8 strategies to give your business an unfair marketing advantage
You need to do things differently to break free from the norm. Discover how to understand customer value, increase cashflow and boost your profits
In business it's very easy to look around at competitors to help you make decisions on things such as how to advertise, price your products/services and opening times etc.
However, more often than not, your best breakthroughs will come from deploying strategies that are not usual in your industry.
If you remember the Twix advert from years back, ‘the norm' was the in thing and Twix promised to offer a break from the humdrum. In tough times, doing unique things and implementing unusual strategies will give you a competitive advantage.
Plus it will be much more interesting to go against the tide and do the opposite of what your peers are doing.
You may think the term “think outside the box” is a little too clichéd and a few years ago I may have agreed. Today though, cliché or not, the principle is right.
There are times where you have to differentiate yourself, even more so in a world consumed by technology where new shiny objects are being released every day. For that reason I'd also highly recommend Mike Vance's book Think Outside The Box.
In the meantime, here are eight powerful strategies you can implement in your business for what I call an ‘unfair marketing advantage'.
1. Segment your best customers/clients
There will always be a percentage of your customers who will return most frequently to consume whatever you have to offer. Therefore, it's important to keep an updated database with this type of information so that you can create offers especially for them. Never neglect your other customers; you can also make timely offers to them based on their buying patterns.
The restaurant owner who can separate ‘married with children' from ‘single' can direct different offers to each group.
You can dramatically increase your bottom line by tailoring your offers to different portions of your database as opposed to one mass offer.
2. Collect and use customer information
Coupled with the above point, the more information you can gather, manage and utilise about your customers, the better off you'll be. As a standard, you need to be collecting names, full addresses, email addresses and phone numbers of all your customers. If you can get this information from visitors or prospects then great.
Dates of special occasions such as anniversaries and birthdays would also make a great addition to your knowledge bank as well as any other sort of interesting information. With this information, you are building a relationship with your customers and staying at the forefront of their minds. You are no longer just another interior designer or financial planner to them when you contact them wishing them a happy birthday.
3. Cash in hand
Cash is king and there is an old saying that states: “Money is expensive especially when you haven't got it”. As a matter of fact, there have been multi-million pound companies who have declared bankruptcy for the sake of a few thousand pounds.
When the time comes that you need cash, there's a possibility you will have to pay a ridiculous amount to get it and, chances are, you may regret the structure of the deal at some point.
Here are some things to consider:
a) It is infinitely better to be the one with money than the one without
b) The best time to get money is before you need it
c) No matter how severe your immediate need, stop to thoroughly consider the long-term consequences of the terms
To multiply cashflow, here are some things to do:
a) Accelerate your collections
b) Delay outgoing payments
c) Reduce your day-to-day expenditure
d) Increase the customer value
Using the knowledge you have in your customer database and applying the personalisation rule you will usually be able to create a cashflow surge therefore increasing your customer value. Here are two quick things you could implement:
a) Counter-season programming….
“This is our slow season, so we are offering…”
“Most people don't want to buy new furniture right before Christmas, so…”
b) The ‘reason why sale'
– We're moving
– Our/your anniversary
– My accountant is out of town
– It's the end of season
4. The importance of your total customer value
Don't fall into the common trap regarding your business assets. The only asset that is not easily replaceable is the customer.
It often confuses me when I consult with a business that doesn't have a clue what the lifetime value of their customer is. This is one of the most important numbers in your business and governs what you can invest to acquire a new customer. Furthermore, it dictates the allowable cost of keeping a good relationship.
If you do know this number, what is your strategy for maximising the value?
5. Work tirelessly on your financial accountability
This is a very simple premise; if there is no way to measure your return on investments and you can't hold something accountable, then you should not be spending a penny on it. No excuses.
There are large companies that rely heavily on mainstream distribution and for them, this principle is not doable. Their primary focus is brand building and advertising on billboards in a more traditional sense. This is not the standard you should live by and these companies would do better if they were to implement this principle.
As a general rule, you can and should live by this principle.
6. The most important number
The most important number in your business is the cost of sale. You have to be constantly aware of the costs to make a sale to a lead or prospect from each of your available sources.
Cost-per-lead is another number you should monitor but this number can be a little deceiving because: if the highest cost-per-lead has the highest conversion rate then it can quite easily become the lowest cost per sale.
For instance, let's say you run a restaurant and you use Facebook ads, Google pay-per-click and your trade journal to attract customers. Let's assume that the cost per acquisition is £15 from Facebook, £25 from Google and £35 from your Trade Journal. Which of these appears to be the best media?
You won't know until you can measure which customers are your most frequent visitors and stay over a period of time. One year's worth of tracking might provide these numbers:
Cost to acquire: £15.00
# of times visited in six months: eight
% still active after 12 months: 40%
Cost to acquire: £25.00
# of times visited in 6 months: six
% still active after 12 months: 20%
Trade journal customers:
Cost to acquire: £35.00
# of times visited in six months: 14 %
still active after 12 months: 30%
So which of these is the best source?
You need to find the numbers that govern your business and keep a close eye on them. The more money you spend on advertising for new customer acquisition, the more important this is.
7. The power of profit
I often advise business owners and entrepreneurs to make it profitable to do business with them. As an extension, give your customers the perception that it is profitable for them to do business with you.
At first glance, you can look at profit as solely monetary but if you can't offer a clear financial argument then you have to be creative and look into other places. Your customers can benefit from saving time or having peace of mind.
8. The ‘big pound' sale
You can quite regularly underestimate the size-of-purchase and the buying capacity of your customers. I have fallen into this trap many times. More often than not, there is up to 10% who will step forward to make a premium purchase if and when you offer it to them.
In industries such as dental and chiropractic, this is often termed as a pre-pay program where patients would purchase packages of £2,500 to £7,000 way in advance of them actually needing or even using it. Can you imagine what this would do to your bottom line?
If you do not create a large ticket item in your place of business then figure that you are leaving a substantial amount of money on the table.
Adam Carter is a direct response marketing specialist and regularly consults with a variety of entrepreneurs and small businesses. You can get a free customised marketing plan specific to your business here.