New vs. Repeat Business

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Once upon a time, I worked for a business in which salespeople were paid bonuses for prospecting. In other words, they were incentivized to find brand new customers. This seems like a logical thing to do, as it allows you to grow your customer base. However, salespeople, like the rest of us, have only so many hours in the day for work. The result then is that a focus on prospecting leads to a lessened emphasis on existing customers.

Upon a very basic superficial analysis of our sales data, we suspected that this incentive program was flawed. So, we undertook a more detailed analysis of our customer sales history. What we discovered was that the average order size of repeat customers was more than double that of brand new customers. This was definitely an eye opener. And, this was before considering the fact that repeat customers purchased from the business multiple times, whereas a large number of new customers never returned.

Based on this, we completely flipped the incentive program to focus on repeat business. This led to increased order sizes, more repeat orders, increased commissions for salespeople, and more profitability for the company.

The point is to not neglect your existing customers. You already have them. They purchased from you for a reason. Give them reasons to come back. Focusing solely on new business is bad practice. While you need to attract new customers, definitely nurture those who already give you money.

Using Stock Photos

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If you use photos you find on the Internet in your social media posts, make doubly sure that you have permission to do so! If you do not, you could receive a bill in the mail for royalties, and that bill could be for thousands of dollars. That is a mistake that lots of people have made, and it can really sting! So just be careful.

However, there are some sites that are a repository of royalty free images. What you are looking for are images that are listed as (1) free for commercial use, and preferably (2) no attribution required. The ‘no attribution’ part just means that you don’t have to give them credit for using the image in a social media post.

There is a large number of sites to peruse for images. Below are a few:

  1. https://pixabay.com/

  2. https://www.pexels.com/royalty-free-images/

  3. https://www.shutterstock.com/

Note that some of these sites also sell images, so if you’re looking for free ones, be sure you search the free sections.

Social Media Engagement

Is your business active on social media? If it isn’t, it should be. But that’s for a different discussion. For those of you who are active, what activities to you undertake in social media?

It’s important to understand that social media in a business context is more than just a tool for advertising. Advertising is one-way communication. You send out a message in some form, you hope people see it and ultimately act upon it in some way.

However, social media is very much a two way communication tool. It is super easy to gather insights on what people are saying about you, and it provides you a platform to respond to comments.

So, if you are using social media solely as an advertising platform, you are doing it wrong. There are a number of activities you should undertake as part of your social media strategy that will help generate awareness, followers, and business.

  1. Listen. Feedback from consumers is invaluable. Before social media, it was hard to hear what was being said about you. But not so much anymore! You should continually scan social media for any mentions to your business, good, bad, or neutral. That feedback could help you improve your operations, marketing, etc.

  2. Respond. We as humans like interaction. This is no different in the social media space. When you see comments about your business, respond to them. Customers like to know that they are being heard. If someone makes a positive comment, thank them. If someone makes a negative comment, apologize for whatever the problem is, and work with them to try to fix the situation. However, if the negative comment is absolutely incorrect, don’t be afraid to defend yourself….politely.

  3. Entertain. This one is a little weird, but let me explain. Some of the most popular business social media accounts out there belong to companies who bring it upon themselves to go beyond straight up trying to promote their products. They crack jokes, make random references, and respond in a humorous way to consumer or competitor social media posts. For a good example of this, check out the Twitter account of Wendy’s. The attention that Wendy’s attracts for its quirkiness is great for business.

This all sounds like a lot of work, doesn’t it? Well, that’s because it is. You’ll need to designate someone to be in charge of your accounts. You’ll also need to specify a plan of action, e.g. how often to check the accounts, when to respond, how to respond, etc. If you can figure out how to work this into your day to day operations, it’ll improve your presence in the social media world and likely help your bottom line.

The Tax Benefits of Marketing

Marketing is great, right? Of course it is. It can drive sales, increase awareness, and stimulate word of mouth, among other things. However, there is another benefit of marketing that people may not know: many marketing expenses are tax deductible. That’s right! You can write off your marketing expenses. So not only does it pay to do marketing to attract business, but it also affects your bottom line by reducing your taxable income.

So what is deductible? Basically, 100% of your advertising expenses, be it advertisements on TV, radio, billboards, social media, as well as any direct mail campaigns.

Are there any caveats? Well, yes. The expenses must be directly related to normal business activities. This means basically donations and sponsorships are not deductible.

For more information, contact a CPA professional or the IRS.

Source: https://www.irs.gov/publications/p535#en_US_2017_publink1000209178

Talk To Your Customers

Talk to your customers. Seems so simple and obvious. But, it may not be. When I say talk to them, what I mean is get feedback from them. What do you like? What don’t you like? What would you change if you were in charge? These are very broad, open ended questions that have endless possible answers. However, the feedback you could receive could be invaluable.

I worked for a company once where we regularly called and visited our customers to get feedback. We then used that feedback sometimes to change our marketing activities. This allowed us to be more successful at our jobs by tailoring what we did to our market.

If you value marketing, then you know that your business centers around your customers. Maybe they have an insight from the outside that you don’t have or simply cannot see. Ask questions. Get feedback.

When you get feedback, you don’t have to always use it. However, when you do use it, be sure to thank the customer for his or her insight. Maybe even provide them a gift as part of your thank you. It will make them feel good to know that you actually paid attention to what they had to say.

Do know however that a lot of feedback that you receive will be very contextual. In other words, it will be something that that one particular customer wants. You have to determine though if enough other customers want that same thing before going out and making whatever change it is. If that customer is the only one, then your changes will be done to make only one person happy. That is not an efficient use of resources.

In sum, ask questions. Many great marketing ideas have come from customers. Who knows, you might find some for your business.

Defining Your Competition

Do you know who your competition is? I hope so. By keeping an eye on them, you can glean insights and learn new ways to go toe to toe with them. Sometimes they do little things that you don’t that might give them an edge. And if you can incorporate those little things, you can take that advantage away, allowing you to compete on other things.

However, getting back to the original question, do you know who your competition is? It is a very common mistake for businesses to cast a too narrow net in defining who their competitors are. This can lead to less than optimal outcomes for your company.

So, be sure to cast a very wide net in terms of defining your competitors. You have direct competitors, who are very easy to identify. Let’s take the example of a pizza parlor. Your most direct competitors are other pizza places. They compete with you for pizza customers. However, other restaurants are also competitors. Be sure to treat them as such. Just because a taco place doesn’t sell pizza doesn’t mean they aren’t a competitor. Customers could very well choose them over you. Supermarkets are also a competitor. People could choose to buy groceries and make dinner at home instead of going out to eat. Don’t forget about this.

Casting a wider net is more complicated, because you have many more competitors to have to understand and address, but the benefits of understanding them all will benefit you greatly. It will allow you to create a better set of marketing activities to attempt to attract positive attention and ultimately drive sales.

To Deliver Or Not To Deliver

It seems like the biggest trend in small business these days is delivery. You can get almost anything delivered right to your door. Does providing delivery make sense for your company? Let’s talk this through.

First, if you are a service business, this obviously does not apply to you. Delivery is a little different than we-come-to-you service, e.g. dog grooming vans. I may address this in a different post.

For those of you who sell goods rather than services, ask yourself the following questions:

  1. Do our customers want it? First and foremost, would consumers find value in having your products delivered? If the answer is yes, then you should probably consider doing it. Would it attract new customers? What are the customer ramifications if you don’t do it? Will they leave? Or never come in the first place? You need to answer these questions first.

  2. Can we afford to do it? Delivery is not cheap. You have to pay someone to do it or have an employee step away from other duties to do it. You have to have a vehicle capable of delivering the products. You have to carry insurance on that vehicle. All of this costs $$$.

  3. Can we afford to not do it? Quite simply, if our customers expect it, you should really really really consider it. If your competitors do it, you should probably do it. By doing it, you can take away a competitor’s advantage over you.

  4. Are we okay with fewer customers in the store? A major advantage of people coming into a physical location is that they tend to browse and potentially buy more than they intended. This is great for business. If you have delivery, however, you lose this benefit. Are you okay with this?

There is the possibility of having delivery be a source of competitive advantage. Years ago I worked for an office supply retailer in a small town. Their major competitor was a big box store (that shall remain nameless) who sold office supplies. The management of our store decided to offer delivery within a predetermined geographic area. This service was very appealing, especially to business customers. The big box was not flexible enough to make the decision to offer delivery themselves. As a result, it ended up being a key strength of the small business that allowed it to compete against the big box.

In sum, the delivery craze is in full swing, and I don’t see it going away any time soon, if ever. I am not necessarily recommending that everyone join the wave. However, it needs to be considered, with a full weighing of both the pros and cons.

The Little Things

We hear all the time that it’s the little things that count. In business, this is absolutely true. There are so many little things you can do that will make a big difference with customers. And what’s great is that these things are free. Retailers, below are some little things you can do. You would think these things would be obvious, but sadly sometimes they are not.

  1. Greet customers when they enter your store. Have you gone into some business and the employees failed to acknowledge your presence? I have many times, and it’s a major pet peeve. It is not hard to say ‘hello,’ ‘good morning,’ ‘welcome,’ or whatever. If you are currently busy, let them know that you’ll be right with them. Ignoring them does nothing.

  2. Smile. This one should be obvious, but maybe it’s not. Smiling at customers gives them a sense of ease and warmth. This can only help their evaluation of your business and products.

  3. Show them the way. If a customer has a question about where to find something in your store, don’t just tell them where it is. Instead, take them directly to it. This little extra effort can pay big dividends.

  4. Take an interest. Your interaction with a customer should not start with ‘how may I help you.’ You should start with ‘how are you,’ ‘nice weather we’re having,’ or something else that shows you are out for more than just the sale. It humanizes the employee-customer encounter, puts customers at ease, and helps to build relationships.

Again, these things are very simple and free to do. Hopefully you already do them, but if not, try to incorporate them into your company’s culture. It’ll work wonders.

"It's Not My Problem"

I was having a discussion with someone recently, and she said that she ran into a situation with a company. When she attempted to address the situation, an employee said, “it’s not my problem.”

I’m sure you already know what I’m about to say, but I’m going to say it anyway: “it’s not my problem” is quite possibly the worst thing you can say to a customer or potential customer. In what ways is this a terrible thing to say? Let’s examine:

  1. It indicates a lack of concern for the customer.

  2. It indicates a refusal to even discuss the matter.

  3. It is very dismissive.

  4. It opens you up to negative word of mouth via social media and personal interactions.

  5. It is quite rude.

Even if the situation is not your problem, you need to find a better way to deal with it. Regardless of fault, you should apologize that things aren’t right. Then you should help them work through the issue as best you can. This doesn’t mean admitting fault (unless it was your fault). It means to go into relationship building mode and try to create something positive out of the whole ordeal. They are going to likely leave your business unhappy, but if you can reduce the level of unhappiness, it might save the relationship.

Instead of saying “it’s not my problem,” carefully explain what happened as you see it. By explaining your side, sometimes customers will see the error of their ways and own it. Of course, sometimes they won’t. In those situations, you can either choose to end the relationship or offer some sort of olive branch, either a refund, a discount, or some sort of incentive for future patronage.

But you don’t have to always give consumers what they want. Stand your ground when you feel it is necessary. You don’t want to become known as the place that is a pushover. Create some standards and stick to them. You’ll be better off in the end.

What is your plan?

Do you have your marketing all planned out? If not, know that it is important to do so. Small businesses tend to do marketing in a haphazard way. Something sounds good, they think about it for a bit, and then do it. This can sometimes result in positive outcomes, but sometimes not.

It is best to develop a marketing plan that lays out everything you are going to do for a set period of time. Let’s say a year for illustrative purposes. Create a plan that discusses in detail what activities you’re going to do and when, and most importantly, why you are doing them. These activities should be created and carried out with a goal in mind.

Make sure that you are specific. Are you going to do a coupon campaign? If so, lay out all the details. Who are you sending it to, how many, how long will the campaign last, what will it cost, what do you hope to get out of it, and how are you going to measure it?

Thinking through all these details ahead of time will make the marketing process go so much more smoothly. And it will help you improve the effectiveness of your marketing over time.

Managing Expectations

We all have expectations for goods and services. We base our evaluations of products using those expectations. Performance exceeds expectations and we’re satisfied. Performance does not meet expectations and we’re dissatisfied. So as a business, what should we do with this information?

Well, the answer is complicated. We aim to put our best foot forward with our marketing efforts. We promote our company and products in the most positive way. Why? Because that is what attracts customers to us. But there is a problem. Based on how successful we are in painting ourselves in a positive light, consumers can come to us with super high expectations. The higher the expectations, the greater the chances that we are not going to meet them.

So do we do things to create lower expectations in consumers? Well, you can, but then you have another problem. If you don’t promote yourself so highly, consumers might not be attracted to you in the first place.

The best approach is to take a balanced approach. Don’t make claims of performance that you cannot match. Don’t promise food to a customer’s table in 10 minutes unless you can actually deliver that. Set realistic expectations for the consumers. In this example, if you know it takes around 10 minutes to get food out, add a small buffer to that and communicate it to consumers. If you tell customers it will be 10 minutes and it takes 11, they might get a little impatient. If you promise 15 minutes and it takes 11, they will be happy it was early.

Another tactic is to couple expectations with a guarantee of some sort. Promise a certain level of quality or service and back it up with a refund or some other compensation. This will help consumers manage their own expectations. If you do this, you will need to make sure you are able to meet those expectations consistently. Because if you cannot, you will be paying out frequently on the guarantee and that is not good for business.

Managing and dealing with expectations is always a challenge. Consumers are more demanding than ever. So have a plan in place to manage expectations and address the ramifications if they are not met.

Answering Negative Comments Online

Social media is a beautiful thing. It allows you to get closer to your customers and get instant feedback. This provides companies with lots of really good feedback, both good and bad. However, the question is….what do you do with the negative comments found on Twitter, Facebook, Yelp, etc.? This is a big question.

You basically have three options:

  1. Do nothing. This is the easiest alternative. You can choose to ignore the comments. However, this is not a good idea. Ignoring the comments don’t make them go away, nor do they fix a potential problem. The complainer may cut off patronage and continue to say bad things about you.

  2. Apologize. You can say you’re sorry for what happened. Thank them for their feedback and promise to prevent the problems from happening again. This resonates with customers. They like to know that you are listening and care about their customers. With this alternative, you could also provide some sort of reparations as well, e.g. refund, coupon, etc., but you don’t necessarily have to.

  3. Refute. Finally, you can refute the negative comments. Maybe the customer did something wrong or had unrealistic expectations. In these cases, defend yourself. The mantra ‘the customer is always right’ is wrong. Customers shouldn’t necessarily be able to get whatever they want, whenever they want, especially when they are being unreasonable. In fact, some chronic complainers use online complaining as a form of blackmail, expecting you to apologize, give them their money back, etc. If you use this option, be sure to be tactful, thanking them for their feedback before refuting their claims. Other customers who see this course of action might be impressed that you didn’t simply lay down for unreasonable customers.

Being able to effectively respond to online complaining should be a crucial part of any company’s promotional strategy. Need help with this? Feel free to contact me.

Be Who You Are

Not everyone wants to buy your products. Let me repeat that. Not everyone wants to buy your products. It’s a hard thing to hear, but it’s true. Knowing who does and doesn’t want your products can allow you to focus on those most likely to buy from you.

Because you can’t be all things to all people, it is important to be who you are. That will serve you and your business well. Stay focused on what has made you successful and you will continue to be successful. By trying to branch out into other customer segments, you may marginalize your business. You may end up pulling resources away from those more valuable segments. This is a big no-no. Stay true to yourself.

For example, if you are a screen printing business who has become well known for a line of quirky, funny shirts, moving into other types of clothing or themes may water down that image that consumers have of you. And if that built up image has created significant value for your company, you don’t want to do anything to harm it. The results could be disastrous.

So, resist that urge. It will serve you well.

What are your Goals?

Does your organization have specific marketing goals? And are those goals evaluated regularly?

If your answer to either of those is ‘no,’ then you should consider revamping your marketing activities. By having specific goals, you create specific targets to work towards. This allows you to focus and have direction. Alternatively, if you don’t have goals, your marketing efforts are likely not going to be as effective as they could be.

Your goals should be clearly written, easy to evaluate, and measured regularly. For example, “increase month over month sales by 5% in each of the next six months.” This is a clear goal, it is easy to evaluate, and can be done so monthly. If you miss a goal, you can then reconfigure what you’re doing to improve your chances of meeting the goal at the next measurement period.

If you don’t have goals, or you do but don’t measure them, how can you know how well you are doing as an organization?

An added benefit of creating goals is that it forces you to step away and take stock of where you are and where you want to be. This allows for some consideration of changes in what you do to improve the performance of the company.

Final note: the creation, evaluation, and updating of goals should be treated like any other marketing activity you do. It is probably as important as your promotional activities.

Sales Patterns

Do you have a firm understanding of the ins and outs of your sales data? Are there different types of customers who purchase different types of products from you? In a previous career, I was involved in digging through our company’s sales data to develop a deeper understanding of what our customers bought. This was a B2B business, and we had detailed information on each customer, including their industry and location. We were able to develop profiles of different customer types and identify clusters of products that they commonly purchased. This allowed us to arm our salespeople with lists of products to focus on during sales calls. We also used this information to create promotions targeting various customer types. This helped our salespeople be more efficient, which was good for them as well as the company.

If you have the ability to link sales data to specific customers, you can also do this type of analysis to gain a better understanding of your customers and how to target them with products that they’re most likely to consider purchasing.

Hello World....

Maranello Consulting is a marketing consulting operation based in Dallas, TX. We have experience in many areas of marketing, including strategy, planning, social media, customer service, data analysis, market research, and marketing troubleshooting. Maranello can also develop and deliver custom corporate training workshops on all things marketing. If you have questions, please do not hesitate to contact us at maranelloconsulting@gmail.com.