackof objectivity. Ifleft untreated, it

can result in the disappearance of entire businesses...company, staffand product, which fade till they become mere ghosts in the annalsof business history.

Your customers remain proudly self-cen-tered. They don’t appreciate the glories ofyour product’s reputation, the immensepracticality of its design or the clevernessof its name. No, they’re focused on theirpersonal need. Maybe it’s a car that’s leak-ing oil. Or a child’s sweater that needsmending. Or a bookkeeping system gonehaywire. Or an old coffee pot that’s diedand gone to Colombia. What do they want?A solution to their problem, not a prod-uct. They want to be able to drive withoutdripping oil; they want something to keeptheir child warm; and they want an accu-rate financial report and a cup of java.You’ve got to present your product as thesatisfaction to the need. As the scratch totheir itch. That, they can buy.

FEATURES VS. BENEFITS: THE KEY TO MARKETING

In the marketing “Hall of Big Ideas,” thedistinction between product features andbenefits sits on a raised marble pedestalin the center room under a ring of spot-lights. This distinction separates marketers

and everyone else in the business worldjust as sharply as the Berlin Wall divid-ed Berlin into East and West. Many entrepreneurs talk about their productin terms of its features: its capacity,color, strength, durability and othertechnical capabilities. Marketers



5.1

Chapter 5

The Basics Of Selling

(that’s you, now that you’re this far into thisbook) are different. They speak of the prod-uct, often as dramatically as possible, interms of how it will benefit the customer.They describe the need the product willimmediately fulfill, offering a vision of thewonderfully satisfied customer living his orher suddenly carefree life. Marketers makea living by wish fulfillment (or sometimes,so I’ve heard, by just the appearance ofwish fulfillment).

Some companies think “benefit talk” isbeneath them: “That’s for retail types,” theysay. High-tech businesses, generally sellingto technically sophisticated customers,sometimes feel a full-voiced recitation ofcutting-edge product features is enough tomake the sale. Not so. Every person responds most immediately to what theyunderstand most easily—in this case, whatthe benefits of the features are. If you spellout the benefits to technical people, theydon’t have to calculate them themselves.Why make them work? You don’t have totalk in baby talk. But be as obvious as youcan. State your key competitive advantagesas clearly as possible.

Some service businesses are also reluc-tant to think in terms of benefits—to theireventual calamity. Manufacturers at leasthave the physical product to talk about. Ser-vice providers don’t, and they sometimesfeel a deep-seated discomfort with the airynature of what they offer. They often cre-ate esoteric jargon to glorify their “product”and make it appear more mysterious andcomplicated than it is. There’s nothingwrong with this, except that when the jar-gon becomes too murky, it obscures thegenuine value. As long as the jargon is ben-efit-oriented, no one suffers.

Benefits are the satisfaction of a need ordesire. Let’s take the example of a cof-feemaker and study the difference betweenfeatures and benefits (see the chart, below).

What you’re doing is translating from avery accurate product description to thewords your customer wants to hear. You’requite literally translating from one lan-guage to another. A parched Parisianwon’t respond to “Want some water?” butyou’ll get his or her attention with “Voulez-vous de l’eau?” It’s the same thing whenyou market a product: Customers may see

Chapter 5


5.2

10-cup or 42-ounce capacity Make a full pot and have fresh coffee for hours

Special filter switch allows pot to be Grab a quick cup during brewingremoved while filling without spilling a drop

Digital timer is programmable on a Wake up to freshly brewed coffee24-hour basis

High-impact polypropylene If it breaks in three years, we’ll replace it free

Uses paper filter #4: truncated cone Standard filter available everywhere4.5 inches

High-grade filter eliminates solids to Clean, smooth, great-tasting coffee8 microns

Feature Benefit



5.3

you talking, but they won’t become in-terested in what you’re saying until youspeak their language.

Study your product or service with thisin mind, and then train your entire organ-ization to appreciate the sometimes subtledifference in perception. The hydraulics en-gineer will boast of how many gallons ofwater a western dam holds, but regionalresidents will only focus on self-servinggoodies like cheaper water, more electric-ity, fewer floods and more opportunities totake the boat out for a spin. Whenever youlist a product’s benefits, you’re answeringthe age-old question: “What’s in it for me?”

Once you master this distinction, you arehalfway to becoming a marketing guru.

Compiling A Key Benefit InventoryWhat are your products’ key benefits? You

must first develop an exhaustive list of everyfeature for each of your products. Grill yourproduct people until you’ve got everything.Now sit down with your sales manager (of

course, this might be just you and a legal pad)and translate, one by one, each feature intoa very short benefit statement. Some may nottranslate. If one isn’t “benefitable” after rea-sonable effort, just cross it off. But experi-ence shows that 90 percent of product fea-tures can deliver benefits to some market.

Does each benefit apply equally to everymarket for a product? Lightweight all-weath-er jackets might pack an enormous appealto a serious backpacker, but brilliant colorsmight clinch the sale to suburban teens. Cat-egorize the benefits by the markets they appeal to most powerfully. Then rank themby importance within each market.

Once you have solidified this listing foreach product by market, you have createdthe most powerful tool your sales force cancarry. In every customer contact, your sales-people should deliver the full key benefitmessage. This works for retail sales just aswell as business-to-business. Each carefullycrafted benefit will appeal to various clientsunequally—that’s life. Price may mean every-thing to one customer, while availability mightbe the deal-breaker to another. You oftencan’t know which issue might be driving acustomer’s decision. That’s why it’s critical todeliver the entire key benefit inventory atevery sales opportunity—in sales presenta-tions, in company literature, in displays. If

InsightThink back to

the last time youwrote up a resume(or evaluated one). The good re-sumes stress benefits to the hir-ing firm. The candidates empha-size how hiring them will benefitthe company. “This job may benice for me, but think how greatit will be for you if I’m hired!”

Jargon AlertEnglish is a

resilient tongue.But sometimes

marketers get caught up in theirown enthusiasm and create twist-ed verbiage that they think makestheir product or company morememorable. But most often, cus-tomers buy despite, not becauseof, the brutalized language. Service businesses normally don’thave to worry about technical jargon, but they do need to avoidusing tortured language to describe simple things. Ultimately,it only makes the sales processmore difficult.

you can’t fit them all in (small ad, tight sched-ule or other reason), use the benefits by rankfor the particular market you’re addressing.

KEY APPEAL, MARKET BY MARKET

Once you have your features translatedinto benefits, you’ve got to make sure thatyou know how important given benefits areto each type of customer. There are somethings for which almost all of us are cus-tomers: restaurants, clothing, vehicles, watch-es and so on. Sometimes these items can bemass marketed: The manufacturer can applythe same appeal across a large number ofpeople and be reasonably assured of the re-sults. But more often, you’re selling to sev-eral different people at once, and you mustadjust your product’s presentation to appealto each of these differentiated markets.

Many times, entrepreneurs have trou-ble understanding that the exact same prod-uct has different appeals, depending on thetype of customer you are selling to. Smalladvertising agencies and free-lance writ-ers often get instructions when creating abrochure to make it speak to two audiences,such as to both doctor and patient, whenpromoting a given medical device. Thoughboth doctor and patient are looking for thesame final result, their perspectives are

unique. You must appeal to them differ-ently, using different language.

Many middle-aged males suffer fromwhat’s called sleep apnea. It’s a conditionmore prevalent among heavier men, and itbasically prevents them from having a goodnight’s sleep. They jerk themselves awakehundreds of times a night, arising exhaust-ed in the morning. There’s an operationto cure it, but it’s expensive and intimidat-ing to most patients.

But there’s an alternative to surgery. Amachine was invented that, under slight

Chapter 5


5.4

Perhaps the ultimate example of how to turn unlikely features into bene-fits (and of how to kick-start a stagnant market) comes from the well-muscledfolks at Arm & Hammer. Working families had less time to bake, so bakingsoda sales had been flat for 20 years. One of their ad agency’s copywriters(who are paid to explore benefits) considered baking soda’s curious and little-thought-of ability to absorb odors. Not particularly useful, it had been consid-ered. That changed when this copywriter suggested promoting Arm & Ham-mer baking soda as a “refrigerator deodorant.” You know the rest. At lastsurvey, most U.S. refrigerators contain baking soda. Behold the dramatic im-pact of an unexplored benefit.

A Diamond In The Rough

InsightWhile this rank-

ing of benefits maysound mechanical,it’s extremely important. Youcan’t expect your customers topuzzle out what your productwill do for them. That’s your job.As you research the benefits foreach market, you’re basically set-ting your sales strategy. So youshould do it right and stick to it.If you have salespeople workingfor you, they should be present-ing the same benefits you are.

5.5

pressure, forces a steady stream of air downthe individual’s throat during the night. Thiskeeps the man’s air flow steady, and he getsa good night’s sleep.

How would you market this machine?Well, if you’re describing the benefits to thepatient, you’ll emphasize safety, ease of use,return of a good night’s sleep, help with in-surance paperwork, warranty and so on.

For the doctor (who’ll write the prescrip-tion for the equipment), your emphasis willbe different: The machine is so simple thatthe patient won’t bother you with questionsabout its operation; it qualifies for insurancecoverage; its efficacy is fully documented inresearch reports (so his or her professionalliability is covered); it’s adjustable to coverthe vast range of patients, and so on. In fact,you will probably have to sell the doctor onthe medical value of your equipment beforehe or she will even mention it to the patient(and give him your well-crafted piece of pa-tient-directed literature).

What’s Your USP?When you market your product, you must

not only appeal to the customer (and to eachtype of customer separately), but you must

distinguish yourself from the competition. Infact, most products that compete directlyagainst each other share many of the samebenefits. No brand of ice cream tastes “un-pleasant.” No infrared spectrometer talksabout its “inaccuracy.” All the products in agiven category are likely to make a largenumber of similar benefits claims. So whywould a customer choose one over another?There can be many reasons, of course, es-pecially convenience (it’s right in front ofthem). But often it’s the USP, the unique sell-



A given product feature may present different benefits to different markets.Kitty litter’s absorbency gives the homeowner (market A) a fresh-smelling laundry room. Service stations (market B) use it to soak up spilled oil. Gardeners (market C) use it to make soil for potted plants drain more quickly.

One Is Not Like The Other

Product Feature

Market A Benefit

Market B Benefit

Market C Benefit

DangerDon’t confuse

uniqueness with aunique sellingproposition. Being uniquemeans nothing (except in thestarry realms of entertainment,art and fashion). Your customerswant the benefit, and unique-ness in itself isn’t a benefit.What’s in your product or serv-ice for the customer?

ing proposition. It’s the compelling benefitthat shouts...no one else is like me!

What’s unique about your product? Whatmakes it stand out from the competition?What gives the customer a good and irre-sistible reason to select your product ratherthan those other fine products? If you aremaking ice cream, you can’t base yourwhole appeal to the customer by simplysaying “it tastes better”—unless you havesome credible objective documentation thatthis is so. Perhaps you can claim that youringredients are uniquely fresh, or that theice cream is handmade in some particularway, which makes it taste “better” or at leastdifferent than other ice creams. Look at Ben& Jerry’s: They don’t just market their icecream; they market the structure of the com-pany itself and its commitment to makingcharitable donations. This helps give thema unique profile in a crowded market.

Many companies base their selling pitchon what’s unique about them. For years, IvorySoap based all its advertising on its claim ofbeing 99 44⁄ 100 percent pure...so pure it floats!Domino’s and its two-for-the-price-of-one piz-

zas. The unique Volkswagen look, which,thinking small again, has returned.

Once you’ve established your product’srange of benefits and distinguished it fromthe competition, can you sum all this up inone phrase or brief sentence? Such as“When it absolutely, positively has to bethere overnight,” “Nothing runs like aDeere,” “Better living through chemistry” or“Legendary engineering”?

If you can, then you are ready to takeyour case to the public. It’s time to persuadethem to buy.

SELLING TO THE PUBLIC: THE FOUR PILLARS

OF MARKETINGAn old marketing adage says that noth-

ing happens until someone buys some-thing—in short, sales drive every aspectof business. In every company, the sales-people are the front-line troops. In therough-and-tumble of the marketplace, theslickest manufacturing processes, theshrewdest marketing, the brightest corpo-rate reputations won’t make the sale with-out the face-to-face (at least usually) meet-ing of seller and buyer.

This is personal selling, and it’s the mostimportant and direct aspect of the market-ing process, but it is not the only way youappeal to the public and persuade them tobuy. While marketing in the large sense in-volves every aspect of your company, thesales side of marketing is made up prima-rily of these four aspects:� Personal selling is face-to-face sales-manship, when you have the prospect infront of you. It includes retail sales, muchprofessional service selling and a healthypercentage of business-to-business sales.� Advertising is paying for media spaceor time in which to sell your product ata distance.� Promotion is a short-term activity, di-rected at either the distributor or the pur-

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5.6

DangerRemember, a

strong benefit di-rected to the

wrong market is no benefit at all.I once ran across a product sheetfor a riding lawn mower that wasaddressed to the dealer. It toutedthe mower’s aftermarket need forparts and maintenance, a keybenefit to the retailer. That wasfine, but the product sheet wasdisplayed next to the mower ascustomer literature. As a potentialbuyer, I thought, Huh? Lots ofparts and maintenance? I think I’lltake that mower over there.



5.7

chaser, to boost sales for a limited timethrough special pricing or other offers. Ofcourse, you hope the short-term increasealso leads to an incremental gain. It can in-clude advertising and personal selling.� Public relations is the unpaid (but, alas,not cost-free) marketing effort you under-take to expose your product to potentialcustomers and other interested partiesthrough the press, trade media and spe-cial media-related events.

Personal selling, advertising and mostpromotion efforts are direct activities: Ina straightforward manner, you are saying“Buy me!” Public relations is the soft sell,in which you take a visible role in the com-munity and increase the public’s generalawareness of you. The rest of this chapterand the next four will look at each of theseaspects of marketing.

BUSINESS-TO-BUSINESS:GIVING AN EFFECTIVE SALES PRESENTATION

Business-to-business sales usually in-volves giving a prearranged presentation,

whether in person or on paper, of yourproduct or service. This differs from retailsales to the general public, which is usu-ally spontaneous and immediate. For moreon retail sales and a discussion on salesstaff, turn to Chapter 6.

In business-to-business environments,the selling and buying process is often notsimple. Many times you’ll never meet theperson who will ultimately use your prod-uct, the person who’ll authorize the pur-chase of your product, or the person whosigns the check. If you’re dealing directlywith the buyer, consider yourself fortunate.You have to convince only one person ofyour product’s suitability and of its superi-ority over competing products. If you’vepulled together your product benefits prop-erly, if you’re talking to a buyer in a mar-ket that genuinely needs your product, andif you’ve positioned yourself appropriate-ly against the competition, you should bein good shape.

However, you may be presenting a pro-posal to a selection committee of a largecorporation. Several of the people presentmay have competing agendas you don’tknow about, or you may discover aftermaking your pitch that no one in the roomhas the authority to say yes. You may bespeaking to a purchasing agent who makesthe decision based on agreed-upon objec-tive criteria. In that case, all you can do isprepare the best proposal you can, all thewhile focusing on making the descriptionof your product and your company matchas closely as possible the demands of theproposal request.

Despite these difficulties, the bottom lineis the same: Personal sales makes commercehappen. And if you are the one making thesales pitch—or if you supervise those whodo—fine-tuning your presentation techniquescan pump up your bottom line. If you havea meeting with a company, you know that,at the very least, you’re being taken seriously

How ToIn tiered selling

situations like thesleep apnea exam-

ple—where you’re sellingthe physician and the patient—you must develop multiple sets ofliterature. To the patient, you willspeak glowingly of the physi-cian’s skill and care…and of hisor her sagacity in recommendingthis device. Your literature to thephysician will speak of how wellyour equipment will take care ofthe patient and of how hassle-free it is for the physician to ad-minister. A very different focus.

and that you have a reasonable chance ofcoming away with the order.

So what should you do? Here’s a hand-ful of tips from the experts.

Get Informed: Know The Buyer Are you presenting to a company that

can conceivably use or afford your productor service? Just as a real estate agent mustqualify prospects, so salespeople must max-imize their time by prequalifying potentialclients and eliminating those that don’t havethe financial resources, that have provedthemselves bad credit risks, that have a busi-ness that doesn’t match up well with the

strengths of your product and so on. Focuson prospective buyers whom you have areasonable chance of winning...and whoare worth winning.

Then, once you’re at the stage whereyou’re making an oral or written presenta-tion, ask yourself whether the person you’representing to has the ability to say yes. Ifthe person doesn’t, you may be better offtrying to work around that person and pre-senting to someone who can give you thego-ahead. Once you’ve set up a seriousmeeting with customers who have pur-chasing authority, ask your contact who’sgoing to be there and what their stake in

Chapter 5


5.8

An especially challenging kind of sale is the “concept sell,” in which youhave to sell not only your particular product but the entire concept behind it. Inmost sales, the concept of the product is self-evident. Bicycle manufacturersdon’t have to explain how a bicycle works or why you might like one. They onlyhave to demonstrate why you would want their particular bicycle.

Imagine being the first person to introduce the “Slinky” to the market, the flavor straw or laser surgery for eye correction. You’re faced with a large task.You have to educate your potential buyers on what your product is before theycan decide whether to buy it.

Louis Rich Foods wanted to promote a line of turkey cold cuts—the productseemed like a natural. The American diet was moving away from beef and toward healthier sources of protein, and busy modern families were relyingmore and more on easy-to-prepare foods. But for most Americans, turkey wasa once-a-year, butter-basted cannonball. Louis Rich had to spend millions of dollars convincing the consuming public that it was OK to eat turkey as aluncheon meat. After a concerted program of “educational advertising,” con-sumer promotion, appearances on nutrition shows and articles in the tradepress, they were able to make their case. Now turkey cold cuts own preciousrefrigerator case real estate in all supermarkets.

However, there are two major dangers inherent in the concept sell:

1. If no one has ever sold anything like your product before...er, maybethere’s a good reason. This is not an appeal for an end to ingenuity and creativity. It’s just fact.

2. Once you spend the money and effort to create the market through buyer education, you’ve also laid the groundwork for your competition to come in andslurp up your carefully prepared customers.

Into The Great Unknown



5.9

the decision is. Get your hands on an or-ganizational chart so you have a feel for thehierarchy. What are the people in the meet-ing likely to be most interested in? For in-stance, if the finance person is there, directyour comments on financial payback andreturn on investment to him or her.

We’re talking business politics here, butthat doesn’t surprise you, does it? You’vegot to scope out the terrain of the sales bat-tle before you can give it your best shot,and you’ll have more success in the majormeetings—with significant dollars on theline—when you understand the situationyou’re confronting.

In addition to knowing whom you arepresenting to, give some thought to why youare presenting. What is the company look-ing for? What is the current situation that’sdriving their request for your presentation?Is there anyone else who works with you inyour office who might have an insight intothis company and why they are having youmake a presentation? Are you presentingalong with other potential suppliers, or is ityou or nothing? Are there other noncom-petitive suppliers who might give you someinformation on what’s happening inside yourtarget company? If you are able to ask clar-ifying questions before the actual presenta-tion (this is common in governmental work),don’t miss the opportunity to come up withsome questions to ask...just to establish aworking relationship.

If presenting is something you do sever-al times a week, you may not need to domuch research or rehearsing. Let’s face it, af-ter a few months of presentations, you’ll haveyour pitch down pat, and you’ll have a goodfeel for the terrain of most sales situations.

Rehearse Your PitchIf presentations are not something you

do regularly, then you need to rehearsewhat you’re going to say and how you’regoing to say it. Work with someone in the

office, a good friend or your spouse tosmooth out the flow of information andmake yourself as concise as possible.

Most of us have been in presentationswhen the presenter was out of touch withhis or her audience, rambling on long afterany audience interest had left the room indespair. Think in bullet points and head-lines. You want the attendees to come outof your presentation with just a handful ofclear benefit statements about your prod-uct. Don’t drown your competitive advan-tages in a lot of chatter about your com-pany, your history or your golf game.

If you use equipment to make your pres-entation (flip charts, computer printouts,PowerPoint on a laptop, interactive CD-ROM, interactive holograms, laser lightshows), bulletproof your equipment and car-ry spares of essential parts like disks, bulbsand power cords. People tend to understandwhen you have a little technical trouble, butthey do expect you to fix it. They’re hiringyou because of the resourcefulness of youand your products, right?

Get Some Sleep And Eat Your Wheaties

No matter how tireless your personalitytype, you’ve got to be your best when you’reon stage. That means being well-rested, well-fed and relaxed. Get a good night’s sleep beforehand, and eat breakfast. Get any ma-terials prepared in advance, and proofreadthem carefully. Get near the presentation siteearly, relax with a cup of coffee or juice, andreview your notes and your plan of action.

Once the meeting begins, you’re expect-ed to be the focus of attention. When peo-ple listen to a presentation, they’re in a “re-ceptive” mode—they expect to be informedand even entertained. You have to deliverthe goods with style and high spirits. You’rethe driver...make this vehicle go where youwant it to. Don’t come out of the meetingwondering if you were too low-key.

Sell The Benefits, Not The FeaturesWe’ve been talking benefits for a while,

and now’s the time to put them to work.Key your entire presentation on the needyour product satisfies, not on your superi-or technology, not on your well-trainedstaff, not on your wonderful reputation.What’s in it for the people in the room?How will their company come out ahead ifthey choose to do business with you? Whatexisting problem is this company wrestlingwith? This should lead your presentation.Your product is the answer.

Also, don’t forget that the people you’representing to also have a personal involvement in the sale. If they hire you or buy your product, will it be a feath-er in their cap? If they’re at risk for choos-ing you over a better-known competitor,how can you reduce their exposure—extend a warranty, offer additional casehistories, provide documentation to passup the chain of command? Fine-tune your presentation to appeal to the indi-viduals in the room as well as to the company they represent.

Invite A Dialogue When you start your presentation, out-

line how you plan to organize the meet-ing—and make sure your audience under-stands that they have a role beyond merelylistening. You expect them to ask any ques-tions they have, raise any objections theyfeel, outline special applications they mayhave for your product, and explain howthey’d like the product integrated into theiroperation. By inviting and encouraging theirparticipation, you enlist their help in fig-uring out all the ways your product or serv-ice can benefit them.

Be Prepared For Any ObjectionsSales objections give salespeople, espe-

cially new ones, the greatest difficulty.You’re really rolling in your pitch. You think

you’re definitely receiving good vibes fromthe right side of the table. You’re well aheadof schedule for your allotted presentationtime. Then the mild-mannered fellow in thecamel-hair suit scrapes his chair, raises hishand and with fixed eye says: “I just don’tsee how this will work for us. The specsseem in the ballpark, but you’re a new com-pany, unproven, and this piece of equip-ment is too important to us. We’ve got togo with a proven provider, even if we giveaway a bit in capacity. It’s just too risky.”

The smoke from the explosion clears.Maybe some of the other people at the tableclimb on board and reveal similar feelings.Maybe you draw some sympathy. Maybethe meeting freezes, with no one set onhow to proceed.

If you can’t handle high-inside-fastballobjections, you’re never going to be suc-cessful selling. The sales experts counsela calm approach:� Hear the objection out. Don’t interrupt.Don’t cut it short. Focus your attention onwhat’s being said, taking some notes (with-

Chapter 5


5.10

DangerIf you sell to

larger companies,you may be in-volved in “rogue meetings” or“commando purchasing opera-tions” in which the corporateperson looking to purchase prod-ucts or services doesn’t reallyhave the authority to do so. Heor she is looking to see what’sout there, seeking a free lunch,trying to impress a superior, orjust looking to wile away somehours. And if you’re presenting tosuch a person, you’re likely wast-ing your precious time.



5.11

out cutting eye contact for more than a briefperiod) so you capture all the details. � Don’t panic. People who object are atleast taking you seriously. When you get ina presentation where everyone smiles ateverything you are saying, you’re in trou-ble. When people object, they’re lookingfor more information, or they want you toclarify their perception of your product orservice. You should be prepared for everyobjection with a killer response. � Find something in the objection to val-idate. No matter whether it is well-found-ed or ridiculous, the objection must betaken seriously. You want to credit thequestioner for mounting the objection. Ac-knowledge that you’re a new and essen-tially unproven company, for example. Infact, you’d have the exact same objectionsif you were sitting where they are. If youneed a few moments to gather yourthoughts, respond to the objection with aclarifying question: “What kind of expe-rience have you had with your existingequipment regarding downtime?” or“What’s a doomsday scenario in your pro-duction? Let me see if I can address it.”This technique will also help you zero inon the true nature of the objection.� You’ve already developed a script withanswers to every objection, right? No? Thesection on page 5.12, “Overcoming BuyingObjections,” discusses how to do this in de-tail. Now’s the time to pull that script up tothe top of your mind and satisfy the ob-jection-raiser. Go through it calmly, gettingyour inquirer’s assent at every step of theway. When you’re done addressing the ob-jection, make sure the individual feels com-fortable with how you handled it.

Talk Money And Ask For The Business

You shouldn’t end the meeting withoutaddressing directly the issue of cost andterms. Some presenters hate to talk mon-

ey, preferring to dance around the sub-ject while focusing on the product and itsbenefits. I don’t think that’s effective. Peo-ple want to know price, regardless of howlittle importance you try to attach to it. Ifyour product is more expensive than thecompetition, make it a point to explainwhy, emphasizing the greater value theprospective customer will get from yourproduct. If your product is less expensivethan the competition, you should hammeraway on that benefit, emphasizing howyou’re able to deliver top quality with-out charging a high price. Don’t apologizefor your price, either high or low.

Finally, you have to ask for the business.How does the sale happen? You can makethe order form a part of your presentation kitand ask them to fill it out then and there. Youcan ask about which particular model theywant to order. You can inquire as to whichdelivery timeline they’re working with. Makewhat’s called the “presumptive close,” bywhich you presume you’ve been successfuland are simply making arrangements for de-livery. This can push some buyers over theedge into making an immediate decision.

InsightYou’ll score high-

er in a presentationthe more you cus-tomize it. That can include per-sonalized handouts or overheadscreens. But go further. Buildyour presentation around thecompany you’re speaking with.Make them forget you’re pitchingthe skills of an outside company;speak to their concerns and inter-ests, highlighting the ways inwhich their company will be en-hanced by dealing with you.Think them, not us.

Fill Out A Call ReportAll salespeople hate to fill out call

reports. They often feel they are beingchecked up on, that no one back at theoffice has to know the details of how themeeting went. Even sole proprietors hatecall reports, and they have no one to report to. There’s just something soarchival and so seemingly unproductiveabout them.

In fact, call reports are prime marketingore for future efforts. Think for a momentof the value you can glean from 200 call re-ports of recent sales presentations:� Which companies have been approached,when and by whom� What products they were exposed to� Who attended the sales meeting—andwho is responsible for purchasing yourproduct� Why they did or didn’t decide on yourcompany (assuming your salesperson fol-lowed up properly on a negative decision)

What can you do with this market in-telligence? � Study the successes to see what types ofcompanies you’re having better luck with.You can then intensify your efforts to makepresentations to more of those companies.� Study the failures to see what you cando to make your product more appealingto those types of companies. With good,concrete follow-up, you can—over time—enhance your product and alter your pre-sentations for greater success.� Use the unsuccessful presentations as asource for possible future sales activities. Ifyou lost the ABC account pitch becauseyour trucking firm didn’t have enough ex-perienced drivers, you can repitch the ac-count when you get a little bigger. � You know the people who hold key pur-chasing authority for your product. Keepthem on a low-level direct-mail effort, tokeep them informed of what’s happeningat your company.

All this is extremely valuable informa-tion. See page 5.13 for a sample call reportform you can adapt to your company.

OVERCOMING BUYING OBJECTIONS

At the top of this chapter, you assembleda list detailing each of your product’s bene-fits. That was the fun part. Now you haveto look at the other side. What objectionsmight you face in a sales call? Salespeopleare like baseball players: Generally, their fail-ures at the plate outnumber their successes.But like good hitters, salespeople raise theiraverage by examining their failures and ad-justing the next time they come to bat. Al-ways ask yourself why a particular sale did-n’t happen. What kinds of remarks have youheard from prospective buyers that keptthem from going with your product? Theseare the objections you weren’t able to over-come in your sales effort.

You should be able to put together a listof the six to 10 most common objections thatpop up during sales presentations. Whenyou have that list, write down your best re-sponses to each of those objections. Someresponses may involve several different el-ements. Some objections may be hard to re-spond to in a positive way. You’ve just gotto do your best in formulating your answers.

For instance, if the objection is that apiece of equipment is too slow, maybe youcan focus attention on other strong pointsthat more than make up for this: perhapsless downtime, lower error rate, greater easeof operation and therefore less training re-quired, and so on. Until you come up withan adequate response, that objection willcontinue to kill sales.

Once you’ve developed your list of re-sponses, you must be ready to use them onthe spot. You can’t call prospects back infour days to tell them, “You know, I wasthinking about that bad reaction you hadto the high failure rate of our pumps, and

Chapter 5


5.12



5.13

Salesperson ________________________________________________________________

Company Visited __________________________________________________________

Date/Time ________________________________________________________________

Clients in Meeting (With Titles) ______________________________________________

__________________________________________________________________________

__________________________________________________________________________

Reason for Meeting ________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Topics Discussed __________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Actions Taken ____________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Projects/Orders Initiated ___________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Action Needed ___________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Relevant Earlier Call Reports ________________________________________________

__________________________________________________________________________

____________________________________________________________________________

_________________________________________________________________________

Sales Call Report

I think you’re overemphasizing its impor-tance.” You have to have all that sales am-munition with you in the room when you’remaking the presentation.

Never forget that your job is not just sell-ing the equipment or service. In the mindsof the prospective buyers, you’re the com-pany, and they’re judging the company byyour performance. Respond smoothly toan objection, and they’ll be impressed withyour professionalism (and that of yourcompany). But if you get flustered by anobjection, or leave without giving an ade-quate response, you will create the oppo-site impression.

If you see the same couple of objectionsarising time and time again, make the smartmove: Eliminate that objection before it aris-es. Build a preemptive strike against thatobjection right into the core of your pres-

entation, so your prospects won’t be dis-tracted by the thought of an apparent weak-ness in your product or service. As you’reable to refine your presentation based onexperience, you’ll be able to eliminate agood percentage of the common objectionsyou run into. Only then will your sales ef-fort really begin to take off.

GETTING TO THE DOTTED LINE

Getting someone to say yes is not alwayseasy. And, as anyone with any sales expe-rience knows, everything can be cordial andpositive during the presentation. But onceit’s time for a decision, once someone hasto write a check, things can turn dark.

If you see some reluctance to say yes,get involved in helping them make the de-cision. An effective way to wrap the sale

Chapter 5


5.14

If you hear… …then try

Your price is too high Re-emphasize the value of your product or service. If that doesn’t work, then offer a slightly different (and less expensive) product or service. Or try discussing your available financing arrangements.

We’re not ready to buy right now Ask what specifically is keeping them from making the purchase now. Address that objection.

Your product/service doesn’t Ask why that particular feature is have a particular feature important. Suggest that the existence

of another feature/benefit more than compensates for the missing feature.

We’re not sure your product will Find out what those other products work well with other products we are and get a testimonial on how have in place well your product functions in

that situation.

Objection Overruled



5.15

up—without appearing overly aggressive—is to recap why you’re there, the need thatthe company recognizes, and how yourproduct satisfies that need in all its aspects.If you’ve done your homework well andmade a skilled and informative presenta-tion, you should have left them right at thedoor of making the decision. Respectfullyask them what’s keeping them from mak-ing the decision right now: Are there sen-ior people who have to approve the deci-sion? Do they have to evaluate a competitorwho’s yet to present? Is there somethingabout your product/service that they’re un-sure of? By the process of elimination, youshould be able to trim away the possiblereasons for delay.

Of course, many business decisionsbased on a presentation take some time.More often than not, you simply can’t forcethe decision while you’re there. If you’retold that’s the case, learn when you can expect a decision. Then tell them that you’relooking forward to the possibility of work-ing with them, and immediately send thema recap of your presentation with some newmaterial—whatever you can pull togetherto show that your desire to provide themservice is still on your mind.

Some salespeople have had success un-locking a sale with the direct question: “Doyou want to purchase this service?” Followit with silence, and let the prospect takeover the conversation.

If you sense a negative decision in themaking, suggest that you’ll send them a re-cap of the meeting with your final best of-fer in a day or two. This will buy you sometime to come up with a “Plan B.”

Finally, let’s assume for a moment that youdon’t make the sale. Your immediate courseof action should be to call your contact, ac-knowledge the inevitable, and then ask if heor she can help you understand why the con-tract went to another company. This providesyou with a real learning opportunity, in manyways more valuable than (although not, un-fortunately, as financially rewarding as) win-ning the sale. Make it clear you’re not dis-puting the decision or trying gamely to alterit. Mention how you put some work into thepresentation, and you’d appreciate the chanceto use your loss to improve the way youmake the next presentation. Was it price? Wasit product issues? Was it a superior presen-tation by a competitor? Probe to get specifics,which you should write up in a call reportfor later analysis. If you learn why peopledon’t buy, then take steps to remedy eitheryour presentation or the product itself.

If you do get the contract, your job is juststarting in two ways. First, you’ve got tomake arrangements to have the product orservice actually delivered. Second, you nowhave a relationship to tend, new peopleto learn about and perhaps a new appli-cation in which to test your product or serv-ice. Congratulations.

In this chapter, we’ll discuss vari-ous other aspects of the selling process.Since all of these areas don’t applyequally to every business, here’s anoutline of what we’ll cover.● The service sector: How is marketingservices different from marketing physi-cal products? ● Pricing:This is an issue near and dear toevery entrepreneur’s heart, and one thatstymies many new businesspeople. ● Distribution: What’s the best way tomove your product from your factory toyour customer?● Your sales staff: Every business needssomeone who’s selling your productor service, but which type of staff isbest for you? What are general retail salestechniques?● Case histories and testimonials: Thesemay be the strongest weapons you have inclinching the sale.

SELLING SERVICESYou’ve doubtless noticed that I of-

ten mention “product or service” inthe same breath. Every company of-fers at least one or the other; mostcompanies offer both, whether they knowit or not. If you’re a manufacturer, retaileror dining operation, you’re providing botha product (widgets, garments or tarragonchicken) and a service (quick delivery, largeselection or a fine-dining experience).

The “work product” of some companiesisn’t as tangible or tasty as these. Account-ing firms, law firms, architects, financial in-stitutions, marketing consultants, chiro-

practors, psychologists, business brokers,car rental companies, real estate agents andmany others in the business universe can’t

send you a box filledwith a sample product.

We are becoming a nation ofservices, with less and less manu-facturing. Our manufacturing region

in the heartland is now called theRust Belt (although lately it’s experi-

encing a resurgent glimmer with targeted marketing). Why the shift to

services? Lots of reasons:● More stringent environmentalcontrols havemade manu-

facturing (at least in the old way) moredifficult. Companies are deciding: “Thehell with this.”● More legal liability for manufacturers hasincreased the risk. (Want to buy a ladder-making company cheap? No? How aboutan asbestos manufacturer?)



6.1

Chapter 6

Selling: Your Next Steps

● With the increasing numbers of two-in-come households people can afford to payother people to do the things they don’twant to do themselves. They hire fitnesscoaches, wedding planners, tax preparers,hair stylists, firewood deliverers and so on. ● Our entertainment and news media pro-mote services constantly. We hear endlessstories about massage therapy, dog psy-chologists, personal grocery shoppers, take-out gourmet foods and more.● Low labor costs and relaxed environ-mental regulation overseas make manufac-turing and assembly more affordable andless troublesome there.● As more women have entered the workforce, “family-related services” have steppedup to handle child care and other needs.Those families now have a second pay-check to compensate for their limited freetime, and they spend it on lawn care, cater-ing, travel and so on.● New technologies have created totallynew services, such as voice mail, comput-er dating, database researching, and a raftof other online services.

When you have the money, and yourfree time is valuable to you, why not paypeople to take care of time-consuming or

tedious chores like tax preparation, house-cleaning, investment guidance and so on?It makes sense.

The Difference Between MarketingServices And Products

Almost all service-oriented businessesshare certain things in common that makethem different than companies that main-ly produce products, and these affect yourmarketing approach.● Services are typically tailored to the particular customer. You can’t mass pro-duce services as easily as you can physi-cal products. An audit report for the FrogsR Us amphibian retailer can’t be used forany other company. So the effort the serv-ice provider puts into developing the endproduct can’t easily be used to spin off oth-er similar products. This affects the mar-keting of the service.● Most services are personally linked.Cus-tomers who buy services typically buy theskills, competence and attention of a par-ticular person. If that person leaves onecompany and goes to another, his or hercustomers will often follow—because theirloyalty is to the individual, not the com-pany. This happens in brokerage houses,hair salons and upscale restaurants all thetime. Service businesses are difficult to sellbecause they’re typically owner-dependent,with little in the way of capital equipment(like manufacturers have).● Most services are also time-intensive. Inaddition to expertise, what service providersmostly sell is time, and they typically billusing an hourly rate (as opposed to the perwidget or per chicken-serving rate). You often make appointments to get your serv-ices rendered. For a service provider, timeis literally money: If an hour passes unbilled,it’s lost income, never to be recouped.

You can also look at services based onone of three qualities (see the chart at thetop of page 6.3).

Chapter 6

Selling

6.2

How ToService businesses

can still use samplesof their work. Take

a report or other workproduct you’ve prepared for aclient, delete the name and otheridentifying information, removeanything sensitive (or insert dum-my numbers or content whereyou have to), and you have a“sample work product” to showto prospective clients.



6.3

If your business is primarily a serviceprovider, you have to approach marketingwith some special sensitivities:● Service businesses depend on satisfiedclients more than other businesses. Whenyou are marketing your services, you can’tsimply drop a product on your prospect’sdesk. It isn’t easy to invite your prospectto compare your products with those ofyour competitor either. So you have tomarket with a “satisfied client” list; theyrepresent the best example of the quali-ty of your service.

The catch here is that—for some busi-nesses—companies don’t want you publi-cizing their use of your services. If you pro-vide counseling services to company X forhelp with its drug- and alcohol-dependentemployees, the president of X might notwant you trumpeting their employee prob-lems across the market.

Solution: Develop client lists that don’tmention the client. Describe your clientsin ways that give the reader a “goodenough” understanding of the types ofcompanies you do business for. In yoursales presentation, help prospects under-stand the need for privacy: Surely if theybecome your customer, they’d want thesame discretion used in discussing your re-lationship with their company.

● The sales process often takes longer,especially in business-to-business sales.

Solution: Maintain a consistent sales effort, even when it’s tempting to say youdon’t need it. If you lose a customer or two,you can’t start from scratch to round up afew new clients. You should already havesome prospects in the pipeline. This is an-other reason to keep up a year-round mar-keting program.● Services are more complex to price, todeliver and to evaluate than comparativelypriced products. Defining the quality ofservice delivery is very difficult. It boilsdown to whether the customer feels well-served.

Solution: When your business providesa service, you need to build a personal relationship. Your only job is to please yourmain contact. You will need to conduct informal “How am I doing?” conversationson a regular basis. ● Many professional services cover areasthat are of extreme importance to the customer: legal, accounting, insurance,financial.So customers tend to be very skep-tical about changing their suppliers of theseservices, since they are intimate and reveal-ing in a way most other services aren’t. Youneed to make a very convincing case to getsomeone to switch from such a supplier.

● financial● legal● accounting● insurance● management● medical● psychological● education/professorial● marketing

● household upkeep● security● janitorial● beauty● lawn care

● vending machines● taxis● airlines● construction● auto repair● flying lessons● dry-cleaning ● printing● broadcast media● telecommunications

Professional Skills Labor Skills Equipment-Based

Solution: When you market your serv-ice, stress the length of time of your rela-tionships and highlight your sensitivity to thebonds of trust in your relationship with yourcustomers. Offer prospects the chance tomake a phone call to your current customersto allay their fears about changing suppliers.

PRICING: HOW MUCH SHOULD YOU CHARGE?

Your product or service is worth exact-ly what someone will pay you for it. Find-ing out what that amount is has captivat-ed generations of economists and millionsof marketers. Customers want to pay as little as possible; businesses want to chargeas much as possible. These are two sidesin an eternal tug-of-war, which is as oldas haggling merchants in a Middle Easternbazaar and as modern as a long-distanceprovider weaving a web of words over dif-ferent pricing programs.

Pricing is one of the most difficult tasksin any business. Many variables enter intoany pricing decision. And the “manufac-

turer’s suggested retail price” (has anyoneever paid this?) is only one of your deci-sions. You must consider quantity discounts,wholesale prices to retailers and trade dis-counts for distributors.

