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 book written by Michael Phillips and Salli Raspberry entitled “Marketing Without Advertising (Marketing Without Advertising, 3rd ed)” provides valuable lessons on how to ensure the success of your business by inspiring customers to rave about it.
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.
Recommended Books on Marketing Without Advertising
- Marketing Without Advertising: Easy Ways to Build a Business Your Customers Will Love and Recommend
- Free Marketing: 101 Low and No-Cost Ways to Grow Your Business, Online and Off
- Smarter Branding Without Breaking the Bank: Five Proven Marketing Strategies You Can Use Right Now to Build Your Business at Little or No Cost
- Powerful Marketing On A Shoestring Budget: For Small Businesses