This article first appeared in
Talking to the Boss
reprinted in other trade magazines

Marketing Without Wasting Money

by Phillip Gelman

Marketing a product or service today is expensive. The penny postcard died in 1952, a letter now costs 33 cents to mail and many dollars to create. Long distance calls are cheap but the phone bill mounts. Reducing marketing costs without compromising effectiveness is a necessity for a small business. Working smart is more important than working hard. It is easy to squander resources in the marketing process. Some years ago I was a sales manager for an electronics company. The marketing geniuses placed advertisements in college newspapers for a September-October back to school promotion. We peons in sales were not informed until we saw the ads and lost all chance to stock the stores to meet the demand created by the ads.

Waste would have been avoided by funneling the funds through the sales reps who knew their territories and customers, who could have created campaigns where they might work. In order to keep your marketing costs low, you must narrow your focus and concentrate on your smallest viable market.

Two Questions To Ask

It matters not whether you are marketing a new or established product or service. Before you proceed, ask yourself two questions:

• "Who am I in business to serve?" and
• "Where can I get an order?"

Don't yield to the temptation to try to sell something to everyone. McDonalds has two hamburgers with a range of fixings, KFC offers two types of chicken, and Denny's assorts a few ingredients to make 6 different breakfasts - all to attract buyers who want a cheap meal quickly. All appear to be growing. Chevrolet, which once appealed to particular types of buyers, in an attempt to appeal to all buyers, expanded its line and lost much of its market.

Are you selling business insurance? To whom? Is your market a neighborhood, a town, a region, a city, a state? Do you have the time and money to cultivate a large or small base of customers? What is your ideal customer's profile? Who are you really in business to serve?

Are you manufacturing a product sold to end users? To resellers? Locally? Nationally? Globally? Your decision will affect how you sell your products. If your product is - say - a grease gun cartridge, where is your best market: automotive? aircraft? maintenance? food? Pick one to start; you may not be able to sell to everyone at once.

You must decide on the specific clientele you want to serve. Our practice, for example, is targeted to small to medium sized companies who want to expand their markets but lack the personnel or knowledge to prepare a workable marketing plan, then hire and train sales representatives to place their products into retail stores. We know that large companies can afford to hire full-time staffers over a long period before sales begin; our clients generally cannot.

We know computer consultants who target Fortune 500 companies only, yet another targets law firms only. Each has picked a niche.

Which One, What Kind, How Many?

By narrowing your universe of prospects, you will be able to concentrate on the most likely ones and generate sales more quickly using a cost effective marketing program.

How many customers do you need? How many can you handle? 1? 13? 27? 72? 1,100? What volume and profit should the average customer produce? If you know you need 25 customers, perhaps you will only have to locate 100 prospects. Contacting 1,000 prospects demands an elaborate campaign. 100 prospects can be covered by a combination of phone, mail, and personal calls.

If you define your market and figure out where you can get an order quickly, you should be able to keep your marketing costs in line.