What is a customer worth to you?

A fairly simple question isn’t it?  And it’s one of the most important statistics any small business owner should know.

But it’s amazing how many businesses don’t know the answer.

Knowing what a customer is worth is simply knowing the long-term value of a customer to your business.  It’s often called “Lifetime Customer Value”.  To know it, you should know the answers to the following three questions:

1. On average, how much does a new customer spend on your business in the first 12 months?.

2. What is the average length of time customers buy your products or service?

3. On average, what do customers spend with your business after the first 12 months until they are no longer a customer?

When you know the answers to these questions, you will understand one of the most important marketing measurements in your business.

So why is lifetime customer value important?  Here are two reasons.

1. It will help you to set a marketing budget.

Your marketing budget shouldn’t be a random number pulled out of thin air.  It should come from knowing you lifetime customer value.

As a business, you must decide how much you’re willing to invest to “buy more customers”, and you base this number on the lifetime value.  I ask you this question.  Would you spend $100 to buy a customer that returns $2,000 in profit to your business?  Of course you would.  (Well at least I hope you would!)

But…..would you spend $100 to buy a customer that returns only$100 in profit to your business.  The answer is obviously a big fat NO!  But you don’t know that unless you know the lifetime value.  As I said, a very important number to know.

2. It will help you know if your current marketing strategies are effective or not.

Any smart business must track sources of leads and referrals.  If you aren’t, then start doing it TODAY!  If you find that your ad in the local paper delivers two new clients a month, that might sound great.

What’s not great (and what will send you broke) is if that ad costs you $1,000 per month and the lifetime value of those customers is $300 each.  Spending $1,000 to earn $600 isn’t smart business.  But you will be surprised how many businesses still spend advertising money that delivers absolutely no return.  I see it everyday.

So it’s now time to do some homework.  Look at your customer base and find the answers to the first three questions in this post.  The answers will highlight to you how effective your marketing is and give you some great insights to decide where to spend your marketing dollar.

This post is one of admiration.

For years I’ve admired the real estate industry and their marketing systems.

I think other businesses can learn from it and in this post I’ve listed what I think are the 7 most important lessons small business owners can learn from real estate marketing.

1.  To sell something, you need to market it.

Imagine if you went to an agent and they said to you – “we will list your property but we won’t do any marketing.  We won’t create a promotional flyer, we won’t take any photos and we certainly won’t promote it in our shop front”.  You would walk out the door. So why do other businesses believe they can sell products and services without any marketing?

What real estate agents do well is they include marketing as a cost of sale.  To sell the product, the investment in marketing needs to be made. A good lesson and process for any business.

2.    Good copy sells

Agents use good copy and often use professional copywriters come up with the words to sell their properties.  They highlight unique selling points and develop headlines that capture buyers attention.   It makes you wonder why so many small business websites begin with the words – “Welcome to Company X”.  You don’t see too many “Welcome to my house” lines in real estate property ads do you?

3. Good photography sells more houses.

Real Estate Agents use good photography to showcase every property, and a property that is poorly photographed stands out for all the wrong reasons.  This is an important lesson when creating marketing materials for your products and services.  Invest in good photography, invest in good design and show your products in the best light.  It will help customers to choose you over your competition.

4. First impressions are everything

In real estate, first impressions are everything.  A buyer forms an opinion as soon as they drive up to a house and agents know it.  The same principle applies with any business.  Your first impression in most cases it will be the deciding factor if someone will do business with you.  It pays to get this right every time.

5. You need to know your target market

When presenting a property for sale, agents know it needs to appeal to the local target market.  They know the demographics of an area and how to make it appealing to the right buyers. This is fundamental to the successful marketing of any business.  Know who you’re targeting and market your product to them.

6. Measure your success, track and follow-up your leads.

It might be annoying at times, but have you noticed when you view a property the agent always asks for your details? By walking into a property you have become a sales lead and by taking down this information the agent can put hard figures on how successful their lead generation activity has been.

They also have some figures to share with the property owner when they ask how many people viewed the property.  Imagine if the agent said to the owner “I’m not sure exactly how many people came through, it seemed like a lot”. You would be shopping for another agent.  By tracking leads the agent can then follow them up to help sell the property.

7. Marketing is a system

Now I’ve saved the most important marketing lesson to last. The Real Estate Industry see marketing as a system.  When a new property is listed, agents systematically go about implementing that system to attract the right buyers for that property.   This system includes:

1. Marketing Strategy – Identification of unique selling points and key messages.

2. Marketing Collateral – Posting “For Sale” signs, designing flyers with good photography and good copy using a consistent brand identity and format.

3. Lead Generation – Website promotion, advertising, direct selling to buyer databases and open house inspections.

4. Lead Conversion – Providing contracts of sale, contacting interested parties and taking properties to auction.

5. Measurement – Tracking sales leads, managing offers and determining the numbers of interested parties.

So what sort of marketing system does your business have to attract and convert leads to customers?.  If you don’t have one, then you are probably getting left behind.

So there you have it.  What do you think?  Can any of these lessons help to market your business?

If you get only one message, let it be that you need a marketing system for your business.  Get systematic about your marketing and watch your business grow.

Good word of mouth is priceless.

When others say good things about you, most of the hard work is done.  It’s then up to you to convert the sale – and it’s much easier to sell when you’ve already come highly recommended.

I’ve been working with a few new businesses recently and I’m finding many are overlooking a key marketing opportunity – that is using friends and family to help market their business.

So why is there marketing value in friends and family?   It’s because they know, like and trust you – the first three critical steps the customer must do before they buy from you.

The question you need to ask is, do your friends and family know exactly what you do?  I bet they don’t.  And that’s a shame because you’re missing out on one of the best word of mouth marketing opportunities available to your business.

In my experience, most business owners spend 90% their time telling total strangers about their business.   Yet they fail to give friends and family the information that can deliver new customers to the door.

So how do you tell them what you do?  Here are three steps.

1. Tell them on the benefit your business provides.

This is the first step.  When you talk to your friends and family, they must be clear on the service you offer, and how it benefits the consumer.  You must be able to communicate it clearly and concisely.   After all, you need them to remember what you do and taking five minutes to explain it won’t make it memorable.

2. Share your business details

Once you’re clear on your message, you need to share it.  This can be via email, letter or by just picking up the phone.  My advice is to use email.  Draft a polite and well worded email that lets your friends and family know your new contact details.  Also tell them you have started a new business.  Show them how they can get in touch and include some copy that explains the benefits your business provides.  Don’t go for the hard sell, just inform and educate.  The rest should take care of itself.

3. Pick up the phone and network

Now the information is out there it’s time to pick up the phone and network.  This doesn’t meet catching up with every single person you emailed, but find a few friends and family who may be good sources of referrals.  Go and have a coffee with them, catch up and tell them more about your business.

In business and in life, there is one common thing we can say about friends and family – they want to see you succeed. Giving them the information to help make you successful, can be one of the best marketing decisions you will ever make.

Image Credit: Herb Hyder via Flickr

Gold is EVERYWHERE!

Well marketing gold is at least…..

When I work with clients, I love finding little bits of marketing gold.

It can come in all shapes and sizes – either big nuggets that make an immediate impact on sales or little sprinkling of gold dust when melted together can add real polish to a marketing campaign.

The challenge for many small businesses, is to know how to recognise marketing gold from just plain old dirt.

Let me give you an example.

I worked with a business in 2011 to establish a clear brand position in their market.  The project involved the development of a marketing plan and it’s implementation.   The market was highly competitive and my clients products are known for their quality and longevity.

Unfortunately, they don’t promote this fact as a key selling point, nor do they use testimonials to highlight this benefit.

My challenge as a marketer, was to bring this benefit to the fore with examples of the products quality.  And during 2011, a little piece of marketing gold landed in our lap.

Whilst meeting with the client and discussing this very point, one of their staff mentioned that one of their products (which was 26 years old..), had been brought in for a service.  The product looked a little worse for wear – it had masking tape in a few spots but the product still worked like a dream apart from a minor part that required replacing.

What I found interesting was this was nothing new to this business and they took this for granted.

But in my world this is marketing gold.  What a great example of the quality of their product and a great opportunity to highlight this benefit through some targeted PR and promotion on their website.

