As
an entrepreneur, you must understand that what counts is not
what your business says about itself, but rather what others say about it. A
new book written by Michael Phillips and Salli Raspberry entitled
"Marketing Without Advertising" provides valuable lessons on how
to ensure the success of your business by inspiring customers to rave about
it.
(article continued below ...)
The book's basic premise is that promoting personal
recommendation is a
superior, yet often overlooked, strategy to attract and keep customers. The
authors contend that advertising, which they define as "broadcasting your message to
many uninterested members of the public," doesn't work. Its expense often
does not compensate for the results; and the customers that are lured by
advertisements are often not loyal.
 Instead, Phillips and Raspberry argue that a crucial element in any good
marketing plan is based on customer trust. Personal recommendations are what
works, and not advertising. Other people's recommendation is a very powerful
factor that could improve the profitability of your business. Plus, they are
more cost-effective than advertising as the customer who is referred comes
to you at a lower cost.
The authors recommend 10 steps to help you develop successful, low-cost
marketing plan that is not based on advertising:
1.
Offer the best and up-to-date product and service.
To make people recommend your business, they have to know and be convinced that
you are offering a top-notch product or service. In addition, they need to know what sets you
apart from others in your field.
How will they know this? Well, you have to tell them yourself (without
sounding egotistical). While they can probably see this in the way you run your
business, you also need to make an effort to give your customers information
that allows them to judge the quality of your business for themselves. If you
are offering financial advice, for example, you may want to point out to your
client that while
15% return for a type of investment is considered excellent, you have done
substantially better than that for his account. The customer will
appreciate you much better for that.
You can also have someone they trust tell them how good your business is.
Positive reinforcement from a trusted person can be extremely effective.
2.
Create easily understandable business description.
If getting personal recommendation is a key part of your marketing plan, your
customers must be able to communicate to others what it is that you really do.
You must provide them with the general kind of information about your business
so they can tell others about you. After all, you do not want customers
misrepresenting your business. Instead of gaining new customers, you might hear
comments like, "I thought you were doing this-and-that, because so-and-so
told me." From positive recommendation, your job will now turn to damage
control.
Your first task, therefore, is to articulate a clear, easily understandable
statement of what your business is about. Think this is easy? The authors
discovered in their study that the business owner who can clearly communicate
what he or she does is the exception. Many business owners are vague about what
they themselves do.
The authors recommend that the place to start is to develop a clear
understanding of the broader domain in which your business functions. You need
to define the range of domains in which you can legitimately sell what you do.
If you are manufacturing cooking pots, for example, saying that you are in
the business of making cooking pots is only half of the story. In order to
create a meaningful description of your business, you must take the next step
further and consider the role of a cooking pot in your customers' lives. What is it
about your business that touches other people's lives? Pots are used for cooking
- but what kind of cooking? If people can use your pot to steam and boil, but
not for frying, you can conclude that you are in the "health"
business. Since pots are stored somewhere, you are also in the kitchen storage
domain. Pots need to be cleaned, so you also need to add the
"cleaning" domain. The shape, finish and overall aesthetics of your
pot also makes it part of the "decorating" domain.
3.
Educate customers about your business.
Some of you operating well-established businesses - such as a grocery or retail
clothing store - need not concern yourselves too much with educating consumers
as majority already have a clear understanding of what you do and when they
might need you. You only need to communicate the special features of your
business, or what sets you apart from your competitors. Tell
potential customers that you do a better job or offer extra service.
However, it is a different story when you are running a business in a new,
obscure or technical field. Hand out your business card that says that you are
selling wholesale lapidary supplies, and chances are you will be met by blank
stares. Even less obscure businesses, like Internet marketing consultant, still
need to be explained to consumers, as it may not be clearly understood.
Even if your business has been in operation for some time, don't assume that
you do not need to educate customers about what you do. The more people know
about what you do, the better they will see when, how and why they will need
you.
4.
Ensure clear pricing structure.
Nothing wins the trust of a customer faster than a sound pricing policy. Put in
trickeries - e.g. saying that a product is free only to have the fine print
saying that a monthly fee of $2 will be charged to their credit card, or offer a
free CD but charge $7.50 for domestically shipping the CD - and customers will
run as far away as possible..
According to the authors, the key is to make sure that you do not confuse or
mislead your customers. State upfront what is included, and what is not, in your
price. Online businesses, for example, must clearly indicate their prices
including shipping; handling and other taxes to avoid shopping cart abandonment.
If you are running a service business, which doesn't have a tangible product to
which a price can easily be attached, be sure to tell your customers clearly
what your price is even before they ask.
5. Open
management policies.
If you want positive recommendation from other people, forget the practice of
"playing your cards close to your chest." According to the authors,
openness builds customer trust, which is the prime requisite of any marketing
without advertising campaign. In particular, you must have an attitude of
openness in your pricing, your treatment of employees (if any), and your
willingness to answer questions about your products and services.
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