While technology has made precision marketing easier, for many SMEs it’s still a grey area – Cameron Bayley asks experts how they use research and strategy to target customers and make a marketing budget work to the max.
Are your marketing dollars hitting the mark? Sharon Williams, founder of marketing communications company Taurus Marketing, says industry professionals equate a marketing strategy with a shooting range. The machine gun v rifle theory sums it up: if you’re using a rifle you’re aiming for one beer bottle and can take it out with one shot, whereas if you’re using a machine gun you’ll be using a lot of bullets and hoping that one makes contact.
"And that’s silly," says Williams, "because you’ve wasted a whole lot of energy."
According to Roger James, chairman of the Australian Marketing Institute, one of the biggest mistakes SMEs make is not defining the target of their marketing strategy and budget. "People don’t try to think through in a logical and analytical way," he says. "They’ve no idea what they’ve done, they have no idea whether it did them any good. They’ve spent the money and it’s disappeared down a black hole. So it’s maybe the best investment they have ever made or it’s the worst. They don’t know."
It all comes down to defining your customer—the person who walks into your store, logs onto your website, or needs your product or service to be shown to them. "I think it’s tempting for small business to accept any work that comes through the door and think that any business that crawls in is good business," says Williams. She admits that when a business is in the start-up phase, this is fine. However, once you’re up and running it’s important to move on from this. "You have to go back to the basics," says James. "You say ‘what are people buying from me?’."
Steve Bohan, from communications agency Oxygene, says for most businesses it comes down to two factors when determining what your business does, and how it differs to others. You either offer a unique function or product, or you have an emotional approach that separates you from the rest (the ‘we try harder’ or ‘we offer better service’ tack) or it could be a bit of both. Once you know your message and who it’s aimed at, from there you can go about finding out how your customer hunts you down, which in turn will help you know how to get your brand to them.
Of course, one of the most basic ways to target your customer is by geographical area, which means using channels such as local newspapers, bus shelters, and other communal outdoor sites. However, if this is not suitable for your business, or you want to take it a step further, there are ways of finding customers who fit the profile you’ve decided you want to aim for.
The best option, Williams advises, is to come up with a database that you can tackle through a variety of methods such as direct mail, phone calls, emails, etc.
Bohn says it’s not difficult to obtain a list of potential clients. "There’s a whole range of companies out there that sell lists," he says. Entering "marketing lists" or similar into an internet search engine will bring up a range of places who trade lists of data. Acquiring a list, says Bohan, allows you to pinpoint the person who is potentially going to be interested in your product or service. "So you can talk directly to a specific target, instead of trying to speak to the whole world," he says. "If you can drill down and identify your target market then you can actually speak to them in a more meaningful way."
The other option is to create your own list of potential clients. "There’s nothing like growing your own in-house list," says Williams. "That’s as simple as being in the right places, going to functions, going to expos and seminars where the target audience who you’ve already profiled, is going to be." Collect as many business cards as you can and create a database yourself. "You’ll find it easier to do business with people you’ve met than people cold-called from a cold list."
Compiling these into a database requires some form of IT system, she adds, but depending on your budget it can be anything from a basic spreadsheet to sophisticated CRM software. She warns businesses not to just dump your pile of acquired business cards and contacts onto a spreadsheet and leave it there. "You’d be amazed how many small businesses have got them in a pile in the corner and don’t do anything with them." It does require maintenance. "Have a part-time mum or part-time student engaged to come in and phone and clean that database regularly. Because a database is almost out of date the minute it’s created."
If there’s one thing that unites the experts, it’s that with the proliferation of communications and public relations activities available now, with everything from event sponsorship to email newsletters to creating a simple and addictive computer game that can be circulated among tech-savvy teens, it’s easier than ever to tailor your marketing strategy to hit the right person. "The era that’s coming in is the era of what I call one-to-one marketing," says James. "You can make offers to particular customers which will have a much higher probability of being accepted, that are going to suit that customer’s needs." And according to James, small businesses are actually better placed to do this than large businesses. "The smaller your customer base, the easier it is to tailor your offering exactly to that customer." This can be through such things as special offers or discount coupons. And while the plethora of options might seem daunting, Bohan says not to be afraid of some tried and true methods. "Everything still works. There’s some more electronic ways you can reach people, but the traditional, direct mail approach is still very strong."
For Williams it again comes back to having met your potential customers in the first place. Particularly if you’re dealing in business-to-business transactions, where it’s important to get the right contact details so you can make sure your brand makes it past the reception desk and lands in front of the right person. Sometimes, she adds, it involves knowing several contacts within the one company and then you can adapt your collateral—fact sheets, brochures, website entry points—for each person. "Each of their paying points, or their interest in my services, will be for different reasons."
It’s also just as important to put systems in place to monitor your marketing, to make sure you are hitting the mark. If you’re sending out coupons or vouchers to different channels, make them identifiable, so you know who’s redeeming them, says James. This can show who’s responding, perhaps helping you to narrow your target market even further.
And the most basic way of finding out if your customers are responding to your marketing? "Simply ask them," says Williams. James agrees: "Keep talking to your customers. Find out where they found out about you and stuff like that."
While small businesses may not be able to afford thorough quantitative research, they can conduct surveys or get a third party to do this for them. "Any evaluation is better than none," says James. And you’ve got to keep constant watch. "A good marketer will always be keeping an eye on his customers. Following them every day."
And while no one is denying targeting your market is the way to go, at the same time James says business owners should also have a degree of flexibility and be open to new markets and new angles for their business. "You may be missing out on opportunitie
s to expand your business simply because you’re too focussed on your particular customers right now," he warns. "Focussing too narrowly can be detrimental."
Keeping your marketing plan linked to your business plan is the key, says Bohan. Looking at the cycles of your business can give you some idea as to the best times to get your brand out there and in the face of your target audience. He knows for many SMEs the budget is tight, and many hesitate to commit funds to marketing as the return on investment can often be hard to fathom in the short term. However, to create a product or service that grabs your profiled customer or client, whether it’s immediately or six months down the track, is invaluable. "Over a period of time, if you’re not investing in your own brand, you’re going to go nowhere. You’ll always be like a start-up business."
Venus v Mars
When it comes to target marketing, Bec Brideson discovered many businesses were missing out on a larger proportion of the consumer market. With almost 80 percent of advertising creatives in Australia being male, but approximately 80 percent of the country’s household purchasing decisions being made by women, there was a huge discrepancy. She founded Venus Advertising, claiming it to be the first agency to specialise in marketing to women.
For any business owner looking to appeal to women, she has come up with five tips on how best to approach this part of their marketing strategy:
Stay away from the colour pink: Quite often this is a token effort and it’s not going to help. "A lot of guys things think ‘Just splash a bit of pink paint on it and it’ll suddenly appeal to women’. That’s a big no."
Wise up to the market: Investigate the latest statistics and research. For example, 50 percent of women shop in DIY stores now, Brideson says. And 90 percent buy over-the-counter pharmaceuticals. "So it’s really understanding what is the majority of your audience and how do you appeal to them."
Stay away from the stereotypes: Reverse sexism can be just as unhelpful as the usual clichés, says Brideson. Making fun of men is not really what women want to see.
Spend your media dollars in direct proportion to the people you target: Car companies will often play their ads during sporting matches, yet women influence 85 percent of all car purchase decisions. "So maybe you’re missing the people who you really should be targeting."
Re-evaluate your product: Think about its appeal to women. "Are there barriers to them purchasing it? If you actually made some small adaptations to the features and benefits, would more females buy your product?"