Avoid the Two Biggest Marketing Mistakes

The two biggest mistakes new business owners make is either to spend too much or too little on marketing their new business.
So, what is the right amount? Well, that depends on a wide range of factors.
Another common mistake is to think that marketing is purely advertising, when in fact it’s far more than that!
A few years ago, I came across a business owner called Jim who had spent well over $100,000 on advertising his new pharmacy. He mortgaged his home and used all his savings to lay siege on the ears and eyes of anyone and everyone who might use his services. The result was dismal. Too much of his advertising was unfocussed, both demographically and geographically.
Throwing money indiscriminately at a marketing challenge will not guarantee you success. In this case, the new entrepreneur advertised in several magazines that were published province-wide when, in fact, most of his customers were going to come from within a 20-block radius of his business. He tried radio advertising, again, with poor results. The only thing that brought in business was a simple postcard announcing his new business that was delivered to local residents.
The big mistake this well-intentioned businessman made was to use his gut feeling about what might work, along with suggestions from friends and family, rather than doing some serious market research. He thought that a big marketing budget was all he needed — wrong!
{advertisement} Having given an example of a businessperson who was less than successful at marketing his first business, let me tell you about someone who got it right. Virginia, a savvy businesswoman, planned to open a pet-food warehouse on the outskirts of town. She knew there was a fair amount of competition and wanted to get it right the first time.
With help from a local business organization, she created a market survey that posed questions such as, “Do you own a cat or a dog, and, if so, how many do you own?” She would then ask the dog owners what breed of dog they owned and the estimated weight of the animal. Then, for both cat and dog owners, she asked if they fed their pet wet or dry food and which brand. Delving deeper, she asked how much they thought they spent a month on food and other items for their pet, including what type of extras they bought on a regular basis. Toward the end of the survey, she asked where they currently bought their pet food and what they liked about the retailer. She didn’t need to ask what they didn’t like because this information is almost always offered after the list of good things has dried up and the person says,  “but they….”
Virginia and a friend of hers spent all day, every day for more than a week interviewing people on different downtown street corners. Once the survey was completed, they had a great deal of data to assist them in all aspects of marketing their store. They knew the ratio of dog owners to cat owners, the average number of each pets people had, how many fed them wet as opposed to dry food, and what brands were the most popular. Not only that, they knew all the things these potential customers liked and disliked about where they currently shopped.
Armed with this information, they knew their potential customers’ needs intimately and were able to ensure that they not only stocked what customers wanted, but also that the shopping experience would be superior to that offered by the competition. Oh, I almost forgot — at the end of each survey, the respondent was given a generous discount coupon to be spent during opening week at the new store, ensuring that the first week was a very busy one!
So, carrying out extensive market research and then using the intelligence gathered to spend money wisely is vital if you are to survive those difficult early years in business.
Advertising can be a money pit if you are not targeting it to the right market; the key is to avoid generic marketing, especially in the early days if you have a limited budget. Promote events that are time-sensitive, like a launch reception or a special opening offer. That way, you can better assess the return on your advertising investment. All promotion should be directed specifically at your target market. Don’t guess — make sure you really know and understand who will be buying what you are selling.
Don’t forget the free stuff! A new business is newsworthy to local newspapers or business magazines. Send out press releases that tell journalists what’s so special about your new business. Make sure you have a USP (unique selling proposition) to talk about. Join your local chamber of commerce and ask them to help promote your business. Many chambers have editorial space in local news media, and the manager or president may regularly appear on a local news radio or television program to talk about business in the region. Make sure you are listed in the chamber business directory and ask them to feature you as a new member on their home page. Attend business mixers and get your name known. It’s amazing how much free promotional coverage you can get by being active in your local business community.
I suppose I should tell you what I suggested that worked better for the pharmacist. After spending more money on advertising than many would spend on buying a boat (with similar results), I asked him to accompany me to the local dollar store to purchase something that would draw people to his pharmacy.
Followed by a somewhat perplexed pharmacist, I went and purchased several hundred brown paper bags, the ones people put their kid’s lunches into for school. We then went to pick up a simple rubber stamp I had ordered and made our way back to the pharmacy. There, we stamped each bag with the words: Drug Amnesty – Bring all your old and outdated prescription drugs to our newly opened store (see details inside this bag) and let us dispose of them safely for you. In each bag, we placed one of the postcards he had produced.
The bags were doorstep delivered by the teenage children of friends and family to all local residences, including several retirement homes. Over the next few weeks, dozens of people dropped off their old drugs and got to meet Jim and his friendly staff. Each person was asked if they had any questions regarding their current medications and many spent several minutes with Jim learning more about their medication regime. In this way, word began to spread about the new pharmacy and about how helpful the staff were. This is bargain-basement marketing in action — it just needs a little imagination!