Here are three major points to keep inmind about pricing:1. Your prices must fall between two poles:

● a low price below which you can-not make money ● a high price beyond which youcannot get customers

2. Customers also have a psychologicalcomfort zone that falls between two poles:

● a low price limit below which theproduct is perceived as “suspect” or“too cheap” ● a high price limit beyond whichthe product is too expensive

3. Given the first two points, pricing (espe-cially consumer pricing) is in large part psy-chological. Perceived value is what drives theexchange. If the customer thinks your prod-uct looks, feels or smells cheap, you won’tbe able to get a high price for it. If you’reable to make the customer think your prod-uct is top-of-the-line, you can start count-ing the golden eggs. Pricing is not logical.

When you calculate prices, you mustkeep many different realities in mind:● Cost: If you don’t cover all your costsin making and delivering the product, youcan’t remain in business. So you must tab-ulate your fixed costs (overhead) and yourvariable costs (product- or service-relatedexpenditures). Fixed costs stay relativelyconstant, no matter how high or low theproduction volume. They include man-agement salaries; insurance; pensions; of-fice, manufacturing or retail space; utilities;and interest expense. Variable costs areusually production-related, but servicesalso have a few variable expenses, prima-rily the time and costs associated with de-livering the service to customers. Otherproduct-related costs include raw materi-

Chapter 6

Selling

6.4

InsightMore than three-

quarters of the Amer-ican work force is

engaged in providing servicesrather than making products. Andthe U.S. transition from manufac-turing to service is steadily increasing. The old picture of thesalesperson schlepping down thestreet with sample case in handfades daily. Now it’s a well-groomed professional, armedwith a Pentium notebook andcell phone, selling services tohelp people do better at whatever it is that they do.

6.5

als, manufacturing equipment and pro-duction wages, packaging and distributioncosts. You will, of course, need to raiseyour prices over time just as these costsgrow to match inflation. ● Competition:Don’t be too cost-focusedin setting your prices. This is a natural ten-dency, since working with known inter-nal and external costs can be comforting;these are items you can really nail down.They’re a lot more reliable to deal withthan the irrationality of the marketplace.Avoid this temptation.

You may have a hungry competitoreyeing you for lunch with an aggressivepromotion designed to drain away yourcustomers. You have to stay sensitive tothe pulse of the marketplace. If a newcompetitor is coming into town, this is nota good time to raise prices. If, on the oth-er hand, the other guy adds a new storeand people start noticing that prices havegone up, drop your prices and buy babya new pair of shoes.

● Marketing mix: Price is the easiest ele-ment of the marketing mix to change: Youcan do it almost instantly. But if your pric-ing strategy conflicts with your image in themarketplace, it can be counterproductive.Earlier, you decided how to define yourcompany in the mind of the marketplaceusing the right mix of the Four P’s—prod-uct, place, price and promotion. Keep thisidentity in mind as you set your prices. Ifyou want to be a low-volume, super-qual-ity electronics operation, you can’t rely ondrastic price-cutting as a regular market-ing strategy. You will destroy your image.Conversely, if you have staked out the high-volume, low-price camp for your own, don’texpect to have crowds at the doors whenyou raise prices and start acting upscale.Stay with your selected marketing mix.

If you want to make more money fromyour existing products, you have to raise theperceived value of your products: update theirlook, add new features, get quality endorse-ments, promote more heavily and so on.



Stop into your local electronics store: In most product categories, there isan overwhelming range of offerings. When it comes to CD players, a singlemanufacturer may have a dozen different models on display, many of themonly slight variations of the same machine. Why don’t these companies reducetheir product line and save on manufacturing costs?

Not so fast. One reason we see so many products with very subtle differ-ences between them is that manufacturers want you and me to pick one that’sa little more expensive than we might pick from a more limited selection. If wecould choose from only two models, one at $89 and one at $135, many of uswould choose the $89 model. But if we have five choices—$79, $89, $104,$135, and $189—the average price we are willing to pay will be considerablyhigher. The manufacturer wins, despite the increased engineering and manu-facturing costs.

However, another reason for this plethora of merchandise is that manufac-turers are also concerned with keeping up with each of their competitors’ majorproducts. Once a new product line is introduced, everyone rushes to get theirown version on the shelves.

Playing The Field

● Market environment: The law of sup-ply and demand governs us all. Are youselling in an up or a down economy (lo-cally or nationally)? This impacts your pric-ing strategy. Are you selling lawnmowersduring a severe drought? If your prices havebeen stable for some time, shake things up

and move them around just to generatesome market excitement.● Product life cycle: For manufacturers, anew type of product—with high demandand no competitors—will allow premiumpricing. An old warhorse—with establishedpopularity, no start-up costs and no re-quirement for ongoing promotion—will al-low moderate pricing to produce a steadyprofit stream (the much-admired “cashcow”). This principle also applies to serv-ice businesses: You must always be devel-oping new services or novel wrinkles onestablished services to maintain interest andprices. No service can afford to do the sameold things year after year, though sometimesthis innovation amounts to just a change interminology (especially true among man-agement consultants).● Skim or penetrate: These are two usefulpricing approaches to keep in mind. Skimpricing means the commitment to maintaina high price and deal only with the top endof the market, which is least sensitive toprice. You’ll let your competition be the bot-tom feeders. Penetration pricing is a deci-

Chapter 6

Selling

6.6

DangerNew business-

es—especially newservice business-

es—often price themselves toocheaply. They may start off get-ting lots of work…and slavingaway to get it all done. Then theyrealize they’re not making enoughmoney to justify their expenditureof energy. Avoid the temptation tounderprice to get your businessstarted. You’ll find it hard to raiseprices too quickly, so you’ll payfor your mistake for years.

I once took my desktop PC into a computer shop to have a larger harddrive installed. When I placed my order, I said that I wanted my existing inter-nal hard drive left in place; I just wanted to add the new hard drive next to it. Ihad backed up all my files onto tape.

When I returned, my old hard drive was sitting on top of my CPU. Fightinghyperventilation, I asked what had happened. The technician explained that hethought it would run faster with just the new hard drive installed. I explainedthat I didn’t want to have to restore all my files from the tape onto the newdrive, updating Window registers and pointers and so on. I knew that would benothing but trouble. He just bristled and said, “You know, our price for that harddrive is $20 cheaper than anyplace else in town!”

I smiled. There was just no sense in arguing with this guy. He didn’t get it.The $20—at this point—meant absolutely nothing to me. The value was in get-ting what I wanted, not an extra sawbuck in my pocket. It took me two days toget my system up and running again. Sixteen hours earning $1.25 an hour.

Nothing For Something



6.7

sion to lower your prices enough to makeactive inroads into a new market. You’rewilling to sacrifice your normal margin to“buy a market.”● Higher prices not equal to higher profits: Raising prices can sometimes cutyour sales and leave you in worse shapethan before. If your product or service isreally needed by customers, and if there’sno ready substitute, you may get away withit. But if the demand is elastic, your cus-tomers will decrease as your price creepsup. Don’t be afraid to test higher prices fora time to judge the market reaction. If thedemand stays strong, congratulations. If itdoes not, you can always return prices totheir original level. You can’t, however, keeplosing money for long, so you will haveto find other ways to increase profits.

DISTRIBUTORS: FRIEND OR FOE?

Happy are those manufacturers who selltheir products directly to consumers. Forthem, the assembly line (through their re-tail outlets or direct-mail arm) empties rightin the customer’s hand, and the money paidgoes right to the manufacturer.

For most manufacturers, however, lifejust isn’t that simple. To illustrate the dilem-ma of distribution, let’s put you into the teabusiness—as Tastee Tea. You purchase teafrom all over the world. You make a num-ber of delicious blends: some induce sleepi-ness, some a sense of well-being and somewide-eyed alertness. You mix those teablends with a number of aromatic essencesand flavors to produce, say, 12 differentteas. When the tea is done, how do youphysically get it to the customers?

If you sell your tea only to the local mar-ket, all you need to do is put a retail outleton the front of your plant, plug in a cashregister, run a few ads and there goes yourtea, moving out the front door. But sellingonly to your local market severely limits the

amount of tea you can sell. How far willpeople drive to get tea?

If you want to sell your tea in other partsof the country, how can you make that hap-pen? You have several choices:● Open Tastee Tea stores around the coun-try. Unless you’ve inherited jillions, youprobably can’t afford this. You also have toask yourself two burning questions:

1. Will people come to a tea store? Idon’t know of any that just sell tea, doyou? Even coffeeshops are carrying moreand more baked goods because coffeeby itself doesn’t draw enough traffic.2. Is this really the most efficient wayto sell your tea? Making tea doesn’t giveyou expertise in running tea shops.

● Sell Tastee Tea through a mail order cat-alog.This will prove very costly unless yourteas are truly spectacular or you mail to theright list. Even in that case, you will needdeep pockets.● Visit coffee and tea stores around thecountry and persuade them to carry yourTastee Tea. This is doable (and has been asuccessful paradigm for many products overthe years), but it takes time and pulls youaway from tea-making, which is what you’rereally good at and enjoy. While you’re away

Jargon AlertDistributors go

by many names,depending on thepart of the country and the mar-ket they serve. They may becalled brokers, agents or jobbers,among others. Sometimes ana-lysts make a distinction betweendistributors who actually own theproduct they deliver and thosethat merely distribute them with-out taking the title to them.

making sales calls, who’s keeping an eyeon the Boysenberry Blend?● Contact several key distributors and havethem add Tastee Tea to their line. If you canconvince these distributors to carry TasteeTea, this is the easiest and most efficient wayto get into the marketplace. If you select adistributor who carries products that com-plement yours (coffees, coffee and cappuc-cino makers, baked goods and so on), youcan count on their help in lining up retailers.

Who Are These Distributors, And What Do They Do?

When you turn on your water tap, wa-ter happens. Wonderful, isn’t it? You’ve gotyour hot; you’ve got your cold. It’s clean,dependable and cheap. How does that wa-ter get to you? Chances are you haven’t aclue—and you probably don’t care. De-pending on where you live, you have large-scale municipal water or a local or privatewell. It’s the same with electricity and nat-ural gas. These things make your life easi-er, but it doesn’t make much difference howthey get to you, just that they do.

Distributors in the American marketplaceoperate the same way. They’re invisible tomost consumers. Their names mean noth-ing to the people who enjoy the productsthey deliver. But they effectively (if not al-ways efficiently) bridge the geographicalgap between producer and retailer. Super-markets and department stores couldn’t ex-ist without a complicated distribution sys-tem, capable of moving enormous amountsof product of every size and description.

Distributors add millions to the cost ofthe products we buy in the supermarket.But from the manufacturer’s perspective,they deliver a lot, too. ● They transport goods from large ware-houses to the retail outlets. The manufac-turer can’t afford to move these goods. Theretailer can’t afford to go pick them up. En-ter the distributor, who serves as a super-warehouse, drawing goods from thousandsof manufacturers, sorting them by retailer,and then dropping them off on the retail-er’s loading docks. Imagine the scenario ifevery manufacturer had its own trucks de-livering goods to every retailer in the coun-

Chapter 6

Selling

6.8

Every physical product has a life cycle—a movement from birth to death,as it were—that has four stages:

1. Introduction: The product is new, so promotion and publicity are key. Often amoney-losing stage.

2. Growth: Sales volume increases, profits begin and competitors appear.

3. Maturity: Sales grow and then level off. More competitors and more similarproducts. Price promotions often used to take customers from competitors.

4. Decline: Market looking to new products and technology for need satisfaction.

Service providers don’t face quite the same pressure for novelty as productmanufacturers. But they have to stay on top of trends in their industry. Every serv-ice industry needs “juice”—the sense that “things are happening.” For example, ifyou’re an accountant, a financial planner, a fitness coach or a hair salon owner,you should see what others in your industry are doing to keep existing servicesfresh and then develop exciting and valuable products to build the future.

The Circle Of Life



6.9

try. The truck-building, highway and gaso-line industries might encourage this type ofsystem, but it would quickly create a dis-astrous and unproductive gridlock.● They warehouse materials in differentparts of the country. This storage role ofdistributors saves manufacturers millions infacility costs, since they don’t have to buildstorage buildings to hold the goods that rolloff the production line.● They handle the paperwork between theretail outlets and the manufacturers.Retailers order their Twinkies from distrib-utors, not from the manufacturer. This allows the manufacturer to focus on prod-ucts, not on logistics, which is the strongpoint of distributors. Logistically, manu-facturers can focus on a limited numberof customers...the distributors.● They handle invoicing and collection.This is an important service for manufac-turers. It keeps them out of the collectionbusiness, especially for small accounts thatthe manufacturer wouldn’t want to haveto deal with.● They don’t sell for you. That’s your job,through your advertising and promotion.Distributors put the product in the handsof the retailer. In many markets, you haveto have distributors, but they don’t relieveyou of the primary sales responsibility.

From the retailer’s perspective, distribu-tors provide the following main benefits: ● Access to a wide range of products froma single source. It wouldn’t be practical fora retailer to order each of the products itcarries from every single manufacturer.● Delivery. To the door, in the quantitiesand sizes needed, according to schedule. ● Connections to the manufacturer’s offer-ings of co-op advertising, promotional spe-cials and special discounts.

Finding A Distributor For Your Product

The distribution channel you select foryour product should be based on a carefulanalysis of the needs of your product in themarketplace.

How can you motivate distributors to car-ry your line? This can be difficult for com-panies and their products breaking into a mar-ket that’s already flooded with other similarproducts. If you have an idea for a new plushtoy, for example, you will have some toughsledding unless you can find something inyour product that’s genuinely unique and at-tractive to the consumer.

You can base your pitch to the distrib-utor on a range of rationales:● You can offer relatively more money forthe distributor than the competition. Thepercentage of sales distributors chargevaries widely depending on the productand the market. There are no nationalnorms—you might pay 5 percent; youmight pay 20 percent. Talk to your localor regional trade association for guidanceon distributor contracts.● You can offer more perks for the distributor than the competition. You canbuy your way into the distribution chainwith 20 extra cases of product for every250 ordered by the distributor. You canfly the distributor out to your Hawaii salesconference to see what your company is about.

InsightSome distributors

offer terms of up to90 days on paying

their invoices. This is a friendly“float,” which can prove veryhelpful to start-up businesses.Keep your payments to distribu-tors on time, and you’ll build along and mutually beneficial relationship.

● You can tie your product in with oth-er products that you or other manufac-turers create.● You can show the marketing campaignthat supports your product.● You can demonstrate genuinely strongconsumer appeal.● You already have a track record of in-troducing successful new products.● You’ve already secured other large retailcontracts.

Remember, you’re marketing to the dis-tributor just as much as you’re marketing tothe general public. If you can’t persuadesignificant distributors to handle your prod-uct, you’ll have a very difficult time break-ing into the marketplace in a big way.

You can probably find local distributorsfor your type of product in the YellowPages, but that’s not the best place to look.When you need a new banker, lawyer oraccountant, you usually look for word-of-mouth referrals, for the endorsement ofsomeone you know and trust. It’s the samewith distributors.

UNLEASHING YOUR SALES FORCE

No matter what kind of business yourun, someone had better be actively sell-

ing your product or service. As I’ve saidabove, there isn’t a product or service, nomatter how spectacular, that doesn’t needto be marketed. For most products, thatmarketing activity must carry through tothe immediacy of personal contact…sell-ing. Retail stores obviously need an on-site staff to do this, but manufacturers canconsider having their own staff or hiringoutside reps. Service providers, since theirbusinesses are typically built around in-dividuals, generally handle sales them-selves, without outside sales reps. Inde-pendent insurance agents would be anobvious exception to this principle.

Training Your Retail Sales Staff

If you’re a retailer, the situation is sim-ple, if very competitive. You need to con-vert a high percentage of the customerswho walk in the door (or call on the phone)into purchasers. This book isn’t the placeto talk about how to set up a store physi-cally to encourage your customers to buy.But you can train your sales staff in the fun-damentals of face-to-face retail selling:● Salespeople should be actively helpfuland friendly, without seeming to exert salespressure.

Chapter 6

Selling

6.10

You’re a retail clothier. You’ve been carrying Trombone Boy jeans, slacksand shirts for five years. They make you some money, you have no problems,but you wish you could tweak your margin. However, the manufacturer’s notgiving an inch.

You’re driving around one day and spot some new construction nearby.“What’s going in there?” you ask the foreman. “New outlet clothing store,” hereplies. “Trombone Boy. Ever hear of ’em? Manufacturer-direct with greatprices, they say.”

Competitive pressures squeeze the distribution channel like never before,and new companies cast off the old rules. Supplier becomes competitor. Distributor becomes competitor.

Swimming With Sharks



6.11

● They should listen to the customer, findout the reason he or she is buying yourproduct and then try to help fill the need,not simply sell one particular item.● Your staff should be well-trained in thepsychology of dealing with customers—especially unhappy ones—as well as in thedetails of processing returns and in your basic sales philosophy.● Salespeople should encourage cross-sell-ing. If someone is buying a shirt, think tie.If a bouquet, think vase. If a particular CD,think other CDs that are by similar artists.It’s a basic sales technique.

Selling in the business-to-business mar-ketplace (or the professional marketplace)requires a more substantial effort. This iswhere business-to-business sales presenta-tions come in (see Chapter 5). Typically, yourcustomers are not walking in the door, theproducts are generally more complex, andthey require a higher degree of customer ed-ucation. However, more and more customersin the retail world are doing their homework,and they often come to you with a goodbackground on the purchase they’re aboutto make. If you run a shop, make sure yoursales staff is at least as educated about yourproducts as the typical customer off the street.

On-Staff Sales ForceThere’s truly no substitute for an on-staff

sales force that’s highly trained, well-moti-vated and experienced in the rigors of face-to-face sales. Any other form of sales effortis a poor second choice, although econom-ics sometimes mandates the use of contractsalespeople, especially for a manufacturingbusiness. Service providers who use a con-tracted sales force must be firmly in chargeof their activities: The boiler-room operationscreated by unscrupulous service providers(insurance, investment, home repair and soon) have given such sales efforts a black eye.If you’re a small manufacturing company selling regionally or nationally, keeping asalaried sales staff on the road gets costly, butthe advantages of using your own salespeo-ple make a compelling case:● You make the hiring and firing decisionsdirectly. If you’re displeased with a partic-ular rep, changing him or her can get com-plicated.● You design and administer compensa-tion. This gives you great flexibility and thebiggest of all sticks to ensure compliancewith your policies.● You dictate accountability. You can re-quire and demand call reports, follow-up

Your sales/support If your product is… should be…

Company-based ● Highly technical, requiring sophisticated serviceor application support

● A rare purchase, or one that’s costly

● A critical product or service that’s use isextremely important to the purchaser

Representative-based ● Something that reps can easily be trained to sell

● Something that you sell to a broad geographicmarket and the price of your product or service is under $500

Hired Guns Vs. Your Own Posse

on trouble spots, greater use of cold callingand so on. With established manufacturer’sreps, you may not have the leverage to dic-tate too many of the rules of engagement.● You handle the training, so your salesstaff can be just as informed on your prod-ucts as you want them to be. With man-ufacturer’s reps, you are one of manyproduct lines.

There are disadvantages to an on-staffsales force as well:● You hire them, you pay them. Sales-people are overhead, whether they’re selling or not.● To gain inroads into new markets, newsalespeople are not an immediate ice-breaker. They have no existing relation-ships, and they usually need at least a yearto develop them.● If you’re working overseas, new sales-people fresh from the United States (no mat-ter how energetic they may be) can be lostin the foreign market environment.

Contract Sales ForceDo you hire salespeople or do you have

your products handled by manufacturer’srepresentatives? Reps are typically self-em-ployed independent contractors who spe-

cialize in a particular market and handle theproducts of several noncompeting (or some-what noncompeting) manufacturers. Theyhave an existing base of industrial or com-mercial customers whom they call on. Theyhave often built up this list over years. Con-vince them to represent your line of prod-ucts, and you have someone presentingyour products who possesses an existingrelationship of trust with your potential cus-tomers. This can be a good deal. Since repswork on commission, your costs will beminimal, other than expenses.

But in the same way manufacturers mustpersuade distributors to carry their line foreventual exposure to consumers, so man-ufacturers must also persuade reps to car-ry their line over someone else’s. Reps canwork with only so many lines, given thatthey have to develop a degree of productfamiliarity. And they don’t want to appearto their clients as if they’ll promote just anyproduct that walks in the door.

TESTIMONIALS AND CASE HISTORIES

Not enough small companies take ad-vantage of the powerful impact of detailedcase histories or personalized testimoni-als. The impact of these documents on be-half of a small company is especially crit-ical since smaller companies typically don’thave the money that the big guys do toput behind marketing.

They say that word of mouth is the bestadvertising. It’s true! And case histories andtestimonials are the closest you will get tohaving your customers calling their friendson your behalf. The reason companies of-ten don’t put them together is that they dotake some trouble to assemble. However,your customers will generally be willing totalk about how pleased they are with yourproduct or service. They’ll often do so inwriting. You just have to ask them and some-times help them put the words together.

Chapter 6

Selling

6.12

Jargon AlertTestimonials are

the words of thecustomer. They can

range from brief kudos—“Theseguys saved my job”—to longerrecountings of how the productor the company have performedimpressively. Testimonials areoften used in selling services.The more well-known the testi-monial-giver, the more powerfulits impact.



6.13

Make a point of doing both testimoni-als and case histories regularly.

For case histories, you will need to alertall your salespeople (even if that’s just you)to keep their eyes open for an interesting,amusing or revealing use of your product.Think about the benefit inventory you didfor your product in the last chapter. Howcan you select case histories that reveal dif-ferent aspects of your product? If the dura-bility of your product is a strong selling point,get some case histories that illustrate it. Per-haps you remember John Cameron Swayzeand the watch that just kept on ticking(Timex before they went digital)?

One accounting firm has a series of abouta dozen case histories that detail the back-ground of the client company, why theycame to the accounting firm in the first placeand how the firm was able to solve theirparticular problem. These case histories givethe accounting firm the ability to highlightits expertise and build on its strengths.

A construction company that specializesin assisted-living projects for seniors hascreated a two-sided sheet on a number ofits projects, with color photos, details of theproject planning and construction, and avery benefit-oriented summation of the con-

struction company’s role in bringing theproject in on time and on budget.

Each case history should be brief and fo-cused on just one or two benefits; don’tmake each one sound like all the others.Give them enough character and personal-ity to make them readable, without sound-ing like a prepared advertisement.

Consider case histories an ongoing proj-ect. This is especially important for small com-panies since you can’t invest the dollars inadvertising and public relations that createa grand public image. You have to work withmore modest tools, which in fact prove justas effective. Every three months, each sales-person in your company should submit a listof client projects that may make interestingcase histories. There’s nothing like ’em.

To begin a case history, gather the corefacts, along with the best contact for a fol-low-up interview. Then assign it to some-one on your staff with a knack for writ-

Jargon AlertIn a case histo-

ry, you tell a business story,demonstrating the problem facedby the customers and how yourproduct solved the problem.They’re often targeted at techni-cal customers. You see them asstand-alone print pieces, as ad-vertisements in the trade press oras recurrent themes in companybrochures.

Good case histories are rich indetail, including explanatorycharts and graphs. They use thereal names of the players. And,of course, they end happily. Agood target length for a case his-tory is 250 words, or about onedouble-spaced typewritten page.

Jargon AlertIn technical

fields, case histo-ries are sometimes

called application notes (apnotes) or application stories. Theyhighlight how the equipment per-formed in a particular application.They often include considerabletechnical information, so the so-phisticated buyer can judge thesuitability of the equipment forhis or her application.

ing (or hire someone outside your com-pany to write the case history). Use pho-tography or charts where they’ll help un-derscore the magnificent performance ofyour product. Include direct quotationsfrom your client. And if you can attachsome numbers to the performance of yourproduct—boosts in production, more sat-isfied customers, increased retail traffic

counts and so on—it will make your casehistory even more compelling.

Testimonials are typically shorter com-ments by a customer on your product orservice. They don’t dwell at length on aparticular application, but they make gen-eral positive “sound bites,” which lendthemselves well to advertising or pres-entation in proposals. If you have a sat-isfied customer, ask him or her to saysomething nice about your company oryour product in writing. If the customer’stoo busy, have someone on your staff interview the customer over the phoneand draft the testimonial for the customerto approve and sign. This isn’t dishon-est, just a time-saving technique to movethings along.

Any company worth its salt should havedozens of testimonials in its marketing files.They can prove effective in presentationsto companies in the same field as the tes-timonial giver. People tend to rely on theimplicit endorsement that’s part of the tes-timonial’s appeal. Develop them all thetime, and use them whenever you get thechance. And avoid the temptation to com-plete a dozen and then feel you haveenough. You never know when the nexttestimonial will clinch your next client.

Chapter 6

Selling

6.14

How ToUse case histories

to close sales. Imag-ine you’re in a sales

situation where theprospect still isn’t convincedyou’re the firm for the job. It’sone thing to talk about all thework you’ve done in a particularfield. But when you take out sixor eight case histories—which de-tail the clients you’ve workedwith, the projects you’ve tackledand the excellent outcomes—yourprospect will be impressed. Forthose sales where you can’t putan actual product on the table,case histories are invaluable.

Now comes the fun part.After allthe heavy lifting of strategizing andmarket analysis, of benefit generationand marketing plans, of market po-sitioning and demographics, you’reat the point where you’re ready tomake some ads.

But wait. Not all products lend them-selves well to actual advertising. You don’tsee much advertising for funeral homes, forexample, or for advertis-ing agencies (hmm, thatone’s worth thinkingabout). Many busi-ness-to-businessfirms (like con-tractors anddistributors)don’t adver-tise, even inthe trade press.If your productis a sophisticatedhigh-end product with avery small audience, your ac-tual advertising needs are minimal. That’sa market better served by very targeted per-sonal selling or informational direct-mail so-licitation. You may use some ads to “soft-en up the market,” but your sales willrequire more work than a few ads.

The vast majority of businesses, of course,benefit by advertising, whether it’s to thegeneral public through the mass media (na-tionally or locally) or through very targetedpublications (some with circulations in the

four digits) that speak directly to the peo-ple who make the buying decision.

Advertiser trends come and go. Foryears, we saw no advertising by hospitalsor doctors, by lawyers or accountants, bydentists or psychologists, by banks orcredit unions. Those that tried it were suedor bad-mouthed by their peers. Many didn’t think it was appropriate for theirimage: “People will think we’re just a busi-ness soliciting customers.”

That’s all changed. The financial andmedical communities now make up a large

percentage of advertising at the local lev-el. Loosening of regulatory pressures

has accounted for some of thisemergence of advertising, but

so has competition. In ma-jor metropolitan areas,

television spots forlawyers blanket

the airwaves,

promising quickand lucrative settlement of injurycases, offering help with establishing job-related injuries, and guaranteeing a pain-less entry into the world of contemporarypersonal bankruptcy.



7.1

Chapter 7

Targeting Your AdvertisingTo Your Business

Of all the different aspects of market-ing we’ve looked at so far, creating andplacing advertising costs by far the mostmoney. Most of what you’ve done up tothis point in your marketing has createdonly internal costs—salaries and overhead.Maybe you’ve gotten involved with a con-sultant or two on market or customer sur-veys, but your wallet hasn’t yet been seri-ously damaged.

Once you get into real live advertising,you must take out the checkbook and startsigning your name. In Chapter 5, we sawthat some buyers get squeamish at theclose of a sales presentation, when it’s timeto place an order and pony up some cash.You should feel the same way about ad-vertising. Is your product or service one ofthose that actually benefits from advertis-ing in the print or electronic media? Canyou reach your best buying audience fora reasonable dollar through paid advertis-ing? Can you objectively justify your ad-vertising choices? Where does your com-petition advertise…and why?

THE BASICS OF A GOOD AD...IN ANY MEDIUM

OK. Let’s say your market is very reach-able by advertising. You’ve selected the me-dia that speak most directly to your prospec-tive customers by asking them which mediathey are most likely to read, watch or lis-ten to. You have also reviewed media kitsand studied the demographics of each medi-um’s audience. You have found some ven-ues that focus quite well on your target audience: They don’t give you a lot of“waste”—audience members who would-n’t be interested in your product.

But what should the ad say? If you sayeverything you think needs saying, you’llneed four pages. With all the thinkingyou’ve done about your product and yourcustomers and how they use your prod-uct, you’re brimming with persuasive ar-

guments on why certain people just gottabuy what you’ve got.

The first thing you have to contend withbefore you’re ready to put together your adis the public’s resistance to advertising itself.Most Americans see hundreds of thousandsof ads each year. We’ve all become immuneto a lot of advertising as a self-protectiveadaptation. If we didn’t, we’d go crazy. Sowe don’t really hear the commercial messageblasted in our ear when we’re on hold on thetelephone. We rarely notice the ads on theside of city buses, on bus benches, on shop-ping carts at the grocery store, or circling thestadium as the local college team takes to thegridiron. When we read magazines or news-papers, we skim over the ads vying for ourattention, noticing the pictures perhaps butnot ingesting the message to buy. It’s as if weare continually creating internal computer security measures while hackers, the adsthemselves, keep trying to break in: the moreinnovations one side comes up with, themore quickly the other side develops a coun-termeasure. It’s a constant tug-of-war.

You must become a hacker. Your admust break through the advertising clut-ter and the self-protective apathy of your

Chapter 7

Targeting Your Advertising To Your Business

7.2

InsightYou can’t buy

steak with a ham-burger budget. Butat least buy good-quality ham-burger. You probably can’t affordto run a full-page color ad. Butthe very small ads (page afterpage of them) in some publica-tions don’t have much of achance to make an impact. Gowith fewer publications and few-er insertions to pump up your adsize and get noticed.



7.3

potential customers. An advertisement hasa simple task, really. It’s designed to getthe reader, listener or viewer to do (typi-cally, buy) something. It can compel thisbehavior by persuasive information or byemotional appeal.

How an ad does this is represented bythe operatic anagram AIDA: attention, in-terest, desire and action. First you get yourprospect’s attention, then you build inter-est, this swells to desire, and it culminatesin action. ● Hey, that’s a neat picture of a tall, coldbeer. ● Boy, a day like today’s a great one for abeer. ● Say, it’s 85 degrees out there, and I’d re-ally like to have one myself right now. ● Honey, I’m driving down to Steve’s for asix pack. Be right back.

In this case, quenching your thirst is thebenefit that’s being sold. But not every adrelies on selling benefits. A lot of consumeradvertising sells an appealing “lifestyle,” andit establishes a link between the desirablelifestyle and your product. The consumeris attracted to the lifestyle and becomes

drawn to your product. This “transference”forms the basis of celebrity endorsements.C’mon—how much does Michael Jordanknow about batteries? Or Jim Palmer aboutmortgage financing?

Despite this, most advertising relies oncarefully crafted benefits, set like dia-monds in an entertaining and informa-tional format.

What Makes A Good Ad?Many long books have been written on

just this topic, and some good rules ofthumb have emerged from all this head-scratching. But remember, there are alwaysnotable exceptions to each of these “rules.”Recall that marketing is part science andpart art, and ads may be the most mercu-rial ingredient of all.● An ad must be clear.Many creative typesin the advertising profession don’t alwaysbuy this, but if your reader doesn’t under-stand your cleverness—or has to work tofigure out what you’re trying to do—you’vecreated a poor ad. Don’t make the targetaudience work. Amusement and entertain-ment are fine, but not at the cost of clari-ty. Make your message unambiguous. Thinkof the old restaurant signs: They didn’t say“Cosimo’s Trattoria” or “Pierre’s Bistro.” Theyjust said “Eat.” Hungry?● An ad must be simple. This flows fromrule number one. Don’t fall into the trapof trying to put eight different benefits inan ad. If you get your reader or listener toremember one thing from an ad, you’vedone a fine job and you should take therest of the week off. If the person re-members two things, you should enter theAdvertising Hall of Fame.

Hone your appeal down to its simplestform. Go for unity of impression.

For instance, in a print ad, make yourheadline short and powerful, promisingan important benefit. Then have the bodycopy pay off the headline, explaining how

How ToWant to get your

readers to noticeyour ad? Use the

testimonial of a currentcustomer speaking of the virtuesof your product or service. Itworks with celebrities, and itworks with people on the street.People are leery of advertising,but they believe what someonetells them, which is the essenceof a testimonial. Put together atestimonial by a typical productuser and watch the results.

possessing your product will deliver thebenefit to the user. Of course, you wantto make the advertisement interesting andengaging, but informative and compellingare critical. Get their attention, get theirinterest, kindle their desire and move themto action. Then you get their money. It’sa good thing.● An ad must impel to action. You wantyour customers to do something after read-ing or hearing your ad. Maybe you want themto go to your restaurant for dinner next Sat-urday. Maybe you want them to call your 800-number to order multiple truckloads of foamfloor padding. Maybe you want them to cutout the coupon and redeem it for a discounton a basket of variegated geraniums. Maybeyou want the home handyman to look forTightman pliers the next time he’s in the hard-ware store. We’ll talk about “institutional ad-vertising” a little later, in which the “call toaction” is less strident. But in most cases, youwant action. That’s what you’re spending yourmoney for. Especially for a small business,you can’t be running advertisements that arenot single-mindedly focused on generating aresponse. When the reader/listener/viewerhas finished your ad, what does he or shefeel compelled to do? Make sure you’re notsimply providing information.● An ad must be intrusive. You don’t pen-etrate advertising clutter by looking likeeveryone else. You have to stand out insome way: with an attention-getting head-line, with an intriguing visual, with an eye-catching graphic, with attractive design orwith the striking use of color.

Never run an advertisement in anymedium without studying the ads alreadyrunning there. Such a survey will tell youseveral things:

1. Who thinks it’s a good place to advertise2. Who doesn’t3. The level of “ad design”: Is it Pipefitter’s Monthly or Architectural

Digest? Run a cheap-looking ad in anexpensive publication and you willget little response. You won’t looktrustworthy.4. The size of typical ads: For manypublications (trade, business and con-sumer), a partial page ad (called afractional) puts you in the back ofthe book. Buying a small ad canprove to be a false economy.

You measure intrusiveness, then, by thead environment in which you’ll be ap-pearing. Producing spots for local televisioncan cost less than a thousand dollars in asmaller market. But placing a cheap spot(which will still be plenty expensive) on amajor TV network will make you intrusivein the worst sense of the word. You’ll bethe trailer park on Rodeo Drive, the Hawai-ian shirt on the Champs Elysées.

While the following ad strategy work sheetisn’t the best way to teach creativity, espe-cially in print and broadcast advertising, ithelps you think clearly about what you want.We have all seen wonderfully inventive ads

Chapter 7


7.4

How ToIf you can only

afford a small ad,make the most of it:● Don’t fill it up with teeny copy. ● Add even a small visual forimpact.● Use color if you can afford it.● Use a heavier border or a bold-er typeface for your headline.● Make it a different shape.● Use more than one small adon the same page.● Use artwork that makes yourad look like someone’s circled orhighlighted it with a marker.

7.5

at the low-budget, small-market level, as wellas remarkably inane ones at the high-budg-et, full-network level. Creating advertising isn’t easy, especially when you are pressuredto be innovative.

Creating Good Ad CopySimply put, an ad should be interesting

to read. This is, obviously, easier said thandone, but keep the four basic elements ofan ad in mind (clarity, simplicity, impulseto action and intrusiveness), and followthese basic guidelines from advertisingcopywriters:1. Use an active voice, not a passive voice.

● “This vacuum sucks up dirt.” Not“Dirt is removed by this vacuum.” ● “Everyone will love this dish.” Not “This meal will be enjoyed byeveryone.”● “These roses will beautify yourhome.” Not “Your home will be beau-tified by these roses.”● “We’ll return your car good asnew.” Not “Your car will be returnedin excellent condition.”

2. Use energetic verbs and phrases, not dullor tepid ones.

● “These training techniques will

transform your business.” Not “Thesetraining techniques will effect achange in your business.”● “Pack a lunch and come for theday.” Not “Bring something to eat;the seminar will last past lunch.”● “Make the cash register ring.” Not“Increase gross revenues.”

3. Be specific, not general or abstract.● “Saves you $75 to $100 every timeyou use it.” Not “Saves you money.”● “Lasts for 20 years on a typicalhome.” Not “Long-lasting.”



You get action by increasing urgency. Stress the short-term nature of theopportunity. Underscore how simple it is to get the benefit of the product...withjust a phone call. Offer additional information for a phone call or returnedcoupon. Connect a benefit directly with the action line.

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● These special-value prices will only last for three more weeks. Don’t miss out.

Taking Action

Jargon AlertCopy is the

word advertisingagencies and me-dia use in talking about thewords in an advertisement orpress release. The people whowrite copy professionally arecalled copywriters. Don’t confusethis with copyright, the legal rightof ownership to an artistic or intellectual product.

● “You can use it everywhere.” Not“This principle is adaptable to a rangeof situations.”

4. Use “you”—speak to the customer. You’reexplaining a desirable benefit to anotherhuman being.

● “Your family will see the differ-ence.” Not “Most families are able tonotice a difference.”● “Boost your profits in the nextquarter.” Not “Typical users realizean increase in profit.”● “We’ll bring you information youcan use.” Not “Information will beprovided to all subscribers.”

5. Make your ad no longer than it has tobe.And how long is that? As long as it takesto communicate your key benefit to your cus-tomer. Technical products typically needlonger copy than consumer products. Butpost-Seinfeldian companies like Lands’ Endand J. Peterman have made millions by ex-tolling the arcane in lively and lovely writing.

You can probably write both a success-ful long ad and a successful short ad foryour product. If you think that’s true, optfor the short ad—at least initially. It will becheaper (less space) and less likely to zipby your customer unnoticed.6. Keep headlines short.Don’t dilute the im-pact of the headline’s larger type by dif-fusing it across too many words. A head-

line should be 10 words or less. If it’s longerthan that, it’s not a headline, just an over-ambitious lead paragraph.

Let’s take the headlines from “HeadCase” at the bottom of this page and lookat some body copy for them. Rememberthat the body copy has to pay off thepromise offered in the headline.

● Quick And Painless PreparationOf Your Taxes. Guaranteed!

Supporting copy: Tax season ishere, and you are probably feelingthe heat. New rules from Washing-ton. The April 15 pressure cooker.Financial penalties for mistakes.Hours locked up with piles of re-ceipts and endless governmentforms. There’s a better way.

Chapter 7


7.6

Here are some sample headlines. You want short heads (10 words or less)that will typically work with a visual. They should have a benefit in them. Andthey should be customer-focused. (For advice on writing body copy, see the“Creating Good Ad Copy” section on page 7.5)

● Quick And Painless Preparation Of Your Taxes. Guaranteed!

● Enjoy A Beautiful Lawn For Pennies A Day. No Sweat.

● The Flavorful Bounty Of Italy…Come!

● Mexico: More Affordable Than Ever Before.

Head Case

How ToUse advertising’s

“magic words” to en-sure your ad’s impact.We all react positivelyto the tried-and-true nuggets of persuasion: “free,” “new,” “now,”“improved,” “easy,” “extra,” “special,” “proven,” “value,”“sale,” and “limited time.”



7.7

Johnson Tax Service takes the pres-sure off your shoulders. We’ve beenmaking taxpayers smile for 11 years,with quick, patient and economicaltax form preparation and filing.● Enjoy A Beautiful Lawn For Pennies A Day. No Sweat

Supporting copy: You can havea luscious, weed-free, family-pleas-ing lawn with just a single phonecall. Our climate is not easy forgrass. Growing a rich, beautifullawn takes special knowledge andlots of hard work. If you just wantto enjoy your lawn, call BergerLawn Services for a free estimate ona season of lawn pleasure—with-out a drop of sweat. Call beforeMarch 10 and get free reseeding oftrouble spots!● The Flavorful Bounty Of Italy...Come!

Supporting copy: Take the fam-ily on a little trip...and taste Italy’srich flavors—delicious pasta dishes,specialty pizzas, hearty homemadesoups, chicken parmesan and a widerange of healthy salads. And don’tforget our Italian desserts! Cap-padona’s specializes in families, soyou can feed your entire crew for amodest price. And everyone lovesour Italian specialties, from the grand-kids to the grandfolks. ● Mexico: More Affordable ThanEver Before.

Supporting copy: Airfares toMexico have dropped dramaticallyin the last six months. So you cantake in the sites, sounds and tastesof the exciting Mexican culture atbargain prices. The flight that cost$249 in August costs just $155 if youbook your flight by the end of April

Small Print AdThis small space delivers the product’s big advantagein a succinct four-word headline.

1. Note how the“eyebrow”(above headline)and headlinecapsulize thesales message.

2. The boxedtestimonialfrom an expertprovides front-and-centercredibility.

and fly within 90 days. And we at M.Breen Travel will throw in our “En-joying Mexico” booklet at no extracharge. Take that vacation you de-serve and spend your money there,rather than getting there.

Creating Clean Ad DesignThe elements of effective advertising

design parallel those of strong ad copy. ● Your design should be clean and un-cluttered.Let the design lead the eye of thereader through the ad, without distractingthe reader from the flow of the visual andthe copy.● Make the visuals large enough. If you’regoing to use an illustration or photo (whichis usually a good decision), make sure youmake it large enough to make an impact.Small photos don’t create much of an im-pression. The eye reacts more strongly tobold pictures.● Steal ad designs that appeal to you.Yes,you’re authorized to steal—not the ads them-selves but design styles. Most of the largeads in trade publications are put together byprofessional designers. Imitation is the sin-cerest form of flattery, so flatter them roy-ally and use variations on their designs tomake your ad look good. If you’re workingwith a designer or ad agency, don’t be afraidto show your team ads that you like.

● White space is not wasted space. Avoidthe temptation to pack every centimeterof your ad with copy and visuals. Readerswon’t know what to focus on, and it canbe too busy. Leaving some “white space”around the important parts of your ad willhighlight them, and it gives the reader’s eyea chance to rest. ● Be conservative with type.The enormousassortment of neat typefaces can be in-toxicating to businesspeople new to cre-ating their own ads. The best ads don’tuse more than one or two typefaces, of-ten just one for the headline and anoth-er for the body copy.

DO YOU NEED AN AD AGENCY?

Advertising agencies contain specialistsin marketing, advertising creation and me-dia analysis and placement. Large com-panies, with budgets in the millions, al-most always use advertising agencies,often more than one. In popular culture,ad people are often stereotyped as huck-sters, but sober marketing types at the na-tion’s most conservative companies chooseadvertising agencies with straight faces.What do they see in ad agencies? Theysee smart professionals who, at their best,know how to connect to an audience andpersuade them to buy.

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7.8

One trick designers use to organize an ad visually is to use what’s calledthe “grid system.” Imagine placing a tic-tac-toe grid over your ad so that twovertical lines run from top to bottom and two horizontal lines run left to right, dividing your ad into nine sections. Where these lines sit is not important; theycan slide one way or the other.

What is critical is that they provide a visual organizing principle, like thestreet grid in a city. Align all the elements of the ad (visual, headline, bodycopy, logo, address) so they are balanced in the grid. This keeps the elementsfrom looking randomly placed.

Tricks Of The Trade



7.9

Here are the main benefits of using adagencies:● You get professionals.Your product ben-efits from the skills of people who mar-ket and advertise for a living. When youmarket and create advertising for yourself,it’s a part-time job. Your main job is run-ning your company, manufacturing stain-less-steel sinks or retailing jelly beans. Youdon’t have the background you’ll typical-ly find at an ad agency.● You get experience. Agency profession-als have marketed and advertised for hun-dreds of clients in all sorts of markets. Justas you’ve become an expert in your busi-ness by working with all sorts of productchallenges, so the ad pros have learned afew tricks along the way that they can turnto your advantage. If you are lucky and youchoose wisely, you can get an agency withstrong experience in the very market you’reselling to. This can be an absolutely tremen-dous advantage.● You get connections. Most advertisingagencies have deep connections with themedia, certainly on the local level. Theyknow how to buy broadcast media effec-tively and efficiently. They know the me-dia representatives from the stations. Theyknow the printers who create yourbrochures. They know the publishers whoput out the newspaper and city/regionalmagazines. They know marketing researchfirms that can bring you insights into yourtarget audience. If you’re traveling in astrange land, it’s very helpful to have aknowledgeable local to make the arrange-ments for you.● You get a team.The ad agency has peo-ple to make a campaign or project runsmoothly: writers, designers, marketers, traf-fic people, media specialists and supportstaff. They know how to work together, andthey know how to schedule.

Of course, ad agencies get a bad rap.They are known as smiling generalists with

no discernible skills—just a bunch of ordertakers and commission grabbers who don’tknow the meaning of hard work. But theyare no different than any profession: large-ly trustworthy and competent but not with-out flaws. The advertising profession suf-fers from some marketing problems of itsown in terms of public perception.

Ad agencies can raise your blood pres-sure with some common downsides:● They’re expensive.Sticker shock does notjust come from automobiles and houses.Creating a brochure can run thousands andthousands of dollars before it even reach-es the printer’s door. Developing a mar-keting plan will also involve hundreds ofhours at hourly rates ranging from $75 to$200, depending on the market. Small busi-nesses especially are often thunderstruck athow inflated agency bills can become...andhow quickly. Here is one criticism that islargely true: Ad agencies don’t do a goodjob of preparing their clients for costs or ofjustifying them after the fact.

● Their broad experience is often shallow.Some advertising agencies specialize in aparticular market, like technology, financeor retail. But most don’t. So their expert-ise, like South Dakota’s Platte River, is amile wide and an inch deep. Even the

Jargon AlertCommercial

artists usually startdesigning an ad bydoing “thumbnails”—tiny roughversions of the ad, perhaps thesize of a playing card (perhapsartist’s physical thumbnails usedto be bigger). Should the visualgo here…or here? It’s a cheapand easy way to experiment withthe basic structure of the ad.

smartest agency team will need time to getup to speed on your product and yourmarketing environment. And guess whopays for that time?● You may get the B team.Unless you’re abig advertising spender, you may be dele-gated down the line to the newest, most in-experienced people at the agency. Agencymanagement may have these people workon small, marginally profitable accounts(like yours, perhaps) before trusting themon the more profitable accounts. Ad firmstypically make their pitch for your businesswith their most seasoned, most capable,most impressive people. If you sign on thedotted line, suddenly those people don’tshow up at the meetings. Instead, you get

bright, shiny people long on enthusiasmand short on street smarts. You’ve taken ona training assignment for the agency. Andyou’re paying for it.● Ad agencies can be “yes men.” Becauseadvertising agencies are typically muchsmaller than their clients, they can exhibita natural tendency toward paranoia. Tokeep their clients, they may tend to goalong with whatever the client wants todo—too timid to disagree or argue the op-posing point of view. If your agency can’tlead, they shouldn’t be your agency. Youshouldn’t pay expert’s prices for less-than-expert advice.● There’s usually a language barrier. Notonly are discussions about marketing com-

Chapter 7


7.10

Lay Of The Land

Typical Medium-Sized Agency Structure

Agency Senior Management

Administration & Finance Traffic

Accounting

Production Services Broadcast Video/Film

Creative Services Copywriting Graphics

Account Management

Marketing Services Planning Promotion

Research

Media Services Print Broadcast



7.11

munications particularly prone to misun-derstanding, but in working with an agency,you will also typically be communicatingthrough several layers of people. Your maincontact is usually an account representative;you normally will not talk directly to the staffwriting or designing your materials. Thenyou are telling an ad person what you thinkof your market and how you think the adshave to work. Will the agency person comeback to you with ads you think are mar-velous? Or, as often happens, especially innew relationships, will the painful climb upthe learning curve commence?

Freelancers Vs. AgenciesIf you spend less than $25,000 a year

on advertising, you’re probably not a goodcandidate for an advertising agency. You’lleither be too small for them—in terms ofhow much gross profit they can makefrom your business—or you’ll be toounimportant to them after they do takeyou on as a client.

At this spending level, you should usefreelance talent to produce your materi-als and campaigns. It’s not hard to findcompetent freelancers who’ll work withyou on an hourly basis; expect to pay $40to $90 an hour for experienced people.It’s like building a house. If you hire ageneral contractor, you’ve got to pay himor her money to keep everything runningsmoothly. If you hire the individual con-tractors (plumbers, carpenters, electriciansand so on) and act as the coordinatinggeneral contractor yourself, you’ll save alot of money...but you’ll work for thatmoney you save.

If you want to handle things yourself, getyour thinking done first (market focus, customer selection, benefit inventory andso on). Then talk to your friends and col-leagues in business for referrals to free-lancers. Use the Yellow Pages as a last resort. Once you have some candidates,

interview them to see how they fit with yourneeds. You’re looking for people who knowwhat they’re doing, so find out who they’veworked for (and call these references), review work samples, ask them how theyprice and look at some projects that are representative of their pricing (ask specifi-cally how much they charged to write ordesign each brochure or sales letter). Makesure your writer and your designer canwork together (or you’ll regret it). Introducethem to each other (although they’ll likelyalready know each other) and have a three-way discussion of the project and possi-ble approaches. You’ll be able to tell thechemistry pretty quickly.

Another low-cost alternative—whichentails a little extra risk—is to contact alocal technical college or art school andhave some students work on your mate-rials as a project or as a way to gain ex-perience. You can also contact small news-papers in your area and ask if any staffmembers do advertising copy or designon the side. If you go this route, providelots of focused input and be prepared tobe patient. But you’ll save a fortune.

DangerI’ve worked in

ad agencies and asa freelancer for 20years, and I know from experi-ence what happens when clientsaren’t able to guide agencies orfreelancers in doing their work.When ad agencies don’t under-stand the chain of approvals forcreative materials, and they’relocked out of the company budg-eting process, bad things happen:spoiled relationships, wastedmoney and poor marketing.

If you spend more than $100,000 a year,you should have an advertising agency,for marketing consulting and creativework, if nothing else. With that amount ofmoney going out the door in marketing,you need high-level thinking behind yourefforts. And unless you’re a very largecompany, you can’t justify the salaries ofmarketing and advertising specialists onboard. Even the giants with large and pro-fessional marketing departments use layers of ad agencies to refine their in-ternal thinking, bring them new ideas andexecute their plans.

If your marketing spending is in themiddle ($25,000 to $100,000 annually),you fall in the gray area. If you want tosave the 20 percent of your budget you’llprobably spend on an agency and do thestrategic thinking and creation of materi-als yourself, give it a try. If you’d ratherrely on experts to do the job for you—with all the risks that involves—then tryan agency relationship for a year and seehow you feel about it. Some people washtheir own cars; others take them to the

carwash. What kind of person are you? Either way you decide about an agency,you bear the risk.

If you decide on a detailed relationshipwith an advertising agency, they will prob-ably want to be appointed as the “agency ofrecord,” a term much valued by ad people.It means that they are your official agency,and that you won’t give significant projectsto other agencies. In your favor, it also in-dicates a level of commitment on your partthat will (or should) stimulate the agency toinvest some time (unbilled) to building uptheir expertise on your market and yourproduct line. It also gives them a warm, fuzzyfeeling that makes them more comfortablein contracting for advertising space and print-ing costs on your behalf. Nearly every adagency has been stung by nonpaying clientsand forced to pay media bills out of theirown pockets. The agency of record rela-tionship has something for both sides.

But don’t let the “agency of record”moniker be used against you. Some agen-cies come to believe that they have a mo-nopoly on your advertising and marketing

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7.12

Advertising agencies come in all shapes and sizes. Most have fewer than10 people; some have thousands. Your tiny local ad shop may be quite excel-lent, while a large high-profile agency may be lackluster. A number of smallagencies are “boutiques,” which rely to some degree on freelancers (oftenmoonlighting from larger agencies) to do the creative work. And design studioswill often portray themselves as “full service” agencies. Don’t get more agencythan you need. If you have “bicycle needs,” don’t hire a “Mercedes.”

All advertising agencies offer creative services, account management andmedia buying. Most offer some public relations and market research. Shoparound when you are looking for an ad agency, ask questions to find out thenature of the company you’ll be dealing with, and make sure that the servicesthey offer match your needs. Do you see some local advertising you like? Callthe advertiser and find out who created their ads. Many communities have a local advertising federation that can also give you list of agencies to consider,although they don’t typically give referrals.

Does The Shoe Fit?



7.13

Here’s another chance to take a quiz on your business and its marketing.

1. How many different advertisements have you prepared for your company?______

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

2. For each ad, list the publication in which it will appear and why.______________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

3. For broadcast media, why have you chosen a particular station on which to

advertise?________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

4. Which customer segments have you not yet produced an ad for? Why?__________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

5. Which products or services have you not yet produced an ad for? Why?_________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________


Chapter 7


7.14

budget. You don’t want that. For most smallcompanies, a one-year contract is plenty. Itgives the agency some security, while theclient company can move to another agencywithin a year if it’s not satisfied.

Here are some tips on working efficientlywith advertising agencies or with experi-enced freelancers:● Insist on detailed written communica-tions. This includes meeting reports, inwhich the agency recaps the results of meet-ings between your company and its rep-resentatives. You review the report to makesure what’s there is complete and accurate.Document your phone conversations. Usee-mail or faxes when appropriate to docu-ment decisions and agreements.

I’m not implying you should mistrust theagency. But marketing is a complicated andexpensive business, and the relationship be-tween client and agency must stand up to thestress of the marketplace. Documenting

paperwork keeps both sides confident in theintegrity of the other. Agencies or freelancersdon’t want clients claiming they never gavethe go-ahead for television production; clientsdon’t want the agencies placing media buyswithout their approval.● Decide on frankness up front. Like allbusiness relationships (including the onebetween you and your customers), this con-nection depends on the idea of a fair ex-change. Both of you have to get somethingout of the relationship. You have to be will-ing to communicate the good and the badto your account executive. Yes, you like thisbrochure design; no, you don’t like this ad.And then give reasons.● Be willing to pay for good work. In agood agency relationship, you’re getting tal-ented, experienced people devoting theirtime to thinking of ways to help your busi-ness grow. It’s the same with seasoned free-lancers. You’ve got to pay them for thattime. While you should scrutinize all billsclosely, don’t nickel-and-dime your agencyunless you’ve seen indications that there’strouble brewing. If you’re satisfied with theproduct, don’t balk at paying a fair price. ● Be clear about your needs, and be opento feedback.You have to manage your free-

How ToMake an ad larger

or run it more often?Every small-business

person wants to get themost out of an ad budget. But thiscommon question is tantalizinglydifficult to answer. Experiencesays you should run no ad lessthan four times. It takes that manytimes for your audience to takenotice of it. If you have a publica-tion that’s targeted very preciselyat your market, then you shouldgo for the larger ad running fewertimes. If you’re running in a moregeneral market publication, whereyour customers make up only asmall percentage of the reader-ship, go with a smaller ad and runit more often.

InsightThe larger your

print ad, the morelikely it will be noticed. But you’ll pay more fora larger ad. In general, go for thelargest ad you can afford. It willincrease the impact of your adand lead to a greater response. Italso gives you more room for information on your product orservice—along with that eye-catching visual.



7.15

lancers or your advertising agency. Youneed to guide them—communicating withthem clearly, making decisions and givingthem reasons for your decisions. An adagency can’t do its job properly if it isn’tsure what you want, doesn’t know whoseopinion to follow and doesn’t know whythings get changed or canceled.

Conversely, if you insist that youragency always agree with you, you don’tneed professionals—you need servants.You have to be prepared to be told thingsyou don’t want to hear. You must listento presentations objectively, with yourclearest thinking. You are, of course, theone who signs the checks, but if an adagency has earned your respect enoughfor you to hire them, then you should lis-ten to the professional advice and expe-rience they have to offer. ● If you don’t understand your market,chances are your agency won’t understand

it either. Especially in the initial stages, anagency or freelancers are going to dependon you for some start-up guidance. Don’teven think about bringing some creativepeople in if you don’t know what your mar-ket is. If you’re at a loss to identify it, youneed a market research firm or some pro-fessional trade seminars, not an agency.

THE WONDERFUL WORLD OF MEDIA

Most small businesses tend to restricttheir actual advertising to the print or broad-cast media. Indeed, these are the best andmost flexible mediums in which to sendyour message, and this section discussesthem in detail. However, there are otherless-common options you might considerfor special situations, such as billboards,transit advertising (bus benches), and siteadvertising (bowling alleys and ball parks).If any of these secondary venues strike you

Most print rate cards are similar. You get discounts for the size of your adand for the frequency with which you run it. The rate is per black-and-white ad.These figures are for a well-produced Midwestern city magazine with a circula-tion of just under 20,000.

If you run four sixth-page ads in a year, you’ll pay $530 each, or $2,120. Ifyou commit to a longer contract, you’ll get a correspondingly lower rate. If youdon’t run all the ads you’re supposed to, you’ll get “short-rated”: Your ads will berecalculated at the appropriate rate. If, for example, you committed to a 12-timehalf-page rate in a year and then ran your ad just four times, you’ll pay theshort-rate difference—you’ve “shorted” the publication on insertions. Instead offour ads at $1,165, you’ll pay for four ads at $1,380: a difference of $860.

Rate Roundup

full page $2,235 $2,125 $1,970 $1,790

half page $1,720 $1,380 $1,280 $1,165

sixth page $560 $530 $495 $450

1 time 4 times 6 times 12 times

as right for your market, call the local bill-board or bus company or site manager.They’ll be more than happy to share theiradvertising possibilities.

Print AdvertisingPrint advertising, depending on your

product and market, gives you a widerange of options, including newspapers,shopping circulars and a wide variety ofmagazines. All these avenues, however,are facing pressures (good and bad) dueto changes in technology and the explo-sion of advanced database marketing ca-pabilities. This is not a good time to bea general publication: They’re the onesfacing tough times.

Publishers can now make money withsmaller press runs than they could in thepast, and advanced databases give them theability to target very particular slices of themarket. In the past, a general sports mag-

azine might be designed to appeal to allmen ages 25 to 45, and that was it. Nowthere are scores of magazines targeting dif-

Chapter 7


7.16

InsightParadoxically,

this rise in special-ized print mediatakes place at the same time thatwe all can’t help but notice that“people don’t read anymore.” Au-diobooks, People magazine, stag-nant book sales, Gen X/MTV—people may still be curling up,but it’s not with printed matter asmuch as in the past. So the gold-en age of print specialization istaking place in a stressful timefor the overall print medium.

Yellow Pages AdA Yellow Pages ad is not just a business-locating aid; itshould sell the product or service like any other ad.

1. This “comforting”headline directs thereader to specificbenefits of using the service.

2. The numbereditems specify whythe prospect willbe glad he or shechose this serviceover others.



7.17

ferent portions of that same demographicand subtargeted by sport.

So let’s say you’re a jogger who’s also in-terested in rock climbing and world soccer. You can subscribe to several pub-lications in each of those interest areas.Soon you’re getting five magazines thatspeak directly to your interests. Where doesthat leave the general sports magazine,which unavoidably includes a share of ar-ticles that don’t appeal to you? Nowhere—certainly not in your house. Magazine evo-lution mirrors animal evolution, with moreand more specialization as time passes.

So the large-circulation magazines areunder pressure from more specialized media. This is good for small business.Smaller circulation magazines are cheaperto advertise in, and more magazines speak-ing to more precise targets is a very goodthing for businesses like yours.

For print advertising, you have five broadchoices:1. Newspapers2. Shoppers3. Consumer magazines4. Business magazines5. Trade magazines

NewspapersNewspapers are a good medium for

local retail advertising because of their “home-

town” focus, and most food coupons are car-ried by newspapers (Tuesday is traditional-ly coupon day). Here are the basic pluses andminuses of newspapers as a medium.

Newspapers are generally eager—perhapstoo eager—to work with new retail accounts,giving them a bewildering range of adver-tising space contracts from which to choose.You buy space by the column inch: one col-umn by 1 inch is 1 column inch. A 10-col-umn-inch ad can be two columns by 5 inch-es or four columns by 21/2 inches. Somenewspapers have gone to a “modular for-mat,” which restricts the size and shape ofthe ads they’ll carry. Get a rate card from thenewspapers you’re interested in. The news-paper masthead will give you the numberto call. The rate card will give you demo-graphic information on readership, as wellas a complete picture of their advertisingrates. The rate card will show you whichsizes and shapes you can use. Color has be-come much easier for newspapers. Even TheNew York Times now proudly bears a colorphoto on the front page of each edition. Thequality of color printing in smaller papershas been improving.

The more space you contract for, thelower your rate. The big local advertisers—food stores, car dealerships, electronics retailers—enjoy sweetheart deals becauseof their big spending.

Plus Minus

Low-cost (compared to other options) Lots of waste circulation (unless you’re retail)

Large circulation (big percent of Poor production quality (color still risky)some demographics)

Targetable by section (business, Little long-term effect (an ad hits the sports, local and so on) birdcage on day two)

Quick impact (within a week) Easy for your ad to get lost (much clutter)

Newspapers

Chapter 7


7.18

This work sheet will help you solidify your thinking about your ad, whether it’s forprint or broadcast. It will keep you from simply throwing something together to meeta deadline. An ad gives you the opportunity to make a brief presentation to yourprospects. Don’t you want to think a bit about what you’ll say?

1. What’s the target audience of this ad?_______________________________________

__________________________________________________________________________

__________________________________________________________________________

2. Why are you running this ad?____________________________________________

__________________________________________________________________________

__________________________________________________________________________

3. Which media will run this ad?____________________________________________

__________________________________________________________________________

__________________________________________________________________________

4. Which products are you featuring in this ad?________________________________

__________________________________________________________________________

__________________________________________________________________________

5. What benefits do you want to communicate to the target audience?____________

__________________________________________________________________________

__________________________________________________________________________

6. How do you support those benefits? How do you convince the reader the

benefit is true?____________________________________________________________

__________________________________________________________________________

7. What do you want this target audience to do?_______________________________

__________________________________________________________________________

__________________________________________________________________________

8. Other important information (size, colors, length, other campaign elements):_____

__________________________________________________________________________

__________________________________________________________________________

Ad Strategy Work Sheet

If your target is the general consumer,newspapers should be in your media plan.They reach a lot of people, most of whomare looking for things to purchase (cars, vacations, a restaurant experience, groceries,camera equipment and so on). The newspa-per advertising department can provide youwith more information than you can read onthe buying habits of their readership.

If your target is businesses, the businesssection of the local paper provides a reasonably good vehicle for your advertising

if used in conjunction with other approach-es. Local businesspeople typically have noplace else to go, since broadcast media arenotoriously weak in business at the local level. But remember, your ad dollar is buy-ing the entire circulation. If your product ap-peals to many area businesses, it’s a gooddeal. If your product is specialized with atightly focused appeal, you should proba-bly look elsewhere.

As the print media specialize, we’re beginning to see some specialized newspa-pers, especially in larger towns and cities. En-tertainment publications have grown enor-mously in popularity, as have periodicnewspapers speaking solely to the elderlymarket. If you’re looking for a younger, moreactive demographic, the entertainment news-papers are excellent, and they have a loyalreadership. If your product appeals to theelderly, you can’t beat the modest advertis-ing rates of their specialty papers. Larger met-ropolitan areas or business regions sometimesfeature business newspapers; don’t miss themin reviewing the media available to you.

ShoppersI don’t know anyone who reads shop-

ping circulars, but they have been aroundfor years and appear like clockwork in mymailbox. There are thousands of them nationally, generally advertising low-enditems or basic services to the consumer



7.19

How ToThe Yellow Pages

isn’t a consumer mag-azine, but it’s a print

advertising medium youshould seriously consider. It can beexpensive, but for many business-es, it means a steady stream ofnew customers. If you run a restau-rant, home-repair business, medicalservice, heating and cooling repairshop, body shop, car dealership orother business that deals with Joeand Jane Consumer, you should bethere. Go with the prime YellowPages for your area. Avoid all theme-too lookalike books.

Plus Minus

Very low cost Very low readership

Complete household circulation Poor production quality

Fosters hometown connection Little long-term effect (an ad hits the bottom of the birdcage on day two)

Easy for your ad to get lost (much clutter)

Image buster unless handled carefully

Shoppers

Chapter 7


7.20

marketplace, in addition to the extensive—and sometime anthropologically interest-ing—classifieds. They can also serve asa venue for some shotgun public relationsactivities at the local level. As an adver-tising vehicle, they are an inexpensive wayto reach your entire geographic area, butactual readership may be low. If you area local business advertising your restau-rant, car repair, home improvement or re-pair service, real estate agency or finan-cial service, they are worth a try.

Consumer MagazinesPublishing technology has led to an

explosion in the number of magazines targeted to the American consumer. Fromthe “shelter” publications like House & Gar-den through the galaxy of hunting and fish-ing journals, and zooming past the distaffcosmos of Glamour and Ms., publishershave microtargeted us like never before.

Consumer magazine circulations are au-dited by the ABC (Audit Bureau of Circu-lations). Publications usually carry theirABC-audited circulation in their media kits.If you are dealing with a non-ABC-audit-

ed publication, you have to take their wordfor it. And you should be skeptical.

Standard Rate and Data Service (SRDS)has a full list of all 3,077 U.S. consumer pub-lications—at the national, regional and local levels—in 74 different subject cate-gories (see the “Appendix” for contact in-formation). At the national level, these areexpensive publications because of their lushprint formats and their large and desirablecirculation. Locally (in city and state maga-zines), they provide a nice alternative orsupplement to newspapers and broadcast.About a hundred urban centers have a citypublication worth investigating. If your mar-ket is the upscale general public (the coredemographic of these publications), this isa good option to investigate.

You’ll buy by the page or spread (twofacing pages), with half-page, quarter-pageand eighth-page (and other more exotic)options. For most, full color is an option ifyou’ve got the budget.

For all of these publications, request arate card from the publisher, which—in addition to costs—will tell you deadlines,special issues, ad material requirements and

Plus Minus

Reasonable cost locally and regionally Expensive nationally, and more expensive despite slowing growth

Range of precise targets Not always easy to match to your target audience

Possibilities for PR connection Competing with many moneyed advertisers with contracts

Excellent production quality: they Ads separated from editorial materiallook marvelous

Some pass-along/waiting room Very long lead timereadership

National magazines allow some You’ll need several different magazinesregional customization. to really cover a large market.

Consumer Magazines

lots of good information on who reads themagazine. Magazine rates used to be non-negotiable. That’s no longer true, especial-ly if you have some ad budget firepower.If you can’t get a lower rate, push for bet-ter position: the closer to the front of themagazine the better, and even better—nextto an article on your industry. You can alsopush for appearance in special issues, likethe annual overview or directory issue. Re-member, to the magazine, you’re the cus-tomer. And the customer is always right.

If you’re convinced you need to run anad in a particular publication but haven’thad the time to create one, almost all busi-ness publications can help you create a

plain vanilla advertisement. Just make itgood plain vanilla.

Business And Trade MagazinesFor business magazines, you have

national, regional and local options, witha total of more than 7,500 publications.The last decade has brought a boom inbusiness publications at the city and regional level, paralleling the explosionof subnational consumer magazines. Formajor business-to-business approaches,these provide a prestigious, though expensive, venue.

The major national “executive” publica-tions (BusinessWeek, U.S. News & World



7.21

Plus Minus

Most of the same pluses as the Most of the same minuses as the consumer publications, plus: consumer publications, plus:

Very finely targeted; some reach If you’re a small, first-time advertiser,virtually your entire target market it’s easy to be overlooked by

the publication and the readership.

Many linked opportunities, such as You’re probably running advertisementstrade shows, promotional publications among competitors with deep and sophisticated inquiry tracking pockets...and really, really big ads.(or bingo cards, see page 7.22)

Business And Trade Magazines

Booking an ad is a two-part process:1. First you sign a “space contract,” which commits you to the number of annual appearances and the appropriate rate. It formalizes the agreement between you andthe publication. Dates are typically left fluid for later periods in the contract.

2. When it’s time for the ad to appear (months before issue date), you place an “insertionorder,” which commits you to a particular issue and size/color ad. Usually you’ll sendthis in with the materials the publication will use to reproduce your ad (floppydisk or print films). Make sure you get the technical details right on the format the publication needs for your materials. This can be very confusing for the uninitiated.

Reservation For One, Please

Report, Fortune and Forbes) have very largecirculations and are read avidly by businessdecision makers around the country. Thisbusiness magazine category also includessmaller-circulation publications like ChiefExecutive that speak directly to senior man-agement, regardless of industry. Smaller,and in some ways more powerful, publi-cations like Chemical Engineering and Avi-ation Week are major forces in their well-defined marketplaces. Circulation in the topthousand business publications is auditedby the BPA (Business Publications Audit ofCirculation). As with the ABC, publicationstypically carry their BPA-audited circulationin their media kit.

You should know that much of the tradecirculation for business magazines is un-paid—they are complimentary. These pub-lications make their money through adver-tisers, not through subscribers.

The business press represents a veryimportant avenue through which to reachcompanies that may buy your product.Businesspeople read, use and keep their

publications more than consumers dotheirs. Harry the iron foundry managermay not store his Horse World, but youcan be sure he has a tall and well-thumbed stack of Iron Age. This meansyou can reach the exact people who makethe buying decisions on your product, and you can trust that they will actuallysee your ad if you choose your venuewisely. This kind of certainty is worthgood money to advertisers. And publish-ers know it.

Rate cards for business publications aresimilar to those for consumer publications,although the business pubs offer manymore “fringes” with their advertising con-tracts: prime spots at their trade shows,increased acceptance of press releases andlistings in various directories. They mayalso list you on their bingo card—the tear-off card that lists all the advertisers andassigns each a number. Readers return thecard to the magazine with numberschecked for the companies on whichthey’d like to receive information. Themagazine processes the leads and pass-es them along to you.

Broadcast Advertising: Radio And Television

Broadcast advertising used to be too expensive for small businesses. But mediapressures are working in your favor. Thereare ever more radio stations for you tochoose from. And cable (and the Fox, UPN,WB networks) are putting the heat on thetraditional three TV networks.

RadioFor the retailer, radio is a wonderful

medium. It offers the lowest “cost per thou-sand” (CPM) of any media. This low-costreputation has also led radio to be under-respected as a positive marketing force. It’sgenerally run along with television andprint, rarely by itself.

Chapter 7


7.22

InsightBusiness-to-busi-

ness advertisersspend almost a quar-

ter of their ad budgets in special-ty, industry-specific businesspublications. This is well morethan any other line item in theiradvertising budgets. Why? Because three-quarters of busi-nesspeople rank trade publica-tions as their most importantsource of good information regarding products or services.That’s why. These magazineshave enormous and valuablecredibility.



7.23

Radio sales reps sell advertising spots indayparts:Morning drivetime: 6 a.m. to 10 a.m.Daytime: 10 a.m. to 3 p.m.Afternoon drive, prime: 3 p.m. to 7 p.m.Night: 7 p.m. to 12 a.m.Late night: 12 a.m. to 6 a.m.

Stations sell listeners to their advertis-ers. While TV advertisers often choosespecific shows for their particular demo-graphics, you choose a radio station forits overall listener demographic—coun-try/western, middle-of-the-road, jazz, talk,classical, blues, progressive rock, alterna-tive, you name it. All U.S. stations sub-scribe to the Arbitron rating service, andyou can see how the various stations stackup in drawing various age groups andgenders. You can find older copies in yourlocal library; more recent listings will be provided by any of the stations. If youhave a product or service you know hasa strong appeal to people who also likereligious music—or easy listening, or top40—then radio should be in your mar-keting mix.

When you are looking into buying ra-dio, talk to some businesspeople you re-spect who already do some radio adver-

tising. Get the name of a trustworthy me-dia rep from a friend in the business com-munity or a colleague from a local serviceorganization. Or just call one of your fa-vorite radio stations to get the process start-ed. A rep usually handles just one station,or sometimes an AM and FM pair of co-owned stations. Although the media repprofession has its share of scoundrels andne’er-do-wells, there are some fine pro-fessionals out there who recognize thebenefit of helping a new customer come

Plus Minus

Mobile and everywhere Scattered market, too many stations

Very low cost, both in air time Background noise; not really heard.and production target audience

Timely, can be on the air in hours Need many repetitions to makean impact

Listeners are loyal to their Skimpy research on audiences/listenershipfavorite station

Allows considerable creative flexibility No visuals and no holdover: once heard, it’s gone

An excellent support medium

Radio

InsightSixty-second spots

cost only 20 percentto 25 percent morethan 30-second spots. But, ofcourse, the radio audience atten-tion span is notoriously short.Most advertisers buy 30s. It’s thedefault purchase: Buy 30s unlessyou feel you’ll benefit from 60s. Ifyou’re convinced you’ve got amore complex (and more riveting)tale to tell, go with the 60s.

to grips with a confusing business. A goodrep will help you understand the languageof radio, with its CUMEs and AQHs. In ex-change, look to see if you can work therep’s station into your schedule...or tellhim or her right away that it can’t happen.

Most radio advertisers buy what is calleda rotator or a TAP program (pronounced“tap”; stands for total audience participa-tion). You contract for a given number ofspots in a week, which the station will dis-tribute over an agreed-upon number of day-parts at an agreed-upon percentage.

For example, you might buy 30 spotsin a week, to be distributed among morn-ing drive (45 percent), daytime (20 percent)and afternoon drive (35 percent).

You can also move one step up in tar-geting (and budget) by sponsoring a par-ticular program that might appeal to yourpotential customers. This is common ontalk- and feature-heavy AM stations.

Finally, if you’re thinking beyond thelocal market, investigate radio networks,which are staging a comeback these days.You can choose from around 40 networks,which might offer you the selection of sta-tions, markets and programs that will bringyou mouth-to-ear with your customers.

Radio, perhaps more than any othermedia, is the land of deals. You can tradesome of your product or service to a sta-tion for extra ad appearances. You canhave one of the popular DJs do a “liveread” of your advertising copy to give yourproduct a personal push. You can makeyour product or service the prize for a sta-tion giveaway. An experienced radio rephas more angles than a hall of mirrors. Seewhat kind of special deals (and prices)you can negotiate.

TelevisionTelevision has become the ultimate ad-

vertising medium. It glitters. It teems withcelebrities hawking wonderful items. It’sborn anew each season with exciting newshows and stars. It’s come to mean Amer-ica in a large part of the world.

As an advertising medium for the smallbusiness, television provides great valueat the local level. By local, I mean affili-ates of the big three networks (ABC, CBS,

Chapter 7


7.24

Jargon AlertAQH is average

quarter-hour share.This is a radio

station’s listenership as a percent-age of the total audience in a given area. Take a mental snap-shot of who’s listening at any onetime during a quarter hour andthat’s the AQH.

Jargon AlertCPM is the stan-

dard measurementto compare oneadvertising option against anoth-er. It’s always used in broadcast media, sometimes in print aswell. It stands for cost per thou-sand. That is, how much does itcost you to reach a thousandpeople one time?

Jargon AlertCUME (or cu-

mulative rating)counts the number

of listeners who are tuned in forpart of any quarter hour.



7.25

NBC) and Fox, UPN and the WB. You canproduce a modest spot (using the station’sin-house producers) for under a thousanddollars. And you can get on the air witha reasonable schedule without venturinginto five-figure territory. This may not besomething you’ll do each week, but—atcertain times of the year—it may give youa traffic boost like no other medium.

You buy television like radio, but differ-ently. You can insist on airing during (oradjacent to) certain shows, or you can letthe station make the selection with speci-fied dayparts.

Television has different dayparts thanradio does:Morning: 6 a.m to 9 a.m.Midday: 9 a.m. to 4 p.m. Fringe: 4 p.m. to 7 p.m.Primetime: 7 p.m. to 11 p.m.Late fringe: 11 p.m. to 1 p.m.Late night: 1 a.m. to 6 a.m.

Primetime rates are highest, generally followed by morning and fringe. This

depends to some degree on the part of thecountry and the season.

More than radio, television is also seasonally dependent. The fourth quarter(October through December) is the busiest because of Christmas advertising. The second quarter (April through June) is thenext busiest, with the coming of spring andwarm weather. Then the third quarter (Julythrough September) chases people outsideand demand drops. The first quarter (Janu-ary through March)—the dead of winter af-ter the flurry of holiday advertising—is thedeadest (and cheapest) time in TV adver-tising. In election years, national or local, allmedia reps just love politicians, a majorsource of advertising dollars. By the way,shrewd media tradition dictates that politi-cians always pay their media bills upfront.

Here are some reasons why you mightwant to use local television: ● To draw ongoing retail traffic, especiallyif your product is visual (gift shop, restau-rant, tourist attraction, home furnishings)

Plus Minus

The visuals, the visuals, the visuals Television is very expensive to produce

As many different audiences as Flashy visuals can impede sponsorthere are shows name retention

Good viewer information Networks losing ground; mass marketdisintegrating into cable and satellitechaos of hundreds of choices

Total flexibility in creative concept Zappers make commercials disappear

Perhaps the best way to reach a Floods of ads as networks and mass audience affiliates sell maybe too much ad airtime

“As seen on TV”—a distinctive place to advertise

Local stations are very competitive, and you may be able to takeadvantage in negotiating rates.

Television

● To create a special promotion for an event,sale, grand opening or personal appearance● To be proactive in combating new competition, which may soon be adver-tising itself● To build a local brand name through along-term, consistent advertising message

As with buying radio, I recommend youwork with a responsible station rep aboutwhom you’ve heard good things. BuyingTV time is complicated, and mistakes canbe very costly.

MEASURING THE EFFECTIVENESS OF YOUR ADVERTISING

There’s no topic of more interest to advertisers of all sizes than the measurableimpact of advertising on sales. Advertising isexpensive, and small companies want toknow they’re not wasting their money.

There are a number of ways to meas-ure how well your advertising is workingfor you. None of these methods is foolproof.And none of them will work for all typesof businesses. But try a few of these on youradvertising efforts, and you’ll get a sense ofhow well they’re doing and whether the ex-penditure is giving you a satisfactory returnon investment.● Mechanical measurements: When youhave your customers bring in a couponor a copy of an ad to qualify for a special

discount, you have absolutely clear evi-dence of how well your ad has drawn.You can even code your coupons to theprecise appearance (publication and date).This will also work with phone calls,when you code your ad with a particu-lar “operator number” or have callers askfor “Mr. Henderson.”● Before and after survey:Sometimes youradvertising isn’t selling some specific item;it’s designed to increase traffic generally orincrease market awareness of your compa-ny and its products. You can conduct a mar-ket survey testing for the level of awarenessof your company and products as comparedwith the competition and its products. Af-ter your awareness campaign has run, youwould then retest for awareness of yourcompany and its products. Barring outsideinfluences, you can attribute the differencein awareness to your advertising.● Customer query: Instruct your staff to sim-ply ask customers why they’re there and howthey heard about you. Tally the answers, andyou’ll see the effect of your advertising.● Revenue measurement:Lots of factors canimpact your gross revenues, no matter whatkind of business you run. But counting thetill every day before, during and after an ad-vertising campaign can tell you in absoluteterms if you’re doing something right. Whenyou make your judgments on this, allow formitigating factors (look at the last few years,

Chapter 7


7.26

Local cable television offers great opportunities to small businesses.Many local cable stations are hungry for advertisers and for content. So if yourbusiness can put together an occasional segment to educate the public (homedecorating, landscaping, investing, real estate, physical therapy, computers fornormal people and so on), you can get airtime and a bargain on advertisingrates. Look in your local newspaper television listing (or the Yellow Pages) fora listing of local stations. And check out the stations yourself to see which station matches up best with your potential customers.

Through The Wire



7.27

for example, to see if there’s normally a sea-sonality to your business).● Split runs: Run two different versions ofan ad—with different prices, different prod-

ucts and different time applicability—andmeasure the difference in responses. Thiswill also allow you to learn which appealswork best with your target audience.

If you’re selling… You should consider…

skateboards hippest radio station in town

classical music CDs concert programs for classical performers

financial services upscale city magazines, business pages of the local newspaper and radio or television financial programs

business cleaning services local business magazine, business pages of newspaper

family dining high-listenership radio, newspapers, local shoppers, billboards, transit (buses)

home health-care services newspaper, radio and TV shows with older audiences, shoppers, specialty elderly newspapers

Speak To Me, Baby

As your marketing efforts moveyour company forward, you willhave times when you want to pro-duce a heightened customer re-sponse.You might want to simply in-crease sales temporarily, move someinventory that’s backing up, finishup with an old product before get-ting in a new one, try a little hard-er on a particular submarket—therecan be lots of reasons.

Advertising is one way to do this, but asurer way is sales promotion.

THE TOOLS OF SALES PROMOTION

Sales promotion works for cerealmanufacturers and car makers, formagazine publishers and cigarettepackagers, for lawn mower compa-nies and brewers. All these indus-tries and many others use the im-mediate impact of sales promotionto transform potential customersinto actual ones, or to turn lowusers into moderate users. How dothey do it? They bribe the cus-tomer. It’s perfectlylegal bribery, ofcourse. The cus-tomers beam asthey pocket some extradollars. And the companygrins about the increased volume,the new products introduced and the newmarket exposure to the product line.

Students of advertising define and ana-lyze sales promotion in a number of dif-ferent ways. Here we’ll look at several fairly clear categories:● Coupons● Special pricing● Point-of-purchase promotion● Contests● Trade incentives● Cooperative advertising

Later in the chapter,you’ll meet trade showsand specialty items (give-aways), two other types ofpromotion sometimes put

in with sales promotion.

CouponsRetailers use

coupons to spursales of specific items,

at specific times, amongspecific audiences. Coupons

have become an enormous business in



8.1

Chapter 8

Sales Promotions:The Turbocharger

America, but like the airlines’ frequent flier miles, they are also something of aFrankenstein’s monster—a creation thattheir creator wishes had never happened.To put it another way, retailers haveclimbed on the back of this tiger and rid-den it enjoyably for a long time. Nowthey’re unable to dismount.

Coupons have been around for over acentury, and advertisers this year will dis-tribute more than a quarter of a trillion in-dividual coupons. Most are distributed asinserts in the Sunday paper, but redeemersfind their mailboxes flooded with specialcoupon packs as well. The grocery storesthemselves produce a wide range ofcoupons, both through the newspaper andin special in-store publications.

Coupons are a proven, effective tech-nique for making product introductions, forpersuading buyers to switch from one brandto another, and for getting consumers to testproducts they haven’t tried before or tomake larger-sized purchases. It’s a moneything: Use the coupon to save 35 centswhen you purchase four rolls of product X.

