Small Business: Small businesses need focus to promote, sell

Here at the chamber of commerce we do a bimonthly networking event that attracts mostly small-business owners and managers. At the end of each session we ask them to fill out an event evaluation form that doubles as a survey. One of the questions asked is "What is the one biggest challenge to your business?" The top answers are always "Getting more new business/customers" and "Improving name recognition." No surprises there, but how can small businesses effectively address this challenge?

The key is communicating with your target buyers. Unfortunately, too many businesses approach the task of attracting customers by experimenting with hit-and-miss marketing tactics that, because they have not been researched and well planned, don't yield the desired results. The businesses that survive this trial-and-error phase eventually come to realize the need to develop a marketing communication plan that incorporates three components: promotion, advertising and public relations. The trick is narrowing down the choices and coming up with a program that makes sense for your business.

First, you must understand who your target buyer is and what is meaningfully unique about your product or service. Know your buyer in demographic, lifestyle and other descriptive terms. Also, know that the customers' perception determines what is "meaningful" about your product.

Meaningful differences are defined as those business or brand attributes that end users consider in making purchase-decisions among all the different available choices. A clear understanding of your target buyer and perceptions of your product will determine your ability to take the next step a business positioning strategy statement.

The business positioning strategy statement will help you maintain consistency in all your promotion, advertising and public relations programs. This is particularly important to small businesses that are often challenged by scarce resources.

The statement should address who the target buyer is, what the competitive environment is, and what the meaningful differences in the products or services are when compared to the competition.

It may also include reasons why these meaningful differences are valuable and some idea of a business "personality" that will be created and used in all marketing programs.

The next step is to determine the best message to communicate your product positioning to your target buyers. You must construct a memorable, unique selling proposition about product features and benefits that are meaningful to your target buyer. This may be in the form of a slogan or ad message that correlates with your buyers' needs and wants.

Finally, figure out the costs of various promotion and advertising options in terms of your available budget. There will probably never be enough money to do everything you want to do. The trick is to develop a program that includes a little promotion, advertising, and public relations, but not all three at the same time.

And make sure that all three are designed based on your unique selling proposition. Your spending in this area may range anywhere from 1 percent to 10 percent of net sales, depending on your type of business. Typically retail stores spend 4 percent to 6 percent of net sales for marketing support. Another consideration is what your direct competitors spend. Whenever possible, you should at least try to match that amount. Keep in mind also that if yours is a new business, you'll have to spend more to establish your market share objective.

When you're finally ready to select specific promotional, advertising and public relations activities, keep these things in mind:

Promotion programs provide direct-purchase incentives, in contrast to most advertising, which provides reasons to buy your product instead of the competing brand. The most important thing is to come up with a promotion that sends the right message about your business and that is consistent with your positioning strategy. Games and contests, premiums and gifts, coupons and rebates, or product demonstrations are all possible promotion activities. But remember that the work is not done once the promotion has begun. It's critical to monitor the effectiveness of your promotion so that if it doesn't generate the results you were looking for you won't waste time or money doing it again.

Advertising must be interruptive that is, it must make someone stop doing what they're doing long enough to read or hear your ad. It must also be credible, and memorable in order to work. For the ad to be memorable the media schedule must provide for adequate ad frequency. And never discount word-of-mouth advertising, which has always been the most effective advertising form and usually involves little cost. The best result of paid media presentations of your ad is when the ad acts as a catalyst to achieve word-of-mouth advertising. And here's an important reminder: Satisfied customers are your best advertisements.

Public relations efforts can be a great way to obtain free advertising, and can leverage your advertising and promotion programs. Make it a habit to constantly consider the image your are projecting, and take time to learn about public relations opportunities like public service activities, special events and using news releases.

(Sonja Chasteen is the business assistance manager for the Springfield Area Chamber of Commerce.)