Some of the ways an example like this can be used to market the business include:

• Press release to industry magazines as a general news story.
• Used as a case study or white paper topic.
• Used as a topic of a blog post.
• News items on the company website.
• Use as a testimonial to promote sales of the latest version of that product.
• Used in sales brochures to highlight the product quality as a key selling point.

This example highlights how important it is to keep your eye out for marketing gold.  Real life success stories are great marketing fodder and help businesses to show the unique selling points of their business.

Image Credit: bfishadow via Flickr

It’s time for a VERY short quiz.

Hands up who owns a Smartphone?

If my numbers are right, 46% percent of you will have your hand up.  And if I ask the same question in 11 months time, that number should be 60%.

It shouldn’t come as any surprise that Smartphones are now the mobile phone of choice for the Australian consumer.

The Apple iPhone, Android and Windows 7 phones are fast becoming the norm rather than the exception – in fact in June 2011, there were 29.28 million mobile services in operation in Australia and 46% of those were Smartphones.   Industry estimates put this figure at 60% by the end of 2012.

This kind of growth is hard to ignore and Smartphones are changing how consumers access the internet, search for products,  consume news and manage social networks.

In June 2011, Telstra in association with The Nielsen Company released their yearly Smartphone Index Report which highlights some interesting facts relevant to small businesses marketing.

Below I have highlighted five statistics from this report that all businesses should know about Smartphone users to improve their marketing in 2012.

1.    44% use Smartphones daily to check email.

With many consumers checking emails on phones and not desktops, it is important that your email communication is clear and easy to read.  In most cases, clear and brief communication with simple text will be more effective that complex graphics.

2.    24% use their Smartphone to find locations of retail stores.

Do you have a website?  Have you claimed your free listing on Google places yet? If not, this has never been more important.  Do it now and make sure you give your address and phone number so customers can find you.

3.    61% of Smartphone users are accessing the mobile internet daily.

The Smartphone is likely to overtake the desktop as the device most consumers use to get access to the internet. This is predicted to occur at some stage in 2014. If you have a website, is it mobile friendly?  Is your contact information easy to find?  If it’s not – it must be.

4.    31% of users compare prices of products before going to the store.

To be considered by consumers, your products and pricing must be available on your website. If you don’t clearly display your product information, how do consumers compare?

5.    51% of users are happy to receive ads on Smartphones if they have opted in to receive messages.

With this statistic,  the golden rules of permission marketing apply.  Allow people to give you permission to market to them and they will be more responsive to your marketing messages.

As a piece of research, the Telstra Smartphone Index makes for compelling reading.  I urge any small to medium-sized business owner to have a look and be ahead of the game when it comes to mobile marketing.  Click here to see the full report.

Sources:

• Telstra Smartphone Index 2011, The Nielsen Company
•  Australian Communication and Media Authority Communications Report 2011

Image Credit: Gene Hunt via Flickr

Want some marketing tips? Here are 10 you can read in 60 seconds.

1. Seed Your Market

Find key opinion leaders in your market, and make sure they sample your product. They will be a great source of word of mouth advertising.

2. Be consistent

Ensure all of your marketing messages and branding are consistent. Consistent marketing and branding builds trust.

3. Ask customers how they found you.

Ask new clients how they found you. It will help tell you where new business is coming from. The answers may surprise you.

4. Provide a bold guarantee

Guarantees move the risk of purchase from the buyer to the seller. A very effective selling tool.

5. Place testimonials next to your call to action

Place testimonials next to your checkout if you sell on-line. It helps customers to feel good when they are making a purchase.

6. Ask your customers for feedback

Who better to ask for feedback than your customers?. They can give you some great marketing insights to improve your marketing.

7. Make your product easy to demonstrate

Ever wondered why the top row of letters on your keyboard say QWERTYUIOP? It was so typewriter sales people could type the word “Typewriter” easily when demonstrating the product. They sold lots of typewriters……How easy is your product to demonstrate?

8. Form business alliances

What sort of businesses are more likely to refer you business?. Think about forming alliances to generate more referrals.

