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Authors: Inc The Staff of Entrepreneur Media

Start Your Own Business (79 page)

BOOK: Start Your Own Business
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Step Five: Set Your Marketing Budget
 
You’ll need to devote a percentage of projected gross sales to your annual marketing budget. Of course, when starting a business this may mean using newly acquired funding, borrowing or self-financing. Just bear this in mind—marketing is absolutely essential to the success of your business. And with so many different kinds of tactics available for reaching out to every conceivable audience niche, there’s a mix to fit even the tightest budget.
As you begin to gather costs for the marketing tactics you outlined in the previous section, you may find that you’ve exceeded your budget. Not to worry. Simply go back and adjust your tactics until you have a mix that’s affordable. The key is to never stop marketing—don’t concern yourself with the more costly tactics until you can afford them.
 
TIP
 
Dream the dream. Your marketing plan should include a “blue sky” section in which you put your feet back and look at where you think you’ll be in a couple of years. Especially in small businesses, it’s a waste of time to formulate marketing thoughts that go out more than two or three years. But dreams are important—and they can be fun, too.
So what should you spend on marketing? There’s no hard-and-fast guideline. In fact, the amount varies based on your industry, the amount of competition you must overcome, and the type of media you have to use to reach your audience. A particularly complex message will also require a bigger marketing budget because prospects will need to be guided through the education phase, which involves more advertising and an increase in the repetition of your mes sage. One study showed that major advertisers with well-established brand names, including General Mills, Kodak, Dunkin’ Donuts and Kraft Foods, spend an average of 11.6 to 12.4 percent of sales on marketing. On the other hand, many successful small businesses that are competing for brand recognition and market share budget approximately 15 to 19 percent of sales.
Where to Advertise
 
Once you know your target audience, it’ll be easier to determine which media will work well for you. Much of this is just common sense, based on your product or service, method of sales and audience.
“All you need in this
life are ignorance and
confidence, and then
success is sure.”
-MARK TWAIN
 
 
Sure, it would be great if you could afford to buy a full-page color ad in
Time
magazine or a 60-second commercial during the Super Bowl. But in addition to being beyond your budget, such ads aren’t even the most effective way to go for a small company.
Small companies succeed by finding a niche, not by targeting every Tom, Dick and Harry. (Remember the “Choose Your Target” chapter in Part 2?) Similarly, you need to focus your advertising as narrowly as possible on the media that will reach your customers. Your customers’ location, age, income, interests and other information will guide you to the right media.
Suppose you ran a business selling model train supplies nationwide online and by mail order. It would make sense to advertise in a mix of national specialty magazines, on websites targeting aficionados, and in specialty e-newsletters catering to the hobby rather than advertising in, say,
The New York Times
. On the other hand, if you sold model trains from a hobby shop rather than online or via mail order, the vast majority of your customers would be drawn from your local area. Therefore, advertising in national hobbyist magazines would net you only a few customers. In this case, it would make more sense to advertise in local phone directories (both online and offline), area newspapers or magazines that carry related editorial sections, or by commercials on carefully selected cable TV programming targeting the local area.
Like any aspect of running a business, marketing involves a measure of trial and error. As your business grows, however, you’ll quickly learn which advertising media are most cost-effective and draw the most customers to your company. Here’s a closer look at the different types of advertising methods and tips for succeeding with each.
Print Advertising
 
The print ad is the basic unit of advertising, the fountainhead from which all other forms of advertising spring. Knowing the principles of creating print ads will help you get results in any other advertising media you use. Print ads have helped launch some of the most successful products and services we know. And there’s no reason they can’t work for you, too—if you observe a few hard-and-fast rules.
 
