Tuesday, January 26, 2010

Where should I direct my spending in these tough economic times?

SCORE counselor Alan Yarnoff once again offers his insights on the necessity of promoting your business in a slow and changing marketplace.

“Over the last eighteen months, the small business owner has faced a wide range of problems: liquidity has become difficult, sales have softened, and costs continue to grow. To the detriment of their future, companies have cut back or eliminated promotional spending as a means of staying afloat.

This, I am sorry to say, is probably the least effective method of looking positively at your long term growth. You must look at the strategies that helped build your business at a time when it’s most needed. Look back and recall how you grew your customer base, what promotions worked best, and then concentrate the limited promotional funds you now have to make those successful tactics work again.

If the best way to turn the tide is by keeping your current customer base, then place your promotional endeavor against this target. Open up a new line of communications with them by e-marketing, social networking: Twitter, Facebook, You Tube, or blogging. With a series of meaningful e-mail bursts, enticing offers, and actionable options for them to act upon, your business will start to improve.

If the road to survival needs a new base of customers, then apply your best efforts to sourcing new business. Review what worked in the past when you had the funds to use multiple methods of promotion and spend your dollars there. If print is the right way to go, advertise there. If special offers or couponing had positive results, then spend your limited dollars there.

Lastly, review your website and make sure it is working as hard as possible in building your business. You must allocate a portion of your promotional budget to making your site always look fresh and exciting. For new customers, it’s their first opportunity to meet you and shop your store. For returning customers, it’s their way of finding out what’s new, what special offers are available, and new trends in the marketplace.

Remember, the goal is to keep you business viable until the economy improves and the worst thing you can do is to stop being aggressive, because being aggressive is what built your business in the first place."

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, January 12, 2010

What can I do to improve customer loyalty?

Much has been written about the erosion of customer loyalty, and how cost-conscious buyers are putting a higher priority on price.

Fortunately, the repeat customer is far from becoming an endangered species. But in today’s highly competitive environment, you need to do everything possible to ensure that relationships with your customers don’t end at the point-of-sale.

“You need to give your customers something of extra value if you want them to return,” says international hospitality consultant Linda Novey-White. “Look at your business like a customer would. What could you be doing better, and what is your competition doing better?”

Start by anticipating your customer’s needs. Think ahead to what the market will be demanding in the coming months and determine what you can do better. Also keep abreast of trends that may influence your customers’ purchasing decisions. They may alert you to the need to modify your offerings to respond to new regulatory requirements, or changes in preferred styles and formats.

You can also gain insights into customer needs simply by asking and, more importantly, listening. Too many businesses take it upon themselves to advertise the next big thing without considering whether their customers want it or not. And while everybody wants a good price, they want a good value even more. Listening to and acting on your customers’ needs and concerns will make a lasting impression on even the most meticulous comparison shopper.

Adding a personal touch will also forge a stronger bond between you and your customers. Casual conversations will yield important information such as birthdays, professional accomplishments, and family events that you can recognize with a card or other low-cost token of appreciation. Everyone appreciates a helpful reminder in this busy world, and a message about an upcoming event such as change in postage rates or a new industry requirement will cement your reputation as a go-to source for more than just your product or service.

It’s also helpful to regularly share news about your products or services, and the issues that affect their use. You can do this on your Web site, or via a customer e-newsletter. Just make sure your customers specifically request to be on your mailing list.

Finally, make sure you deliver what you promise. “Too many people offer hype and then don’t follow through,” Novey-White says. “Delivering a product or service that disappoints is the fastest way to lose your customers.”

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, January 5, 2010

How can I maximize word-of-mouth referrals?

Even in an age of high-tech communication, the most powerful and effective means of generating new business is also the oldest: word-of mouth. People naturally turn to trusted friends or colleagues for recommendations regarding product or service providers. You’ve probably used it yourself when searching for a mechanic, making major purchases, or weighing an outlet to promote your small business.

And because word-of-mouth referrals are free, you can’t be the return on investment that a positive referral can generate.

While a successful word-of-mouth marketing chain can sometimes start on its own, don’t assume that the phone will start ringing off the hook. Any successful marketing tool—word-of-mouth included—requires a proactive, patient approach to ensure that the right message gets to the right people.

A good way to get started is to create a simple marketing message that is easy for people to pass along. If it’s not simple, it won’t pass the test. But make it specific to a real benefit or need, not something vague or general. If you can, include success stories or testimonials from real customers. These can have a tremendous pass-along impact.

To stimulate word of mouth, you might also consider asking customers for referrals and recommendations. And put your networking efforts into high gear. If you network and get to know people in your community or industry, they will think of you when they need your product or service. Join networking groups and local business organizations, and attend conferences. Donating your products or services to local charities can generate goodwill and get your name around.

Consider introductory discounts or free samples. People are more willing to try a new product or service if they can do so economically. Many small companies have jump-started sales through carefully controlled giveaways.

Above all, perhaps recognize that people will happily spread the word about your business if you treat them well. Tales of negative experiences or poor performance can be difficult to correct once they are passed on. That’s another important reason why it’s important to continually provide superior service, address problems quickly, and anticipate your customers’ needs. Those are the things they’ll remember—and talk about.


Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties