Tuesday, September 25, 2007

Crystal Ball Marketing

In the past few months, I have watched several businesses open and close in my community. The latest to bite the dust was a New York style deli around the corner. Was it to be my fate to welcome a new place only to have it close it’s doors in a couple of months. In the span of a few months, a coffee shop, Mexican restaurant, grocery store and drycleaners had all shut down. Here in Michigan where unemployment is among the highest in the country, it would be easy to place the blame on the economy. While the economy certainly played a role these business failures can be traced to fundamental errors made by the owners.

Nosiness is a professional hazard, so I talk to everyone, and ask lots of questions. I had chatted with the owners of the businesses on many of my visits so in every case had gotten to know their story. Many of the businesses had opened and closed in less than 6 months. In every case the owners had been filled with enthusiasm and hope only to close up shop a few months later. So, what happened?

The economy does impact spending. But let’s be clear consumers do not stop spending money they simply become picky about where those dollars go. This means that businesses have to work a little harder to attract their customers. Each of these businesses had failed miserably at attracting customers. They opened their doors and hoped for the best. None had a solid marketing plan (I asked) and apparently all were severely under capitalized. The owners all mistakenly believed that they could not afford to market so their efforts were a couple of fliers and coupon offers in local papers. Yeah, that worked out real well.

It may surprise you but these owners are not unlike many business owners. So for all of you out there allow me to share this: Consumers do not have a crystal ball that will direct them to your business. You have to TELL them not only that you exist but WHY they need you. You have taken the time to develop a business idea, raise enough capital to get started so isn’t it worth it to close the deal. Without customers, you don’t have a business so shouldn’t the acquisition of customers play a central role in your planning? Consumers are not psychic and the mere presence of a building (or website) will not guarantee you business. In fact as a business owner, the majority of your time should be spent on acquiring business and creating systems to improve the customer experience. Again - no customers, no business.

Marketing does not require a million dollar budget. There are many creative, low cost ways to acquire customers. The key is to understand your target market and find the most cost efficient and effective way to reach them. Who is your market? (Here’s a clue, your answer should not be “everyone.”) How and where does your market make decisions? How does your product/service help them solve a pain point, or avoid pain? Here’s a great example. The Mexican Restaurant that was briefly open did a fair share of take-out business. They had a small dining area which was perfect for the lunch crowd but most of their business was take out. Yet they did nothing to market or cater to this business segment. What could they have done? Local delivery service could have helped to grow this market. Fax and express phone service are other low cost ideas that could have worked. Dominos Pizza built an empire by filling a customer need and marketing it to death. By the way, they were not the best tasting pizza but they certainly were savvy in their marketing.

Marketing is not a nice to do task, it is essential to the life of your business. You cared enough to start your business so share that passion with your target market by telling them what you can do for them! Stay with me in coming weeks as we look at low cost ideas and methods to get you the recognition you deserve.

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