Marketing and advertising are the keys to business success. After all, every company needs new clients. In fact, for many businesses, advertising expenses are second only to payroll. And for extremely marketing-driven companies, such as mail order sales, advertising may be the number one expense. But unlike other business expenses, advertising and marketing costs traditionally increase at a much more drastic rate than inflation, which makes it difficult for smaller companies to remain competitive.
So, how can a small business get the most bang for its advertising dollar? You can use the following five strategies to cut your marketing costs without sacrificing the effectiveness of your efforts.
1. Seek Publicity
Media publicity is like free advertising, only better. It gives you more prestige than traditional advertising. Unlike a full-page ad that your company purchases for thousands or even millions of dollars, a full-page story written by a neutral third-party reporter builds your credibility and expertise. Publicity also makes you a celebrity, which is a powerful advertising advantage.
How can you get publicity? Faxing press releases to different media outlets is a very effective and inexpensive method of getting their attention. Find something controversial—something tied in with celebrities or a timely, hot topic that relates to some aspect of your business.
Once you have press clips you can use them over and over again in your marketing efforts. Simply including an article about your business in your mailings can dramatically increase your response rates.
2. Buy Print Advertising on the Cheap
Magazines and newspapers are like airlines. If you call an airline three hours before the plane takes off, you can probably get a discounted ticket, since at that point, the airline just wants to fill their empty seats. Newspapers and magazines are in the same predicament: if they haven’t sold all their ad space by the time they go to print, they’re likely to offer discounts. They have to print anyway, so they would love to sell those empty pages—sometimes for as low as ten cents on the dollar. This is called random-page advertising.
These cheap ad rates aren’t usually publicized—otherwise the publications would lose all their regular advertising revenue. Just keep in mind that certain conditions exist--the ad has to run on the day when the publication has the extra space, rather than the day you choose. And they can run the ad on whatever page they choose. Also, your ad has to be direct response, meaning it only provides a toll-free phone number, not your business address. Some ad agencies specialize in purchasing this type of ad space and can help you secure these low rates.
3. Buy Television Advertising on the Cheap
Television stations also sell direct response advertising time on an availability basis. As an advertiser, you can send the station a schedule or a proposal of advertising for the month, and you can buy time at reduced rates as long as your ad is direct response. However, if the station gets another advertiser who is willing to pay the full rate, they will preempt your spot. So in a given month, they’ll run anywhere from fifty to seventy-five percent of the spots you’ve ordered.
Going in to this situation, you know that whatever spots you get will be at the direct response rate, which could be as much as fifty percent lower than the conventional rates. Remember, you aren’t buying ad spots during a specific time or a specific show. These ads usually run late at night. Large companies usually avoid late night TV spots because they feel the placement may tarnish their image, but smaller companies that need to get the maximum value out of each advertising dollar can benefit from the lower rates.
You can approach media outlets and negotiate rates for yourself, but you may be better off going through a savvy media buyer who knows the exact availability and costs for these opportunities.
4. Find a Mentor
Every industry has a marketing guru who’s already paid his or her dues and learned how to market effectively. These gurus often package marketing materials, ideas and strategies you can purchase and apply to your own company.
Finding one of these gurus or another mentor who has been in your situation can cut your learning curve dramatically. Your mentor could be a public relations firm or an ad agency or you can purchase prepackaged marketing materials that already have a proven track record within your industry.
5. Establish an Effective Referral Generation Program
Referrals are very important because when a potential client hears about your company from a friend or other trusted source, they automatically feel more comfortable with your products or services. But before you can get referrals, you need to earn the right to be talked about. In other words, you have to treat your clients well so that they want to refer their friends and acquaintances to you.
Next, you have to ask for referrals. This is a simple, but often overlooked strategy. You won’t get referrals without asking your current clients. When you ask for them, you’re likely to get them.
Finally, you need to reward the person who gave you the referral with a small gift or discount on additional services. Behavior that is rewarded is often repeated. Additionally, those clients who are referred to you are more likely to refer other people. A solid referral system can be a powerful marketing tool for your company. In fact, many companies operate solely on a referral basis.
Better Marketing for Less
Business is all about profitability, and a business that can’t afford conventional advertising needs to know how to advertise and market their products and services on a shoestring. The strategies described here give everyone, from an entrepreneur of the smallest start-up company to the CEO of a large company, opportunities to improve their bottom line and be successful.