The expiration date on the coupon allowsthe manufacturer to put an end-date on theprice promotion.

Grocery stores have a love/hate rela-tionship with coupons. They like the ex-tra sales they generate, but they hate the lo-gistical hassle of dealing with them. Wrongcoupons cause bad feelings, lines areslowed, checkers get confused and so on,though scanners now read the bar codeprinted on the coupons and speed theprocess along. Stores receive compensationfor redeeming the coupon, both for its facevalue and a handling fee.

As with all promotions, the product mustsucceed or fail on its own merits. A man-ufacturer can get a consumer to try a prod-uct by offering cents off. But if it doesn’ttaste good, a few cents off won’t bring thecustomer back.

One reason coupons continue is be-cause it’s easy to judge their success. With-in weeks of a coupon’s appearance, amanufacturer can tell you how many havebeen redeemed across the country. Andthey can calculate the incremental increasein sales over time through the periodicuse of such coupons.

Chapter 8

Sales Promotions

8.2

Jargon AlertAn FSI (free-

standing insert) isthe glossy, full-colorsheet or group of sheets that fallon your lap when you open upthe Sunday newspaper. They’retypically provided to the newspa-pers by large FSI production com-panies for insertion by the localnewspapers. Most of the couponsare placed by large national ad-vertisers. Ninety percent of allcoupons appear through FSIs.

InsightConstant coupon-

ing and productsales can hurt you.

Some large retailers are shiftingto an “everyday low pricing”strategy to avoid the endlesstreadmill of price-cutting andsales. While cutting prices doesbring in the customers, it alsocosts you money, both in the discounted price itself and in thecostly mechanics of “handling” astore sale: informing cashiers,coupon appearances, changingsignage and so on.



8.3

If your business lends itself tocoupons—grocery store items, health andbeauty products, restaurants, retail music,florists and entertainment venues like the-aters, bowling alleys and roller rinks—they’re worth a try if you’re able to clear-ly delineate your goal. Make them theexception rather than the rule. Track yourcoupons’ impact on your bottom line care-fully. That way, you can track coupons bycoding them with their source. Forcoupons that will appear in the Sundaynewspaper on August 15, for example, puta little 8/15 down in the corner. You willbe able to track exactly how manycoupons were redeemed from that par-ticular promotion. Coding coupons overtime will tell you which publications, andwhich issues of those publications, workthe best for you.

To cover your cost, tie the coupon pur-chase in with another purchase: “Two dol-lars off on a coffee mug when you purchasea pound of beans.” What you make on thatother purchase will help defray your pro-motional expenses. In many retail trades,this is called a “loss leader.”

Special PricingThis category of sales promotion cov-

ers a range of terms and applications: re-bates, mail-in coupons, buy three and getfour, and general sale pricing. The retailerwants to convince the buyer to act nowby offering a special monetary concessionwith an immediate purchase. This avoidsthe paperwork morass of coupons, and it’sgenerally linked to higher-priced goods.

We’ve all seen stores that seem to makea living by offering things at sale prices.Most Americans have become very callousabout the reality of “sale prices,” especial-ly when we’re told that the sale “must endabsolutely on Monday evening...so you’vegot to make you’re mind up right now.”

While an occasional discount periodseems to do no permanent damage toprice integrity, overuse of sales leads theconsumer to avoid purchases until a salearrives. Obviously, this defeats the purpose of the sale from the offerer’s pointof view. When buyers expect sales, theysoon demand sales. And then your carefully crafted market pricing careensout of control.

“Push-pull” is a term describing two complementary ways that a manufacturer creates a promotional demand for a product. In a “pull” promotion, you, as the manufacturer, create demand at the consumer level andhave them “pull” your product through the marketing chain. If you run couponads or a flight of TV advertising to generate response, you’re engaged in “pull” advertising. If you’re hitting the end-user with a heavy message frequency, you’re counting on the public to go to the outlet and “pull”the product through the retailer.

“Push” promotions take place between manufacturer and distributor. Youprovide incentives to the middlepeople in the distribution chain—giving themheavy discounts, cooperative advertising money, deals on related products, all-expense-paid trips to the Cayman Islands and so on. They “push” the product through to the end-user with in-store advertising, favorable positioning and other help.

When Push Comes To Pull

When to use special pricing:● To counter special competitive situa-tions—the opening of a new store—or totake advantage of a competitor’s high prices. ● To move merchandise you have pur-chased on special pricing arrangement withthe manufacturer.● To establish a loss leader, when your of-fer mandates that consumers purchase oth-er products at the same time.● To increase volume: Offer a 10 percentdiscount on all purchases over $150.

Point-Of-Purchase PromotionYou use point-of-purchase or point-of-

sale (POS) promotions at the actual placewhere people do their buying. The think-ing here is simple. Take an impulse-typeitem, one that doesn’t require research orcomparative shopping. Place an exciting,high-energy display near the items on theaisle or at the checkout to get customer at-tention. Appeal to the basic instincts—hunger, thirst, sex, humor, greed, whatev-er. Boom, you’ve hooked them.

Research shows this “crude” advertisingis very effective. People buy many moreitems in stores than they plan to buy. A lot

of color and design research has gone intoassembling POS displays. Supermarkets looklike Christmas year-round with their col-orful displays of all sizes. They now havelittle flashing machines on many shelveswith blinking lights. They hand you acoupon. Pull it out and another appears.Eerie. Personally, I much prefer the niceladies handing out cracker and port winecheese samples.

By itself, point-of-purchase advertisingworks. When it appears along with simi-larly themed advertising, the combinationis dynamite. Run a radio spot telling listenersto take a pizza picnic. They buy the pizzaat special midday prices and you throw inthe soft drinks. Place a newspaper ad witha picnic graphic and the same theme line.At your pizzeria, have a poster facing thefront door to remind them of the promo-tion. And have each of your employeeswear a “Had a pizza picnic lately?” button.

ContestsContests (a competition that requires some

skill) and sweepstakes (which are chance-based) can work for small businesses, butyou have to watch the way you run them.Government regulators at the state and mu-nicipal level monitor contests and sweep-stakes avidly since they are based on a bla-tant appeal to the latent greed in all of us.

At the national level, advertisers under-take such “events” because of the attentionthey draw, both from consumers and themedia. Make the prize big, glamorous orintriguing enough, and you draw attention.

The McDonald’s chain has mastered theart of running sweepstakes based on in-genious tie-ins with popular culture. Itsyouthful market joins in enthusiastically, theresultant publicity garners major press cov-erage, and a few more french fries meet theiringlorious and McDividend-enhancing end.

Any such activity you undertake shouldfocus on drawing your customers’ direct

Chapter 8

Sales Promotions

8.4

Jargon AlertAlthough the

word “promotions”is used loosely to

mean almost all arenas of mar-keting, most professionals applyit to short-term, direct and quan-tifiable sales-inducing activities,often including a discount or spe-cial value offer. Examples includecoupons, contests, premiums, rebates, free samples, point-of-purchase displays and incentivesto the distribution channel.

8.5

attention to your site, and on getting presscoverage to magnify its impact. Have a draw-ing to give away a trip. Offer all purchasersin a given time period a chance at a rafflefor a new camera. Put the good ol’ jar of jel-ly beans in the window and request guess-es for a prize. If your prize is a gift certifi-cate, you’re guaranteed to get the winnerinto your operation at least one more time.

Trade IncentivesIn the same way that manufacturers give

price breaks and coupon discounts to con-sumers, so they take care to treat their owndistribution channel right by offering re-wards for help in moving their products.

Manufacturers recognize that distributorsand retailers control the far end of the hose.They are the point of interaction with theconsumer. If the distributors and retailersaren’t on a particular manufacturer’s side,then they’re in someone else’s pocket. Sincedistributors and retailers buy in muchgreater volume than does the individual

consumer, so the rewards to the distribu-tion channel are accordingly much larger.

Getting on the shelves is a life-and-deathstruggle for all manufacturers of retail prod-ucts. If they can’t get on the retail shelf, theycan’t be bought off the retail shelf. In somesense, the manufacturers are held hostageby the far end of the chain. This is especial-ly true for new manufacturers who are try-ing to break into a distribution network,which is always interlaced with complex andmutually supportive incentive arrangements.

Distributors may get a paid trip to an ex-otic vacation locale for boosting productvolume over a specified period of time. Aretailer may benefit from price breaks abovea certain sales volume, a discount that canamount to sizable dollars on strong sales.Finding out what’s the standard for your in-dustry involves some sleuthing. It’s a murkyarea, and every industry is different. Con-tact the trade association that deals withyour industry, and talk with someone thereabout industry practice in compensationand discounts. Speak to noncompetitivepeople in your business about how theyhandle distributors or retailers. Ask paymentquestions directly.

Working with the distribution chain is athrowback to earlier times, and you haveto do some investigation to find out howthings are handled in your industry. Theguiding principle, of course, is that you’vegot to be competitive: Distributors and/orretailers must have a reason to carry yourproduct. You’re renting shelf space andyou’re paying the rent to the retailer, andyou pay the distributor to “move you in” toyour rented space.

Cooperative AdvertisingThis form of promotion indirectly re-

wards the lower end of the distributionchain for promoting a manufacturer’s prod-uct. “Put my name and logo in your ad inat least 12-point type,” says the manufac-



DangerBefore you get

far in your plans fora contest or sweep-

stakes, check with local authori-ties to get up to speed on the local rules governing them inyour home market. Typically,your secretary of state or the StateDepartment of Commerce canhelp you (names vary by states).If you think you’ve got an ideathat will really attract some atten-tion, give your attorney a call. Alittle time and money spent up-front can save you an enormousamount of expense and embar-rassment if things go wrong.

turer, “and I’ll pay 50 percent of the ad’scost when I receive a copy of the invoice.”

The concept of cooperative advertisingoffers major advantages to both manufac-turer and retailer. The retailer gets money,of course, as well as the connection with aprestigious brand name. The retailer’s me-dia friends love cooperative advertising, sinceit expands the budget they’d normally getfrom the retailer. For the manufacturers, theyget local exposure and local appreciationfrom the retailer. And the market’s customerssee ads in their local newspaper carrying themanufacturer’s national brand logo.

Cooperative advertising goes mostly intonewspapers, although many manufacturersencourage their retailers to use broadcastand direct mail as well. The accounting be-hind cooperative advertising can get com-plicated, but if you have a manufacturer of-fering you money to run ads, take it andrun. If you’re a manufacturer and want re-tailers to give your products greater visi-bility, offer to pay for 50 percent of the ad-vertising in which your company name andlogo appear. This will get them thinkingabout you! Spell out very clearly what typeof appearance in the ad will earn the co-operative dollars, lest a misunderstandingleave hard feelings.

TRADE SHOWS AND EXHIBITIONS

When entrepreneurs start up a business,their knowledge of the industry varies wide-ly. Some have worked for firms for yearsand know the market and the competitionvery thoroughly. Others have wandered intotheir particular field from afar, and theyspend their first few years trying to growa business and build their expertise at thesame time. It’s a tall order.

For both these business owners, tradeshows and exhibitions provide a tremen-dously valuable opportunity to learn andto sell. Getting hands-on competitive in-

telligence is never easy, but it’s as easy aspie at a trade show. A little creative self-identification can get you a complete re-view of the competition’s product line.You can then ask what they think of yourproducts (of course, they can’t know whoyou really are). It’s...er...enlightening tohear how your competition speaks of youto prospects. This is competitive researchat its grittiest.

A walk around the exhibit hall will earnyou a sackful of literature on suppliers, dis-tributors, the trade press, new market con-cepts—a 2-pound synopsis of the market thatyou can review at your leisure when you getback home. You can also have yourself puton mailing lists, participate in market surveysand earn complimentary subscriptions to ahandful of journals. Not to mention more cof-fee cups, laminated business cards and freegolf balls than you’ll ever need.

If you are selling business-to-business,exhibiting and walking around at a majortrade show lets you accomplish several im-portant tasks at once:● Show off your product to people whoare hyper-qualified as buyers (they’ve goneto the trouble of showing up).● Meet your current customers, and get afeel for how your product’s really per-forming.

Chapter 8

Sales Promotions

8.6

How ToYou’ll find major

trade shows listed inthe publicationTradeshow Week, aswell as in the major publicationin your industry. Attend thebiggest trade show you can tostay in touch with the best think-ing in the industry. Exhibit at thebest trade show you can afford.



8.7

● Spy on your competition, and either gloatover your superiority or gnash your teethat their achievements. Some people say thatlooking at the competition is what suchshows are really all about.● Connect with distributors, wholesalers,brokers and others in your product distri-bution channel.● Build a mailing list for follow-up contact.This is why you’re there.● Schmooze with major prospects at yourcompany’s booth or hotel hospitality suite.● Make small or major presentations to at-tendees under the auspices of the show’sorganizers. This boosts your credibility andenhances the seriousness of your product.● Meet the movers and shakers in your in-dustry’s trade press. You’ll never have a bet-ter opportunity to chat with the top edito-rial staff.● Sell some product!

Here is a list of tips for making the mostof trade shows:● Pick the right show. Especially for smallcompanies, the trade-show circuit can be abudget-buster. It’s expensive to fly staff andmaterials all over the country, especiallywhen the return may be marginal. Beforeyou start reserving booths, look at the tradeshow scene in your industry strategically.List the major shows, their location and ven-ue, logistical considerations, anticipated attendance, costs, competition typically inattendance and distribution channel in-volvement. Most respectable show organ-izers have detailed information on past at-tendees and exhibitors. Talk to some ofyour noncompetitive peers in the businessand get their take.

Once you’ve laid this all out in front of you, let your overall budget make your decision. Experience suggests it’s better to have a strong presence at oneimportant and expensive show than amediocre impact at several smaller, inex-pensive shows.

● Get an attractive, portable, versatilebooth. The display industry has a range ofgood-looking booth arrangements that aresturdy enough to travel well without show-ing their miles. You’ll want a setup that givesyou the room to display literature, show vi-suals of your product and its manufacture,take names and addresses, and put on amodest show of bustle and enthusiasm.

Don’t go the bargain-basement route inshow booths: If you’re trying to convinceimportant prospects you offer a qualityproduct, you don’t want the letters peel-ing off your signs and your tables look-ing like pioneer-day school desks. Do not,repeat, do not use plywood: It showsevery impact it will unavoidably absorb.And then it falls apart. It also makes youlook like a hand-to-mouth organization,which is never a good thing (with all duerespect to the much-admired Americanplywood industry).

● Decide what you want to accomplishand stay focused.Do you want to sell prod-uct? Some shows make that an emphasis,but most don’t. Shows are contact points,like the trappers’ rendezvous: Everyone inthe area comes together to see what the

Jargon AlertWhen attending

trade shows, manybusinesses host a“hospitality suite,” a suite ofrooms at a nearby hotel to whichthey can go with prospects, respected suppliers or just friendsin the industry. It’s a place awayfrom the hubbub of the exhibi-tion hall, where parties can talkbusiness and generally get ac-quainted. It’s commonly suppliedwith food, drink and sales tools.

other folks have been up to—and inciden-tally to trade some furs. Trade shows pro-vide a good venue for many tasks:

1. Introduce new or enhanced prod-ucts to the market2. Distribute surveys to develop bet-ter market understanding3. Make strategic or key personnel announcements4. Bring together key players on thesales staff for networking, trainingand morale boost5. Build your contact list

● Have your literature ready. If you have agap in your printed materials, plug it before show time. For large shows, compa-nies often prepare special brochures or fly-ers speaking directly to attendees, perhapsoffering special terms or discounts. If youknow you’re attending a particular show,mention that fact (and give your booth num-ber) in advertising leading up to the event.

● Give your display energy. A card tablewith technical product sheets will not havepeople backed up in the aisles. What canyou do to generate excitement?

1. Show your product working.Manycomputer-based products are live-linked at shows, so prospects cansee the systems actually working ontheir problems.2. Bring visuals to make your bootheye-appealing.Use charts and graphson the curtains, use larger-than-lifescale models to show technical details. Have a continuous-loopvideo of your operations runningthroughout the conference. Use logos of large companies you haveserved. Show antique versions ofthe equipment you are introducing.Your prospects are human beingswith an interest in your market—what will get a rise out of them andmake them elbow their way to thefront of the crowd? In the tradeshow, you are the ad, and you mustbreak through the clutter of all theother “ads” to hook the interest ofyour customer.3. Don’t be afraid to get silly.Attenda few shows and you will see: Peo-ple dress up in strange costumes andclown makeup, feed mice to cobras,recite product benefits at a machine-gun pace, print prospects’ names onold-time newspapers with heroicheadlines, and anything else to create interest. However, unlessyou’re in a remarkably retro market,avoid the classic bimbo in a bikini.It will hurt you.4. Food and drink never fail. Themore unusual the better. Rattlesnakehors d’oeuvres? Camel jerky? Butavoid messy items.

● Allow the opportunity for serious busi-ness. Most people who come to your booth

Chapter 8

Sales Promotions

8.8

How ToIt’s not hard to

get on mailing listswithout giving away

who you’re working for.Crafty businesspeople have somebusiness cards printed up withtheir home addresses and a foggytitle like “market consultant” or“distribution analyst.” They mayuse their son’s or daughter’s firstname. You get competitive litera-ture sent to your home withoutyour opponent identifying youand purging you from the list. Ohyeah, and make sure to drop thecard unnoticed on your target’stable so you don’t get spottedand identified at your own boothlater in the show.



8.9

will be tire-kickers. They’ll grab a handfulof pistachios, cherry-pick your printed ma-terials and move on to the next booth. Butevery once in a while, you’ll bag a live one.Know how and where you will talk to thisperson at length. Will it be a spot in the rearof the booth, a nearby conference room,a table in the concession area, a later meet-ing at your company suite? ● Select the right cast. Get the right peo-ple at the show. Introverted types don’talways do well in the hustle and bustle ofin-your-face show-booth selling. Enlistyour most experienced salespeople.Throw in key marketing staff so they canrefine their understanding of the marketand help you sell better. Give yourselfenough crew to get the job done.Prospects won’t wait around for someoneto break free from a conversation. ● Capture business cards.You want to leavewith as many leads as possible, so bait yourhook with a tasty morsel. Set up a drawingwith a prize. Tell people you’ve got earth-shaking material stalled at the printer thatwill be available next week. Offer them amarket report that is too bulky for you totake to shows. Set up a follow-up contactby your applications specialist, who willhave special knowledge of the prospect’smarket challenge. Give out newsletter subscriptions. Offer imprinted premiumsthat will be shipped to the prospect’s officein three weeks.● Follow up. Before you go to the show,you should have decided what to do withthe leads you generate. Most companies di-vide them into categories: hot prospect, re-contact in 60 days, put on mailing list, sendspecific materials and so on. You have tomove promptly and efficiently on this, whilethe prospect’s memory of you is fresh. Manyfirms fax or e-mail leads and literature re-quests from the show to their home office,the support staff handles fulfillment, andthe literature is sitting on the prospect’s desk

when he or she returns to work. It makesa good impression.

SPECIALTY ITEMSSpecialty advertising has been reborn of

late. For years, it was the land of trinketsand kitsch: marginally usable imprinted cal-endars, blotters, miniature flashlights, pig-gy banks, baseball caps, refrigerator mag-nets and imprinted pens and pencils. Timeshave changed.

The $5 billion specialty item businesshas upgraded its toys. To attract new busi-ness, companies now offer to throw in ex-pensive tool kits, clothing (almost a quar-ter of current sales), premium food itemsand attractive art objects for home or of-fice. Thousands of advertising specialtybusinesses have grown up to supply thedemand. They draw on hundreds of man-ufacturers who in many cases have es-tablished separate divisions to handle thecorporate specialty business.

The market is growing for good reasons.Here are four of them:1. People like getting stuff for free. And theyfeel obliged to you for giving it to them.That sense of obligation may lead themto consider you for a bidding opportuni-ty in return. For ongoing customers, itmakes them feel you genuinely appreci-ate their business.2. Specialty items have a long shelf life.Yourgifts (often with your logo) will be worn,used, looked at or ridden for an extend-ed time. 3. You can be creative with your gift. Onecompany gives each of its major clientsa striking art vase produced and signedby a local (but nationally recognized) pot-tery artisan. Fruitcakes may not have manyfans, but specialty smoked salmon orgourmet cheeses are very popular, espe-cially around the holidays.4. You don’t have to engage in shame-less self-promotion. Some firms give gifts

(especially sportswear) imprinted with thename of the recipient’s company. Talkabout appreciation.

In a business-to-business market, youcan use advertising specialties to thankcustomers for their business (and to re-member you the next time they need aproduct or service like yours). Whenyou’re targeting your specialties toward abusiness, you can spend a little more—since your clients’ list is smaller than thephone book. When your product is a serv-ice, delivering a specialty product withyour name on it gives your customerssomething to look at. You can employ ad-vertising specialties as a promotional strat-egy to reach the general public (radio sta-tions do this all the time).

When you’re considering purchasingsome specialty items, ask yourself the following questions:● How do these specialty items fit into mymarketing plan and budget? It has to make

economic sense. Not all your customersneed to get something. ● Whom do I want to give these items toand why? Limit your list, so you can spendmore on the customers that are importantto you.● Do I lose anything by not giving them?What is your competition doing?● What reaction to my company will theseproducts trigger? If someone is an impor-tant customer, you don’t want to give awaya cheap-looking trinket that will do moreharm than good. The greater the sale percustomer in your business, the more im-pressive the advertising specialty should be.● What items have a natural connection(however indirect) with my company’s busi-ness? Here’s your chance to be clever, butdon’t get carried away and give your clientsomething he or she doesn’t know what todo with. You want the customer to bethankful and come away with a heightenedimpression of you and your business.

Chapter 8

Sales Promotions

8.10

Public relations represents agreatly underused opportuni-ty in marketing your firm.Mostsmall companies don’t do anypublic relations, even though it’samong the simplest of market-enhancing activities you can un-dertake. Even “amateurs” canhave a powerful local impact. Infact, local media sometimes pre-fer working directly with the“newsmakers.”

Public relations is the fourth horse-man of marketing. We’ve already cov-ered the first three—personal selling, ad-vertising and promotion. But publicrelations moves by a different tactic. It’sthe king of indirection. The “Buy me” mes-sage is whispered very softly in the earof the prospect, while the more visible partof the communication proceeds through thereportorial objectivity of the news media.

In fact, the various marketing techniquesreinforce and complement each other. Newshas credibility, but with PR, you can’t dictateits appearance or message. Advertising putsyou in control of appearance and message,but the public views it as less credible. Pro-motion further entices people (who’ve cometo know of you through PR and advertising),and personal selling finalizes the exchange.

THE IMPORTANCE OF PUBLIC RELATIONS

What is the task of public relations?Quite simply, to trade on the inherent

credibility of the nonpurchasable newsmedia to enhance the visibility and desir-ability of your product.

Public relations isn’t aimed solely at po-tential purchasers. This seems counterintu-itive at first, but think about it: You wanteveryone to have a favorable attitude aboutyour product and company, right? In fact,as we’ve seen, marketing includes every-thing that impacts the exchange betweenyou and your customer. All exchanges oc-cur in an environment alive with other play-ers who can impact the exchange—either



9.1

Chapter 9

Public Relations:The Softest Sell

working to make your sales effort easier ordooming it to failure. Public relations pro-vides you the opportunity to influence these“environmental factors” in your favor.

Some of the marginal players you maywant to influence include:● legislators (who have the power to makelaws affecting your business)● local government leaders (who can affect zoning and many other areas)● community leaders (who impact the social environment in which you work)● potential suppliers (who can decidewhether to work with you)● the general public (you never knowwhen individual members may drift intoyour marketing target audience)● shareholders (if you’re a publicly heldcompany)● the financial community (especially ifyou’re not publicly held)● regulatory agencies (who can inspect oraudit you until you’re sore)

Public relations includes a range of activities, from press relations to lobbyingfederal lawmakers. It also encompassescorporate communications (stockholders,SEC relations and so on), visitor relations

(if you’re enough of an institution to merit visitors), and even non-sales-orientedWeb sites.

Companies aren’t the only entities thatengage in public relations. It’s used very ef-fectively by tourist groups (which have aspecial, almost symbiotic relationship withthe travel press) and municipalities (fortourism, funding and overall spin control).Trade and professional associations (the Na-tional Association of Manufacturers, the Ad-vertising Council, the American PlasticsCouncil) conduct highly structured publicrelations at the national level. They are the500-pound gorillas of PRdom.

For your company, public relations provides some unique wrinkles in themarketing mix:● Credibility: You speak to your marketsor your public in a forum that’s explicitlymore believable. Readers or viewers trustthe media (consumer or business) more ful-ly because of its implied endorsement ofwhat it says about your company. In fact,most people don’t understand the role thatcompanies play behind the scenes in cre-ating news about their products. This is nowa well-established system, and the news me-dia are neither innocent victims of shrewdPR opinion molders nor fully complicit co-conspirators in the manipulation of theAmerican public. They are somewhere inbetween, balancing their own integrityagainst their own needs and their ties tocorporate America.

Any shrewd observer of the networkevening news or—even more blatantly—the morning news programs can see thetelltale fingerprints of corporate public re-lations specialists at work in many of thelight news segments. And let’s not even talkabout the use of the media by politicians...● Affordability: Public relations generallycosts far less than advertising. Of course, ifyou have people who do nothing but pub-lic relations, you have salaries and expenses

Chapter 9

Public Relations

9.2

InsightMany consumers

like brand-namemerchandise because

they think it’s safer, more reliableand a better value. When youbuild up your image in the press,you’re becoming a brand name: abrand name endorsed (at leastkind of) by the media. Get your-self in the news enough and people trust you and your busi-ness. That trust is worth a milliondollars worth of advertising.



9.3

to cover. But out-of-pocket costs are verymodest, especially compared to the whop-ping print space or airtime costs of the paidmedia, particularly if your target audienceis local or regional. PR impact typically faroutweighs its expense.● Precision: You can select specific media.Just as with paid advertising, you can directyour PR efforts to particular media. Televi-sion, for example, reaches the greatest pro-portion of the general public and obvious-ly lends itself well to visuals. If your productappeals to a broad market and makes foran interesting visual demonstration, televi-sion can be a prime medium for your pub-lic relations. If your spokesperson is attrac-tive, comfortable and credible on camera,put him or her in front of the cameras atevery opportunity. You pick the mediumthat highlights your product most convinc-ingly. You may not be successful at gettingexposure where you want, but you’re freeto take your story where you want to.● Lasting impact: It leads to a long-term relationship. As you establish contact withthe local business press, keep the big pic-ture in mind. You know what you wantfrom them; they know what you wantfrom them. It should be a relationshipbased on mutual needs. You need expo-sure; the media need news. It’s importantto the media to look in touch with thebusiness community.

Local media are often criticized for be-ing business-illiterate and unfriendly. Let’sface it—the press (once you get away fromthe major markets) tends to rely on rela-tively inexperienced and low-paid youngpeople for most of its work. TV stations andnewspapers have some senior people, butthe younger generation handles the front-line reporting. This is good for you.

Young reporters—especially business re-porters—can always use a hand under-standing the details of the marketplace. Pro-vide reporters with a source for insightful,

candid and not blatantly self-serving infor-mation, and you have a contact for years.

Be honest in your efforts. Give your me-dia contacts good, solid press releases andcredible news conference announcements.Don’t pester them with non-news issues andblatant product puffery. If you establishyourself as someone who knows and playsby the unwritten rules of press/PR relations,you will gain the respect of the media folks.You will ultimately benefit from this respect.(See the “How A Newsperson Thinks” sec-tion on page 9.4 for more on this.)

● Marketing linkage: Public relations canfurther your marketing goals. Make your pub-lic relations effort an integral part of your mar-keting plan. If your marketing goal, for example, is to introduce a new lightweightbut damage-resistant attaché case, you selectyour markets, pick your media and prepareyour advertising materials, just as we’ve out-lined in the preceding chapters. But you in-clude public relations (the news/entertain-ment media) as another outlet for yourmessage. You send a free attaché case to well-known business travelers and ask for theirreviews. You have the case “reviewed” by ed-itors of local business publications, includingthe business editors of the largest newspa-pers. You create an “event,” whereby the

How ToIntegrate your PR

and ad schedules. Nocompany has enoughmoney (OK, maybe Mi-crosoft does) to do all the adver-tising it wants. To put your nameout there more often—withoutbreaking the bank—scheduleyour PR efforts to maintain mediavisibility in your market whenyour ads aren’t running.

attaché rides the local airport luggage carouselfor 24 hours straight to demonstrate its sturdiness. All this is built into your market-ing plan. You combine the news dimensionwith the paid advertising portion of your overall marketing effort. Public relations enhances advertising—together they makemarketing successful.

How A Newsperson ThinksYou won’t get anywhere with the busi-

ness press or consumer media if you don’t“market” to them. If there’s one thing you’velearned so far, it’s that you have to get in-side the head of the customer. Public rela-tions provides another group of noggins topenetrate—media news directors.

If you’re running advertising, all youhave to do is hand your media rep thecheck and you’re on. Not so with publicrelations. You don’t choose where to ap-pear. The media decide whether to allowyou to appear. So you have to understandwhat they like and don’t like to run intheir pages or on their airwaves.

Consider the newsperson’s job. He orshe has pages of newsprint or precious

airtime to fill. If it’s a busy news day,there’s no problem finding stories of interest. Sometimes a single enormous story—Kennedy’s assassination, the WorldTrade Center bombing, the Olympics—willdominate the news completely. But forevery day like that, many others dawn withfew good stories to report. Newspaperscan’t put out a six-page newspaper sincereaders would revolt and advertisers wouldsue. TV news programs can’t simply runpublic service announcements or stationpromos—their audiences would defect,and they’d never make payroll.

Every reporter is part marketer. He or shewrites or shoots stories with the audiencein mind, adding style or looking for con-tent that is appealing and/or interesting. Af-ter all, news is a product, no matter howmuch of a veneer of “importance” the me-dia may put on it. The media hold a pub-lic trust to be informative and objective, butthey are also a business. If a newspaperdoesn’t give readers what they want, thepaper won’t sell, and eventually it willfold—as so many afternoon papers havedone with the emergence of the two-earn-er family as the norm. The network newsoperations battle fiercely for audience shareand the resultant advertising dollars. Andthe local news directors are driven by forcesjust as demanding.

This is not to criticize the Fourth Estate.The dedication and integrity of manymembers of the press do indeed helpkeep democracy breathing. But they ex-ist in a capitalist environment that requiresbottom-line success.

The day-to-day reality looks somethinglike this: The editor, whether in print orbroadcast, pushes his or her reporters tocome up with something every day. If theeditor’s smart, he or she has a number ofstories on the back burner that are not sotime-sensitive and that can fill in the in-evitable blank spots. If you can provide

Chapter 9

Public Relations

9.4

How ToWhen you talk to

the media aboutyour story, highlight

the benefit the media willgain from the appearance of yourstory. Will it help the media outlet: ● bolster its local business credibility?● scoop the competition?● provide a strong visual fortelevision?● tie to a holiday or local special event?● build on existing local interest?

9.5

the media with a story they perceive asnews to their audience, and you can offerit to them in a form that’s easy to workwith, yours may become that slow-day sto-ry—and you will be way ahead of thegame in gaining public relations exposurefor your company.

Your PR goal is to think of stories thatwill make the media outlet look good to itsaudience. Follow the same feature-benefitequation you used to figure out how to sellyour product to your customers. What ben-efit does your news release or feature sto-ry offer to the media? If it doesn’t offer themanything, then why should they run it?

Newspeople look at their subject mat-ter as either hard or soft. Hard news is time-ly, detailed and likely to be of immediateinterest to a sizable portion of their audi-ence. They feel they have to run it.

Soft news is less time-sensitive. It is of-ten turned into feature-oriented human-in-terest stories: the pregnant cat that crawledinto the basement window to have her kit-tens; the insurance agency with a handfulof crazy explanations of car accidents; thecivil engineer with a story of the toughesthighway in the state.

The media don’t have to run these sto-ries. But if they’re appealing enough—ifthey’re cute, clever, intriguing or unusual—they’ll run them to entertain. In fact, beforethe days of computerized typesetting, news-papers had books of little squibs—inter-esting facts in varying lengths (now calledfactoids) they could use to fill out a column.

Chances are your business doesn’t generate many hard news stories. Someexamples of such hard news stories:● New product● New plant or office● Hiring/promotion● Major contract/government project● Stock offering● Ownership change● Business alliance

Each time you’re lucky enough to scorea success in one of these areas (keep thefailures to yourself, of course), you write apress release and forward it to your localbusiness press contacts. If the story is ofgreater interest than normal—a very largecontract, hiring a local celebrity, a major newproduct—you might get both business newsand regular news coverage, which is a coupthat quickens the pulse of every PR person.

While your hard news stories may be rare,your company offers a never-ending supplyof soft news stories. One of the most pow-erful tools you have with soft news is thewell-developed anecdote. Find an interestingand/or amusing and/or heart-warming useof your product, and then weave a short fea-ture story from it. Most companies never exploit this part of their business...the humanpart. But it can pay nice dividends becauseeveryone—the general public, your currentcustomers, your prospective customers, themedia—is a sucker for a good story.



InsightBe sensitive to

the time constraintsaffecting the media.Broadcasters and newspapers reporters work on very tightschedules. Contact them two orthree weeks before the event youwant publicized to allow time fora second contact before theevent itself. With the trade press,you need to think months ahead.Get a copy of their editorial calendar, which is normally prepared at least a year in advance, before contacting them.Try to tie your release or articlein with the issue that relates bestto your subject.

The hardest issue here is finding theseanecdotes. Your sales staff doesn’t think “anecdote”; they think sales. Your engineersdon’t think “anecdote”; they think appli-cation. You’ve got to get them both to slowdown for a second, tip their chairs back,and talk to you about some of their stories.I’ve never met a business that didn’t havesome good ones. Play on your people andyour product in an unusual situation or“with a twist”:● Medical equipment that saves a life● A computer tape drive that maintaineddata in the midst of a flood● An insurance agent dealing with a tornado● A restaurant’s freezer failure● The double life—home health-careprovider and model-train builder, financialplanner and orchid expert, software devel-oper and cross-country bicyclist, cleaningservice owner and jazz musician, recep-tionist and repertory actor

● Reactions to related national events● Interesting overseas sales

Within your company, set up an infor-mal procedure for gathering anecdotes.Assign a marketing-savvy staffer to polleach employee with customer contactevery 60 days. Look for case histories andtestimonials (see Chapter 6 for more onthese) and search through PR raw mate-rials—job site photos, meeting reports, jobstatus reports, information on trips abroadand so on—anything that you might growinto a news story.

When you have your story idea, formal-ize it in a pitch letter and send it off (seepage 9.7 for a sample pitch letter).

Your Company As A News Resource

There’s a second type of soft news youcan use to highlight your professional expertise to your target market. Whateveryour business is, you know more about it

Chapter 9

Public Relations

9.6

You’ll do a better job of promoting your company if you become comfort-able talking to the media. It can be intimidating, since we’ve all seen news clipsof ambush interviews set up to make businesspeople look bad. But media people are regular folks just making a living. Help them do their jobs and you’lldo fine. Here are a few tips:

● Be prepared to respond quickly. If you’re called for an interview, they won’t wantto talk to you next month. More likely tomorrow morning. Be flexible with yourtiming. It will probably be a phone interview, since timelines are so tight.

● Talk with simple phrases and short sentences. Also, keep examples clear andstraightforward; don’t use abbreviations or trade jargon.

● Be as colorful as you can. Remember, the media want everything compressedinto bite-sized nuggets and sound bites.

● Give some thought before your meeting of how to make your business entertainingand illuminating to the general public. What interests people about your business?

● Speak forthrightly. Answer questions directly, without a lot of qualifying phrases. If you don’t know the answer to a question, tell the reporter you’ll findout and get back to him and her. Then do it.

Talk The Talk



9.7

March 15, 2005

Leonard ThompsonFeature EditorBlankville Gazette1234 Main StreetBlankville, AA 33333

Dear Mr. Thompson:I run a car detailing business in Blankville, with three shops in town and two

others in southern Ohio. My company has detailed more than 550 cars in the lastthree years. Business is booming, as more and more people are getting into taking extra care of their vehicles. We know the secrets of supercleaning them sothey look like new.

I’m proposing to write a series of two 800-word articles on how car ownerscan maintain the value of their cars by using some simple cleaning tricks. I knowyou have a car section coming out in about four months, and that might be a goodplace to put the first article (or both of them). If you need more, I can write more.

I’ll explain some of the techniques car detailers use to restore cars to their showroom luster:● The best polish to use...do the quick polishes work?● How to get your chrome to shine and stay shining● The right products for getting your upholstery clean...and then sealing it against dirt● Some simple ideas for keeping the driver’s seat area clean and uncluttered● How to evaluate windshield treatment to repel water

I’ve enclosed several copies of my company newsletter, as well as an article Iwrote for the national Detailers magazine. I can also provide relevant photos to support the articles.

I look forward to your response. Please give me a call to discuss any aspect ofthis proposed series. I think your readers will enjoy them.

Sincerely,

Jack FerreriJack Ferreri

Sample Pitch Letter

than any news reporter. How can you lever-age your expertise into press exposure?● Write a periodic column.CPAs do it lead-ing into tax season. Investment professionalsdo it all the time, providing potential investorswith helpful advice on how best to investtheir funds. Massage therapists do it in earlysummertime as people start to ruin them-selves with exercise. Nursery owners writecolumns of regular gardening advice. Whatcan you write a monthly column about?

● Establish yourself as an interview resource.With a media kit and personal back-ground information, demonstrate yourknowledge to the local media. When a storydealing with your expertise emerges (eitherlocally or nationally), write your press con-tacts offering your insights from a local per-spective. You can offer your experienceacross all media, print and broadcast.

1. After a large fire, talk about what’sinvolved in cleaning up. This worksfor specialized damage restorationservices, regular house cleaners,painters, remodelers and paperers.2. Before the Tour de France bicy-cle event, explain the basics of buy-

ing and maintaining a bicycle(works for bicycle shops and sport-ing goods retailers).

● Teach courses/workshops/seminars atlocal colleges, extension campuses, tech colleges or for evening classes. No doubtyou could probably teach “Starting YourOwn Business,” “Writing a Business Plan,”and “Hiring the Best People,” in addition tocourses in your particular field. Ours is acountry filled with self-improvers. My mailbox is filled with educational offeringsfrom all over the country. These sessionsserve a double function:

1. You get the chance to impresspotential customers with yourknowledge.2. You get up-close and personalwith present and future customers.It’s instant market research that willserve to keep you in close touchwith your market.

● Give speeches at the local level to serv-ice and luncheon clubs. Look under asso-ciations or fraternal organizations in yourYellow Pages (think Rotary, Lions, Kiwanis,Optimists and local civic organizations). Ifyou’re a people person, this can be greatfun. If you’re not, think of it as “massprospecting.” Many community groups lookfor speakers to give them 35 minutes to50 minutes of information on almost everyimaginable topic.

THE PRESS RELEASEThe press release is the basic curren-

cy of public relations—it’s the one-dollarbill. Almost everything that happens inpublic relations starts with a press release.A press release announces news. Peoplewho receive press releases expect themin a certain format. While creativity is normally a great ingredient in marketing,your press release should follow press release standards. It still gives consider-able range to your cleverness.

Chapter 9

Public Relations

9.8

InsightYou can also

become a radio star.Many smaller com-

munity radio stations and publicradio stations have regular guestson a very wide range of topics,from dealing with sick animals tocar repairs, from getting crabgrass out of your lawn to finishing your basement. Whatregular features (weekly or biweekly) does your local radiomarket offer? Offer yourself as an expert guest.



9.9

FOR IMMEDIATE RELEASE NEWS

January 9, 2005

For additional information, contact:Jody Milstead(999) 999-9999Fax: (999) [email protected]

HULMSLET OPENS DEKALB CONSULTING OFFICE

Hulmslet Consulting Group will open a two-person office in the Water Street

Complex in DeKalb in late December. The DeKalb office will focus on Hulmslet’s

experience in consulting with nonprofit organizations on gaining funding from state,

federal and local governmental and private entities.

“We’re happy to be in DeKalb,” said Hulmslet Director of Operations John

Meyers. “It’s a community with a healthy arts and community organization network

that matches up well with our strengths. We hope to add to our new office in the

next 18 months.”

Hulmslet Consulting Group is a 12-person consulting firm based in Decorah,

Iowa. Hulmslet works with arts groups, social welfare groups, political organiza-

tions and lobbying groups in the areas of proposals, fundraising, organizational

structure and administration.

Full press kit available upon request.

See Hulmslet Web page at www.hulmslet.com

Sample Press Release

The Five W’sYour press release must be concise and

complete, and it must answer journalism’sfive W’s: who, what, when, where and why.If you don’t cover the fundamental infor-mation, save your stamp and just throw therelease in the recycle bin before sending it.

News editors are busy people. They wantthe key information in a press release revealed in the headline and the first twoor three sentences. People who write re-leases tend to offer more information thanthe editor can use...or wants. So be sureyour release gets to the point immediately.

Don’t use negatives. Do use active verbsand concrete language. Pepper your releasewith relevant facts and figures that supportits newsworthiness, but don’t overdo it.More is not better. In press releases, moreis worse. If an editor’s really hooked byyour release, you will get a call for addi-tional information.

A press release should never exceed twopages, and the one-page release seems tobe the standard. Tighten your writing un-

til you pack the information onto a singlepage if at all possible.

Your most important information—thefive W’s—goes up front. Then provide min-imal background, perspective and moregeneral narrative. The editor will use it (orrewrite it) as he or she feels is appropriate.

To humanize your news, put in a briefquotation from a big player. Make the quotelively and dynamic—avoid business jargonif you want the quotation included. Makesure you fully identify the speaker.

The final paragraph of your release shouldbe a succinct, one-paragraph summary ofwhat your company does for a living. Thiswill remind the editor of who you are, andit may appear in the final news story.

Some other press release elements:● Date: Always date your press release.Most releases also carry the header line “ForImmediate Release.” Use it if it’s relevant.● Contact:At the top of the release (whichis always issued on your letterhead), putthe name of the person at your companyyou want the press to contact, along withthe appropriate phone number, fax num-ber and e-mail address. If you have a Webpage, list it.● Photo: If your story benefits from a pho-to, include one in black and white. Putthe caption at the end of the release andtape a copy of the caption onto the backof the photo.

How To Hook The Media On Your Story

Business news editors receive scores ofreleases each day. Many are from ad agen-cies and public relations firms trying to dothe same thing for their clients that you’retrying to do for yourself. To be noticedabove the fray, sometimes it helps to be re-sourceful. Here are some ideas:● Talk to your friends who run business-es and ask if any of them have a contactat the media outlet in which you’re inter-

Chapter 9

Public Relations

9.10

InsightWhen you send in

a release and encourage the editor

to call for more information, beprepared for the call. What additional information do youhave to give out? If you’reshrewd, you’ll put only the basicsin the initial release, but make itenough of a tease to encouragethe editor’s call. Have back-ground information already prepared. Putting things in aQ&A (question and answer) format is easy, and it simplifiesthe job for the editor or reporter.



9.11

ested.Ask them to share the name or put ina good word for you.● In addition to sending the release to thebusiness editor, also mail a copy to a busi-ness staff member. You can often find thenames listed on the newspaper’s masthead.● Follow your mailing of the press releaseor feature-story pitch with a personal phonecall. Explain that you’re checking to see ifthe editor got your piece, if there were anyquestions and so on. You’ll probably getthe bum’s rush when you call, but youwon’t hurt your cause.● Review the last few months of the busi-ness pages (or broadcast venue) and seewhich companies appear to have more-than-average luck in getting coverage.Givethe company a call and ask to talk to theindividual in charge of public relations.Explain that you’ve noticed their PR suc-cess, and you’d like a few tips on howyou can emulate it. Don’t call a competi-tor, of course. People like to be recog-nized for their success; you’ll likely learna trick or two.

Publicizing Special EventsAs you build your relationship with the

media, you’ll be able to use it more andmore to promote the news potential ofyour business. When your business makesbona fide news—has a grand opening,conducts a special community event, pass-es a milestone anniversary, makes an important new hire, moves to larger of-fices or gains an important new contract—you need to let the media know. If you’vereally got some news, you’re what the media exist for.

When you’re planning an event, talk tothe media early—with a preliminary pressrelease and a phone call. You want cover-age of your event. You’d like a reporter toshow up with a photographer to take somephotos, interview some attendees and writea glowing story for the Sunday paper. Af-

ter the event, if you don’t get on-the-spotcoverage, send the editor some photographsand a press release on the event. Somethingis better than nothing.

One of the surest ways to receive cov-erage is to team up with high-visibility organizations in your community. Chil-dren’s groups, community organizations,religious groups, tourism centers, artsgroups: All these have a built-in interestthe media like to tie in with. Think of visuals when you’re staging your in-volvement; television lives for pictures.Make your event both newsworthy andcommunity-enriching:● Sponsor a quarter-mile run for kids. ● Coordinate a fund-raiser for seniors.● Take some underprivileged young peopleto the local zoo.● Take part in a career clinic for highschoolers.● Have your business play a role in coun-ty fairs or other community activities.

How ToSending out a

press release is neverenough. Follow upwith a phone call tothe editors, and ask if they’ve received it and whether any decision has been made on whenit will appear. You don’t want tobe a pest, but you don’t want tobe ignored either. Be persistent.After you send out enough releases and make enough follow-up phone calls, they’llknow who you are. Make yourfollow-up phone call within 10days of sending out your letter.That gives them time to receive itbut not to forget it.

PICK THE RIGHT MEDIA OUTLETS

Bacon’s Publicity Checker is the PR in-dustry bible. It lists all the PR outlets in thecountry, including newspapers, electronicmedia and trade press. You get double-checked names and addresses, as well asinformation on whether the source acceptsphotos and other details. A one-year sub-scription is several hundred dollars, but itincludes a year’s worth of updates. Checkyour local library to see if they have a copy.Call the local newspaper and ask if you canuse their copy.

If you have hired a new receptionist,don’t send a release to Business Week. Youhave to be realistic in your public relationsexpectations, especially when you’re justgetting started. Look at your marketing planand your target markets—who should re-ceive messages about your company’s ac-tivities? Some likely targets:● Local media: This helps reinforce yourstrength in your local market. It also aidsin recruiting employees from the local la-bor pool and from your competitors. Andeach positive story you can place serves asa partial reserve of goodwill in the eventthat you earn some bad publicity. Targetswould typically include the local newspa-per, city magazines, local business publi-cations, television and cable stations withnews or business interest, and your localchamber of commerce.● State/regional media: This depends onyour target markets. Most regions have anumber of business publications in whichyou’d probably like to make an appearancenow and again. Get inside the head of thiseditor—Why should your story run in astatewide or regional publication? What’sthe benefit to the media outlet?● National media: Unless you have reallygot something remarkable happening—acelebrity connection, verifiable contact witha remote alien civilization, recent Elvis testi-

monial—stay local and regional. The nation-al audience is the playground of the big dogs.● Trade press: Most companies would ben-efit from a relationship with their trade pressand the resulting connection with colleaguesacross the nation and the world. Even if yourmarket is small-time local, there’s no down-side to getting known at the other end of thecountry. You never know what can happen.

TELL THE WHOLE STORY: THE PRESS KIT

If you are just getting into organizing PRactivities for your business, you probablyneed a press kit. The press kit expands onthe company information included in thefinal paragraph of your press releases. Itusually consists of a folder with one or twopockets, designed to hold a changeable array of company information:● company history, with trade associationmemberships● overview of products and product lines● “capabilities brochure”—your single mostcomprehensive piece of company literature

Chapter 9

Public Relations

9.12

InsightFor local televi-

sion, consider avideo news release(VNR) for news with a visualcomponent. Provide the station aprinted release supplemented byvideo footage on cassette, whichthey can run as background tothe news reader vocal. Show yourmachine kerchunking, themarathon runners sweating, theinternational visitors smiling. Evenif the video quality doesn’t meetstation standards, they can at leastsee what you’ve got. They’llreshoot if they’re interested.



9.13

that describes your firm’s overall capabilities● a guide to the marketplace for yourproduct● biographies of principals (with CEOphoto)● samples of advertisements and back-ground news features● most recent product press releases● organizational chart

The press kit should accompany your firstpress release to a new media outlet, but don’tsend it each time a release goes out, as thatgets too expensive. Although you might men-tion in your release that “a full and updatedpress kit is available for your review.”

A press kit should be on hand anytimeyou stage a press conference or meet withthe business press.

You’re positively beaming withmarketing vision by this point.You’vegot your market targeted. You’vethought through your marketing planin detail, and you’ve cleverly seg-mented your markets into logical cat-egories. Your marketing plan sitsproudly in a three-ring binder behindyour desk.Time to check off the “Mar-keting” box on yourto-do list, right?

But there’s more. Ifyou’re in business for yourself, you know—of course—that there’s always more. En-trepreneurs can fall into the trap of self-ab-sorption very easily. We devote almost allour energies to our business, and then wekeep the little remaining time we have leftto ourselves and our families. Our work de-mands are tremendous, causing us to guardour off-the-job time (you’ve heard of that,haven’t you?) zealously.

“If I handle the marketing well, won’tbusiness take care of itself?” you may think.

No business is an island. You run yourshop surrounded by thousands of other organizations, businesses and individuals nomatter where you live and work. They’re allconducting their businesses, living their lives,trying to build their community. Leaving asideyour marketing connections, what relation-ship does your business have with the com-munity at large—beyond the business arena?Can you succeed in the long run keeping

yourself aloof from the society in whichyou hope to flourish? Not likely.

By their very natures, small busi-nesses depend more on their localcommunities than do large corpora-tions. You don’t succeed in a com-munity without getting involved. It’sgood for business, it’s good for the

community, and, ultimately, it’sgood for you. To enhance your

job satisfaction and enjoyment ofyour local community, you and

your company should become goodcorporate citizens.Becoming a good corporate citizen may

be an obligation, but it doesn’t need to bea burden. It really isn’t one. It’s personallyvery enjoyable, and it can help your com-pany assume a respected role in your localand larger community. This is a good thing.Being a good corporate citizen means put-ting good word of mouth to work for you.

Making your company a good corporatecitizen gives you a range of rewards:● It brings personal satisfaction, since youcan really choose the public service arenasin which you and your company will become active.



10.1

Chapter 10

Be A Good Corporate Citizen

● You will meet other business leaders andget to know them face to face, often out-side their normal “business personalities.”This “beyond the suit” interaction can bepersonally rewarding—and it expands yournetwork of business contacts. The com-mercial marketplace is a community, andwe all tend to do business with the peoplewe know. It’s natural; it’s human.● You will enhance your understanding ofyour community. My Rotary Club meetsonce a week. I’ve been a member for 12years. In that time, I’ve heard perhaps 500presentations about all sorts of things, fromsocial welfare issues to politics, from newtechnologies on the local scene to living inCroatia, from a major referendum on a con-vention center to mass transit issues. I’mricher for all this insight.● You will keep from becoming too one-dimensional through your work. If youdon’t have time for community involvement,you need community involvement. ● If you are running your own business,you have likely been luckier than most on

the way up. Making your company a goodcorporate citizen is a way to “give some-thing back,” to repay society for the bene-fits you have enjoyed...no matter how hardyou have had to work to earn them. TheFrench have an expression for it: noblesseoblige. Nobility has its obligations. ● When businesspeople go out of theirway to make an impact on the commu-nity, that is news. You may garner posi-tive press coverage for your efforts. Butthere’s no guarantee.● You can increase the quality of the peo-ple you draw to your company. Your high-minded community commitment will at-tract other hard-working, like-spiritedpeople to your company. And don’t un-derestimate the impact of vigorous cor-porate citizenry on your current workers.Your company’s visibility and good namewill make them proud to work there andeager to refer their friends to you as potential employees.

Don’t misunderstand: This isn’t the samething as doing a good deed and sending

Chapter 10


10.2

How ToMake your compa-

ny into a company oftomorrow. Thesetimes are spawning anew kind of company—firms thattry to respect their employeesmore than companies of the past,to treat them better, to share abrighter vision with them. Yousee these companies in the news,with their innovative on-site day-care centers, their profit-sharingplans and their commitment toopenness. These companies playan active role in their communi-ties, both with their employeesand beyond.

How ToJoin a service

club. You will meetlocal businesspeo-

ple, help your communityand have fun. Don’t fall for theancient stereotypes of cigarsmoke and dirty movies. Today’sservice clubs are filled with vibrant, people-oriented individu-als of all ages and genders. Someoptions: Eagles, Elks, Jaycees, Kiwanis, Lions, Masons, Opti-mists, Rotary and Sertoma. Lookin the Yellow Pages under “Organizations,” “Associations” or “Clubs.”



10.3

out a press release. If you approach it thatway, you’ll likely do more harm than good.It’s akin to “enlightened self-interest.” Approach the task with a spirit of helpful-ness, with a genuine resolve to benefit oth-er members of the community.

Of course, you’d like to get some busi-ness benefit from your commitment of timeand resources, but you shouldn’t be directlyself-serving. Let the publicity come to yourather than set your PR machine in motion.You’ll benefit in the long run.

MAKE THE BUSINESS CONNECTION CLEAR

Your goal with this “white hat” activi-ty is to benefit the community while keep-ing yourself in the peripheral vision of thepublic eye. You want your name, thename of your top people, your company’sname and the names of your product tobe part of the public’s consciousness.Companies like RJ Reynolds and Texacospend millions sponsoring art and operabecause they feel it’s the right thing todo—and it earns them some recognitionand kudos from influential people.

Decide early on whether your communi-ty involvement will spring from your time oryour checkbook. The size of some compa-nies, or the intensity of the workload, makesit difficult to get active community involve-ment from staff members. In that case, check-book involvement is better than none.

If you have some business seasoning un-der your belt, consider involvement as aboard member:● Community boards: school boards, artsorganizations, social welfare organizations● Professional boards: Your line of workhas a professional organization at the local,regional and national level. Get involved inbuilding the strength of your trade. Offer toserve locally and eventually at higher lev-els. You’ll make valuable contacts, you’llexpand your understanding of the nuances

of your business, and you’ll have a hand inmapping the future of your industry.● Affinity boards:No matter what your in-terest (model railroads, fly fishing, corvettes,Thai cooking, orchid growing), play a rolein meeting local and national people.

You can also use board connections in re-verse. Create an advisory board for your busi-ness, with key suppliers and clients. You canuse this board (perhaps with biannual tele-phone meetings) to advise your business onstrategies, industry trends and so on. Ofcourse, you’ll choose members of this ad-visory board who can benefit your businesswith more than advice. You hope you arebuilding a bond between your company andthe companies of the board members.

Be forewarned: Don’t be transparent inyour creation of an advisory board. If you arejust doing this to curry favor with influentialpeople, you are going to get turned down

DangerDon’t let your

marketing ambi-tions show toonakedly behind your efforts tobuild community good feelings. Alocal Hooters bar and grill—achain that touts the buxomness ofits waitresses—decided to garnersome goodwill by giving $5,000to a local rape crisis center. Thepolitical forces in the universitytown soon raised an outcryagainst the mixed messages in-herent in the gift. The crisis cen-ter publicly gave the money back,and Hooters gained a black eyerather than community praise.Consider how your contributionsmight be viewed by people whomay disagree with your business.

(these people aren’t stupid, after all), and youwill damage your relationship. Choose youradvisory board members wisely...and use theboard intelligently and respectfully.

Social clubs are another opportunity.Most communities have social organizationsto which you apply for membership. Largecities have layers of them. To promote thegrowth of your business in the long term,make an effort to get involved in these cir-cles. For some people, this social net-working provides great joy and satisfaction.For others, it’s torture. You know whichkind of person you are.

Networking is especially important forservice businesses because of the personalsource of the business. You’re not selling aproduct, just your own time and expert-ise. The better known you are in your com-munity, the more recognized your product.

If there’s a statewide association for yourtrade or profession, at the very least youshould be a member. You’re almost alwaysmore successful as a member than as an

outsider. For many businesses, it also makesgood sense to join the local convention andvisitors’ bureau. The more convincing animpression you give of being a “team play-er,” the more likely you’ll benefit fromcommercial alliances and “inside handoffs.”If you’re a manufacturer, join the local orstate manufacturers’ association.

Depending on the size of your compa-ny, consider creating a speaker’s bureau—a contact person within your company whowill coordinate requests for presentationsby you (or another senior person) aboutyour company or industry. The contact per-son can prepare a slide show to go alongwith the presentation, and he or she willcoordinate all other details: which groupyou’ll be speaking to, length of program,venue, requirements for visuals, types of in-terest and so on.

Consider joining organizations as a sup-plier (or associate) member. Printing pressmanufacturers and ink suppliers, for ex-ample, frequently join printers groups.Again, you’re spreading your name around,going to a few meetings, meeting individ-uals who might turn out to be customerssometime in the future. Such affiliated or-ganizations can also give you insights intothe business market you’re trying to serve.

INVOLVE YOUR COMPANYAND ITS CUSTOMERS

How can you get your company involved?There is no end of good causes that can usea helping hand. Every community—no mat-ter how small—offers scores of avenues foran organization—no matter how small—toget involved. Here are just a few ideas thatmight work for your company:● Join an adopt-a-highway program.● School intern program: Offer high schoolor local college students the opportunity forsome real-world experience.● Food for the elderly or homeless: Helpfinancially or by serving meals.

Chapter 10


10.4

InsightA group of busi-

nesses and serviceorganizations run a

Paint-a-Thon program in DaneCounty, Wisconsin, in whicheach year some 20 to 30 homesof elderly or disabled citizens arepainted—all on one Saturday.The paint is donated, while thegroups and businesses pick upsome incidental costs (like lunch,brushes, ladder rental and so on)as well as supply all labor. Eachgroup works on its own house,so a great group spirit develops.Press coverage is considerable.And we all have a great time.

10.5

● Audio books for the blind: Audiotapeproducers are always looking for readersand funding.● Sponsorship of broadcast public serviceannouncements: Pick a cause you believein—ideally one that has something to dowith your line of work. You sponsor the socially beneficial message.● Participate in the American Red Crossblood drive at your place of business.● Help with fund-raising for any numberof good social causes.● Get involved with the high-profiletelethon for local public television. ● Invite service clubs and youth groupsto visit your offices or plant. Show themyour product and how you make it, giv-ing some idea of your impact on the localeconomy. For youth groups, prepare a to-ken visit remembrance.● Every major disease has a walk, run orbike these days. Get your family, your em-ployees and your clients involved.● Let a spokesperson for Big Brothers orBig Sisters speak at your workplace.● Encourage on-site breast cancer screening.● If you’re in the food business, donate ex-cess food to homeless shelters.● If you’re in the music business, arrange forsmall free concerts at homes for the elderly.● If you are a financial person, offer to givesome counseling at a neighborhood centeron budgeting or debt management.● If your business provides an infrastruc-ture-related skill—plumbing, electrical, con-struction and so on—you have ample op-portunities to satisfy your communityimprovement urges.● Promote adopt-a-pet programs from yourlocal Humane Society.● Have employees contribute old cloth-ing to give to the needy.● Work with a local environmental groupto clean up a neglected nearby natural area.● Work with a local neighborhood center

and take some needy kids to a ballgame.● Print up some T-shirts and do some con-struction work for Habitat for Humanity.● Get involved with causes that are favoritesof local print, TV and radio outlets. This willassure you the cause is legitimate, and youhave a better chance of coverage. The caus-es might differ by station or publication, butthey will most likely be related to kids,schools or the environment. It doesn’t takemuch research to find out what causes yourlocal media is involved with—all you haveto do is read, watch and listen.● Approach a service group in your com-munity and ask them to develop a projectfor your umbrella sponsorship.● Consider sports sponsorships, especiallyfor teams from disadvantaged neighborhoods.● Promote literacy programs in connectionwith schools or community organizations.● Young people these days need mentors,an adult who can teach them about life.Look into existing mentoring programs.

● Talk to your local social service people.They can steer you to hundreds of addi-tional worthwhile opportunities.● Limit your involvement to a few ventures. It’s far better to work with twoor three causes where you can make a difference than to spread yourself so thinthat your money or your effort have little impact.



InsightCity hall and

county governmentcan impact the wayyou do business and certainly affect the way you’re perceivedon your home turf. It’s good tohave them on your side.

The Internet has emerged as one ofthe most important and lucrativeplaces to conduct business.And eventhough it has been around for awhile, it is still relatively in its begin-ning stages.So even if many of the de-tails contained herein quickly gathercobwebs, you will learn enough to getstarted on your own exploration of atruly interesting and unique place todo business—one with marketing pos-sibilities galore!

According to the most recent statisticsavailable from the U.S. Census Bureau, re-tail e-commerce sales for the third quarterof 2004 were estimated to be $17.6billion, an increase of 4.7 percentfrom the second quarter of 2004.For this reason, and the abilityto reach customers andco-workers around theworld, the Internet isjust too tantalizing a

prospect to ignore for many small busi-nesses. If you only make use of a tenth ofits capabilities, you gotta be there.

Compared to other marketing avenues,the Internet offers some outstanding advantages:● You can establish a basic presence with-out a large investment.● You can talk to the online world acrossborders and around the clock.● You can establish yourself as an infor-mational resource in the prospect’s mind.● You can speak directly to interestedprospects. Depending on your markets, itmay be a popular avenue for sales.● You can look bigger and more profes-

sional than you are (always abig plus for the small busi-

ness, right?).Most owners and

managers of small en-trepreneurial business-es usually don’t need tobe sold on the bright



11.1

Chapter 11

The Internet: MarketingAt The Speed Of Light

promise of the Internet. Many have workedwith computers for years and aren’t afraidof using their technology skills to explorenew terrain. If you’re leery of venturing outonto the Internet, relax. It’s a different mar-keting terrain, to be sure. But your basicmarketing skills will support you well.

THE INTERNET AND THEWORLD WIDE WEB

As you may know, what’s come to becalled the Internet started as the Arpanetback in the ’60s. Originally designed as anArmageddon-proof communications net-work for the military-industrial-academiccomplex, it soon outgrew its original pur-pose. While a few savvy vendors, such asCompuServe, began offering e-mail to themasses even before the advent of the desk-top computer, the Internet blossomed dra-matically in the early ’90s with the imple-mentation of the World Wide Web.

The Web made the Internet much eas-ier to navigate for “civilians” and othersnot accustomed to the sacred hiero-glyphics of mainframe communications.It was more visual since the internal com-puter operations and communicationscould be accessed through a graphicaluser interface (what techies call a GUI),not unlike the Macintosh or Windows op-erating systems. Most of the recent surgein activity on the Internet occurs throughthe Web. The wealth of information avail-able on the Web is how most people ac-cess and use the Internet.

To establish a link to the Internet, mostsmall businesses have two options: Oneis to hook up with an Internet ServiceProvider (ISP), which can be an online ac-cess provider, such as America Online, aphone company or a cable company. Forspeedy connections, most small businessestoday turn to broadband Internet access,such as the popular Digital SubscriberLine, or DSL service. DSL service is often

provided by local phone companies. DSLdoesn’t interfere with phone conversa-tions, even when voice and data are onthe same line at the same time. DSLproviders usually use small hardware devices to establish an Internet connec-tion. You plug the filter into your phonejack and then plug the phone into the filter. You’ll also need a DSL modem (usu-ally provided by the DSL provider) andan Ethernet card to install your DSL service. Prices start at about $30 to $40 amonth for DSL service.

Another broadband option is cable In-ternet access. This service is deliveredthrough the same kind of wiring that yourcable TV comes through. To get hooked up,you’ll need a cable modem and a networkcard, as well as a cable outlet near yourcomputer. In general, cable Internet accessis used by home businesses, small officesand teleworkers. It is often available fromthe same companies that provide cable tel-evision, and thus, a separate ISP is unnec-essary. Prices start at about $40 per monthfor cable Internet access, although the costsare often mixed in with cable TV costs.

Chapter 11

The Internet

11.2

DangerWhichever ISP

you choose, checkout its reputation.You will be vitally dependent onthis supplier; it will be your com-puter phone company. Ask thecompany for a list of currentbusiness subscribers and callthem to ask about their experi-ences. How often does the system crash? How about busysignals and access delays? Canyou get service support whenyou need it?



11.3

There are some additional broadbandoptions as well, such as satellite or T1service, but they can be expensive and notsuitable for many small businesses. Forexample, a T1 line costs about $150 to$1,000 per month, and is designed forsmall or big businesses that send out largevolumes of data and have a large numberof users. Satellite is also expensive ($50to $110 per month, not including the required satellite dish and on-site instal-lation), and it is more suited for peoplewho live in remote areas and have no access to a DSL or cable connection.

Some large and sophisticated ISPs offer abroad range of support services, includingWeb-hosting services, through which you canestablish your own company Web site. Earth-Link, SBC Communications, AT&T Worldnet,Microsoft Network (MSN) and America On-line (AOL) are five examples of ISPs that caterto a nationwide market. They may be moreexpensive than the bare-bones ISP provider(which just charges an entrance fee to the In-ternet), but you’ll have more support for put-ting the Web to work for your business.

The second and more expensive op-tion is to become your own ISP by pur-chasing a server computer for your com-pany. Since the Internet is really just awhole bunch of these servers (calledhosts) connected together over the phonelines, larger companies often cut out themiddleperson (the ISP) and buy their ownhost to handle the company’s Web accessand e-mail. Keep in mind, however, thatyou would still need to buy broadbandaccess for this option.

To access the World Wide Web, you musthave a Web browser. Today’s leadingbrowsers are Microsoft’s Internet Explorerand Mozilla’s FireFox. Generally, ISPs pro-vide you with a browser (which normallyincludes e-mail), but the larger commercialISPs—such as AOL, MSN, the Baby Bellsand other major companies—also offer a

wide range of other services and goodies.Several, such as MSN and AOL, are theirown online “communities,” providing mem-bers with customized search services, newsand information services, online technolo-gy and software support, and any numberof special-interest forums, chat rooms, andnewsgroups for business, finance, sports,arts and entertainment, games, and anythingelse people want to talk to each otherabout. These are normally designed to bemore user- and family-friendly than the be-nign chaos of other areas of the Internet,which can be more difficult to navigate.

These larger services have grown dra-matically over the past 15 years. Like manyother ISPs, these services also give you thecapability to create your own Web site. Onceagain, be sure to do some research. Biggerisn’t always necessarily better, and sometimesthe smaller services will be slightly cheaperor offer other perks to get your business.

E-MAIL AND THE COMMUNICATIONS

REVOLUTIONE-mail is worth the cost of admission

to the Internet. It has become a businessnecessity, and every day you spend without e-mail is a day you’re sacrificingcommunications efficiency. E-mail will rev-olutionize the way you communicate within and outside your company. If youare not a believer already, following are

DangerBefore deciding

to use DSL serv-ice, make sure it’savailable in your area. While itoffers a speedy connection to theInternet, unfortunately, it is not aswidely available as other services.

some of the advantages it has over tradi-tional communications:● The technology has proved itself stable,easy-to-learn and user-friendly—once youget used to it.● Messages are automatically time-stampedand saved, so you have a “paper trail” ofcommunications on a project. It allows youto organize your messages (outgoing andincoming) by topic: You can open foldersin which to store messages related to col-leagues, clients, projects, suppliers, gener-al topics and so on. ● You can forward e-mail from one per-son to another. This is a tremendous time-saver and can speed up project and committee work.● You get all messages in electronic format,so you can edit an e-mail you receive be-fore forwarding. Get an e-mail message,make substantive or formatting changes, andsend it on. Again, great for team projects.● You can send and receive lengthy writ-ten documents via e-mail as attachments.You can edit what you receive with anyword processor. ● You can sort or search for e-mails bydate, time or subject. This can help you pulltogether a range of information quickly ona given topic or reconstruct a chronology.● E-mail is essentially free. It’s part of yourISP charge, and you pay no extra chargesper message.● You can maintain an e-mail address bookof all the people you need to stay in con-tact with. As addresses change, you simplyupdate your book. ● You can send the same e-mail to one orto thousands of people with just a fewmouse clicks. ● You can send and receive e-mail whenyou’re on the road. Accessing the Internetwith a laptop from motel rooms has growncommonplace in working America.● It’s very efficient. Many professionalsspend a lot of time at their computers, and

they find e-mail the preferred form of com-munication; it avoids the annoyance of call-backs, voice mail and phone machines.Once you send the message, it’s sent—andyou know it’s been sent.

E-Mail Communication TipsSending e-mail seems very similar to

dashing off a quick note at the computerand zipping it off magically without print-ing it out. But it’s not. Here are some in-sights into some unique aspects of e-mailyou should be sensitive to:● Written communication is forever. Nomatter how well you know the person onthe other end of the computer exchange,be prudent. Don’t say things you can’t af-ford to have get around. This is especiallytrue if you’re communicating with a com-pany whose procedures for screening e-mail you’re unfamiliar with. You don’twant the Secret Service, local SWAT teammembers or paramedics with big hypoder-mics and a straitjacket lined up outside youroffice. You also don’t want to explain mes-sages containing bad taste or bad judgmentto your colleagues...or to an opposing at-torney under aggressive cross-examination.

As some government officials have foundto their regret, deleting e-mail from a com-puter system won’t make it disappear. Tech-nical wizards can resurrect it from the net-work’s server.● Make your messages short. People arebusy, but the ease of e-mail sometimes se-duces us into long-winded rants about ir-relevant topics. Save that for elsewhere.Short messages get read, and they’ll earnyou a reputation for concise communica-tion and clear thinking. Don’t write longsentences or paragraphs; break them up forfaster reading. By the way: Don’t use allcaps. IT’S CONSIDERED BOISTEROUS ORARGUMENTATIVE SHOUTING.● Keep your writing informal, but not slop-py.Don’t get hung up over perfect grammar

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11.5

and flawless sentence construction. But don’tlet the ease of e-mail degrade the quality ofyour communication. Unless your messageis very short, read it through again beforeyou send it and make clarifying edits. ● Are you sure you want to send that e-mail? If you’re upset or angry aboutsomething, it’s a little too easy to create andsend a blistering e-mail. If, half an hour later, you cool off, there’s no “unsend” but-ton to bail you out. Consider the impact ofyour message and the way you say things.Remember, e-mails can be forwarded. Ifyou’re mad, it’s prudent to wait before you

send that e-mail and then reread it whenyou’ve calmed down.● Don’t become an e-mail junkie. E-mailis not a substitute for face-to-face or tele-phone communication. Don’t hide behindthe monitor. And please don’t become oneof those people who finds something fun-ny, cute or grossly obscene on the Internetand insists on sending it to everyone withwhom they’ve ever swapped an e-mail. ● Look before you click. We habitual com-puter users have grown accustomed to mov-ing quickly on the keyboard and clickingthe mouse. When we see a dialog box, we



It’s a brave new world, and the advent of e-mail and the Internet havebrought with them whole new sets of problems. Or, perhaps, they’re only newarenas for age-old workplace issues.

You need to set up guidelines about privacy, standards of decency and thelevels of acceptable usage for e-mail and the Internet. Ideally, you shouldn’thave to worry about these things, but experience suggests they can become aproblem unless you lay down clear guidelines upfront.

The most common issue is employees surfing the World Wide Web for per-sonal chuckles on your time. You can establish any kind of guidelines youwant, as long as they’re consistent for all employees. Your network consultantcan give you some tips on software that will let you track employee access us-age. Expect your staff to do a little wandering, especially after the network isfirst installed, but that should taper off quickly. If it doesn’t, act soon to makesure recreational surfing doesn’t become a habit.

Expand any company handbook you have to include standards of decencyand the Internet. Spell out that Internet work on office computers does not in-clude sexually oriented sites. If you’re worried about problems, a few commer-cial software vendors offer programs that can be installed on your server thatallow you to limit access to certain kinds of Web sites.

Do you as an employer have the right to read an employee’s e-mail? Thelaw is still evolving on this, but the current state of the law says you do. In yournew-employee briefing, you should make it clear that office computers are com-pany property and as such, files and messages on them belong to the compa-ny. You might say that you have no objection to a modest amount of personale-mail messaging at work, but the law doesn’t view these messages as the em-ployee’s private property. Ask for their cooperation in minimizing personal com-puter time and in keeping privacy issues from becoming troublesome.

Caution: Dangerous Surfing Ahead

don’t always read it—we just click or hit En-ter. With e-mail, this can get you into trou-ble. A high-profile legal case was throwninto turmoil when someone on the defensestaff sent an incriminating statement to theprosecutor instead of to a hired investiga-tor: All it involved was a simple mouse clickon the wrong recipient. You can easily sendthe wrong file to the right person as well.‘Tis better to have looked and clicked thannever to have looked at all.

How To Set Up A Local NetworkThis isn’t the place for a technical trea-

tise on computer telecommunications, but wecan cover some basics. To have a networkup and running in your office, everyone youwant on the network must have his or herown computer. Your installer will run cablingconnecting each computer with the server, adedicated computer whose job is to run thenetwork. You install networking software(which includes messaging— read e-mail—capability) on the server and each individualcomputer. Users sign on to the system witha password, which enables them to get andsend e-mail to others on the system. As men-tioned earlier, the server must be connectedto the outside world to allow network usersto send e-mail outside the company or to

browse the Web, and your phone system willalso have to be set up to handle this.

Don’t trust yourself to set up a computernetwork. This is not what you’re good at, andthere’s no reason you should spend your timeand energy getting good at it. Look in yourlocal Yellow Pages, and you’ll probably finda busload of suppliers eager to help you out.Check out their references before you usethem, give them plenty of time to understandwhat you need, and get a detailed estimate.Because of the technology involved, you’revulnerable. So proceed cautiously.

Some of the companies that sell networkserver computers (IBM, for example) willalso sell you a support subscription alongwith the computer. When the computer ar-rives, a support person comes along andtakes care of installing the network, and heor she will also be available to fix any prob-lems you have once it’s all hooked up.

Networking software is complicated. Giveyourself and your network supplier a monthto get the bugs out of the system. And ap-point one person in your office as the net-work administrator or guru. This individualwill handle problems your staff discoversand then work with your network supplierin getting them solved.

Having all your computers networked allows your staff to communicate instantlywith one another via e-mail and to storefiles on the remote server so they can beaccessed by everyone. The network willalso allow you to back up all company filesfrom the server onto a backup system.

Once you get onto the Internet, the bor-ders of your e-mail disappear. Now you canexchange e-mail with anyone on the plan-et who’s connected. You can do it any time,and you can send messages carrying attachments with text or picture files.

And thanks to the growth and popular-ity of Wi-Fi, it’s becoming easier than everto communicate with people who are wire-lessly connected to the Internet.

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Jargon AlertA Web browser

is an applicationprogram (like a word

processor or spreadsheet) that letsyou work on the Web—to navi-gate, view graphics and visitnewsgroups. In some cases, youmay even be able to use it to sendand receive e-mail. The two mostpopular ones are Microsoft’s Inter-net Explorer and Mozilla’s FireFox.



11.7

Wi-Fi, which is short for “Wireless Fi-delity,” is a set of standards that enablespeople with wireless-enabled computers toconnect to the Internet when they’re inproximity to an access point, called ahotspot. These hotspots are becoming com-mon in places such as your local Starbucks,as well as in public areas like airports, hotels and convention centers.

“Talking” Via The InternetYou have several additional Internet

avenues that offer you the opportunity tolisten to and, to some degree, talk withyour market.

One is blogs, or weblogs, which are on-line journals. There are various forms ofblogs, including personal blogs, which arekept by individuals, and community blogs,which are maintained by groups of indi-viduals. What makes blogs so appealing—and freewheeling—is that you can post in-formation directly to the Web without anyknowledge of HTML scripting or Web-au-thoring software.

Blogs are usually updated frequently withlinks and commentary. New items are gen-erally on top and older items below on thepage. Some blogs are interactive, allowingusers to respond or comment on posts,

while others are not. Blogs can focus onone subject or cover a range of topics.

Blogs are used regularly by businessesto promote their products or communi-cate information—such as a new productlaunch—among employees, customers,partners and prospects. And some em-ployees publish blogs, giving outsidersnew and unsanitized insights into a company’s culture. All this information canbe valuable from a competitive intelli-gence standpoint.

One thing is certain: Blogs are not goingaway. In fact, readership of blogs grew significantly in 2004. According to a surveyby the Pew Internet & American Life Pro-ject, 27 percent of Internet users in the Unit-ed States said that by end of 2004 they wereblog-readers, compared with just 17 per-cent in February 2004. This means that bythe end of 2004, 32 million Americans wereblog-readers.

You may have heard of blogs, but youmay not have heard of wikis. Whereasblogs enable individuals to post theirthoughts online, wikis allow users to addcontent and material covering a variety of

Jargon AlertBlogs are

becoming verypopular. Whatmakes these online journals soappealing is that you can post information to the Web withoutany knowledge of HTML or Web-authoring software. Locatingblogs, however, that provide relevant and interesting contenton a regular basis can be challenging. To find one thatsuits your needs, ask around ordo a Web search.

Jargon AlertNewsgroups and

listservs are onlinediscussion groups.

You can find a newsgroup andlistserv devoted to every subjectunder the sun. To find a news-group, visit Google Groups atwww.groups.google.com. To finda listserv, check out Tile.Net(http://tile.net/lists) or CataList(www.listserv.net/lists/listref.html).

topics to a Web site, but that content canbe edited by anyone.

Many wikis are used by corporations asa quick way to collaborate with employeeswithout having to send e-mails back andforth or using complicated and expensivegroupware tools. Wikis, however, are be-ing used more and more by the generalpublic as a way to find information abouta range of topics, so they can be a great re-search tool for your business. The best placeto view wikis at work is to visit Wikipedia,a free content encyclopedia with hundredsof thousands of articles anyone can edit.You can find it at www.en.wikipedia.org/wiki/Main_Page.

There are several other forms of Inter-net communication you can use, such asnewsgroups, listservs (sometimes calledmailing lists), and message boards or bulletin boards.

There are thousands of newsgroups cov-ering a vast range of subjects, most of whichcan be accessed by the general public.Newsgroup messages are linked by topic;they’re “threaded.” This allows you to reada lengthy sequence of messages (calledpostings) on a given theme.

Newsgroup participants post respons-es to other participants, asking them tojoin in the discussions. Some newsgroupsare moderated, which means peoplecalled “moderators” decide what gets post-ed to them. All postings to a moderatedgroup are sent automatically to the mod-erators, who then post only those messages they consider appropriate to the newsgroup.

Listservs are topic-oriented online dis-cussion groups that use e-mail as their primary mode of communication, and havea moderator or host. Messages posted to alistserv are automatically sent to everyonewho is a subscriber. Subscribers can takepart in ongoing discussions, asking ques-tions, answering others’ questions, or sim-ply observing—an acceptable practiceknown as lurking. And, in general, messageboards or bulletin boards are threaded discussions on a Web site.

Newsgroups, listservs and messageboards are best used for gathering marketinformation rather than for actual sales.With newsgroups and listservs, you know

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DangerIn a travel-

related news-group, membersmay ask specific questions aboutEuropean cities. A travel agencycan answer such questionsthoughtfully and then steer read-ers to the company’s Web site formore information. Aim for help-fulness, not self-promotion.Newsgroup “regulars” can smellan overaggressive self-marketer amile away and will ignore you.Make your appearance notewor-thy for genuine, detailed knowl-edge, not for horn-blowing.

Jargon AlertBecause of the

fluid nature of theInternet audience,

most newsgroups and listservshave FAQs. Some are simple;others are quite elaborate andstructured. Find out where theFAQ document is kept, downloadit (or read it online) and learn theanswers to basic newsgroup orlistserv topics. To avoid lookingignorant, always read the FAQbefore contributing.



11.9

at least one strong interest of the peoplewho post messages. But how can youmake use of these groups?● Read the FAQ. Most people in the news-group or listserv will have read these. If youdon’t, you’re likely to post a message thatmakes you look either stupid or insensitiveto the group dynamics. Most FAQs are onlya few pages long—they will give commonabbreviations, background info on the group,identify some legendary posters, and gen-erally orient you to what the group’s about. ● Lurk for a month or two. Get to knowthe terrain. Again, you want to use this fo-rum with the utmost of courtesy.● Wait for a question or comment to whichyou can truly add some good comments.Write a concise posting and mention yourWeb site or e-mail for more information.● Be especially helpful to the opinion lead-ers of the group. Their impressions of your

knowledge and capabilities will influenceall other readers.● Don’t communicate by spamming.Thiswill only alienate recipients and blackenyour virtual eye in future dealings withthe group.

ESTABLISHING A WEB SITE:YOUR VIRTUAL

BUSINESS ADDRESSAn e-mail address gives you the absolute

minimum Internet presence. But the paceof technology is advancing so quickly thatmany small companies are quickly con-cluding that an e-mail address isn’t enough.Web sites are where it’s at.

Your Web site represents your compa-ny’s outpost on the virtual frontier. Everysite has an exclusive address; visitors typethe address into their browser software,press Enter, and they’re transported to your

You type in a topic, and a search engine finds relevant sites on the Web.Some of the best-known search engines are Yahoo!, Google, MSN and AskJeeves. You access them quite simply through your browser window.

Much of what’s initially found is not very helpful, but the various search engines have different ways to help you focus your search to yield better infor-mation. You can, for example, search just the matches to your first search witha second search term. If you’re looking for plastic kites, for example, you mightfind a jillion hits on the word “plastic”; search just those matches for the word“kite” and you’ll get what you’re looking for. Search engines are rapidly growingmore discriminating and useful. Today, there are essentially three types ofsearch engines: Those that are powered by crawlers, or spiders; those that arepowered by human submissions; and those that are a combination of the two.