9. Contact lapsed customers

Lapsed customers are a great source of new business. Make sure you stay in touch to keep your business top of mind.

10. Be a child friendly business

Do you make it easy for parents to buy from you? If you are targeting parents in a retail store, make it easy for them to navigate your store with a pram. You could even offer some toys for kids to play with whilst the parents browse.

These are just some of the tips you will receive in our weekly marketing ideas. If you want to receive a free idea every week, just register in the right hand corner of this page. You can unsubscribe at any time.

We never run out of good marketing ideas and neither will you….

I’m always amazed at how many business owners say they don’t do any marketing.

Nearly every time, it’s at a networking function where they have handed me a business card and told me what they do.  ”Never done any marketing?” I respond.

“Don’t look now, but you’ve just been marketing your business to me. And you’re also at a networking function which is a marketing tactic in itself”.  It’s often a bit of a light bulb moment where the person actual realises the different between marketing and advertising.

It’s amazing how many businesses don’t distinguish between the two.

If you were to google a definition of marketing, you will find answers such as:

“The action or business of promoting and selling products and services” or “Marketing is the management process for identifying, anticipating and satisfying consumer requirements profitably”

You will notice none of this identify “advertising” as the key component of marketing.  It’s just the tool that businesses are most aware of.

So my point with this post is for business owners to consider marketing in much broader terms.  My own definition is “Marketing is everything a business undertakes to sell their product or service to a consumer”.

Yes, this might seem broad, but marketing is broad and needs to be considered this way.

With this understanding, you will realise that nearly every business decision you make has a marketing impact.  From the name of your business to how you speak about your business at networking events.

So if you think you don’t do any marketing, think again.  If you talk about your business, you are marketing your business.

Everyday I talk to businesses owners needing help with their marketing.

It’s great that they recognise they need help. With nearly all that I speak to, some commons themes arise.  Most will say, “I printed some marketing flyers and they didn’t work” or “I advertised in the local paper and didn’t receive a call”.

I also have business owners wanting help to produce marketing materials.  They want help to put a flyer together or a sales brochure.  When we look closer and ask some probing questions, it becomes clear that the business doesn’t have a clear marketing strategy. Any flyer or brochure put together based on their current messages will be a waste of time AND money.

The flyers, brochures and advertising are what we call marketing tactics.  They are the tools marketers used to execute a marketing strategy.  The reality is, if the strategy isn’t right, then no tactic will deliver a result.

We often find that the tactic  choice was correct, but the poor implementation meant that the business owner didn’t get the results they expected.  Again, it comes down to getting the strategy right.

So here are three tips for business owners to help refine your marketing strategies.

1. Know your target market intimately

It’s not just good enough to know your target market.  You need to know them intimately.  You must know who they are, where they are and what problems they have that you can solve.  Find the key driver that will motivate them to buy and focus your marketing messages on that.  Your results will improve dramatically.

2. Use copy that talks to the customer needs.

Most marketing copy written by non-marketers has the same problem.  Commonly, it overdoses on the word “we”. Bland and banal wording such as “We provide quality service and client satisfaction” is everywhere. Newsflash, the customer doesn’t care about what you do, they want to know how you will solve their problems.  Focus on that in any marketing you create.

3. Refine your brand positioning

Brand positioning is the most challenging part of your marketing strategy.  It defines why you are different from your competition and identifies the compelling benefits that make your business memorable. If you get your positioning right, you will have the focus to produce marketing materials that will deliver results.

So before you head out and design some flyers, or put your ad in the local paper.  Make sure you get your marketing strategy right.  And if you need help doing it, please give us a call on 1300 351 141.

Anyone who knows me, knows I am a bit fanatical about branding.

I believe that good, consistent branding is critical to business success.  Unfortunately, in my travels as a marketing consultant it’s often hard to get this message through.  I often find an attitude of “near enough is good enough” or “we don’t want to invest our money in that”.

On Monday this week, I was lucky enough to spend a few hours with a small business owner who gets it.  He doesn’t have any marketing qualifications, or specific marketing experience other than his own business but he is fanatical about his brand. That small business owner was Kelvin Ong, the Managing Director of Beauty Grace, a beauty therapy business in the Sydney CBD.

