It seems like marketing is one of the first things cut in a down economy. How do you convince a company to market instead of laying off employees, for example?
I can’t advocate doing marketing instead of keeping valuable employees, as the decision is always specific to a business and its needs. However, people often misunderstand the role of marketing in helping to generate sales and generate them more quickly. If marketing is done correctly — and that is not always the case of course — it can help find prospects and then help them buy your products or services with the least amount of time and expense. As such, it may be the best way to keep your business moving ahead in a down economy. Also in a down economy, it’s actually a great opportunity to do marketing because there is less noise from competitors who are scared or unable to do marketing themselves. Given the lack of demand for marketing elements such as advertising, promotional items, and other marketing programs, the price for these services can usually be negotiated to get great bargains.
You talk about profiling your potential customers. How can this be done cheaply and efficiently? After all, if you don’t have the money for marketing, how do you come up with the money for market research?
One of the most underutilized and cheapest means to do market research is talking to your fellow employees, customers, prospects and lost accounts. You can talk to them in person if you have a store or other convenient means to meet them. If not, use the phone and call them! The only way you can truly understand their buying intentions, processes and preferences is by hearing from the horses’ mouths! If you are collecting quantitative data such as age, magazines they read, trade shows they attend, etc., then you can use a survey. Create your own on paper if you want to send or interview them over the phone but a great way to get professional help are the free survey tools online such as Surveymonkey and Zoomerang.
Not only do they provide loads of template questions and well-designed formats, but they automatically tabulate and report on the data once collected. Another inexpensive suggestion is to ask some customers to participate in an advisory board. You might want to create a special offer to reward them or simply have your CEO send a letter to help recruit and thank them. Set up regular meetings (weekly, monthly, quarterly depending on your need) via a free conference call line such as freeconferencecall.com and talk through important issues that you want their vote and input on. I also mentioned in the beginning of this answer to talk with lost accounts.
These people will be the most honest and usually most interesting to learn from. Go after them with in person or phone interviews and ask them why they didn’t buy from you. If you can afford to become a customer of each of your competitors, that is another ultra-rich resource of market research that you can’t read from a secondary source.
In understanding the buying process, you say “How much time can and should a sales rep spend on a deal and are certain deals worth more to your company than others?” OK, how does a company determine that? Are there instances when a $100,000 sale is better than a $1 million sale?
Of course it depends on your business. A $1 million sale will typically take much longer and cost more to get than a $100,000 one so the question is it 10 times less? In many cases the big deals take so much time and money that they are hugely risky in that lost deals can be crippling to smaller businesses. However, it really depends on what you sell. You want to ensure is that you have a handle on how much time and money it takes to attract, foster and close a lead and how much profit does that leave for your company. I shiver when companies don’t know if they are actually making money or not from their marketing spend. The only way to know this is track where a lead comes from and if and when it closes.
There are systems that do that and more but even if you only use Excel to look at the deals that closed and what lead sources they came from, that helps. As for the intangible value of deals, some deals may be worth more to your company simply because of the brand, panache, referenceability or other future business benefits the account will bring to help close other business. As such, some companies decide to cut prices or offer more than normal to win that specific account since it can help leverage other business going forward. This is one case where a smaller deal may be worth more in the long haul. Startups often look for and even buy that showcase account while other companies may want a large volume of showcase accounts instead. Another obvious exception to low price, high value are all the internet businesses that want to accumulate eyeballs, even non-paying ones.
Google certainly exemplifies this as a business that saw huge value in winning subscribers regardless of the “sales price”.
You counsel that marketing staff should be out with sales staff on a regular basis. Should companies look towards hiring people who can do both jobs? Isn’t that more effective for smaller businesses? It would seem effective for large businesses, too.
Sales and marketing are so different that it would be quite impossible to hire someone who is good at both, including me. I carried a sales bag for a while and did OK but the skills and personality of marketing and sales are distinct and in some ways conflicting. Sales is all about understanding human interaction and behavior to manage the negotiation and contracting of a transaction. Marketing helps get them both to that point.
I believe that it is possible to outsource both if you can’t afford one versus the other. However with that said, if I had to select one to hire, I would hire a good sales person since the base salary will typically be much cheaper than marketing’s and the customer relationship is the most important asset for a company to build and keep. If you have a sales consultant come and work successfully for a while and then leave with that asset, it’s very costly to your company. Marketing consultants can come in and quickly do their job and while they need some knowledge and experience with your company to do the marketing work, it’s far less of an investment than risking your customer relationships.
You have great advice on going to the “watering hole” to find new customers. Explain a little more what you mean by that, especially using Google alerts.
I call places were your prospects get information about your type of product or service a watering hole. This might be magazines, online resources, trade shows, association meetings, etc. While there are an unlimited number of potential channels, most industries and niches have a few that are respected and should be known as key places for you to have your information and presence. To build this list, brainstorm with colleagues and get a baseline list that can be shared with customers for additional ideas and polling which ones they frequent. Google Alerts is a great free tool that you can seed with search terms relevant to your industry such as product names, competitor’s names, etc. It will then send you daily/weekly (your choice) emails with any misinformation on the internet matching your keywords. You can look at this to add to your list of watering holes as well s stay up to date ion important industry info.
Don’t’ forget to also check out the media list on your competitors’ Web sites for places and well as writers who have covered the space in the past.
You also have good advice that is relevant when it comes to web marketing: “Don’t be impressed by quantity. Quality always rules.” How do you convince people that it isn’t the number of page views – it’s the people eyeballing the pages that count?
It’s like handing flyers on the street corners of New York. If you stand there long enough, you might get one person interested in what you are pushing to hundreds of passersby who are just trying to get to work or another place other than the one you are promoting. However, the cost and effort is probably not worth it compared to focusing on where your most likely customers will be receptive to such info. For example, if you sell dating services and advertise on the Super Bowl, you will get a huge volume of views of which some subset will be interested in your service. However, advertising much more cost effectively in the night life section of your local paper may have fewer overall eyeballs but better suited eyeballs that are receptive to buying your service. Anything that is focused on a specific geography (more specific is better) and demographic or other segmentation strategy, you will limit the overall audience but hone in better on the people that are most likely to be interested in what you have to say and sell.