In general, crawler-based engines send spiders into cyberspace. These spiders visit a Web site, read the information on the site as well as the site’smeta tags—a special HTML tag that provides information about a Web page—and the links that the site connects to. The spider returns all the information toa central depository where data is indexed. The spider will go back to sites regularly to see if information has changed.

Human-powered search engines, on the other hand, rely on humans to submit information that is subsequently indexed and catalogued.

Seek And Ye Shall Find...Eventually

site. People still talk of Web pages, but moreand more the Internet community speaksof Web sites. Originally, Web site address-es tended to be a single page, hence thephrase “Web page.” But it’s becoming in-creasingly rare to see a Web site with a sin-gle page, especially for a company. Manyfirms now have sites with scores of pagesfilled with product information, companynews, electronic catalogs, contact people,pages for soliciting visitor feedback, andmuch more amazing material.

Deciding whether you need a Web site,of course, depends on the type of businessyou have and who your customers are.

Locating And Building Your Web Site

There are two opinions on whether small-business owners should design and createtheir own Web site. Some people say it’s toocomplicated and that any time you spendlearning how to do it just takes you awayfrom your best work: running your business.In other words, stick to your knitting.

The other side maintains that with newWeb site design software (like FrontPageExpress), which is packed with attractivetemplates, it’s relatively easy to get a sim-ple site up and running in just a few hours.

There are also a lot of Web site designcompanies that will build your site online,which means you don’t have to purchasea software package. And there are alsoWeb-hosting companies that offer Web-hosting/Web site building packages. Someleading companies in this space are In-terland, Verio, Affinity Internet and Home-stead Technologies. Basically, if you wanta simple site—a functional presence onthe Web without the frills—then get thesoftware and get to work. If you want

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Some key facts about Web users from the Pew Internet & American LifeProject:

● Percentage of online adults who use the Internet to send e-mail: 92 percent

● Percentage online adults who use a Web search engine to find information: 84 percent

● Percentage of total adults aged 18 to 29 who go online: 72 percent

● Percentage of online adults who use the Internet to buy a product: 67 percent

● Percentage of total adults who go online: 59 percent

● Percentage of total adult women who go online: 58 percent

● Percentage of adults aged 65-plus who go online: 24 percent

Who’s Surfing?

DangerWeb site design-

ers like fancygraphics, but many

Web visitors hate them—becauseeven though many people mayhave high-speed Internet accessthat allows these visuals todownload speedier than ever,they can still take time to down-load. Keep visuals to a minimum:Do you really need a graphic ofyour logo spinning majesticallythrough the rings of Saturn?



11.11

your company’s site to be a full-featuredlocation, then have a designer do the workfor you. Designers are not hard to find, ascreating Web sites is big business. Manysmall advertising agencies and creativeboutiques have found Web site design tobe a profitable market niche. After all,they’ve typically been using computertechnology for years, and they have thedesign skills to make a site visually attractive and marketing-driven.

Look in the Yellow Pages for a list of themany companies that will help you buildyour Web site. Don’t clinch any relationshipwithout looking at sites the developer hascompleted and talking to those clients.Check that you both have the same under-standing of what you’re looking for. If youwant plain vanilla, don’t sign on with a developer with a reputation for buildinghazelnut Oreo crunch.

For locating your Web site, you have twobasic options:1. Host it yourself on a computer that canbe dedicated as a Web server—not as a

personal computer—and has a broadbandInternet connection. This will prove cost-ly to set up and maintain, and if you’re atall successful in using your site for busi-ness, you’ll soon overwhelm your capac-ity. It’s also a good idea to be technolog-ically savvy, have a large amount of timeto allocate for this project, and have

Consider Web Site Don’t Consider Web Site Now

Geographical market Market extends beyond Market is limited to county city or county

Demographic market Your customers or potential Your customers or potential customers are online customers aren’t online in

large numbers

Staff support You can keep your site You can’t keep your site current current

Site content Your business can provide Your business can’t provide timely information of timely information of interestinterest on your Web site on your Web site

You can provide content You can’t provide contentthat will improve on your that will improve on your printed materials printed materials

Web Works?

How ToCosts for Web-site

hosting are very fluid.For example, theEarthLink offers a rangeof Web-site hosting services, from$20 a month to more than $100 amonth for very active sites. Generally, the pricing structure isbased on the amount of spaceyour site will consume on theISP’s server and sometimes onthe number of visitors it receives.

excellent problem-solving skills. This isprobably not a good option.2. Use an ISP that offers Web-hosting serv-ices, or use an ISP along with a separateWeb-hosting provider. This is a good choiceif you’re somewhat comfortable dealingwith Internet issues and won’t need a lot ofhand-holding. Some of the larger, moreservice-oriented ISPs as well as phone, cable and Web-hosting companies provideconsiderable support.

A decision you’ll have to make early onis the address of your Web site. In Web language, you’ll need to decide on your domain name. As you might imagine, everycompany with a Web site would like to useits company name as the site address. Butthere are too many businesses out there.And a few wily and farsighted entrepreneurshave already reserved Web addresses withthe names of the largest companies. Whenthose companies go to book the domainname for myempire.com, they find it’s reserved by some little guy in Pittsburgh.Of course, he will let Myempire Corp. havethe name...for the right price.

If you are looking into establishing aWeb presence, check on the availabilityof a few names you would like to have

for your address. They are going quickly,so check fast. If you can’t get your com-pany name, try for a common product ortool associated with your field (key-pad.com, numbers.com, ohiofinance.comand so on). And keep in mind, .com is nolonger the only ending for domain names.Besides .com, you can use a variety of oth-er extensions, including .net (for compa-nies involved in Internet infrastructure),.org (for nonprofit organizations), .biz (forcommercial and business purposes), .info(for both business and personal sites), aswell as country-specific extensions suchas .us (for US citizens and corporations.)Go to www.internic.net to check on nameavailability, and then check out the list ofregistrars where you can register yourname. Registration prices vary significantlyamong companies, so do your homework.In addition, some registrars offer dis-

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InsightCan you really

make money on theInternet? Yes, if youdo it right. Amazon.com, for example, is one of the largest retailers on the Internet, offeringeverything from health-and-beau-ty aids to books, music, DVDsand more. Its sophisticated Website includes the latest technolo-gy—and very good prices. Onthe peak day of the 2004 holidayseason, Amazon’s worldwide fulfillment network shipped morethan 2 million units. While such asystem is complicated and expen-sive to set up, with it you caneasily sell goods and servicesover the Internet to users world-wide. Think of the potential of 2 million units in one day!

DangerBy hosting your

own site, you’reundertaking a

full-time job. When visitors knockon your virtual door, someonehas to let them in, so you need acomputer connected to the Internet at all times. Taking thisroute can be risky. Instead, youmight want to do what mostbusinesses do—outsource yourWeb hosting.



11.13

counted or free registration services inconnection with other offerings, such asWeb hosting. You can also have your do-main name registered by your ISP, butyou’ll be better off having your own. Ifyou register it, you know what you’ve got.Some unscrupulous ISPs have beenknown to register a client’s domain nameunder their own (the ISP’s) name, and thusthey grabbed ownership.

HOW TO BUILD A WEB PRESENCE

When someone enters your Web site,he or she expects to see something. Whatdo you want it to be? Some Web sites area maze of different connections, leadingto all points of the compass. Other Websites show a disconcerting bareness...notmuch there. And what is there is proud-ly stamped as having been updated threemonths ago!

How can you make a stop at your Website a positive experience? What can yougive your visitor and potential customer?Here are some ideas:● More important than anything else is organization. Don’t make traversing yourWeb site like hiking through Yellowstoneon a moonless night without a map. An-ticipate the visitor’s response to your pagearrangement. Make it easy for the visitor toget the information he or she needs.● At the beginning, place a clear statementof what your company does for a living injust a few words. This will save everyone’stime and hook the person who’s truly look-ing for someone with your capabilities.Make your description benefit-oriented.● Give a listing of your products, with visuals. If your type of business allows youto list prices or price ranges, do it. If youhave a large inventory, list the key productsearly on on the Web site. Let the visitor godeeper into your Web site as he or she ismore interested. But show your basic prod-

ucts early in the visit. Don’t be afraid to usethe Web’s excellent graphics capabili-ties...just avoid overdoing it.● Show your brick-and-mortar locations.Make it clear where you’re located andwhere you have distribution or sales offices. A map is nice, with phone and fax numbers. ● If you can sell through your Web site, allthe better, and most companies offer thiscapability today. For customers to placeorders online, however, you need a so-phisticated understanding of Web dynam-ics and technology. Because of security is-sues, a “click-and-order” system requiressophisticated password and identificationsafeguards. Contact your ISP or Web-host-ing service for information on how to getthat done for you.

If you don’t offer this capability, makesure to list your toll-free or fax order number or e-mail address. And also offer a link to an order form that your customers can download, then print outand fax back you.

● Especially if you’re a small company, usepeople pictures. Give visitors a sense of thepersonality of your company by showingyour senior people and staff. Make themfriendly...not “corporate.”● Offer a list of clients, completed proj-ects or work samples. This is your chanceto trumpet your skills and successes, somake the most of it. If you have some killer

How ToWhat’s a great way

to promote your Website? Make sure to putthe address on all yourprinted marketing materials, includ-ing letterhead and business cards.

case histories, applications stories or testi-monials, don’t hold back. ● Include e-mail capability. In fact, don’tcreate a site without e-mail. Otherwise, you are an online merchant who doesn’tspeak to its customers. Don’t forget to

keep absolutely current with e-mail. Every-one knows how easy it is to respond toe-mail. So if you neglect to do it prompt-ly, the message you send is clear: “Youare not that important to me.”● Keep the information on your Web site

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11.14

The ability to reach millions of people instantly has proved too seductivefor some unscrupulous and shortsighted people. These are the advertiserswho spread spam on the Internet. “Spam” is the Internet term for utterly undif-ferentiated advertising that’s sent to millions of people daily, offering instantriches, high-quality sex talk, lucrative investment opportunities and other suck-ers-only come-ons.

The problem is so prevalent that the Controlling the Assault of Non-SolicitedPornography and Marketing Act (or Can-Spam act of 2003) was passed into lawand went into effect in 2004. The law requires commercial e-mail messages tobe labeled and to include opt-out instructions as well as the sender’s physicaladdress. It also prohibits the use of deceptive subject lines and false headers.

In addition, a growing number of consumers, businesses and ISPs are usingspam-filtering software to eliminate spam. This technology uses algorithms todetermine whether incoming messages qualify as junk e-mail and filters themout before they get to an end-user’s inbox.

But the problem still exists. A 2004 study from research firm IDC found thatspam represented one-third of e-mail traffic in 2003, and three-quarters of ITexecutives polled said they expect the problem to worsen by 2006.

Spammers don’t realize (or don’t care about) the appalling contempt inwhich they’re held and with which they affect the entire Internet marketing community. Be forewarned that many Web denizens have grown hypersensi-tive about spam, and they won’t hesitate to “flame” you (send you a nasty, angry e-mail) if they feel you’ve spammed them.

You can avoid this practice by being sensitive. When doing a targeted, differentiated mailing, make clear you’ve selected them for the mailing for aparticular reason—that you’re not just blanketing the Web with your offer. Youmay still get blasted occasionally, but it will be the exception, not the rule.

Also, check with your ISP to make sure they won’t block your e-mail via theirspam filters. What do these filters look for? Use of large or colored fonts andALL CAPS; use of words such as “free,” “special,” or “click here”; language in asubject line that says something like “urgent assistance needed”; and incorrector dated date stamps. Some ISPs will also block based on volume. If they seean IP address that is blasting a bunch of e-mail messages, they may block it orshut it down to investigate. The message won’t get to anyone on the list, andyou might not find out for days.

Food For Thought



11.15

fresh. You’ve got to change things oftenjust to keep up visitor interest. Many Websites carry a small indicator of when theywere last revised. The better Web sites usethis technique to prove that they’re up todate. Web surfers have no patience for oldinformation.● Depending on your market, make yoursite fun to visit. Use clever graphics. Writeengaging page headings. Internet users enjoy an entertaining Web site.

As your Web site is nearing completion,make sure you register its name and ad-dress with the various search engines. Sincemost Web site visitors first find a site bysearching for a keyword, you want to makesure you register your site under as manyapplicable keywords as possible. Whatwords might a prospective customer ofyours be looking for on the Web?

The best way to accomplish this is to register individually with the search enginesof your choice. They are easy to find on theWeb. The most popular ones today are Yahoo!, Google, MSN and Ask Jeeves. Youmight also want to try a Web tool like Traf-ficBoost.com, which submits your Web siteaddress to more than 500 search enginesfor a modest fee. Keep in mind that manysmall businesses today are also doing thingslike buying words on search engines tomake sure their Web site is part of the results of a user’s query.

RSS TechnologyA new, more intrusive technology is

making the Web even more useful. Called“RSS’ or “Really Simple Syndication” or“Rich Site Summary,” it’s a kind of “pe-sudo-push technology” that enables youto use your Web presence as a “channel”to send information to “subscribers” orstaffers at times when their computersaren’t in use. It’s similar to a TV. Whenyour TV is turned on, whatever is on thatchannel is being pushed onto your screen.

With RSS, however, you get to determinewhat information—or feeds— from whichchannels you’d like to receive. New ma-terial can be broadcast every 30 minutesor so, depending on the feed, what pa-rameters the author has set, and whetherthe computer is on.

Many blogs are able to push data or information from their database into anRSS news feed. Most RSS news feeds aredownloaded into stand-alone newsread-ers or through Web sites that convert single or multiple RSS feeds for viewingon the Web.

Businesses can use the RSS/blog combi-nation in many ways. A popular applica-tion is project management, where you andyour colleagues can use blogs and RSS toeasily track and organize all aspects of aproject in one place.

For example, a team of engineers with-in a company working on a project may

How ToEven if people

don’t leave you an e-mail or sign yourguest book, you canlearn a few things aboutthem...automatically. Your Webdeveloper can include a visitorlog in your site software. Thiswill give you visitor counts,time they spent at your site,which parts of your site theyvisited and in what sequence,and from where they came toyou. Use this valuable informa-tion to refine your site, to increase your visibility on thosesites that send you the most visitors, and to track the resultsof each change.

post the status of their work on a blog orWeb site. Then, all the team members caneasily go to a newsreader or to an IntranetWeb site and pull up the RSS news feedswith all the project information.

Project members can coordinate sched-ules, keep up to date while out of the office, track internal deadlines, commu-nicate with contractors and consultants,and share knowledge from workshops. Inshort, it enables people to do information-sharing without having to send thousandsof e-mails to everyone.

Web AdvertisingWhat’s the best way to advertise your

Web site on the Internet today? Handsdown, it’s search engine marketing, whereyou market your Web site via search engines, whether by improving its rank inlistings or purchasing paid listings.

Improving your listing rank involves ensuring that your Web pages are opti-mized to attract as many visitors as pos-sible, such as making sure each of yourpage titles is designed to match a specif-ic search query. Getting your listings in thetop-10 search results can be a full-time job,but it can be rewarding.

Paid listings are also very popular. Thereare two types of paid listings programs: paidplacement and paid-inclusion programs.

Most major search engines carry paid-

placement listings, where advertisers areguaranteed a high ranking. These listingsare usually separated from editorial resultsand labeled to show that they are ads.

In paid inclusion, you pay a fee to haveyour Web pages included in a search engine’s editorial listings. However, it does-n’t mean that you will be ranked tops in theeditorial results.

Affiliate Marketing ProgramsAnother form of Web marketing that’s

popular today is affiliate marketing. Manysmall companies participate in affiliatemarketing programs, where they sell other companies products and services for commissions.

Here’s how affiliate marketing programswork: An affiliate partners with an onlinemerchant. When you join that merchant’saffiliate program, you can put their linkson your site. These links come in the formof banners, text, and a number of other,more sophisticated types of links. TheHTML code for these links is supplied bythe merchants. Then, if a visitor clicks on

Chapter 11

The Internet

11.16

How ToWant to learn more

about search engine marketing? Check out

SearchEngineWatch(www.searchenginewatch.com), a great source for news and how-to information about search-engine marketing.

How ToWant to break into

affiliate marketing?You may want to con-sider joining an affiliateprogram network, which providesall the tools and services youneed to create and manage affili-ate-marketing programs. Sites thatoffer the best programs are Link-Share (www.linkshare.com), Per-formics (www.performics.com),and Commission Junction(www.cj.com). If you are an affili-ate, not a merchant, you can jointhese networks for free.



11.17

the links and buys something, you receivea commission. Commissions vary from 2.5to 15 percent at the low end, and up to50 percent at the high end.

Affiliate marketing programs are a greatway to make your site more valuable to vis-

itors because you are offering goods andservices that are likely to interest them. Inaddition, you can earn extra revenue fromyour site through partnerships with mer-chants that compensate you for the traffic,leads and sales you send them.

It’s easy, in the throes of business,to look at customer service as an after-thought...the mint on the pil-low, the “inspected by #1442” slip ofpaper in our new slacks.We all liketo assume that our “deliverable”—our physical product or service aslisted on the invoice—is what willgain and keep our customers. Peo-ple pay us for our product, after all,and whatever shortcomings mightsurface in how we provide it...well,we’ll be forgiven, won’t we?

Not for long, we won’t. An occasional lapse can be worked out,

but the competition has raised the bar incustomer service. Buyers of all sorts haverisen from their comas of contentment todemand more, demand better and demandfaster. The old ways don’t cut the mustardanymore. Unless you market a unique prod-uct with an absolutelyamazing customerbenefit, you’ve gotto please customersin every way you can.With the product, ofcourse. But beyondthe product as well.

Our society as a whole—not to mention thebusiness-to-business mar-ketplace—looks for moreand more service. Nakedproducts without the warmfuzzies of service just aren’t

enough. As a small-business person, thismeans five things to you:1. Pure service businesses represent a boomindustry. Our economy’s health and soci-ety’s wealth mean more of us can affordservices. The money is there, and peopleare going to spend it on something. So wehave gardeners and masseurs, private shop-pers and housecleaners, personal trainersand private accountants, carryout gourmetfoods and Fabergé by mail. These job slotshave long existed for royalty, of course. Butour culture’s success has made them af-fordable for those of us not wearing crownsor bearing scepters. Oursociety has a serviceframe of mind.We expect more.



12.1

Chapter 12

Customer Service: TheSoft Underbelly Of Marketing

2. Even product-based businesses have be-come more dependent on their servicecomponent.The pace of business quickenseach day. The rate of technological changeraises the heart rates of customer and man-ufacturer alike. Competitive product ad-vantages fade faster. Information can’t becaged—it just flows through the bars—andwhat makes news in the morning is stale inthe afternoon. Certainly making a buck hasalways been challenging, but technologyand heightened service expectations suremake us sweat more for each greenback.People want more. Stuff is good; stuff withgood service is even better. When it comesto burgers, you’re told, you possess thebirthright to “Have it your way.”3. Well-delivered service—above and beyond the level expected—can provide youa competitive advantage. Rather than seeservice demands as just another businessburden, look at them as one more chance

to pack additional perceived value into yourproduct. More perceived value means sat-isfied customers...and the opportunity tocharge higher prices.4. A company that delivers good service toits customers generally has a happy, satis-fied workforce.People like giving good serv-ice, especially if they can see that the com-pany elders support their efforts and trainthem in how best to provide the service.5. Small businesses like yours have a built-in service edge. As a small business, you aregenerally locally based, know your customerspersonally, know the local market conditionsand preferences and have a certain amountof “buy from someone you know” loyalty.For many products and services, these ad-vantages are difficult for a large companyto overcome. Don’t underestimate the loy-alty of hometown customers. But don’t over-estimate it either. Lackadaisical service willdrive your customers right into the arms ofthe big boys. Ask the small store owners whofelt small-town fidelity would let them beatbig bad Sam Walton.

We’ve seen that marketing is all aboutfocusing yourself on the mind of the cus-

Chapter 12

Customer Service

12.2

InsightThe mail order

industry thrives be-cause of its service.

Luxurious catalogs, a broad arrayof products, targeted mailing lists,rock-solid guarantees and inex-pensive overnight shipping makefor a customer’s dream buying environment. You see the prettypicture this afternoon; you holdthe product in your hand tomor-row. Talk about instant gratifica-tion! Once the mail order businessovercame the natural skepticismof people buying things throughthe mail, they had a multi-billion-dollar industry on their hands. Butthey never could have succeededwithout die-hard, satisfaction-guaranteed customer service.

Jargon AlertCustomer

service is a com-mitment of all employees in a company tomake being a customer a com-pletely positive experience, onethat every customer will want toexperience time and time again.Nothing is more important thanpleasing the customer in expect-ed and unexpected ways. Everybusiness benefits from a strongcustomer service program. Eventhe IRS is thinking about it.



12.3

tomer as you establish and run your busi-ness: As you decide on products, set upproduct distribution and pricing, determineyour advertising and so on. It’s no differentwith customer service. The key to good cus-tomer service is keen customer orientation.

The fact is, you’re delivering customerservice whether you know it or not. Youcan’t avoid delivering it. The question is:What kind of service are your customersnow getting?

Sometimes it’s easy to let the runningof your business get in the way of howyou take care of your customers. Everybusiness needs procedures to operate ona day-to-day basis. This gives your busi-ness continuity, helping new people getup to speed quickly. It’s how any busi-ness learns from its past. But those pro-cedures—the inherited company wis-dom—can block customer service.

I’ve never seen a manufacturing oper-ation, for example, without a healthy (orsometimes destructive) tension betweenproduction and sales. The sales staff makea living selling, and they will go to anylengths to make the customer happy. Theircompensation depends on it. So sometimesmaking the sale means stretching the production capability or canceling fun-damental laws of space and time. “Theygotta have it by the 14th!”

The production people, on the otherhand, must make the stuff. They have rawmaterials and manufacturing equipment to

worry about. Not to mention quality con-trol. They want to slow things down a bitto make sure the product that ships is justright. No product before its time. “We can’tdeliver by the 14th!”

This tension can lead to timeline dis-honesty. The salesperson surreptitiouslybuilds a “fudge factor” into his commit-ment to the customer. No one at the plantknows about it. Of course, the productionpeople have their own secret fudge factor, which gives them a little safety mar-gin and allows them to look good by often delivering ahead of schedule. Aftera while, the whole function of schedulebreaks down, and no one knows howlong things take and when customers really need delivery.

Small businesses especially must put thecustomer ahead of procedures. Give yourstaff the discretion to make decisions to gooutside procedures for customers. Workwith your sales crew on being honest withdates—and to let you know when they really, really gotta get something quick.

InsightOne of the ways

restaurant ownersjudge their man-agers is how well and decisivelythey handle customer com-plaints—how well they can be afixer. The good manager actsquickly and aggressively to resolve issues, especially sincethe conversation normally takesplace surrounded by other diners.A badly prepared entree can be salvaged by genuine concern andprompt professional action. Stuffhappens; good practice teachesyou how to handle it adroitly.

InsightEvery one of your

employees has a direct or indirect

impact on your customers. If theydon’t, why are you paying them?

ALL CUSTOMER SERVICE IS PERSONAL

There’s an irony at the core of customerservice. At its heart, service has nothing todo with business. It’s about people and theway we feel about each other. When every-thing is said and done, we are all in this lifetogether. Forget the commercial businessside of things for a moment. Whatever weare doing, we feel genuinely appreciativewhen someone does a little something forus that they don’t have to do: opening adoor for us when our arms are full, help-ing guide us into a tight parking space, let-ting us into a long line of traffic.

Now bring it back to the business realm.Think of how warmly you appreciated itwhen someone went the extra mile for youwhen he or she didn’t have to. Wouldn’t itbe nice if we did things for the customerthat we didn’t contract to do? Providing customer service is good for business andgood for the soul.

I once had a printer working on Christ-mas Eve to finish up some desperately

needed restaurant menus. He didn’t haveto do that. I wouldn’t have blamed him ifhe’d said we’d have to wait until the 26th.But he gave me a few hours on ChristmasEve above and beyond the call of duty,which made me both personally gratefuland a longtime future customer. I turnedmy sense of obligation into future business.

One good current example of the con-flict between business efficiency and goodcustomer service is the growing use of so-phisticated voice-mail systems. Proponentsof these systems maintain that they providecompanies a way to guide customers di-rectly to the information they need, not tomention the fact that they save payroll byautomating the function.

But navigating these voice-mail systemsmakes for a bleak and annoying journey—endless prompts, long and unbroken instructions, layers upon layers of systemarchitecture. Older customers often justhang up: They’ve learned to deal with answering machines, but these new systemsjust drive up their blood pressure. I think

Chapter 12

Customer Service

12.4

You probably have some form letters you use in your business: brief notesthat accompany standard requests for literature, cover sheets for standard pro-posals, responses to job applications, answers to requests for charitable fund-ing. These are all customer service-related issues, broadly defined. We’ve allreceived form letters in response to questions we’ve asked of a company. Youknow how eerily impersonal they feel: filled with abstractions, passive voices,bureaucratic speak—totally bloodless.

Have your form letters and major public communications written by someonewith a soul. If you have someone on staff who can do this, great. If not, draft thematerials and have a real writer give them the once over. They should be hu-man and conversational, fostering a face-to-face feel. Make it personal. Eventhe simplest of notes or letters gives you an opportunity to make an impressionon your customer. Be certain it’s the right impression. It should fit the personalityof your company and leave your customer with a sense of the personal side ofyour business. The same applies to any equipment instructions and other prod-uct support literature. All customer service—even the written word—is personal.

One More Time—With Feeling

12.5

these automated voice-mail systems some-times provide companies a way to econo-mize on customer service, not to providebetter service. Don’t let your voice-mail sys-tem get between you and your customers.Limit the layers of messages and simplifythe system for your customers. Remember,they want to talk to you.

DEALING WITH HOSTILE CUSTOMERS

Complaints are an opportunity for fine-tuning your operation. Look at a complaintlike an objection in a sales presentation. Ora brutal, one-person survey. It’s bound tohappen. Your best efforts at product de-livery and customer service have come upshort and you’ve got an angry customer onyour hands. How do you handle it? ● Acknowledge your mistake. Don’t blameit on the computer, those slacker branch of-fice people or the customer’s lack of under-standing of your requirements. If it’s a gen-uine error on your part, just confess it andmove on to the next step in the process.● Admit the serious implications of yourmistake for the customer. You have to empathize with your customer. For you, it’sanother business transaction. For the cus-tomer, your blunder can range from a mi-nor inconvenience to a major trauma. Inquiregingerly about the implications of the prob-lem. Try to get a feel for the actual impact.● Ask how you can make things right forthis particular transaction. Do you give anew product? Do you redo the service? Doyou discount your price? Do you performyour service gratis? Your response dependson a range of factors, including just whatyour product is. But make this decision aspart of your effort to retain the relationship,not just to put out a fire. ● Learn how you can repair the relation-ship. Once you have worked out the de-tails of remedying the particular transaction,move directly to the next step. “How can

we make things right with you overall?” youmight ask, or “How can we restore our re-lationship to where it was before this prob-lem surfaced?” Think big picture here: Youshould be willing to invest something in re-taining the relationship, especially if it’s along-term customer for whom you’vebotched a transaction.

Although the customer is “always right,”sometimes it doesn’t matter. We’ve all runinto customers for whom the “hassle perdollar” ratio proves just too high, the rela-tionship just too painful—financially andemotionally. Sometimes you have to makethe hard decision that a given customer mustbe let go. Several factors may lead to this:● The dollar losses you take in meeting thecustomer’s demands are too high. ● The person’s requests throw your oper-ations into internal scheduling turmoil. ● Your negative personal interactions havesimply become too uncomfortable.● You’ve changed the nature of your busi-ness and you’re no longer servicing thattype of customer.● The customer has ongoing financial orcredit problems.



InsightBesides your

customers them-selves, who knowsyour customers best? Your employ-ees. They have the face-to-facecontact, they’ve built the relation-ships, they know how customersuse your product, and they hearabout it when things go awry. Askyour employees how you can improve service to the customer.How about a service suggestionbox, or a customer-service surveyfor employees to fill out?

Don’t come to this decision brashly,but—once you decide—act immediately.Most experts suggest making the break inperson rather than in writing or over thephone. This is a good time to “shade thetruth”: Couch your decision in the most gen-eral and nonconfrontational terms. Talkabout how the goals of your two compa-nies just don’t seem to be compatible, nomatter how hard you work at meeting theirneeds. You can mention that you’ve seenthat this customer just hasn’t been happywith the type of work your company does,and that you’ve come to believe that onlya different type of company can meet hisor her needs. You get the idea.

Be politic and polite. Don’t burn anybridges, and don’t give in to the temptationto get all your feelings off your chest. It willnot do you any good, and it may indeedcause you commercial harm—you don’tknow who your customer knows.

FIRST-CLASS SERVICE MEANS REPEAT BUSINESS

Let’s look at five key reasons why youneed to consider superior customer serviceas a “prime directive” for your business:1. Good service keeps customers. We allknow that it’s easier to grow business fromexisting customers than to prospect and winnew ones. Few businesses can stay afloathaving to bring in a constant stream of newbusiness to replace lost business.2. Good service builds word-of-mouth business. You can’t buy referral business—except by providing memorable customerservice. You can be sure your customerstalk about you with their friends and col-leagues. What do they say?3. Good service can help you overcomecompetitive disadvantages. This is espe-cially true against larger companies. Youmay not have the same capital resources orresearch capabilities, but your smile is justas bright and you can work just as hard.

4. Good service is easier than many partsof your business. Developing innovativeproducts, moving into new territories,prospecting new markets…this kind of hardwork can be very demanding on a smallbusiness and its managers. Compared to thiskind of heavy lifting, solid customer serv-ice—given the right point of view—is real-ly quite simple. It’s just a matter of makingsure you and all your employees “get it.”5. Good service helps you work more efficiently. Make sure you extend your goodservice pledge to your internal customersas well. Any organization with more thanone person has internal customers. You’vegot to ensure that your people inside thecompany treat one another with a serviceorientation. This will make your internal in-teractions proceed more smoothly, and itwill lead to even better service for your ex-ternal customers.

For many of the items we buy in our lives,we’re willing to pay more for customer serv-ice. Take the differences in hotels. When we

Chapter 12

Customer Service

12.6

InsightSome industries

thrive on customerservice. Think ofthe salon business. Most of us,male or female, could probablygo to the local Speedy Snip fran-chise for a simple, inexpensivehair trim. But instead we spendmuch more to go to salons,where—with a little extra atmos-phere, special products withFrench names and more stylishstylists—we get fundamentallythe same operation performed.Most of us are more than willingto pay for service. It just feelsgood. It provides value, evenwhen it’s largely psychological.



12.7

book a hotel, we are basically looking fora clean place to spend the night. Many ho-tels and motels provide just that for an eco-nomical price. But the range of hotel ratesin any sizable city is enormous. Why? Be-cause different people want different levelsof service. Upscale hotel rates are notoriouslyinelastic (raising the price doesn’t cut the de-mand) because, with enough wealthy peo-ple around, there’s no upper limit for hotelrates—provided you deliver a thick andgooey layer of plush services.

SPOT-CHECK YOUR SERVICELarge retail businesses and franchise

operations have long used outsiders tocheck on the level of service quality theircustomers are actually receiving. It’s onething to give employees a 20-minute pres-entation on how “the customer is the onewho signs all our paychecks,” but gettinginto the trenches and seeing the way cus-tomers are actually treated is something else.

Depending on your business, you cando this in several ways:● Use secret shoppers. Contract with a tem-porary agency to have outsiders “shop” yourbusiness and fill out reports on what theyfind. No single report will reveal any hid-den secrets, but a number of reports overtime will show you what your customerservice is really like, no matter what man-agers and staff may tell you. ● Establish a regular service evaluationwith your customers. Meet with your “reg-ulars.” You’re just taking the temperature ofthe relationship and looking for areas inwhich there remain unfulfilled, maybe evenas yet unperceived, avenues for providing superior customer service. Ask customers to“blue sky” it: What dream services could youprovide?● Conduct a detailed study of the way youprovide a product or service to your customer. Put on your marketing cap. Create a flowchart highlighting each step

in the sales and delivery process. How doyou make the sales presentation? How doyou establish pricing and terms? When doesthe customer make the buying decision?When are delivery options established anddecisions made? Where in the process canyou make customer-friendly alterations?(See the “Sample Service Plan For An In-terior Designer” on page 12.8.)

SETTING SERVICE STANDARDSWe can characterize service by the old-

fashioned American concept of “hustle.” Itmeans moving fast or thinking hard for yourcustomers, even when they don’t expectyou to. In setting your company on the cus-tomer service track, however, you’ll needto be more specific when you talk to yourpeople. They’ll want to know specifics onwhat you expect them to do.

Service standards are measures againstwhich we match our actual performance.

DangerDon’t make

your service efforts too trans-parent. Kmart used to have stick-ers attached to its cash registerswith the letters TYFSAK. This wasto remind the cashiers to say tothe customer: “Thank you forshopping at Kmart.” There’snothing wrong with the senti-ment, but why have the sticker inclear view of the customer? Ittakes away the genuineness ofthe words. How many times haveyou seen an Employee of theMonth plaque that’s more thansix months out of date? It sends amessage about customer serviceall right, but not the one thebusiness intends!

Chapter 12

Customer Service

12.8

How do I get business?

● Initial contact1. They call:

● responding to an ad.● responding to a referral.● responding to a mailing.

2. I hear they’re looking, and I call them.

● First meeting1. I come to understand their needs.2. I explain how we do business. (I need to update my handout on business procedures to include business bio, customer list and so on. I should also do a frequently asked questions sheet to make customers feel more comfortable.)

● Response with a proposal or pricing estimate:1. spells out pricing. (Can I create a rough pricing sheet, with sample prices fortypical projects?)2. spells out scope of project.

● I get the go-ahead on the project. (I should draft a general “Thanks for giving me the business” note to send to clients on project start-up.)

● I produce a draft design plan for the project. (Can I make a small ride-along sheet that explains how they can best give me their input on the first draft plan—maybegive some examples of helpful and not-so-helpful comments?)

● I produce a second and third draft. (Some clients have been surprised at how much billing can happen between first draft and final plan. Maybe I should give aninterim billing report after the first draft and with each subsequent draft.)

● I produce final plan.

● We begin work on the project. (How about a little flier that lets customers know what type of disruption they can expect as we do our work? I can fill in spots for howmany days and how many hours a day.)

● We finish the project, and I bill for the work. (How much detail should I offer in my bills? I’ll contact my last 12 clients and get their reaction to the format of myinvoices.)

● I send a thank-you note, expressing my appreciation for the business and asking them to refer me to friends and acquaintances.

Sample Service Plan For An Interior Designer



12.9

They’re like a salesperson’s sales goal or thetraffic cop’s ticket quota. You want your peo-ple to understand what you want them todo and how often you want them to do it. ● Spell out your service policy. Give a gen-eral statement of commitment, say how youwant customers to be treated and why, anddescribe how employees will be evaluatedregarding service.● If your business allows you to establishmeasurable criteria (number of phone callsper hour, length of time spent with a client,number of orders through a station and soon), then set them. These measures can helpquality, but they can also hurt. Don’t let ef-forts to “make the numbers” turn into cus-tomer-busting behavior.● Specify actions you want employees totake in response to customers. At the localBarnes & Noble superstore, if you ask a staffmember where you might find a particularbook, he or she is trained to actually take

you there, not just point the way. Do youwant your employees to greet customerswith a specific phrase? Do you want youremployees to wear a particular type of cloth-ing? If someone calls accounting with aquestion about a bill, what steps do youwant your employee to follow in zeroing inon the problem and then resolving it?● Your service standards will get more notice if you reward employees who exceedthem. Is there a way customers can play arole in recognizing good service? Can theyfill out an “I was well treated” card?

If you have a business-to-business clientor a distributor, remember that the pur-chasing agent isn’t your customer. Youhave lots of other people who deal withyour product. Is there a way you can im-prove the logistical details of your prod-uct: packaging, palletizing, shrink-wrap-ping, invoicing and so on?

In a business-to-business situation, doyour employees know who your customers really are? Do they know howyour products are used? Some manufac-turers take key employees on tours ofclient factories to show them how theproducts they work to produce are actu-ally used by their customers. It can be aneye-opening experience.

DangerYou don’t have

to be in businessvery long to recog-nize there are countless ways tolose customers. Don’t add yourown insensitive service to the list.Customer service that isn’t a toppriority is bad customer service.The more competitive your mar-ketplace, the more important yourlevel of everyday service.

InsightPay attention to

the services you runacross as you live

your life. Can you translate theminto similar services your businessmight provide? One piano tuner Iknow always books the next ap-pointment—even though it maybe four to six months away—before he leaves a tuning. He’slocking in business rather thanleaving it to chance. Can you usea “prebooking technique”? Thesalesman who sold me my carknows exactly how old it is, andhe sends me a “Hi, how are ya?”card every year or so. As the carages, the frequency of the cardsincreases. Would this same timedapproach work for your product?

How would you feel if one of yourkey customers asked you to share withhim or her your thoughts on devel-oping a well-trained workforce?

How loud would that gulp be?

TRAIN FOR GOOD SERVICE

Training is a sore point for most smallbusinesses, especially new ones, for obvi-ous reasons:● Training takes time.● Training takes money.● Training takes mental energy.

And we all know that owners andmanagers of small businesses, at theend of the day, have little left of time,money or mental energy. Entrepre-neurs often feel that training can waituntil the company is more estab-lished, when it has a little extra timeand money to spare. Many small-business owners resemble subsis-tence farmers—you make enoughto feed the family and pay thefarmhands, and maybe you

earn enough extra to repair the tractorevery few years, but you don’t have muchleft for opera tickets.

If you’ve started your own business,chances are you feel you don’t need a train-ing program. After all, you make the rulesand procedures. You or one of your trust-ed lieutenants may well have done most ofthe hiring. What’s wrong with good, old-fashioned on-the-job training? What’s all thehubbub, especially about formalized train-ing? That might work in the state and fed-eral government, because those people

don’t work very hard anyway, right? It’salso fine for large, successful, well-

heeled companies—but wedon’t have that kind of luxu-

ry around here.You must come to view

training as an integral part ofyour marketing vision. Ifyou’ve worked hard to alignevery part of your companywith the needs and desiresof the customer, you mustfollow through by commu-



13.1

Chapter 13

Stay Strong Through Training

nicating that to everyone in your company.Training will get all your people on the samepage in dealing with marketing vision.

There’s another reason, too. You can’tmarket in a knowledge vacuum. You’ve gotto keep up with what’s happening in yourindustry. Your competitors certainly are.Training makes you more marketable.

For small businesses, training can be crit-ical to survival. It’s important for many com-pelling reasons:● Most vitally, it ensures the consistent de-livery of quality service. This is the lifebloodof your company. You can’t deliver serviceif your people don’t know what they’resupposed to be doing.● It acclimates new hires to the companyrules and guidelines.● It provides customers with an added confidence in your viability as a long-termsupplier who’ll grow with them. Withouttraining, you’re shooting from the hip, andyou won’t last long running your businesslike that.● It allows you to get the most out of yourcurrent staff. In a small business, this assumes large importance. You can hireextra people, but you’ll be ahead financially

if you can cross-train a small staff to do several different jobs.● It draws and retains better people.Highachievers recognize the value of workplacetraining and learning. They want to bein a place where they can better their abil-ities. When you invest in building your employees’ skills, they’re willing to investthemselves in building your company.● It lets your company and your peopletake advantage of changing conditions.That’s a lot better than reacting passively tochanges in markets, production techniques,technology, regulatory issues and so on.● It gives you the chance to inoculate every-one with your marketing vision. No one inyour organization can afford to be market-ing-ignorant.● It aligns your operation with the trendtoward business decentralization. With flex-time, independent contractor arrangements,virtual offices and job sharing, independ-ent thinkers make businesses go. You wantstrong-minded people who have the con-fidence to use their good judgment to makewise decisions. You can’t make all the de-cisions for your company.

Another way to look at training: If youcould increase the production on a machineby 5 percent, you wouldn’t hesitate to doit, right? But a good training course canboost individual efficiency by 15 percent to25 percent. Don’t think of your employ-ees as flat-line producers who will turn outwork products at the same rate forever. Youare selling them short. Give them some ex-perience, some training and the right man-agement support, and they will surpriseyou. The productivity of workers canchange dramatically with good training.

Training represents the wave of the fu-ture. It doesn’t take a card-carrying futur-ist to predict that our economy will becomeincreasingly more high-tech and knowledge-based. Germany’s legendary manufacturingand engineering expertise relies on a long-

Chapter 13


13.2

Jargon AlertCross-training is

giving an employ-ee the core skills to

handle a position other than hisor her regular job. This helpsyour company deal with unex-pected departures, illnesses andemployee leaves. It also keepsthe cross-trained employeesfresh: They’re not likely to getstale in their regular jobs ifthey’re exposed to the responsi-bilities of other positions.



13.3

established program of apprenticeships andtraining regimens.

Jobs that require little skill or training willoffer little promise in our society. Many suchjobs in manufacturing have already movedto the Far East or the Third World. Unlessyou want to position yourself as a low-costsupplier of a commodity product, you needto train your people to provide value andmore service to your customer.

