This article is Part 1 in Dr Greg Chapman’s ‘Five Profit Drivers’ Five Part Series. Follow these monthly articles for a comprehensive guide to driving profits with expert marketing advice for your small business. Last month, Dr Chapman introduced The Five Profit Driver marketing system that can double your profits.
The first of the Five Profit Drivers is Increasing Enquiries.
What marketing strategy are you going to use to communicate with your customers and entice them to contact you? There are really only four types of enquiry generation marketing strategies.
- Public Relations
- Word of Mouth
- Cold Calling
All enquiry marketing falls into one of these categories, or is a combination of them. Ultimately, they will be compared in their effectiveness by the Cost per Lead for each strategy. In different markets, some of the strategies will be more effective than others.
Advertising can be cost effective if you are talking to your best buyers. However, I heard of one business that spent $50,000 on television ads, and got just one enquiry. The Cost per lead for this campaign was $50,000. Just about anything you could think of would be more effective, including standing on a street corner and shouting. I would like to tell you that this story had a happy ending and that the business made a massive sale from this one enquiry, but the enquirer needed to think about it, and is still thinking about it today!
On a Cost per Lead basis, Public Relations can produce a large amount of enquiries for very low cost, because what others say about you is more important than what you say about yourself. Of course, it is much harder to get publicity than just paying someone to take your ad. There needs to be some angle, some novelty in your story so sending out media releases to every outlet you can think of will be a waste of time if you have no story to tell, except that your mum thinks you’re great.
Word of Mouth
Word-of-Mouth is probably the most powerful form of marketing there is, but it is not enough just to do a good job for your customers and expect the world to beat a path to your door. You need to be proactive in your Word-of-Mouth strategies so that your customers or other businesses are encouraged to sing your praises.
The last of these strategies is Cold Calling. However picking numbers out of the phone book at random is highly inefficient and produces a poor response. Targeted Cold Calling strategies can be effective, particularly if you combine it with one of the other strategies. This is also the most difficult of the strategies for a salesperson as the rejection rate will be high, particularly if there is no carefully designed script and they have not been properly trained.
Generally a business will use a portfolio of these tactics and not rely on any single one. In different industries a different mix of strategies will be used, tailored for their potential customer profile.
How do you tell which is the right mix for your business? No one can guarantee marketing results so you must design each strategy so you can measure the response rate, the quality of the responses and determine the Cost per Lead, and ultimately the Cost per Sale. So when you create a new campaign, Test and Measure. Over time, with controlled testing, you will improve you results from the First Profit Driver.
May Your Business Be – As You Plan It!
- For each channel for Increasing Enquiries list your opportunities.
- Estimate the Cost per Lead and pick the best opportunities for each channel.
- Monitor the results of each campaign and adjust them as you go.
Dr Greg Chapman is the author of the award winning best seller, The Five Pillars of Guaranteed Business Success. Visit Empower Business Solutions to learn more about marketing your business and a free preview of his book.