TIP
 
Make sure all your ads answer every customer’s number-one question: “What’s in it for me?”
Most print ads out there are poorly conceived and, as a result, perform badly. If an ad lacks a strong motivating message, especially in the crowded marketplace of a newspaper or magazine, it becomes a costly lesson—one your business will be lucky to survive. The good news? With so many bad ads out there, if you can put together a good one, you’re way ahead of the game.
Whether you are developing an ad yourself or having someone else craft it for you, make sure it follows the five fundamentals of successful ads.
1.
It should attract attention
. That sounds obvious, but nothing else matters unless you can do this. And that means having a truly arresting headline and visual element.
2.
It should appeal to the reader’s self-interest or announce news
. An ad that takes the “you” point of view and tells readers how they’ll benefit from your product or service piques and keeps their interest. And if, in addition, it has news value (“Announcing a bold new breakthrough in moisturizers that can make your skin look years younger”), your ad has a better than fighting chance.
3.
It should communicate your company’s unique advantage
. In other words, why should the prospect pick your firm over a competitor’s?
4.
It should prove your advantage
. One convincing way to do that is through testimonials and statistics.
5.
It should motivate readers to take action
. This is usually accomplished by making a special offer that “piggybacks” your main sales thrust. Such offers include a free trial, a discount or a bonus.
An ad doesn’t have to do a “hard sell” as long as it is an all-out attempt to attract, communicate with and motivate the reader. That process starts with the single most important element of any ad: the headline.
GO FOR THE PROS
 
C
an you create your own advertising copywriting and design? If you have a background in marketing and advertising, the answer may be yes. If not, however, you’re better off hiring professionals. No matter how creative you are, a commercial artist or a graphic designer can vastly improve almost any ad created by an entrepreneur.
 
 
However, since no one knows your business better than you, it’s a good idea to develop your own rough draft first. Think about the key benefits you want to get across, what makes your company different from and better than the rest, and the major advantages of doing business with you.
 
If you’re reluctant to spend the money on a copywriter and a graphic designer, don’t be. Printing, distributing and placing your advertising and marketing materials are going to be costly. If the materials you’re paying to have printed aren’t well-written, eye-catching and effective, you’re wasting your money.
 
Graphic design and copywriting are two areas where it’s possible to get good work at substantial savings. Plenty of freelance, one-person graphic design and copywriting businesses exist, many of them quite reasonably priced. Ask friends, other business owners or your chamber of commerce for referrals. Many copywriters and designers will cut you a price break on the first project in hopes of winning your business in the future.
Headlines That Work
 
Some of the biggest flops in advertising contained convincing copy that never got read because the ads lacked a great headline or visual element to hook the passing reader.
David Ogilvy, founding partner of legendary ad agency Ogilvy & Mather, said that on the average, five times as many people read the headlines of ads as read the body copy. Headlines that work best, according to Ogilvy, are those that promise the reader a benefit—more miles per gallon, freedom from pimples or fewer cavities.
Flip through a magazine or a newspaper and see what you notice about the ads. Typically, it is the headlines that your eyes go to first. Then notice how many of those headlines promise a benefit of some kind.
However, expressing a benefit is not enough if the way you communicate it is dull and hackneyed. Your headline should be unusual or arresting enough to get interest. Here are some examples of headlines that got noticed:
• “When doctors feel rotten, this is what they do.”
• “Why some foods explode in your stomach.”
• “How a fool stunt made me a star salesman.”
John Caples, co-author of the classic guide
Tested Advertising Methods,
recommends beginning headlines with such words or phrases as “New,” “Now,” “At last,” “Warning” or “Advice” to pique interest. He also suggests using oneor two-word headlines and giving readers a test in the headline to get them involved (such as “Do you have an iron deficiency? Take this simple test to find out”).
Whatever you do, don’t use your company name as the headline for your ad. This is one of the most common mistakes small companies make. Would you read an ad whose most eye-catching element was “Brockman Financial Services”? Probably not.
 
TIP
 
Can’t come up with ideas for your ad? Try a brainstorming session. Jot down words or phrases related to your product or service and its benefits. Then see what associations they trigger. Write down all the ideas you can think of without censoring anything. From those associations—whether words, phrases or visual images—come ideas that make good ads.
BOOK: Start Your Own Business
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