Marketing and advertising are key to business success. After all, every company needs new clients. In fact, for many businesses, advertising expenses are a significant monthly expenditure. But unlike other business expenses like payroll or inventory, advertising and marketing costs traditionally increase at a much more drastic rate than inflation, which makes it difficult for smaller companies to remain competitive.
Therefore, acquiring new clients as easily, inexpensively and effectively as possible is critical to the success of most small businesses. And the ads small businesses buy have to work. Buying advertising for a low cost is one thing, but making sure the advertising you're using is highly effective is another. For example, you may get a great deal on advertising space in a particular publication, but if that ad doesn't reach your target market, then you wasted your money. But that doesn't mean you have to pay top dollar for effective ads.
You can use these five strategies to cut your marketing costs without sacrificing the effectiveness of your efforts.
1. Seek and gain 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 of dollars, a full-page story written by a neutral third-party reporter builds your credibility and perceived expertise. Publicity can also make you something of a local 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 that you can talk to the media about.
Once you have the publicity you can use it over and over again in your marketing efforts. Simply including a public relations article in your mailings can make a dramatic impact on your response rates. Any article you are in or television show you appear on can be reprinted, recorded and reused in your marketing efforts to establish credibility.
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 ticket for a fraction of the regular cost. At that point, the airline just wants to fill its empty seats. It costs them the same amount of money to fly the plane whether those seats are filled or not, so they might as well fill them with paying customers. Newspapers are in the same predicament: if they haven't sold all their ad space by the time they go to print, they may offer discounts. They have to print anyway, so they would love to sell those empty spaces - even for as low as 10 cents on the dollar. This is called random-page advertising.
These ad rates aren't publicized; otherwise the publications would lose all their regular advertising revenue. And although you can purchase the space for cheap, certain conditions exist. The ad has to run on the day when the publication has the extra space, rather than the day you choose. They can run the ad on whatever page they want, not the page you choose. Also, your ad usually 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 will 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 50 to 75 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 50 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, because large, image-conscious corporations usually buy primetime spots. Big companies often feel late-night ads tarnish their image. But that may not be the case for your product or service and you may be able to get the maximum value out of each advertising dollar by running your ad at any time.
You can approach media outlets and negotiate over these opportunities, but on your own, you probably won't know if you're getting the cheapest rates available. Therefore, 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 time 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, he or she 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 enough that they would want to refer their friends and acquaintances to you.
Next, you have to ask for referrals. This is simple, but often overlooked. You won't get referrals without asking your current clients. And 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 gift or discount on additional services. Behavior that is rewarded is often repeated. So if a client sends a referral to you and is rewarded for it, she will likely do it again. And those clients who are referred to you in the first place are more likely to refer other people. In a sense, they are trained that way. 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 its products and services on a shoestring. To cut your marketing budget, use publicity to build your reputation and build a buzz around your business. Look into opportunities to purchase print space and broadcast time at reduced, direct-response rates. Seek a mentor in your industry who knows how to market effectively and inexpensively. Then develop a solid referral system to bring new people in the door. These strategies give everyone, from the smallest business owner to a large company, an opportunity to increase profits and be successful.
