Common marketing mistakes
nder capitalization,
inexperience and poor management are blamed for most business
failures. Of course, there can be one or several other reasons
that will cause a business to go belly up.
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These are the most common marketing
mistakes:
1. Management
does not know specifically what it costs to recruit a new
customer, and has no accurate statistics on the average
lifetime value of a customer.
Without this information, it’s
impossible to make sound decisions. You cannot determine how
much to invest in marketing. If you spend more to gain a
customer than the lifetime value of a customer, you’ll go
broke. Without this information, many businesses can and do
fail. Unfortunately, few of them ever understand what happened.
Before you invest any more money in
marketing, determine the average lifetime value of a
drycleaning customer.
2. The
customer database is not marketed to. While this is especially
true about drycleaners, I’ve seen it happen at many other
businesses. For instance, the supermarkets I frequent all track
my spending, but none of them target specific marketing to me.
A company’s database of customers is
its biggest asset. It’s much more valuable than
equipment, inventory or anything else. Every company that wants
to survive and prosper needs to build and utilize a database.
3. The company
does not communicate often enough with its customers. The
result is lower sales and lower profits.
Contact your customers a minimum of once a
month. This is not a random guess-at frequency. As a
drycleaner for 31 years, I experimented with different
intervals. I tried once a year; twice a year; every other
month; twice a month and several variations of those.
I found that the ideal and most profitable
interval was once a month. And I found that the most effective
method of regular contact with drycleaning customers is with a
postcard.
At first I thought that contacting
customers every 30 days might be too often and that customers
would stop paying attention to my mailings. But that
didn’t happen. My sales kept going higher. As long as
your customers feel that your service is a good value, they
want to hear from you frequently. Of course, you have to send
excellent offers.
If you are not in frequent contact, your
customers will quickly forget about you. Many will start buying
from your competitors.
Making offers to your database is often
referred to as the “back-end” in direct marketing.
But every business should cash in on the huge potential of
existing customers by simply making frequent offers to them and
giving them more opportunities to do business with you.
4. Most
businesses have no method of accurately measuring the results
of their advertising investments.
The solution is to ask for a direct
response from each promotion. Code each promotion. The coding
system can be numbers or letters. Or you can simply ask if the
customer is responding to a particular ad. Then when an order
is received or a customer visits your store, you can trace the
response to a particular promotion.
5. Marketing
is considered a business “expense” rather than a
necessary “investment.” And there’s a big
difference. An expense produces no revenue. like supplies and
the electric bill. An investment will bring a return.
The confusion is the result of the
misconception by many small businesses that they should receive
a 100 percent return, immediately. There’s really no
reason to expect this. No more than a landlord should expect an
immediate 100 percent return on newly purchased rental
property. The return will surely come. It just takes patience.
To successfully market any service
business you have to:
A. Allocate sufficient re-sources to your
marketing program.
B. Build your entire business strategy
around your marketing.
Your whole company should be focused on
what the customers want and be prepared to satisfy their needs.
If marketing is not at the heart of a
business, it is doomed to a life of mediocrity, at best, and
failure, at worst.
Dennis McCrory is president of The Golomb
Group Inc., a firm that designs marketing programs for
drycleaners. Contact him at The Golomb Group Inc., 7664 Plaza
Ct., Willowbrook, IL 60527 Tele: (800) 679-5856
E-mail: dennismccrory@golombgroup.com
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