TWO KINDS OF TRAININGThere are really two types of training,

both of which you’ll need to harmonizewith the lifestyle of your company: 1. Training that integrates new hires intoyour current system. Each new employeeneeds to know what he or she is supposedto do for you. 2. Training to expand or refresh the skillsof your employees.

If you don’t train your people carefully,how do you expect them to act any differ-ently than they did at their previous job?Every business has its own procedures. Youneed to systematically show your new hireshow to work smoothly in their new envi-ronment, with new processes and workrules and to help your long-term employ-ees continue to develop their skills.

Training New HiresYou can smooth the arrival of new

employees by developing a regular train-ing process—with written documentation—that pairs a new hire with an existing work-er in the same or similar slot. Smallcompanies aren’t typically able to field a“training department” or “training special-ist.” If you don’t have detailed job descrip-tions, write them today. You can’t run anorganized company without job descrip-tions, no matter how inaccurate they mayseem at the time. You need job descriptionsto do the following:● Create a salary structure● Hire the right person● Reward your staff for performing theirjobs well ● Protect against lawsuits by employeesyou’ve fired● Structure your overall training program● Decide when training is done

You want to tie all your training efforts—both for new hires and for existing em-ployees—to end results. The current ter-minology for this is CBT, competency-basedtraining. People are finished with their train-ing when they possess the skills you’re outto teach them. You’re not interested inwhether someone has taken a high school

Several years ago as I was upgrading my computer system, I was re-searching the best way to increase my efficiency at the computer. Should I gowith a massive amount of RAM, faster chip, larger hard drive, more diskcaching? Then I read an article that made an impression. It simply stated that,if you made your living as a writer (which I do), the single thing you can do to maximize your efficiency is learning to touch type well. I thought that madesense. And so I did, increasing my speed by 150 percent. And it’s paid off inmuch greater productivity in both writing and editing. In this case, a little training gave me a skill that yielded much greater dividends than the slight increase available through a technofix. A solid training program often yieldsmore than additional technology.

More Power?

or college course on a topic; you just wantto know, Can they do it?

Because the development of training canbe a controversial topic within a company,businesspeople tend to concentrate a lot ofenergy on describing what should go intotraining and relatively little effort on meas-uring what training is supposed to accom-plish. What does successful training looklike? What’s the difference in a given work-er before and after the training?

Think of a word-processing position. Itwould be reasonable for you to expect agraduate of word processing training to:● Know basic computer skills: turning iton, saving and deleting files, organizing directories and so on● Be fluent in English (or other necessarylanguage)● Be able to use a word processor skill-fully, using basic editing commands, pagi-nation, document merging, headers/footersand so on● Be familiar with computer spelling check-ers and know their weaknesses● Possess good grammar skills to keepcompany correspondence on a literate busi-ness level● Type at 75 words per minute● Be organized enough to work with anumber of documents at one time andmerge them into a single report

● Be able to handle basic graphs, tablesand figures

You don’t care where your word-proces-sor person learns these skills. You’re not in-terested in whether he or she has ever tak-en a training course. You only want toknow that he or she has the skills. Once theperson has the skills, he or she has com-pleted the training.

When you are establishing a trainingscheme, base it on job descriptions. Whatskills does a given job require? Which ofthose skills can you quantify or measure?Many job skills can be “counted” in someaspect: in manufacturing, phone sales, main-tenance and equipment repair, to name justa few. The more you are able to attachnumbers to jobs, the more clear-cut can beyour performance expectations.

Develop Your EmployeesDon’t waste your time reinventing the

wheel. Unless your business is trulyunique (and no business is), owners ofbusinesses like yours have wrestled withthe identical problems you are facing.Many have solved them and moved on toa higher level of success. This is especiallytrue of employee training. Look to yournoncompetitive peers in business. Howhave they used training to move theircompanies ahead?

Chapter 13


13.4

Jargon AlertPeople who do

training or whohelp new hires

work themselves into the flow ofyour company’s work have a variety of names, depending onthe latest hot business book. Youcan call them mentors, job coaches or trainers.

How ToWhen you send

someone off to training, have themconduct a lunch-hour recap of the training session forpeople whose jobs can benefitfrom it. Why not pass around theknowledge and skills at a fractionof the price?

13.5

There are likely many different types oftraining courses that can benefit you andyour employees:● Your national, regional and state tradeassociations most likely offer seminars orshort courses at major trade shows. This isa chance to learn at the hands of very ex-perienced professionals in your field.There’s no substitute for listening to some-one who’s been where you’re trying to go.Such presentations by trade associations canbe astonishing shortcuts to gaining businessskills. Some also offer remarkably detailedcorrespondence courses in technical issues.

For example, the Credit Union Nation-al Association (to which almost all worldcredit unions belong) offers a wide rangeof courses at different sites in the UnitedStates for credit union managers and staffto become certified and increase their pro-fessionalism. They support this with ex-tensive manuals, videotape training andhome training opportunities as well. Overa hundred courses for all levels of tellers,supervisors and senior managers give stan-dardized and highly professional training.It increases the professional image of thecredit unions themselves, and the certifi-cation it brings provides a good person-al and financial incentive for the individ-uals. It’s win-win. Many industries haveprograms like this.

● Your state government and the federalgovernment offer courses on selling to thegovernment, dealing with internationalsales and a host of similar issues. You canfind out about these courses through yourState Department of Commerce.● Universities and university extensionsoffer more and more courses of great interest to the business community. Manyof these courses take place in the eveningsto simplify life for employed registrants.They’re an excellent way to enhance skillsand knowledge. Consider reimbursing tuition when your employees take cours-es relevant to your workplace.● With corporate downsizing a fact of lifein American businesses, there exist manysmall training businesses run by high-lev-el professionals with big-company back-grounds. Such companies or consultinggroups offer many useful programs: team-building, quality improvement, internal com-munications, workgroup development andso on. They’ll come to your workplace andpresent seminars or act as facilitators forworkgroups dealing with your company’sparticular issues. Look in your local YellowPages or talk to other businesspeople inyour area for some recommendations. Tobe assured of a top-quality training experi-ence, never hire such a company withoutspeaking to references.● Your salespeople and key managers willlikely benefit from a public-speaking course,such as those run by Dale Carnegie Train-ing or Toastmasters. Such skills boost self-esteem, increase presentation confidenceand can yield you a dramatic return on yourinvestment. Every company can benefitfrom a polished, forceful and eloquent pre-senter who is unafraid to talk about his orher company in front of a crowd.

How else can you encourage your employees to learn? Maintain a well-stocked library of relevant business books,and encourage employees to read them.



InsightIf you have an

internal newsletter,have it play a role as

a training vehicle: Provide hintsand tips, updates on new proce-dures, insights into recent sales,who’s getting trained on whatand so on.

In small businesses, many entrepreneursleave their business reading to airports.But a look in any large bookstore willshow you a wealth of solid thinking aboutall aspects of business and every indus-try. Make yourself and your top managersserious business readers, as well as sharers of the information and insights you uncover.

Not everyone can be a trainer. But somepeople are just born to be teachers. Latchon to one of these people and make himor her responsible for putting together andconducting training programs for your com-pany. This person is probably a generalistand a warm people person. In small com-panies, human resources and training areoften handled by the same person.

In addition to establishing a regular train-ing program and staying on top of the lat-est techniques and technologies, your train-ing chief must have the gift of instillingexcitement in the learning experience. Wecan all remember school courses when wewere bored witless as well as those cours-es that kept us engaged and high-spirited.It’s the magical art of the teacher to makelearning both thrilling and entertaining.

Connect with your local training network.The American Society for Training and De-velopment has about 70,000 members aroundthe world and scores of active local chaptersaround the United States. It’s a good orga-nizational start through which to get in touchwith the world of training. Visit its Web siteat www.astd.org.

Chapter 13


13.6

Database marketing is the promo-tion of your company’s products toyour current and prospective targetaudiences by using computer-based,data-driven information.

The emergence of database marketingstems from the convergence of three sep-arate strands of contemporary society:1. Computers now combine tremendousspeed and power with a reasonable price.The old 640K limit on memory producesa confused grin from the younger genera-tion. New purchases of even moderatelypriced desktops arrive with gigabytes of diskspace and a thousand times the RAM of the

pioneer PCs. And processing speed seemsto double every 12 months. Most small busi-nesses will never use all the horsepower ofa fully loaded desktop, or even of a note-book, for that matter. Programs have somuch power and so many features that ittakes years to discover all they can do.2. The triumph of the marketing mind-setmeans most businesses recognize the im-portance of consumer focus in their mar-keting efforts. If “cash is king” on Wall Streetduring harried times, then it’s a safe bet that“the consumer is king” at all times in theretail or business-to-business marketplace.3. The information explosion has yielded

a wonderful data glut of solid, practicalinformation on the purchasers of ourproducts. Buyers are scrutinized moreclosely than ever before—both by thesellers themselves and by specialized re-

search-oriented companies thatpeddle their information to

manufacturers and retailers.Even the Census Bureau

has piled its informationinto the market infor-mation avalanche.

What all this means foryou is that you can under-

stand the buying habits ofyour current customers—and build

a pathway to new ones—withundreamed of precision.In a sense, contemporary data-

base marketing with the computerlets you return to the roots of mod-



14.1

Chapter 14

Database MarketingExpands Your Horizons

ern commerce. Imagine the shopkeeper ofDickens’ 19th-century London (he’s givenus great portraits of them in his novels). Be-cause he sold only to the extremely localmarket, he knew most of his customersquite well—what they bought, who was inthe family, what they didn’t like and theirincome level. He maintained his databaseunder his hat.

Based on this, the informed shopkeep-er could hazard a solid guess that Mrs.Thomas, for example, might well be inter-ested in the new lavender-scented candlesthat had just arrived from France. He knewshe planted a lot of lavender along thestreetfront near her house. She was alwaystrying different scented candles to use inher dark home. He could suggest it to her,study her reaction and make a mental noteto “refine the customer profile.”

In one medium-sized Midwestern city,a specialty perfume shop sells upscale per-fumes and sundries to its near west-sideand mail order clientele. The shop is in anout-of-the-way specialty mall. In additionto a splendid memory for customers anda gentle but engaging personality, the Scan-dinavian proprietor possesses an extensivecatalog of index cards. He can tell youeverything any one of his thousands of cus-tomers has purchased for the last 15 years.He meticulously enters each new purchasealong with date and price. He also askshow you liked that bottle of scent you pur-chased last April...a little too much jasminein the background, you say? As childrengrow up and into the perfume-wearingage, they get a card in this file. When hus-bands appear before birthdays, anniver-saries or holidays, the proprietor providesan extremely accurate recommendation fora splendid gift. What an efficient database!Dickens would be proud.

Computers have replaced index cards formost businesses, but the principle remainsthe same. Your personal computer system

allows you to gather information on yourcurrent customers so you can sell to themmore efficiently. You can then put that datato work in various productive ways:● You can identify your best customers.Which customers spend the most with you?Which customers can you make the mostmoney from? How often do they buy?● Use repeated contacts to enhance cus-tomer loyalty. You have to protect your cus-tomers from inroads by your competitors.Use a mailing to tell them they’re a spe-cial customer—and that they’re invited to a“customers only” sale next month. Offer aspecial on a product related to one youknow they often buy.● Cross-sell products. If you know a cus-tomer has purchased a barbecue grill, forexample, make sure he or she receives acoupon for your barbecue serving tools orspecial barbecue sauces and spice blends.Maybe you can work out a cross-promo-tion with the butcher down the street to sellhim the names of your recent grill pur-chasers in exchange for joining with you increating a “Buy a grill and get 10 poundsof steaks free” promotion.

Or, you’re a furniture store owner.You’ve built your database over the lastfew years, and you’re darned proud of it.You love fiddling with different compar-isons and contrasts. You notice that theblack leather couch with the golden trimhas been a very good seller. You also no-tice that some 28 percent of the peoplewho bought that couch also purchasedthe floor lamps that match up with it pret-ty well—gold trim on very dark ma-hogany. Well, how about a simple lettermailing (with color photocopies) to theother 72 percent of the black couch pur-chasers that offers the lamp at a 10 per-cent discount to families who’ve pur-chased the couch within the last year. But,of course, the offer is only good for 90days from the date of your letter, just to

Chapter 14

Database Marketing Expands Your Horizons

14.2



14.3

add some urgency to the recipient’s deci-sion. You’re cross-selling! Selling Y to acustomer who’s bought X.

● Build a profile. You can collect customernames, addresses and phone numbers fromtheir checks. What else can you learn aboutthem? If you are selling through the mail,have them fill out an extended customersurvey sheet for a 15 percent discount ontheir next purchase. If you’re selling throughthe Internet, have their completion of anonline survey earn them some computer-related premium. If you’re just conductinga friendly conversation, take notes after-ward and capture marketing content.● Start with your first customer. Build out-ward from what you know. Everything startswith your first customer. This is the known.You may have to guess at lots of things intargeting your market, but you know thiscustomer purchased your product. An islandof certainty in a sea of haze and obscurity.

Where do your customers live? Sort byZIP code. Do one or two ZIP codes stand

out from the rest for a majority of your cus-tomers? What are the demographics of thatZIP code? The Census Bureau and other datasuppliers can provide you with significantdemographic data by ZIP code (and by nine-digit ZIP codes, at that). You can use thisto get a more thorough understanding of theprofile of your geographic market. Chancesare you’re selling much more in a few ZIPcodes than in others, and it may have littleto do with your physical location.● Extrapolate from the known. As you learnmore about your customers, go the next step.If these people buy your product, then peo-ple like them will be likely to buy your prod-uct. At least they’ll be more likely to buy yourproduct than the public as a whole.

One business sells desks, filing, shelvingand storage units to the business market.They conducted surveys of their customersand found that a disproportionate percent-age of sales were to what’s come to beknown as SOHOs: small office/home office.They purchased a mailing list of these com-panies (sole proprietorships with less thanfive people, sorted by the appropriate ZIPcodes for their geographic market) andscored several successes in direct-mail pro-grams. They supported their mailings withmodest ads in several of the publications thattarget this growing market. They includedtear sheets (color copies) of the ads alongwith their mailing to bolster their credibili-ty in this market. Prospects can see they’resophisticated enough (and stable enough)to advertise in respected publications.

You can apply the same thought processto the business-to-business marketplace withSIC codes (see the section on “Segment-ing For Business Customers” in Chapter 3).● Step into a bold new frontier. With yourbest customer profile in hand, go to profes-sionals in the database/mailing list businessand see what lists they have that match yourcurrent customer/prospect demographics.We’ll get more into this in just a moment.

InsightDirect Mail List

Rate and Data Service is a publica-

tion from Standard Rate and DataService that presents informationon some 40,000 different lists,from automobile registrations toprofessional licensees, from mag-azine subscribers to hotel guests,from credit card holders to bankaccount holders, from appliancepurchasers to Web site visitors.And there are many other lists oflists. You can find this publica-tion in your local library. It tellsyou where to go to get each ofthese lists, along with prices.

GETTING NEW CUSTOMERSFROM EXISTING ONES

Your customer and prospect databaseneeds to be set up so that it’s capable ofdynamic interaction—you want to tell itthings (new purchases, address updates,change in contact names) and you want itto tell you things (average time betweenpurchases, average amount of purchase,types of products purchased and so on).

You can’t expect to get all this infor-mation on your customers when they firstwalk in the door. If you tried, you’d prob-ably wind up with a ex-customers walk-ing out the door because you asked toomany questions. But you can build this information up over time on your key customers. Put together a contest that theycan enter, and ask a question or two onthe entry form. If the purchase price ofyour products is high enough, run a credit check on your client to determinecredit worthiness and general financialoverview. You can also add to this data-base by drawing on other databases avail-able to you. You can also take the directapproach with good customers and sim-ply send them a survey, explaining youneed the information to refine your op-erations to serve them better.

If you make your database as adaptableas possible, you’ll get the best use of it be-cause you don’t know how you’ll need touse the information in the future. A good

marketing database captures your past,records your present and helps chart yourfuture. As you accumulate information onyour existing customers, you’ll be able toprofile the typical customer within reason-ably accurate ranges.

For a retail customer at your gourmetfood takeout shop, your data might revealyour core customer profile as follows:● Married couple without kids● Gross family income of $85,000● White collar occupations● Own home in ZIP codes xxxxx andxxxyz● Read U.S. News & World Report and sub-scribe to the local morning paper

You take that profile, with its gross num-bers, and head to your local list broker ordirect-mail consultant. You can start yoursearch for a list broker by looking in yourlocal Yellow Pages. Check out their refer-ences carefully before getting involved.“This is what I’ve got,” you tell them. “Showme more of these.” You’re using your cus-tomers as templates for additional prospects.Depending on your product line, you mightfocus on ZIP codes, on subscribers to a par-ticular magazine, sometimes on income oron the number of kids.

List brokers have access to many thou-sands of lists. You’ll pay between $35 and$135 per thousand names on a list, depending on the size of the list and howmuch trouble it is to compile. Brokers

Chapter 14


14.4

● Name, address, phone number

● E-mail address

● Family members, with ages

● Home ownership

● Car ownership

● Educational level

● Gross family income

● Purchasing history

● Publications read regularly

● Radio station of choice

● Newspaper subscriptions

● Hobbies

Sample Consumer Customer Database

14.5

typically have a very thorough under-standing of their lists and can give you in-sights into the best list for your use. Themore you know about your current cus-tomers, the better use you’ll be able to makeof your list broker’s experience.

You don’t buy lists; you rent them, usu-ally for a single-time usage. If you wantto send a second mailing later to the samelist, that’s another charge. If you knowyou’ll be sending a series of four mailingsto a given list, mention this upfront for acumulative rate.

You can’t simply fold these names intoyour database of customers. Not only wouldit be illegal and wrong, but you’d also getcaught. Every list is “salted” with “ringers,”names that aren’t real but simply serve togive away any mailing done to the list. Ifthe list broker’s ringer gets a mailing fromyou for which you haven’t paid the usagerights, you are busted. You do your mailingwith the broker’s list. Once people respondto your mailing, you’re free to add themto your own database of customers. Yourlist grows and grows.

DIRECT MARKETING: PRECISION MESSAGE DELIVERY

So far you’ve seen a number of possi-bilities for using your computer (and thecomputers of business allies) to extend thepresence of your company, both to yourcurrent customers for other needs and tonew customers.

Let’s say you identify a new market,one that you think is going to be very receptive to your product. The cost of advertising to this market may be pro-hibitive: The best publications are fright-fully expensive, and your ads couldn’t appear for six months, anyway.

Direct marketing provides you with away to conduct a test of this market relatively quickly, at a reasonable cost,and with convincing certitude. You’ll knowwhether this is indeed the gold mine youhope it is.

Perhaps the most common use of a mar-keting database is to generate a target listfor a direct-mail campaign. Of course, di-rect mail also works with purchased lists.Direct mail provides giant companies withthe ability to target defined markets withspecialized offers.

For smaller companies, using direct mailhas a number of attractive advantages:● You can target recipients very precisely.● You can protect against overwhelmingresponse. If you run an advertisement, youcan’t know whether you’re going to get 10responses or 10,000. For a small compa-ny, a powerful response to an ad can beeven more disastrous than no response atall, since a poor reaction to a prospect’s re-sponse will likely damage your relationshipeven before it’s begun. With direct mail, youcan start out with a modest-size mailing tostudy the response and make sure you canhandle it expeditiously.



● Name, address, phone number

● E-mail/Web site address

● SIC

● Annual sales

● Number of employees

● Product lines

● Purchasing history

● Trade publications read regularly

● Memberships in professional

associations

Sample Business-To-Business Customer Database

● Costs can be modest. Or, more accurately,you can create a campaign to fit large orsmall budgets.● Direct mail can happen fast. With a mod-est campaign to a known target audience,you can acquire a mailing list, develop mail-ing materials (including direct-mail letter,flier, reply card), launch a mailing and startto receive results in just a few months. Thisis faster than the typical advertising cam-paign—and a lot faster than waiting for thephone to ring.

● You can test different appeals, called“offers” in the trade, to reveal the mostpotent message. By making a different of-fer to randomly different portions of yourmailing list, you can see which offer pullsbest. Go with your best puller until youfind a better draw. As you try different of-fers and different letters, you’ll find onedoes better than another. Use the betterone, and then try to beat that in your next

mailing. Eventually, you should get bet-ter and better response rates. ● You can mail to the same list again witha slightly different mailing and still garnerworthwhile results. Most direct-mail expertssay that companies don’t get enoughmileage out of their materials. Use them un-til they no longer pay their way.● You can never run out of prospects. Useyour imagination to find new niche direct-mail markets for your products, whether retail or business-to-business. Your list broker or mailing consultant can suggestpossible target markets worth trying.

With consumer products, you can oftensell them right through the mail...or at leastget customers to stop in. With business-to-business products, you usually face a two-step process. First, you get a response toyour solicitation with an indication of interest (request for catalog, literature, report or sample). This is the lead-gener-ation phase. Once you mail off the requested material, you then follow upwith additional material or a phonecall/fax/e-mail to use your skills at trans-forming the lead into a prospect.

Let’s put you in charge of another busi-ness: a travel agency. It’s been in businessfor nine years and has an established clien-tele of about 1,400 people. You’ve taken aclose look at who books with you and why,and you’ve segmented several different sub-markets that make up the bulk of your busi-ness: the elderly, school groups and vaca-tion and cruise bookings. You don’t handlebusiness travelers (they are always wantingyou to make last-minute changes and cutback on your discount).

The senior market is the one that inter-ests you. You’ll define that as 60 and over.You know the demographics are workingin your favor here: More and more peo-ple will be entering this age group as thebaby boomers get older. Your communityhas an ample supply of potential clients,

Chapter 14


14.6

Jargon Alert“Direct market-

ing,” “direct mail,”“direct response”:

These terms are used confusinglyin the trade. Direct marketing typi-cally refers to marketing efforts bythe manufacturer that are directedat the end-user when a retailer ordistributor is in the middle. Direct-mail advertising uses the mailservice to deliver your best saleseffort directly to the mailbox ofyour prospect. Direct-response advertising is any advertising(print or broadcast ads, or direct-mail packages) that invite the recipient to contact you directlythrough an 800-number, a mailingaddress or a business reply card.



14.7

and you’re not up to your eyeballs in cut-price competitors.

You notice that senior travelers are tak-ing more and more “adventurous” vaca-tions—to China, Australia, the Middle East,India, South Africa—not just to the tradi-tional destinations of 10 years ago. Thereare lots of eco-tourists, too, in this agegroup. They have money to spend, they’renot overly cheap on accommodations, andthey’re a trustworthy lot. You want more ofthem. How do you get them?

You talk to your buddy Glenn, who (af-ter a career in advertising) does some con-sulting “just to keep his pulse steady.” Glennmakes some suggestions on making moreof the senior market:● Create a modest one-page newsletter andmail it out six times a year to your currentsenior customers. Material should addresstheir travel needs in particular, and it shouldinclude lots of “idea starters” to get themthinking about exciting new destinations.● Send your best senior customers a “Re-ward Offered” special mailing. If they sendyou the names of some of their seniorfriends, you’ll contact those friends aboutbecoming their travel agency. If they booka trip with you, you’ll reward your originalcustomer with 10 percent off his or her nextairline ticket.● Look to develop new senior customersby some thoughtful mailing-list shopping:

1. What magazines do the elderlyread and can you get mailing labelsfor subscribers in your market area?A list broker can help you here, oryou can contact the publication directly.2. What local resources are there formailing lists? Many cities have sophisticated “letter shops” with remarkably adept mailing-list de-partments.

● Set up focus groups of senior citizens andestablish a protocol for finding out how to

put together tour packages that will appealto them. Depending on the importance ofthis senior citizen demographic, you mightwant to set up an advisory board of sen-ior citizens to advise you on proposed mar-keting ventures to the market.

WAGING A DIRECT-MAIL CAMPAIGN

Once you’ve outlined your target mar-ket, staging a direct-mail campaign has seven key steps:1. Develop a mailing list. We’ve alreadycovered many of the details of pulling to-gether a list. Put your description of the tar-gets on this list in writing, so you know towhom you’re mailing. If you’re mailing toa larger-sized list (more than 20,000), you’llprobably want to provide your letter shopwith Cheshire labels: unglued labels thatare affixed to your mailing piece with spe-cial glue. For smaller quantities, you mightjust provide pressure-sensitive (self-stick-ing) labels. When you have a small quan-tity of labels, you can put them on by handwith pressure-sensitive labels. Cheshire la-bels require machine application at the mail-ing house. Your list supplier will provideyou the labels in whatever format you want.2. Create a mailing piece. You don’t justmail out a brochure to your list. That getstoo expensive, and your brochures weren’tdesigned for it. You need to create a direct-mail piece with a strong offer that will spurthe recipient to action. All direct mail leadsto the “call to action”: What do you want therecipient to do next? Mail back the businessreply card? Call the 800-number? Fill out theorder form and fax it to your number?

You can never be too pushy in direct-mail materials. You can also be clever, cute,whimsical, even overpowering, but only inconnection with being pushy. Your goal isto get action. You don’t create a direct-mailpiece to inform. That’s what your brochuresare for. You want action!

Designers of direct-mail pieces like to getcreative with graphics. Your goal is to getthe reader to respond to the offer. Anygraphics that don’t contribute to that are notworth the design and printing costs. According to most direct-mail gurus:

● 40 percent of a piece’s impactcomes from sending it to the right listin the first place.● 40 percent comes from the valueof the offer.● 20 percent comes from the designor writing of the piece.

3. Code your response vehicle. Whateverway you ask recipients to respond, makesure you code your mailing. All you haveto do is assign each mailing a batch num-ber, such as 04992103: 0499 is themonth/year of the mailing; 21 is the identifier for the particular list you mailedfrom; and 03 is the identifier for the par-ticular offer. Coding provides a simple device for revealing just who has re-sponded to which mailing and which of-

fer. It makes individual responses muchmore valuable, since you can easily tabulate the different codes to see what’sworking the best for you.4. Test the campaign. Even a modest cam-paign of a few thousand pieces can run upthe budget with mailing and duplicationcosts. So you should always test mail a por-tion of your mailing list and check the re-sults. No one can predict the response rateyou’ll get; there are just too many variables.

What percentage of your mailing makesfor a reliable test? Again, it varies, but mostauthorities would tell you to test 10 percentof your list and no less than 250 pieces. Thiswill give you enough of a spread across thevariables to make the results worth some-thing. Before you do your test, you shoulddecide what response rate will support yourgoing ahead with the planned major mail-ing. This will depend on your budget. Writ-ers on direct mail duck the issue of responserates because there are so many variables—and because no one really knows how to

Chapter 14


14.8

Consumer Direct Mail Business-to-Business Direct Mail

Value of product Low to medium price Medium to high priceor service

Potential target Enormous, almost Sometimes very small; can be audience unlimited several people at same company

Goal of mailing Usually cash sale (via Lead generation for personalphone and credit card), follow-upsometimes store visit

Mailing content Short copy works best, Can be long, depending onexcept for expensive complexity of productgoods

Source of funds Personal money Company money

Buying process Short and simple...one Can be complicated foror two people make big-ticket itemsthe decisions

Anatomy Of A Campaign



14.9

predict response. Experience suggests thatif your rate is less than 2 percent, somethingis wrong. Either your list is wrong, or youroffer is too weak. If you get a response rateabove 7 percent for a mass mailing (with-out giving away the farm), you’ve donevery, very well. 5. Run the campaign. Keep your mailingpace in line with your ability to handle thepotential responses. Your test mailing willgive you some sense of the rate of customerresponse. Use that as a gauge for how manypieces you should mail in a given week.Mail only those pieces you can support withyour sales effort.6. Handle customer responses. You can’thandle the fulfillment end of a direct-mailcampaign without considerable planning.If you’re asking respondents to request ad-ditional information, what are you going tosend them? How soon do you want to mailthe information out? What else will you dowith the responses? In other words, howwill you make maximum use of the namesyou have spent so much money to acquire?

If you’re a company with distributors orsales offices, it’s common to pass along thenames of prospects, so that follow-up canbe handled on the local level. This can be

handled with e-mail or faxes. The quickerthe response the better, since your speedin dispatching information can quite justi-fiably be viewed as reflective of your com-mitment to customer service. Why shouldrespondents have to wait for materials?

If you are mailing out product or sam-ples, do you want that handled from yourmain offices? Many mail order campaignsdepend on fulfillment houses, professionaloperations that handle the logistics of send-ing out materials to large quantities of cus-tomers. You provide the products and theprospects, they’ll take care of the rest.7. Analyze the results of the campaign. Thisis perhaps the most important, and under-rated, aspect of the campaign. Did the finalresults match what you expected from thetest? What parts of the demographic re-sponded better than expected? Are theresubsets of your target audience that you canfocus on in future mailings?

Every direct-mail campaign you runshould contribute not just to your sales fig-ures but to enhancing your customer data-base. In very real terms, it represents thefuture of your business.

CREATING YOUR DIRECT-MAIL MATERIALS

Direct mail is the weapon of choice formany small businesses because of its tar-getability and reasonable cost. It’s also veryversatile since you can include whateveryou want in a mailing package to convinceyour prospect of the desirability of yourproduct or service. All your company lit-erature can become part of your direct-mailefforts, including company newsletters.

The Direct-Mail PackageThe standard direct-mail package con-

sists of four elements: an envelope, a salesletter, a flier and a reply card (see the sample direct-mail package, starting onpage 14.10).

Jargon Alert“Letter shop” is

almost an old-fash-ioned term, but it’s

still in use in the direct-mail busi-ness. It’s a business that special-izes in printing, addressing andshipping direct-mail materials.Generally, they are highly computerized with a sure senseof the local market. Look in theYellow Pages under “Letter shop”or “Mailing Services.”

Chapter 14


14.10

This is the clasic direct-mail package, including outer envelope, sales letter,brochure, reply card and return envelope.

Outer Envelope

Reply Card

Return Envelope

Sample Direct-Mail Package

This headlineon the outer envelope entices readersinside with abig savings opportunity.

The box highlightsa limited-time offer, which helpsmotivate readersto respond.

Make the return envelope postage-paid to improve response.

The replycard’s head-line repeatsthe big benefitto the reader.



14.11

Sample Direct-Mail Package

An indentedparagraph offers visual relief, makingthe letter look easier to read.

Bullet pointson front andback make iteasier to findthe benefits.

This one-wordheadline grabsattention andforces theprospect toread further.

Underscoring directs the reader’s attention to important points.

Chapter 14


14.12

Inside Right Flap Back Cover Front Cover Inside Left Flap

Inside Spread

Sample Direct-Mail Package (Cont’d)

This is a good place for testimonials;use a heading on each quote.

A whole panel of bullet points outlines thebenefits for the scanning reader.

Show how easy it is to respond to this offer.

This brochure’s headline repeatsthe promise from the envelope,and adds a little more information.



14.13

● Envelope: This carries your package tothe recipient and bears the mailing label.There’s no reason not to use the envelopeto get the sales process started early. Usethe outside of the envelope to carry an enticement to the prospect to open it:

1. “A new development in equip-ment rental reduces costs for yourcompany.”2. “Important information for your financial future.”3. “Time-sensitive material enclosed.”4. “Spending too much on bankcharges? Look inside.”

● Sales letter: This is the workhorse of anydirect-mail sales effort. It’s been around fora hundred years, and the experts have beenworking at fine-tuning its appeal for 50years. Many direct-mail campaigns consistof nothing more than a sales letter. It’s in-expensive to duplicate, easily reproducibleand simple to test. No matter what yourproduct or service, a well-written sales let-ter gives you the opportunity to “make yourcase” to the prospect.

All the thinking that’s been done aboutthe basic sales letter can be boiled down tojust a few key principles:

1. Write person-to-person. That meansit’s an “I” writing to a “you.” A salesletter is a one-on-one selling oppor-tunity. The prospect has opened yourenvelope, which has appeared in themailbox. For a few moments (andnot much longer), you have his orher attention. Write as if you wereexplaining the benefits of your prod-uct to a friend. Use short sentences.Avoid formal language. Don’t beafraid of contractions like “don’t,” “is-n’t” and “it’s”: This is the way we talk,and this is the way your letter shouldsound. You’re not writing as a com-pany; you’re writing as a person.2. Make your first paragraph yourbest. People are busy, and no mat-

ter how wonderfully crafted yourletter is, you can’t count on yourprospect finishing it. So put yourkiller benefits to that prospect right in the first paragraph or two.Many sales letter experts suggestyou also convey the problem towhich your product is the solution.This highlights the benefit and em-phasizes the importance of yourproduct or service.

3. Use boxes, subheads, bullets andbold type. Don’t make your sales letter look like an encyclopedia arti-cle. Break up any large chunks ofcopy with headings and indents.Your reader will scan the letter quick-ly in the first few seconds to decidewhether it’s worth reading. You wantthe message to get across even witha cursory review.4. Keep your letter short. One pageis best if you’re including other material. You should never go overtwo pages.

InsightGo to direct-mail

school in your mail-box. If you’re likemost Americans, each day yourmail brings you a handful of direct-mail solicitations that youcan use as your hands-on educa-tion. Study the letters. Use designideas from the fliers. Keep copiesof different types of reply cards.Big-time direct-mail companiesspend millions refining their mailing techniques. You can usethat information for the price oftearing open the envelope. A real bargain.

Chapter 14


14.14

Ms. Betty SmithersXYZ Corp.1234 Fifth St.Irvine, CA 92614

Dear Ms. Smithers:

I know how hospital executives like you might react when it comes time to consider building an assisted-living facility:

Where’s my Maalox? Where’s my Excedrin?For that reason, I think you’ll be especially interested in the stress-free process weoffer you at ABC Corp. We use our experience to take the uncertainty out of building assisted-living facilities.

You’re comfortable every step of the way.You will be fully educated in the process before we make one drawing or liftone spadeful of dirt. You’ll understand exactly what we think it will take to helpyou build the finest facility for your purposes. If you’re wondering about the feasibility of the facility in your market, we can provide a complete report. If youwant to know whether you can build your dream facility within your budget—you’ll get the answer.ABC can also provide complete design and building services or work with localbuilders and other contractors of your choice.

In addition, you can learn:● how to have an assisted-care facility connected to your hospital.● the various options for operating the facility successfully.● the range of financing and ownership options.Whether you’re considering the development of an assisted-living facility soon ormerely building a file of information for the future—get the facts from ABC. Nothing beats experience in building these facilities, and we’ve built scores of them.Take a look at the enclosed case materials; they show you how we work.

Get up to speed quickly on assisted-living facilities.I know that a hospital executive like yourself will benefit greatly from the factswe provide on planning, building and running one of these facilities. And the information is yours for the asking. Give me a call or drop me a note.

Sincerely,

Bob DibbleBob DibblePresident, ABC Corp.

Sample Sales Letter



14.15

5. Make an offer. You’re not pro-viding information—you’re active-ly selling. So you need to presentthe reason for sending your letter.There is something new about yourproduct. You’re writing to peoplewho attended a particular show andare offering a discount. You’re giv-ing a second product free to peo-ple who order a first product. “Or-der five and get a sixth free.” “Joinfor a year and get two months free.”“For a limited time, respondents cantake advantage of a one-time trialoffer.” “Book the service now andget a discount for summer delivery.”These are all extra enticements designed to push the prospect overthe edge and get him or her to respond.6. Repeat the offer. State the offer atleast twice in your letter, at the open-ing and at the close.7. Add a sense of urgency. Give theprospect a reason to reply right away.If you can’t persuade the person toact while he or she is holding yourmailing package, chances are the per-son will never respond. So add atime deadline for a response. Or anoffer on top of the offer for a quickresponse. Or maybe a limitedamount of the offered product isavailable at this special price.

● Flier:You frequently support your direct-mail letter with a flier, a small brochure thatprovides additional information on the prod-uct or service you are offering. While theletter has to condense the benefits of theproduct, the flier gives you the opportuni-ty to expand on them a bit. Here is whereyou can use photography, charts and graphsto make your case. Testimonials alwayswork well in fliers to help convince theprospect of the truth of your claims. Stayfocused on benefits.

Don’t make the flier depend on the di-rect-mail letter. It should be able to standon its own in telling your complete prod-uct or service story. You’ll undoubtedly haveother uses for this flier than a particular di-rect-mail effort: as an invoice stuffer, as anitem in a display rack and so on.● Reply card: Reply cards can simply be inserted in the mailing package, or they canbe attached to the brochure and torn off forreturn. You want the prospect to write hisor her name, address and phone, and thengenerally to either place an order or ask formore information. Make sure your replycard has room and spaces for the respon-dent to include all the information youneed. And have your business reply cardchecked by the post office so that it fits alltheir legal requirements for size, weight andcolor. You don’t want the respondent tohave to worry about postage, so your replycard has to carry your business reply per-mit information where the stamp normallyappears (you can get such information fromyour post office).

The Self-MailerA scaled-down direct-mailing option is

the self-mailer, which can incorporate vir-tually all the elements of a full direct-mailpackage on a single folded sheet of paper.And, of course, along with a decrease in elements is a reduction in cost (see the sam-ple self-mailer, starting on page 14.16).

With a self-mailer, you eliminate the costsof producing additional elements, insertingthem into an envelope and paying greaterpostage. The simplicity of a self-mailer alsomakes it easy to produce quickly, enablingyou to introduce a new product, announcea sale or make contact with customers inshort order.

The only challenge of self-mailers isovercoming the image of a flimsy fold-over that epitomizes so-called “junk mail.”However, what the self-mailer lacks in

Chapter 14


14.16

This self-mailer uses a “free pass” technique to motivate prospects to trythe service.

Cover:

Back Panel:

Inside Flap:

Sample Self-Mailer

The copy on theback offers thetwo key sellingpoints, shouldthe reader turnhere first.

A simple graphic of a hand holding freepasses instantlyconveys the sales message.

This wording isprinted in red toensure that thereader takes special notice.

Users fill in personal information,which builds thecompany’s database for future contact.



14.17

Inside Spread

Panel 1:

Panel 2:

Panel 3:

Sample Self-Mailer

Itemizing thebenefits, and using bold typeto introducethem, attractsthe eye.

The headline’smessage is dramatized by theuse of a copy“balloon” to drawextra attention.

The backside ofthe tickets is amini-reminder of benefits and directions.

format appeal, it can make up for in copyclout and design.

The “guts” of the self-mailer can be set upany number of ways. In a three-panel piece,one panel can have bullet points, another apersonal sales letter and another the responsedevice or order form. You can even makeyour self-mailer a four-panel affair, with thefinal panel for testimonials.

The PostcardThe postcard is perhaps the most ele-

mentary of mailing formats, offering manyof the advantages of a folded self-mailer, aswell as some exclusive to itself (see thesample postcard on page 14.19).

Since a huge percentage of direct-mailpackages never get opened, it pays to con-sider a format that never has to overcomethat obstacle. With a postcard, all the re-cipient needs is a flip of the wrist to readeverything you have to say. This can be abig advantage in attracting the typically im-patient reader.

Inexpensive postcards give you the op-portunity to consider a mailing “campaign,”enabling you to send out a number of suchcards at regular intervals to remind the re-cipient of your product or service.

You can also produce oversized postcardsthat give you more “canvas” on which to dis-play your wares and make your sales argu-ment. And while the larger size costs incre-mentally more in printing, paper and postage,its simplicity still makes it affordable.

Like the folded self-mailer, one possi-ble downside of a postcard is that it won’tget the respect of a sealed envelope. But ifit’s developed in a way that has originalityand selling power, you could have yourselfan inexpensive business builder.

Your Other Printed Materials And Catalogs

Every company needs “literature,” print-ed pieces that do a careful and well-

thought-out job of presenting its productsand services: catalogs, newsletters, productsheets and brochures, letterhead, presenta-tion folders, specification sheets, case his-tories or application sheets, special eventbrochures, annual reports, manuals, tech-nical bulletins, posters, product insert sheets,labeling, recruitment materials and so on.

With the increased availability of pow-erful desktop publishing systems and soft-ware, many companies decide to meet theseneeds internally.

Resist this impulse. Your home-grownmaterials will betray their off-the-cuff ori-gin to most of the people who read them.Appearance is reality in marketing, and youhave to look as professional as you are.

Here are some tips in dealing with theliterature needs you’ll face as your com-pany expands and grows:● Get a logo and stationery package designed professionally. Do this, and don’tchange it for at least 10 years. Either hirean advertising agency to create it or a de-sign studio/graphic artist. Don’t try thisyourself, no matter how artistic you con-sider yourself. A professional artist willmake sure your stationery materials reflectyour corporate personality, while main-taining a clean and professional look.They will look good in color and in blackand white; they’ll reproduce well in small-er sizes; they’ll fax clearly; and they’ll sim-ply be more attractive than what you canexpect to do yourself.● Learn the principles of solid graphic design. Understanding graphic design is alifetime’s work, of course, but some read-ing and a sensitive eye can teach you a lot.Get hold of some graphic design books ata local bookstore and educate yourself. Allyour printed materials should (just like yourads discussed in Chapter 7) follow funda-mental design principles:

1. Keep the look clean and simple.Don’t overload the reader visually. Use

Chapter 14


14.18



14.19

An inexpensive postcard like this can be a powerful new business generator.

