Kimberly Smith, University of Houston
Small Business Development CenterEach year, about 400,000 new small businesses open their doors to the economic landscape in their communities. But according to www.bloomberg.com, a whopping 80 percent of these new ventures will fail within the first 18 months. What’s the difference between one energetic, inspired entrepreneur with an idea that succeeds and a similar one who just can’t seem to get his or her business off the ground?
To answer that question, we spoke with Kimberly Smith, director of marketing and publicity at the University of Houston Small Business Development Center. She shared her insights about strategic marketing tactics and how they help small businesses across all industries build their brand.
“If you’re an entrepreneur with a great idea, and you’ve had big sales at opening that later tapered off, you might be experiencing a combination of problems,” said Smith. “When business owners come to me for advice, I tell them in order to be successful, they have to have a well-planned, well-researched marketing strategy.”
According to Smith, if you’re a new or aspiring small business owner, there are five fundamental elements of a marketing strategy that will move you closer to achieving your business goals in the first year and beyond.
Marketing Strategy Do’s:
1. DO identify your ideal target market for your product or service.
It might be that everyone is your “target market,” but not everyone is ideal. Find out exactly who needs your service or product, who wants it, and who can afford it. Do lots of research, and find out exactly who fills those three categories.
“For example, when Apple started marketing their computers, they knew they wouldn’t be appealing to the cheapest consumers, so they used a different approach to marketing,” Smith said. “They advertised (their product) as a ‘work of art’ that would appeal specifically to people who would appreciate art — like graphic designers, illustrators, innovators, musicians. That made the market much smaller and easier to target.”
2. DO figure out How to reach your ideal target market.
Where are the people who need, want, and can afford what you’re selling? How can you get the word out to them?
“The best way to answer these questions is to do a lot of research,” Smith said. “So, if your ideal target market is professional women between the ages of 30-40, the next step is to figure out where they purchase. Online? In brick and mortar stores? Do they listen to certain TV or radio shows?”
Smith said that pinpointing the specific buying behaviors of your target market will lead you to the most effective places to spend your advertising dollars.
Follow up with social media. “Figure out which social media platform is the best fit for your product, and start posting there,” Smith said. “It takes time and effort, but it pays off.”
Helpful Hint: Call a TV or radio station, or a community newspaper — any publication that posts a website with banner ads. Tell them you’re looking at their ads, and explain which market you’re trying to reach with your product or service. They can tell you exactly who their ads will connect with, so you’ll know if your advertising money will be well spent there or if you need to keep looking.
Free Advice: “The librarian here at the Small Business Development Center at the University of Houston will run a competitive marketing analysis free of charge for any small business owner,” Smith said. “She’ll help you figure out the trends so you can market more effectively in your particular industry.”
3. DO use surveys.
If you’re in business, you have access to people. It’s always a good idea to ask them questions about your products and services.
“Even if you’re still at pre-venture stage and you don’t have actual customers yet, survey your friends and family,” Smith said. “Ask them if they think the price points you’ve set are acceptable. Get as much feedback as you can about that.”
Ask how often they might need or want the product or service you’re selling, and how they tend to receive information about new products — online, social media, flyers in the mailbox?
“That’s extremely useful information for your new business,” Smith said.
For new businesses that have already opened, Smith suggested a by-invitation-only special party consisting of a specific focus group of guests. “If you’ve opened, you can use your own place to bring customers in after hours, let them know how much you appreciate them, and ask them to answer a few survey questions,” she said. “The feedback you’ll get from this is invaluable.”
4. DO claim and maintain your online presence.
Too often, business owners believe their online profile ends at their website. “If you want to succeed, you need to get beyond your website and set up profiles on Yelp, Google, and the Yellow Pages,” Smith said. “Claim them. Take control of your online profile. Make sure all of them convey a consistent message about your business, and all the details are correct across all of them — your selling proposition, your business hours, your contact information.”
That also will positively affect your search engine optimization (SEO), which is essential for targeting your customers and driving traffic to your website.
“It helps to be at the top of the page when someone is searching for a business that has your products or services,” Smith said. “All the information should match. It’s surprising how many inconsistencies there are from site to site with basic information like store hours. That’s confusing to the customers. Your pages should be constantly monitored and maintained.”
5. DO create a marketing plan using these elements.
Smith said small business owners don’t always understand what she means when she tells them how important it is to create a marketing plan, but it just means pulling together the four previous points. “It’s just a way to make sure you’re finding your target audience, you’ve identified your unique selling points, and you’ve set goals with a plan to achieve them,” she said. “You’re not just selling. You’ve got an efficient, clear plan in place, and you’re progressing toward your goal.”
Marketing Strategy Don’ts:
Not only should new business owners take an active role in planning and implementing their marketing strategy, they also should be wary of traps that can undermine their efforts. When entrepreneurs run out of money, it’s often because they’re overconfident, their marketing message doesn’t connect with consumers, or they underestimate the need to keep up digitally.
Smith said the following poor practices are a recipe for new business failure.
1. DON’T make assumptions.
If a business owner assumes his product or service is so great that everyone will buy it, he’s in for a big disappointment, Smith said. “This shows a real lack of focus and research into the ideal target market. Let people try your product or service for free and get feedback. That tactic usually works very well and teaches the owner a lot about how people are receiving his product or service.”
2. DON’T design your own logo or own website.
Brand image is everything, and if it’s not on par with your competitors’, your target customer base will not take you seriously.
“Unless you’re a trained graphic designer, hire a professional to do your logo and your website,” Smith said. “People often think cheapest is best, but the smart thing is to set aside the money you need to get a good website and logo, and hire a very reputable person to do them.”
3. DON’T create too many social media profiles.
It’s better to have one or two well-maintained social media profiles that fit your business than to have a lot of profiles that don’t get any traffic.
“Your ideal target market can’t necessarily be reached on all social media platforms,” Smith said. “It’s impossible to keep posting on multiple social media pages, so choose one or two that match your products and services and post regularly. Don’t get on Pinterest if you’ve got a business or service that doesn’t apply.”
Hint: When the last post on a social media page is from a year ago, it could imply that you’re no longer in business, which causes customers to look elsewhere.
4. DON’T ignore bad reviews.
When customers leave a bad review on Yelp or Google, don’t think it won’t affect you. “When people search for your business, those reviews will come up,” Smith said. “Negative reviews deter people from your business, whether they’re true or not.”
She said it’s best to reply to each bad review and apologize for failing to meet expectations. Then offer something to make it right with the customer.
5. DON’T rely on referrals or word of mouth.
You work hard to earn a good reputation and have your clients tell their friends about you, but relying on them to do that is another trap that can lead to failure.
“It’s the ‘if I build it, they will come’ theory,” Smith said. “If you create a marketing plan and remain consistent, you do a good job with your customers, and you get lots of referrals and good word of mouth, imagine how well you’d do with advertising,” she said. “Advertising expands your customer base. If you’re already doing well, advertising will help you go beyond referrals and word of mouth. You can make enough money to hire more employees and go sit on the beach!”