BEAR Press Release
Marketing a business properly is the key to a firms success, especially when they are first starting out. Misunderstanding what marketing is and what kind of a framework it should take place in is often one of the biggest mistakes a entrepreneur can make.
That was the premise of a recent presentation to the Castle Country Business Expansion and Retention general board meeting by Ryan Murray the Director of the Southeastern Utah Small Business Development Center.
“The problems many businesses have with marketing is that they don’t understand what marketing is,” said Murray. “They don’t understand how it works.”
One of the things he touched on was that often businesses think marketing is just advertising, but advertising is just one piece of the pie that is marketing. He also said that even when businesses know all the pieces of a marketing scheme, they often put them together in the wrong order, circumventing the process by where they could get the most out of their marketing efforts.
“Compare it to taking a shower in the morning,” he said. “Imagine if you went to shower and you took your clothes off, stepped into the shower, soaped up and washed your body, shut off the water and got out. Then you put shampoo on your head. Would that work? You’d just have a gooey mess. That is a good comparison to what a lot of businesses do when they use marketing. They get the whole thing out of order.”
Murray explained that marketing is made up of four parts and these pieces should be done in the following order.
The first thing is to have a product or service that is in demand. Basing a business on a business owner and his personal preferences is a mistake. Instead, identify what people want, not what you want.
“This is something I find quite often in businesses in the area,” he said. “They have a product that no one wants or is very common. Before you decide to start a business, make sure what you have to sell is wanted by someone.”
Next, he said, is that businesses need to position their product or service in the market and price point is the most important part of this. Businesses need to position themselves correctly with value and price. He also said that businesses should never say they have the best quality and the lowest prices. When firms do this, customers think they are lying to them. Psychologically, people use price to determine what the value of something is.
“It may sound counterintuitive but small businesses tend to do better by selling their services or products at higher prices,” stated Murray. “People perceive value in a higher price.”
Once a business is positioned, then they need to find out who their target market is. If a business is not doing well locally, then that must business must go where there is demand for what they do.
“Of all the businesses I work with in eastern Utah the only ones that are growing are selling their services or products outside this area,” said Murray. “No one who is selling locally is growing. There are businesses here that are doing well just selling locally, but they are not growing. We have a declining population in the local area, so if a business only remains local and are to grow here, they must take business away from someone else in the market. ”
Advertising is next. A business needs to let potential customer know that they are in business and have something to sell. Murray said there are all kinds of advertising mediums and determining what works best for an individual company must be considered carefully. He said when he worked in a similar job in Tooele earlier in his career he learned that.
“A guy came to see me and said he wanted to start a painting business and wondered where he should advertise,” stated Murray. “He told me that he was thinking about putting an ad in the local newspaper and in the phone book. I told him that both those were dead and that he should use social media. Six months later he came to me looking for some help on doing some financing for expanding his business and he told me that his business had really taken off. In the six months since he started, he had hired eight people because of the growth he had. He also told me that he did it by putting ads in the local paper and in the phone book. I had given him some bad advice and he didn’t take it.”
Different advertising mediums work differently for different people and companies.
Next is to find a marketing message. The message must be consistent with what a business is marketing.
“I was working with a local auto body shop that used an ad that portrayed a shiny red Corvette,” said Murray. “The problem with the ad was that the shop didn’t work on those kinds of cars and some people looked at that ad and thought that the service must be too expensive or that they don’t have that nice a car so they would pass that shop by for repairs. I told them that instead, they should have portrayed an F-150 or something like that.They had mixed up their marketing message.”
Last but not least he said businesses should continue to cycle through this process again and again, refining what they are doing.
“There is a natural flow to marketing,” said Murray. “Most businesses don’t realize that it flows in a circular manner, which means it will repeat itself if it is done correctly.”
He told the group that there are two approaches to marketing. One is the creative approach and the other is the systematic approach.
The creative approach is to do something that is a little different, comes up a little sooner, shines a little brighter, etc.
“But watch the Superbowl and the commercials,” said Murray regarding their unique creativity. “They are successful at making you laugh. But are they successful in making sales? Research shows that is rare. The problem with this side of marketing is that the world is bombarded with noise, and small businesses can be drowned out.”
He said the systematic approach works for better for small businesses. Marketing is used to make sales, which means that all sales are a function of marketing. This isn’t just about advertising, but it includes the way a company answers their phone, how they answer their emails, the type of uniform those that work there wear, etc.
Small businesses also need a marketing strategy. They need to figure out what works for them and concentrate on that. Guessing about that won’t find a strategy for a business, but analysis will. For instance, in some businesses, just being able to sit down with the right person and to be able to talk to them can generate sales. That is a marketing technique. Someone who figures this out for their business has gained critical information by knowing this. That business knows that this type of activity generates sales. By learning things like this a business can focus on the one thing that drives sales.
He then switched to talking about digital marketing.
“It’s the hot topic,” he said. “Is it the best form of marketing? That depends on what is being sold and who one is selling it to.”
He said there are two reasons why it is popular. First, one can measure it, unlike most other sources of marketing. That is because clicks throughs and other data can be counted. The second thing is that it is new and novel.
“We got all giddy about it, but that doesn’t make it better,” he said.”But that first part, that data piece, is important.”
He then talked about an online business that makes $200,000 a year working part time.
“The owner uses the data she has correctly,” he said. “She uses Pinterest. What is the value of that? Among the professional blogging community, Pinterest is the number one money making platform. She does not pay to promote her stuff online. It does cost her a lot of time, however. If you go into social media and decide to use it as part of your marketing, investigate all the platforms out there. Probably Pinterest and Instagram are the most profitable and the best place to start. She makes her money by just writing. For every 1,000 clicks she gets, it is worth $1.52 in Pinterest. In an Search Engine Optimization, those clicks are worth $3 per 1,000 clicks. SEOs are worth more than social media. She also has an email newsletter with links in it. That is worth $42 for every 1,000 clicks. When one gets to that point it is high because it is personal and there is buy in others. If you don’t use the data when using social media, it will not be as worthwhile.”