Kelvin gave me some insights into his business and his views on branding that I thought would be useful to readers of the MarketingHQ blog.  Here are some of his insights:

1.    His brand is everything

Kelvin sees his brand as the most important asset of his business. He protects it, nurtures it and ensures his message is consistent at all times.  He is uncompromising when it comes to his brand and he knows it is a cornerstone to the success of his business.

2.    Near enough is never good enough for his brand.

Kelvin shared with me a story where he paid for some marketing activity, and the agency that designed the piece of marketing material distorted his brand.  Some may have ignored this but not Kelvin.  After a few requests the logo was still not fixed so Kelvin got legal on them.  He demanded his logo be used correctly or he refused to pay.  Now that’s what I call doing everything you can to protect the brand.  Near enough is never good when it comes to branding.

3.    Support your brand with good imagery.

For his business, Kelvin understands the need to market his staff in a professional way.  He uses professional images throughout his marketing to showcase his staff because knows they are critical in growing his brand.  You will find these images at the bottom of his email signature, on his Facebook page and on his website.  He is now taking this  one step further by getting some professional videos taken of his employees talking about some of the services they offer.

So next time you consider your brand, take a leaf out of the book of a savvy business owners such as Kelvin Ong from Beauty Grace.  His brand is everything to his business, as it should be to yours.

Everywhere I turn, there is a reality show on TV about renovating.

Don’t get me wrong.  I love these shows.  I enjoy watching creative people take something that’s run down and turn  it into something special.  It’s a skill I’d love to have.

I was watching “The Renovators” and couldn’t help but see the similarities between some principles of renovating and marketing.

Whilst I was watching these poor buggers renovate an entire house in just 11 hours, I came up with 7 things a renovating show can teach you about marketing.  Things you do hey…

So here they are, let me know what you think.

1. You must have street appeal

They all talk about “street appeal” – which in the marketing world means first impressions count. Nothing is more important in marketing.

What’s the first impression customers have of you? Is your business looking a little run down in need of some TLC?  Or is it a slick operation that invites customers through the door with great branding and compelling sales messages.

Your business must have street appeal to get customers through the door.

2. You’ve got to spend money to make money.

Would you spend $30,000 on a new kitchen if  it added $70,000 to the selling price at auction?  I know I would.

The same rules apply in marketing.  Good marketing is an investment, not an expense.  A good marketing strategy will grow your business and return back to you much more than you spend.   But you’ve got to invest the money first .  When it’s done one well, you will get your money back and some.

3. Know your target market.

So you’re trying to make your property appeal to a young professional couple but also a family with three kids.  Huh?  Try picking one target market and make it REALLY appealing to them – it will work much better for you.  Know your target market and create a product that suits their needs.  The same rules apply for your business.

4. Use good tradespeople.

Even if you’ve never done any renovating, you still know a good “tradie” is worth their weight in gold.  A dud will just make your renovation a nightmare.

The same goes with marketing.  A good consultant or creative agency are worth their weight in gold – and good ones are worth paying for.

Don’t use a dud tradie just because they are cheaper –  you really do get what you pay for.

5. Spend money on quality materials

There  is nothing worse that a great bathroom renovation with a crappy plastic toilet seat.  It just lets the whole room down.

The same goes with your marketing materials.  Spend money on quality.  Don’t print your business card or advertising flyers on the home printer.  And please….. don’t go for the free business card option to save yourself $200.

It just makes you look cheap.

6. Fix one room at a time

Pick one room first and do it right.  Don’t try to do everything at once, you will suffer from burnout and lose momentum.

With your business, start with something simple.  It might be starting an e-newsletter every month or fixing up your website.

Just don’t leave things half-finished.  Get the website done and then move on to the next project.  You’ll get a better result.

7. Stick to your  budget

How many times do couples go over budget in these shows….seriously.  Set yourself a budget and stick to it.

Track how you are going against your budget and measure everything.  Measure, measure, measure…how else will you know its working?

Just like renovating, it’s important in marketing to get the foundations right. Build those foundations and you will achieve great results from your marketing.

Now if you don’t mind, I’m going to paint a bright purple feature wall in my lounge room….yeah, as if!