Sample Postcard

The “blackboard” effect makes this thought-provoking question leap out at the reader.

Repeat themessage fromthe front side,in case thereader seesthe addressside first.

CAR-RT-SORTRESIDENT1813 MAGNOLIA BLVDSHERMAN OAKS, CA 90000

BULK RATE U.S. POSTAGE

PAIDPERMIT NO. 00

Call to request free pick up and delivery serviceWednesday Evenings, Saturdays, or by Appointment.

● You pay nothing for pick up and delivery.● You enjoy convenient monthly billing.● Ask about our professional alterations.● We offer drapery cleaning and fur storage, too.

Cleaning by Rabena’s Quality Care Since 1940For information on free pick up and delivery

CALL NOW 657-2636Read what our customers say about this service:“This is not actual copy,

but only copy placed

here to show you what it

will look like.”

By Line

“This is not actual copy,



will look like.”

By Line

“This is not actual copy,



will look like.”

By Line

Why Lug Your Clothes To The Dry Cleaner When The Dry Cleaner

Will Come To You?

Why Lug Your Clothes To The

Dry CleanerWhen The DryCleaner Will

Come To You?

Rabena’s

D

ry Cleanin

g

Without being fancy, this three-panel brochure looks classy and readscompellingly.

Inside Flap Back Cover Front Cover

Inside Spread

Sample Brochure

Chapter 14


14.20

This inside flap is agreat place for a testi-monial or a personalnote from the sender.

Here you can lay outyour company’s creden-tials, after a show ofsalesmanship inside.

Using a provocative“how-to,” the headlinespurs the reader to open the brochure.

The headline and sub-head pay off the curiosi-ty aroused on the cover.

Subheads and generousspacing keep an all-typetreatment from being boring.

Big numbers draw the eye to this important section.



14.21

a graphic grid to align the different elements in an orderly fashion.2. Use heads and subheads to leadthe reader. When the reader turns thepage, where will he or she look? Useheads and subheads to provide scan-ning points to keep the reader mov-ing along.3. Avoid too much type. Pages filledwith writing are not appealing tothe reader. Break up the copy with photos, illustrations, cartoons, chartsand so on. 4. Use white space. Avoid a crowd-ed look, despite the temptation tomake use of every inch of paper youare paying for. White space serves asa visual frame for the rest of the con-tent on the page.5. Stay with standard formats unlessyou have a good reason not to. Allof us have grown accustomed to thestandard 81/2 x 11 format for print materials. Even our filing systems aremade for things that size. If you gowith an unusual size, your piecesmay not lend themselves to beingfiled easily for reference.6. Put a caption with each photo.Weall want to know what we are look-ing at. And a caption gives you thechance not just to identify yourproduct but to remind the reader ofthe benefit. 7. Use charts and graphs rather than tables. A brochure is a visual document. Use graphics to boost visual interest and make numbersmeaningful.

● Be sure your materials have a “familylook.” Every piece of literature doesn’t haveto look identical, but they should all lookplanned as a compatible unit. Imagine yourliterature laid out in front of you on a con-ference table. Does it all look like it comesfrom the same company? It should.

● Invest in good photography. Small com-panies sometimes scrimp on getting goodphotos of their equipment, their job sites,their equipment in use or their accessoriesand supplies. Strong, professionally donephotography will set you apart from othersmall companies. Your customers want to bereassured of the quality of your product. Am-ateur snapshots give a very damaging im-pression of your professionalism. Good pho-tography is an investment in your future.● Appoint one person as lit boss. Your lit-erature needs will be ever-changing, withtrade shows, with new products and mar-kets and with normal growth. You musthave one person responsible for anticipat-ing future needs, handling literature pro-duction and maintaining inventory. Un-tended literature grows increasingly lessuseful and more frustrating. Every newpiece should have a written rationale, audience description and content outline,not unlike the rationale you develop for apiece of advertising copy.

Your Company NewsletterOne popular technique for staying in

touch with customers and establishing your-self as a source of valuable information isa company newsletter. For small business-es, they offer a lot of advantages:● They are easy to produce in-house. Whilethey’re labor-intensive, they don’t demandspecial skills. Any personal computer witha word processing program or page lay-out program can turn out an attractivenewsletter. Many programs includenewsletter templates to make your jobeven easier. Be sure to use a two- or three-column format for easy scanning. Employphotos or illustrations to clarify your articles. Keep your typeface large enoughfor all your customers to read the articleswithout straining. ● They let you inform and sell. You canprovide your customers and prospects news

Chapter 14


14.22

Here’s the final work sheet about your business; this time it’s specifically relatedto your printed materials. List each piece of print materials you currently have onhand for your company and describe its purpose.

1. How long do you think each of those pieces of literature will last without revision?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

2. Which new printed pieces will you produce in the coming year?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

3. Do you anticipate using any outside help to produce these pieces?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

4. Have you considered having your literature reviewed by someone in the industry (but outside your company)?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

5. Who is the “lit boss” for your company?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________




14.23

on your company, information on yourproducts, case histories of how your prod-ucts perform, background on key employ-ees, market overviews and so on. You dic-tate the content. Your only requirement isto keep it interesting for the customer...andto keep the sales content from over-whelming the information content.● Their size can deliver more complex information. Ads and brochures alwaysrestrict what we can say. Newsletters provide you with an endless brochure.You can put together multipart articles,conduct lengthy interviews, show newways to use your products—all within acomfortable space allotment. ● They let you offer lots of different typesof information. Don’t be misled by the pre-vious point. Although newsletters give youroom for lengthier articles, keep the bulkof your newsletter as short pieces, so theyare very scannable. You want lots of dif-ferent items in the hope of providing some-thing interesting to every reader.● You create credibility. Your newsletterlets you show off your knowledge and prod-uct savvy. Your customers get to see you,your products and your company directly,outside the typical selling framework. ● You can think long-term. Good newslet-ters don’t just happen. Editors have edito-

rial calendars that link newsletter themeswith conferences, new product introduc-tions and other company events. Youshould plan your newsletter at least sixmonths in advance.● You can get your customers involved.Establish a newsletter advisory board to give you ideas on content. Profile someof your largest customers in your newslet-ter to show other customers the quality ofyour product. Have customers write articles for your newsletter on industrytrends, new applications, reports on tradeshows and so on.● You can use your newsletter to prospectfor new customers. Send out extra copiesof your newsletter with a cover letter toprospects. It’s a softer sales approach thatcan be very effective with some potentialcustomers who may resist more direct salesefforts. You can win them over with yourknowledge, not your sales persistence.● You control frequency. Newsletters canbe a lot of work to maintain. Plan on foura year to start, and add more if you’re get-ting interest and your company can handlethe workload. You can always put out spe-cial issues for extraordinary reasons—newproduct introduction, large contract, specialtrade show exhibition, story in nationalpress and so on.

By now, you should be at the top ofyour game.You’ve earned your title of“Marketing Guru,” and your col-leagues are all amazed at your savvyand acumen.You need a rest becauselook at all you’ve done:● You’ve done your customerhomework: You know whothey are, where they live andwhat they’re looking forfrom you. ● You’ve compiled a full ben-efit inventory, so you knowwhat each niche market wantsfrom each of your products. ● You’ve figured out how to workthe Four P’s (product, place, priceand promotion) to your advantage.You have put them into the market-ing mixer to come up withdiverse variations onyour core marketingthemes.● You’ve looked at each ofyour audiences using the FourUtilities (form/function, place, timeand ease of possession) and learnedhow to keep all yoursales literature and advertisements focusedon your customers’ pointof view, not your own.● You’ve learned to thinklike a marketer.● You’ve avoided thetraps that come froman entrepreneur’sconfidence and

drive, and you’ve dodged the Four FatalMarketing Assumptions.● You’ve studied how to segment your keymarkets and tailor your appeals to the mostimportant benefits to those markets.

● You’ve captured the uniquecharm of your company ina memorable positioning

statement.● You’ve put in the work to

pull together a good marketingplan, one that sets high goals

while keeping in reasonable con-tact with reality.

● You’ve clearly distinguished fea-tures from benefits in all your lit-erature, and you’ve made sure thatdistinction has become a part ofyour company’s fabric.

● You’ve learned how to inspireyour people to make face-to-facepresentations—and to over-

come any objections andclose the sale. They know

how to determine the realbuying process.● You’ve determined

how best to price your product,and you’ve begun to use the full rangeof distribution channels to move your

product to the buyer’s hand.● You’re nuts about testimonials

and case histories, and you’vegot your whole organization

developing them.● You’ve evaluated the

best advertising choic-es for your company,



15.1

Chapter 15

Keeping On Top

including advertising content and the best media for your budget.● You’ve been able to support your ad-vertising with a promotional budget thatadds some spice to your marketing mix.● You’ve worked your distribution chan-nels with incentives to get yourself someprime exposure in your market. And you’vepressed your advantage with appearancesat prime trades shows.● You’ve utilized the tools of public rela-tions to create a good image for your com-pany in the popular and trade press. ● You’ve made your company a force forgood in the community.● You’ve examined the Internet and decidedhow your company can best make use ofit, whether as a communications tool or asa full-fledged sales arena. You know this de-cision will need to be reviewed often.● You’re sold on the value of customerservice, and you’ve made it a priority in themind of each of your employees.● You’ve recognized that only training cankeep you in front of the pack. You’ve com-mitted to ongoing training for all managersand key employees.

● You have harnessed the power of yourcomputer system: You have used your data-base capability to refine your marketing andto target markets through direct mail andother venues.

Quite a day’s work, wouldn’t you say?

REGULAR MARKETING PLAN REVIEW

The work you’ve done, much of itframed in your marketing plan, is part ofan ongoing process. Some of tomorrow’schallenges you can predict today; othersyou will never anticipate. Market conditionschange. Technology spurts forward. Yourcan’t-miss advertising campaign may bomb.An important distributor may switch overto a competitor. A key manager may leaveto start her own competing company.

A changed business needs a changedmarketing plan. You have to look at it atleast every three months, and on a formalbasis every six months. At one point, it rep-resented your very best thinking aboutwhere you thought your company shouldtravel. If you are not on track, why not? Hasyour thinking changed...or has the marketthrown you a curve?

Chapter 15

Keeping On Top

15.2

InsightWith marketing

plans, it’s temptingto look back at last

year’s plan and note with regretall the things you didn’t accom-plish, or at which you tried andfailed. Make a point of startingout each year’s plan with a recapof your marketing accomplish-ments from the previous year.When you set ambitious goals,you’re bound to fall short nowand again. But keep your eye onthe successes.

InsightGet those maga-

zine subscriptionsstarted now. Subscribe to the top ones in yourparticular field—and why not geta subscription to a few marketingand training publications as well?Start prowling the aisles at yourlocal bookseller. Build yourknowledge. You just never knowwhen something you’ve runacross in your business readingwill prove useful.



15.3

Keeping your marketing plan current justmeans being realistic. Share your updat-ing of the plan with all the recipients of theoriginal plan. Make sure all copies reflectthe changes. And be sure to keep a copyof all plan versions; they might be inter-esting a few years down the road.

Your newly developed marketing vision will serve you well in the years to

come. Soon you’ll be developing newproducts to meet the real needs of newmarkets or the new needs of some of yourfamiliar customers. If you stay in touchwith your market through regular researchand steady informal contact, you’ll knowwhen the market’s going to shift beforethe competition does. And that advantageis priceless.



16.1

Account executive: the individual at an ad agency who handles the clientand coordinates the efforts of the advertising team

Added value: the extra benefit you’reable to add to an item in the customer’smind, generally through marketing and advertising; added value means you can charge more, while brandingadds value

Advertising campaign: a coordinatedeffort, often using several media, toachieve particular marketing goalsthrough the use of planned paid adver-tisements; lasts a limited amount of timeand has a single theme or a group ofrelated themes

Advertising specialty: physical itemsused to support a marketing effort, typi-cally carrying the product name andmeant to be given away

Arbitron: the major rating service forlocal radio; also provides some TV ratinginformation

Audience: viewers or listeners of a TV orradio advertisement; same as circulationin the print media

Benefit: a product’s customer-orientedstrength; a statement of a valuable prod-uct feature, with an emphasis on whatthe customer gets from the product

Brand equity: a brand’s long-term valuein the consumer’s mind after it has builtequity by being in the marketplace forsome time

Business-to-business: advertising fromone business to another, either in prod-ucts or services; more specialized thanmass-market or consumer advertising

Closing: that part of the selling processwhen you actively move to get theprospect to agree to the sale

Clutter: the mass of advertising impres-sions that the consumer faces each day;your ad must break through this clutter tobe recognized and have an impact

Collateral materials: typically, printedsupport pieces that tell the story of yourcompany and its products; includes salessheets, case histories, product brochuresand so on

Comparison advertising: a style ofadvertisement in which you directly com-pare some aspect of your product withcompetitive products

Consumer: generally used in the market-ing business as the undifferentiated retailgeneral public, as opposed to the busi-ness-to-business market

Co-op advertising: advertising by retail-ers that includes the specific mention ofmanufacturers, who—in turn—repay theretailers for all or part of the cost of theadvertisement

Copy: the written portion of any adver-tisement, print or broadcast

CPM (cost per thousand): the typicalway to compare costs of different adver-tising venues

Chapter 16

Glossary

Customers: the people who buy yourproduct and whom you’ve made it yourlife’s goal to understand; your customerdetermines your product

Database marketing: using computertechnology to categorize your existingcustomers and to introduce your productto new customers through profiling,building mailing lists and so on

Demographics: a statistical view of apopulation, generally including age,gender, income, schooling, occupationand so on

Direct-mail advertising: a marketingeffort that uses the mail service to delivera promotional printed piece to the targetaudience

Direct marketing: a sales effort thatgoes directly from the manufacturer tothe consumer, without the use of aretailer or distributor

Direct-response advertising: a market-ing effort that, regardless of the mediaused, encourages the target audience torespond directly to the advertiser: throughthe telephone, a business reply card, acoupon and so on

Distribution channel: the manner in which goods move from the manu-facturer to the outlet where the consumer purchases them; in some marketplaces, it’s a very complex channel, including distributors, whole-salers, jobbers and brokers

Drive time: prime radio advertising time:6-10 a.m. and 3-7 p.m., when audiencemembers are driving to or from work

Focus group: a controlled group inter-view of a target audience demographic,often led by a facilitator; a set series ofquestions or topics are covered, and theresults are used to guide marketing efforts

Four P’s: product, place, price and pro-motion; the four elements of the market-ing mix; the raw materials with which amarketer must work

Four Utilities: form/function, place, timeand ease of possession; the four elementsrepresenting the client’s perception of themarketing exchange; as you increase thevalue of the Four Utilities in the con-sumer’s mind, the exchange becomesincreasingly beneficial

Frequency: the number of times a givenradio spot appears over a time period;with reach, determines the number ofimpressions made on the target audience

FSI (free-standing insert): a colorfulstand-alone sheet or sheets that ridealong with newspapers and carrycoupons

Full-service agency: an advertisingagency that offers a complete range ofcreative, media and marketing services; asopposed to a boutique or studio, whichfocus on creative services

GRP (gross rating point): TV and radiosystem in which each GRP represents aportion of the listening/viewing audience;in television, one GRP is 1 percent of thearea households with televisions

Institutional advertising: advertisingthat promotes a company rather than aproduct; generally produced for largercompanies

Internet: virtual electronic landscape ofconnected computers, rapidly becomingcolonized by commercial interests; youaccess the Internet with a computer,modem and browser software

Letter shop: a printing and mailing company that specializes in handling the production and dispatch of direct-mail campaigns; often includes mailinglist capabilities

Glossary

16.2



16.3

Line extension: adding a similar productto an existing product line to gain addi-tional shelf space or to draw a slightly dif-ferent demographic

List broker: a company that gets mailinglists from various sources and rents themto direct mailers

List manager: the in-house person whomaintains a company’s internal customermailing list

Loss leader: a product that a retailermight sell at a loss to stir interest and tolead to sales of other items

Marketing goal: goals you set to enableyou to reach the marketing objective;they’re the rungs on the ladder; achieve thegoals and you’ve reached your objective

Marketing objective: the marketing taskyou want to accomplish; should be rela-tively independent, easy to grasp andmeasurable

Marketing plan: the written documentthat describes your advertising and mar-keting efforts for the coming year; itincludes a statement of the marketing situation, a discussion of target marketsand company positioning and a descrip-tion of the marketing mix you intend touse to reach your marketing goals

Marketing tactics: you develop thesebasic action steps to enable you to reachyour marketing goal

Market segmentation: taking a marketand analyzing its members; allows you tospeak more specifically to members of aparticular segment (the market of males,for example, can be divided into manysegments: by age, education, wealth,activities, interests and so on)

Media plan: the portion of a marketingplan that deals with print and broadcastmedia; aims to get the most reach and

frequency in your target demographic foryour advertising dollar

Media schedule: the details of yourmedia plan: stations, publications, spotlengths, flight duration and ad size

Niche: a portion of a market that you haveidentified as having some special character-istic and which is worth marketing to

Perceived value: the value the targetcustomer sees in your product, regardlessof its actual value; the higher the per-ceived value, the greater the price youcan attach to your product; perceivedvalue is the key to branding

Point-of-purchase advertising: colorful,intrusive materials that are set up wherecustomers do their shopping; typically usedin in-store advertising at grocery stores

Positioning statement: a brief descrip-tion of the claim you want to stake foryour product in the consumer’s mind

Product life cycle: products go througha distinct cycle: introduction, midlife anddecline; of course, advertisers try to accel-erate the introduction, prolong the midlifeand delay the decline

Psychographics: mental or lifestyle profiles of potential customers used byadvertisers in the creation of advertising

Public relations: using the news or busi-ness press to carry positive stories aboutyour company or your products; cultivat-ing a good relationship with local pressrepresentatives

Publicity: promoting a positive image ofyourself, your company or your productsin the media without paying for space

Reach: the number of consumers in yourtarget audience who see your ad; generally,applied more strictly to broadcast media

Response rate: the percentage of peo-ple who actually respond to a mailing;you calculate a response rate to deter-mine the relative effectiveness of a mailing program

RFP (request for proposal): a solicita-tion to submit a proposal to perform work;generally, issued by government agencies

Sales promotion: efforts to gain extrasales on a product through short-term,usually price-related activities: couponing,special mailings, sales and so on

TAP (total audience plans): a type ofradio ad purchase plan that gives you

access to a range of dayparts at a reasonable rate.

Trade show: a commercial gathering atwhich vendors meet, conduct workshopsand seminars, demonstrate products andgather information on each other

Web site: a location on the World Wide Web; can be used as a sales tool or merely a marketing and informational site about your company;each site can contain hundreds of pages of information or just a basic,simple layout

Glossary

16.4



17.1

They say you can never be richenough or young enough.Whilethese could be argued, we believe“You can never have enough re-sources.”Therefore, we present foryour consideration a wealth ofsources for you to check into, checkout, and harness for your own per-sonal information blitz.

These sources are tidbits, ideas to getyou started on your research. They are byno means the only sources out there andthey should not be taken as the UltimateAnswer. We have done our research, butbusinesses do tend to move, change, foldand expand. As we have repeatedlystressed, do your homework. Get out andstart investigating.

As an additional tidbit to get you going,we strongly suggest the following: If youhaven’t yet joined the Internet Age, do it!Surfing the Net is like waltzing through avast library, with a breathtaking array ofresources literally at your fingertips.

AssociationsAmerican Marketing Association, 311 S. Wacker Dr., #5800, Chicago, IL 60606-5819, (800) AMA-1150 or (312) 542-9000, fax: (312) 542-9001, e-mail: [email protected], www.ama.org

Business Marketing Association, 400 N. Michigan Ave., 15th Fl., Chicago, IL 60611, (800) 664-4BMA or (312) 822-0005, fax: (312) 822-0054,

e-mail: [email protected], www.marketing.org

Direct Marketing Association, 1120 Ave. of the Americas, New York, NY 10036-6700, (212) 768-7277, fax: (212) 302-6714, e-mail: [email protected],www.the-dma.org

BooksBrowse the aisles and shelves of any

large bookstore to find scores of bookson how to develop your marketing andsales skills. You can learn something fromany book. Entrepreneur publishes aquality line of books helpful for the individual running a small business.

The best single book is AdvertisingProcedure (Prentice Hall) by J. ThomasRussell and W. Ronald Lane. Although it’swritten for a university audience, you’llbenefit from its very thorough coverageof all marketing topics. It includes hundreds of examples to illustrate itspoints. I highly recommend it.

Magazines And PublicationsFor the small business, business maga-

zines and newsletters contain lots of inter-esting material—and it’s usually more up-to-date than what you’ll find in books. I’velisted here a number of the best journalson marketing- and advertising-related is-sues. You should also be very familiar withthe best journals in your particular industry.

There are two kinds of journals in themarketing, advertising and sales industry:

Chapter 17

AppendixMarketing Resources

academic journals and trade journals.Avoid the academic journals. They’rewritten by professors for professors andhave little to do with day-to-day life inthe world of commerce.

There is no replacement for deep andextensive reading to increase your mar-keting and sales judgment. While it’s truethat you can’t learn everything frombooks, expanding your knowledge byreading will save you from the horror ofexperiencing every business mistakeyourself. Experience, as they say, is thebest teacher...and the cruelest.

Set aside a few hours every couple ofweeks to catch up on your journal reading. Besides the marketing-orientedmagazines listed below, you should bea regular browser or reader of Fortune,Forbes, U.S. News & World Report andEntrepreneur.

Advertising Age, 711 Third Ave., New York, NY 10017-4036, (212) 210-0100 or (312) 649-5476, e-mail: [email protected], www.adage.com.The bible of the advertising business.More news than practical information butsome good case histories. Also publishesAdvertising Age’s Business Marketing.

Adweek, 1515 Broadway, 12th Fl., New York, NY 10036, (800) 562-2706, fax: (212) 536-5353, e-mail: [email protected], www.adweek.com.Also an industry magazine, with a bitmore how-to content.

Direct, Primedia Intertec, 11 Riverbend Dr. S., P.O. Box 4294, Stamford, CT 06907-0225, (800) 775-3777 or (203) 358-4160, fax: (203) 358-5812,

www.directmag.com.A good basic magazine on the world ofdirect marketing.

DMNews, 100 Ave. of the Americas, New York, NY 10013, (212) 925-7300, www.dmnews.com.Very hands-on with lots of good ideas.

Guerrilla Marketing Newsletter, Guerilla Marketing International, P.O. Box 1336, Mill Valley, CA 94942, (800) 748-6444, fax: (415) 381-8361, www.gmarketing.com.This newsletter is put out by the enor-mously prolific Jay Conrad Levinson or-ganization, which originated the conceptof “guerrilla marketing.” Take a look at anyof his many books at any large bookstore.

Promo Magazine, Primedia Intertec, 11 Riverbend Dr. S., P.O. Box 4225, Stamford, CT 06907-0225, (800) 775-3777 or (203) 358-4160, fax: (203) 358-5812, www.primediabusiness.com.The best magazine on promotion. Much industry news but filled with ideas you can use.

Sales & Marketing Management, Bill Communications, 355 Park Ave. S., New York, NY 10010, (800) 821-6897, fax: (212) 592-6309, e-mail: [email protected],www.salesandmarketing.com.As the title indicates, this magazine focus-es on managing sales and marketing.

Target Marketing, North American Publishing, 401 N. Broad St.,

Appendix

17.2



17.3

Philadelphia, PA 19108, (215) 238-5000, fax: (215) 238-5378, e-mail: [email protected], www.targetmarketingmag.com. A how-to magazine for direct marketers.

Reference SourcesThe Almanac of Business and Financial Ratios by Leo Troy, publishedannually by Prentice Hall, gives you somefinancial rules of thumb for what othersin your line of work are spending onmarketing, advertising and many otherfacets of their business. If your ratios arewildly different, get curious.

Market Share Reporter is an “AnnualCompilation of Reported Market ShareData on Companies, Products and Ser-vices” published by Gale Publishing,www.gale.com.

The Small Business Sourcebook is awonderful resource. Published by GalePublishing, this hefty two-volume workgives you great industry-by-industrybackground, including start-up informa-tion, associations, licensing information,reference books, trade periodicals, statistical sources, special libraries, computerized databases and relevanteducation programs. It covers 326 industries, with general articles on 79business topics. Gale Publishing, 27500 Drake Rd., Farmington Hills, MI 48331-3535, (800) 877-GALE or (248) 699-4253, fax: (800) 414-5043, e-mail: [email protected],www.gale.com.

The Standard Rate and Data Services(SRDS) publishes a bookshelf full of invaluable and unique monthly booksthat you should be familiar with. Every-one in marketing and advertising usesthese volumes; they give the demograph-ic and rate information for each of themedia below.

Standard Rate and Data Services, 1700 Higgins Rd., Des Plaines, IL 60018-5605, (800) 851-SRDS or (847) 375-5000, fax: (847) 375-5001, www.srds.com.● Television and cable: lists all TV andcable stations in the country● Radio: lists major radio stations● Consumer magazines: lists all consumermagazines● Newspapers: lists all daily and weeklynewspapers ● Business publications: lists all businesspublications by industry category ● Radio small markets: lists small-marketradio stations ● Direct-mail lists: gives more than 40,000mailing list choices

With the Polk Co., SRDS also publishes an annual Lifestyle Market Analyst, which analyzes geographicalmarkets by assorted lifestyle interestsand market segments. It then matchesthese elements with broadcast and print media.

Thomas Register of American Manufacturers has been a standby foryears. It lists some 155,000 companieswith core information. A good place togo to get the basics or to find particulartypes of manufacturers in your area.You can find these at your local library.Also check their Web site atww.thomasregister.com.

Standard and Poor’s Industry Surveys are issued twice annually on 52 different industries, www.netadvantage.standardpoor.com.

Market ResearchACORN Lifestyles, from CACI MarketingSystems (www.caci.co.uk/acorn/) is auseful mass-market analysis tool.ACORN stands for “A Classification ofResidential Neighborhoods.” All ZIPcodes are broken down into neighbor-hoods (226,000 of them), in 43 clusterscategorized into nine groups, with

useful demographic information presented. For example:Affluent Families:● Top 1 Percent● Wealthy Seaboard Suburbs● Upper Income Empty Nesters● Successful Suburbanites● Prosperous Baby Boomers● Semirural LifestyleUpscale:● Urban Professional Couples● Baby Boomers with Children● Thriving Immigrants● Pacific Heights● Older Settled Married CouplesUp-and-Coming Singles:● High Rise Renters● Enterprising Young Singles

Mediamark Research Inc. (www.mediamark.com) publishes a 20-volume ongoing survey of consumerbuying habits for the advertising agency.You can find this in a good library. It correlates demographics of buyers with theproducts they buy. What consumer maga-zine will deliver you a higher percentageof sweater buyers? This will tell you GolfDigest is a good buy.

Simmons Market Research Bureau (SMRB) publishes its Study of Media andMarkets. This multivolume set contains de-mographic and lifestyle information forusers of specific products, and it relatesproduct usage to users’ media habits(magazine, radio and television). It showswhich media do the best job of reachingparticular market groups. The data mayalso be used to learn the demographiccharacteristics of the users of specific typesof products. Provides enormously usefulinformation on the consumer marketplace.Simmons also puts out useful summarieson all large urban markets. Simmons Market Research Bureau, 230 Park Ave. South, 3rd floor, New York, NY 10003, (212) 598-5400,

fax: (212) 598-5401, www.smrb.com.

Spending Potential Indices, publishedby CACI Marketing Systems (www.caci.com), covers home, entertainmentand personal financial services, cross-tab-ulated by income, age and U.S. ZIP code.

Web SitesHere is a grab bag of interesting sites

on the Web. Things are changing all thetime, so don’t be afraid to do a keywordsearch to catch new arrivals.

The Census Bureau’s “Official Statistics” (www.census.gov): Tremendous amount of information. Easily searchable by topic. You’ll needAdobe Acrobat or another PDF file readerto get the best look at the data.

Claritas (www.claritas.com): Extensivemarketing capabilities in this world-classcompany. Lots of big-league techniquesfor segmenting consumer markets.

Database America Companies(www.databaseamerica.com): Someuseful marketing and resource links.

Direct Marketing World (www.wowdirectory.com): Links tomailing lists and databases, a directory ofdirect-marketing professionals, and a library of articles and other resources.

infoUSA Inc. www.salesleadsusa.com):A prime source for business and consumermailing lists. Has good lists of 11 millionbusinesses and 110 million households.

The Silicon Valley World Internet Center (www.worldinternetcenter.com): If you want to feel the future, pay thisambitious and high-minded site a visit.Information on e-commerce, samples ofselling on the Internet.

Appendix

17.4

AAd Strategy Work Sheet, 7.18Advertisements

components of, 7.3–7.5grid system layout, 7.8print, 7.21sample, 7.7, 7.16size, 7.4size vs. run frequency, 7.14thumbnails, 7.9

Advertising, 1.6, 5.6, 7.1–7.27agencies, 7.8–7.12, 7.14budget size, 7.12case histories, 6.12–6.14cooperative, 8.5–8.6copywriting guidelines, 7.5–7.8design guidelines, 7.8effectiveness of, 7.26–7.27freelance talent, 7.11–7.12magic words, 7.6media, 7.15–7.26overview, 7.1–7.3print rates, 7.15saving money on, 7.11specialty, 8.9–8.10strategies, 7.18testimonials, 6.12–6.14web, 11.16–11.17

Affiliate marketing programs,11.16–11.17

Affiliate program networks, 11.16Agency of record, 7.12, 7.14AIDA (attention, interest, desire and

action), 7.3Almanac of Business and Financial

Ratios, The, 4.12American Society for Training and

Development, The, 13.6Application notes, 6.12–6.14Application stories, 6.12–6.14

AQH (average quarter-hour share), 7.24Associations, 17.1Attention, interest, desire and action

(AIDA), 7.3Average quarter-hour share (AQH), 7.24

BBacon’s Publicity Checker, 9.12Bankers, 1.8Benefits, product, 5.1–5.6Bingo card, 7.22Blogs, 11.7Books

marketing, 17.1reference, 17.3

Broadband Internet access, 11.2–11.3Brochures, 14.20Budgets, 4.11–4.12Business plans, 4.2

CCable Internet access, 11.2Call reports, 5.12–5.13Case histories, 6.12–6.14Closing (sales), 5.11, 5.14–5.15, 6.14“Commando purchasing operations,”

5.10Community service, 4.9, 10.1–10.5Company literature, 14.18–14.23Competition, 2.7, 2.9, 6.5Concept sell, the, 5.8Contests, promotional, 8.4–8.5Controlling the Assault of Non-Solicited

Pornography and Marketing Act(Can-Spam) of 2003, 11.14

Cooperative advertising, 8.5–8.6Copy, advertisement, 7.5Copyright, 7.5Copywriters, 7.5Copywriting guidelines, 7.5–7.8

18.1

Chapter 18

Index



Corporate citizenship, 10.1–10.5Cost per thousand (CPM), 7.24Costs

advertising, 7.2agencies, 7.9freelancers, 7.11saving money, 7.11

fixed, 6.4variable, 6.4

Coupons, promotional, 8.1–8.3CPM (cost per thousand), 7.24Cross-selling, 14.2–14.3Cross-training, 13.2CUME (cumulative rating), 7.24Current Customer Marketing Survey, 3.5Customers, 1.10, 2.3–2.8, 3.12

annual meetings with, 2.8business-to-business, 5.8–5.9collecting information on, 14.1–14.23false assumptions about, 2.9feedback from, 2.7–2.8selling to, 6.10–6.11

Customer service, 12.1–12.9. See alsoTraining

complaints, 12.5–12.6spot-checking, 12.7standards, 12.7, 12.9voice mail systems and, 12.4–12.5

DDangerous pricing, 1.6Database marketing, 1.6, 14.1–14.23Differentiated marketing, 3.1–3.3Digital Subscriber Line (DSL), 11.2Direct mail, 14.5–14.23

campaigns, 14.7–14.9coding, 14.8customer response, 14.9mailing lists, 14.4–14.5, 14.7materials, 14.7–14.23offers, 14.6results analysis, 14.9test mailings, 14.8–14.9

Direct Mail List Rate and Data Service,14.3

Direct marketing, 1.6, 14.5–14.7. See alsoDirect mail

Direct response, 14.6. See also Direct mail

Display booths (trade show), 8.7–8.9Distribution, 1.7, 2.11, 6.7–6.10Domain names, 11.12–11.13DSL (Digital Subscriber Line), 11.2

EElastic pricing, 2.5E-mail, 11.3–11.6Employees

customer service and, 12.2, 12.5false assumptions about, 2.10training and, 13.2–13.3

Exhibitions, 8.6–8.9

FFeatures, product, 5.1–5.4Financial plans, 4.2–4.3Five W’s, the, 9.10Fixed costs, 6.4Fliers, 14.15“Float,” 6.9Focus groups, 2.8Form and function (four utilities), 1.9Form letters, 12.4Four P’s, the, 1.7–1.10, 2.10–2.12Four utilities, the, 1.9FSI (free-standing insert), 8.2

GGlossary, 16.1–16.4Goals, marketing, 4.5, 4.7Graphic design, 14.18, 14.21Grid system (ad layout), 7.8

HHeadlines, advertisement, 7.6Hospitality suites, 8.7

IIndependent researchers, 2.8Inelastic pricing, 2.5Internet, the, 11.1–11.17. See also Web sites

blogs (weblogs), 11.7bulletin boards, 11.8–11.9company usage policy, 11.5connecting to, 11.2–11.3e-mail, 11.3–11.6

Index

18.2



18.3

listservs, 11.7–11.9local networks, 11.6message boards, 11.8–11.9newsgroups, 11.7–11.9overview, 11.2–11.3search engines, 11.9spam, 11.14web sites, 11.9–11.17wikis, 11.7–11.8

ISP (Internet Service Provider), 11.2–11.3

JJob coaches, 13.4

KKey marketing insight, the, 1.3

LLetters

form, 12.4sales, 14.13–14.14

Letter shops, 14.9List brokers, 14.4–14.5Listservs, 11.7Local networks, 11.6Logos, 14.18Loss leader, 8.3

MMagazines, 7.16–7.17, 17.1–17.3

business, 7.21–7.22consumer, 7.20–7.21subscriptions, 15.2trade, 7.21–7.22

Mailing lists, 14.4–14.5, 14.7Marketing assumptions, 2.8–2.10Marketing concepts, 1.3Marketing insights, key, 1.3Marketing matrix, sample, 4.10Marketing objectives, 4.5, 4.8–4.9Marketing overview, 1.1–1.13Marketing plans, 4.1–4.14

data for, 4.4–4.5review, 15.2sections

“blue sky,” 4.14budget, 4.11–4.12

executive summary, 4.13–4.14goals, 4.9, 4.11objectives, 4.8–4.9progress plan, 4.12–4.13threats and opportunities, 4.6–4.8

vs. business plans, 4.2vs. financial plans, 4.2–4.3

Marketing tactics, 4.5Market personality, 3.10Market research, 1.6, 2.7–2.8

annual customer meeting, 2.8focus groups, 2.8independent researchers, 2.8market segments, 3.4–3.8resources, 17.3–17.4trade organizations, 2.8trade press, 2.8

Marketsniche, 3.1, 3.3, 3.10, 3.12–3.13overview of, 2.1–2.12

Media, 7.15–7.26broadcast, 7.22–7.26outlets, 9.12print, 7.7, 7.15–7.17, 7.19–7.22public relations and, 9.1–9.13

Mentors, 13.4

NNetworking, 4.9Newsgroups, 11.7Newsletters, 14.21, 14.23Newspapers, 7.17, 7.19Niche markets, 3.1, 3.3, 3.10, 3.12–3.13

OObjections, 5.10–5.12, 5.14Objectives, marketing, 4.5, 4.8–4.9Offers, 14.6

PPaid-inclusion programs, 11.16Paid placement, 11.16Personal selling, 5.6Pitch letters, 9.7Place appeal, 2.11Place (four utilities), 1.9Point-of-purchase promotions, 8.4

Positioning statements, 3.8–3.10Possession, ease of (four utilities), 1.9Postcards (direct mail), 14.18–14.19Press kits, 9.12–9.13Press releases, 9.8–9.11Price appeal, 2.12Pricing, 1.6–1.7, 6.4–6.7

dangerous, 1.6elastic, 2.5inelastic, 2.5penetration, 6.6–6.7price appeal, 2.12skim, 6.6special, 8.3–8.4

Print advertisement rates, 7.15Product appeal, 2.11Products, 1.2, 2.11

false assumptions about, 2.9features vs. benefits, 5.1–5.6life cycle of, 6.8market fit, 2.10–2.12positioning, 3.8–3.10pricing (See Pricing)vs. services, 6.2–6.4

Progress Plan, 4.13Promotional appeal, 2.12Promotions, 1.6, 2.12, 5.6–5.7, 8.1–8.10

contests, 8.4–8.5cooperative advertising, 8.5–8.6exhibitions, 8.6–8.9loss leader, 8.3point-of-purchase, 8.4push-pull, 8.3special pricing, 8.3–8.4trade incentives, 8.5trade shows, 8.6–8.9

Publications, 17.1–17.3Public relations, 1.6, 5.7, 9.1–9.13

importance of, 9.1–9.3the media and, 9.4–9.10press kits, 9.12–9.13press releases, 9.8–9.11

Push-pull promotions, 8.3

RRadio, 7.22–7.24Reference sources, 17.3Reply cards (direct mail), 14.15

Resourcesassociations, 17.1books

marketing, 17.1reference sources, 17.3

market research, 17.3–17.4publications, 17.1–17.3Web sites, 17.4

“Rogue meetings,” 5.10RSS technology, 11.15–11.16

SSales Call Report, 5.13Sales force

contract, 6.12on-staff, 6.11–6.12retail, 6.10–6.11

Sales letters, 14.13–14.14Sales presentations, 5.7–5.15Sample Brochure, 14.20Sample Budget, 4.12Sample Direct-Mail Package, 14.10–14.12Sample Marketing Matrix, 4.10Sample Pitch Letter, 9.7Sample Postcard, 14.19Sample Press Release, 9.9Sample Sales Letter, 14.14Sample Self-Mailer, 14.16–14.17Sample Service Plan For An Interior

Designer, 12.8Search engines, 11.9, 11.15

marketing on, 11.16paid-inclusion programs, 11.16paid placement on, 11.16

SearchEngineWatch, 11.16Segmentation, 3.1–3.8, 3.10, 3.12–3.13Self-deception, 2.1–2.3Self-mailers (direct mail), 14.15–14.18Service clubs, 10.2Services, 6.1–6.4Shoppers, 7.19–7.20SIC codes, 3.7–3.8Small Print Ad, 7.7Software, 4.14Spam, 11.14Special events, 9.11Special pricing promotions, 8.3–8.4Standard Industrial Classification (SIC)

Index

18.4



18.5

codes, 3.7–3.8Stationary, company, 14.18Strengths, Weaknesses, Opportunities,

and Threats (SWOT) analysis, 4.6Surveys, 3.4–3.8. See also Market

researchSWOT (Strengths, Weaknesses,

Opportunities, and Threats)analysis, 4.6

TTaglines, 3.9Talking About Your Business (Stage 1),

1.12Talking About Your Business (Stage 2),



14.22TAP (total audience participation)

programs, 7.24Television, 7.24–7.26Testimonials, 6.12–6.14Thumbnails, 7.9Time (four utilities), 1.9T1 Internet service, 11.3Total audience participation (TAP)

programs, 7.24Trade incentives, 8.5Trade organizations, 2.8Trade press, the, 2.8Trade shows, 8.6–8.9Tradeshow Week, 8.6Trainers, 13.4Training, 13.1–13.6. See also Customer

servicecross-training, 13.2employee development, 13.4–13.6new hires, 13.3–13.4

UUndifferentiated marketing, 3.1–3.2USP (unique selling proposition), 5.5

VValue, 2.4–2.7Value triangle, the, 2.7Variable costs, 6.4Verbosity, 5.3VNR (video news release), 9.12

WWeb browsers, 11.6Web design companies, 11.10–11.11Web hosting, 11.11–11.13Weblogs, 11.7Web sites, 11.9–11.17, 17.4. See also

Internet, thebuilding, 11.10–11.11designing, 11.10–11.11, 11.13–11.15domain names, 11.12–11.13e-mail capability, 11.14hosting, 11.11–11.13marketing on search engines, 11.16promoting, 11.13RSS technology, 11.15–11.16search engine registration, 11.15selling from, 11.13visitor log, 11.15

Web users, 11.10Wi-Fi (Wireless Fidelity), 11.7Wikis, 11.7–11.8Wireless Fidelity (Wi-Fi), 11.7Work sheets

Ad Strategy, 7.18Talking About Your Business (Stage

1), 1.12Talking About Your Business (Stage



4), 14.22World Wide Web. See Internet, the

YYellow Pages, 7.19Yellow Pages Ad, 7.16

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