Your current customer - your best business growth asset

It doesn't matter whether it's a recession, depression or just business as usual - your current customers are the best source of business growth. Unfortunately, too many businesses neglect their current customers to go searching after new ones.

Research has shown it takes about five times the money to get a new customer as it does to retain a current one. But just retaining a current customer really isn't enough. Why not get them to do more business with you? Why not get them to bring their friends and family to your business as well? Or in the case of business-to-business enterprise, why not get their co-workers into your customer base?

In some businesses, management believes it is solely the job of the sales force to stay in touch with current customers and try to grow the business. I would suggest however the sales force could be more efficient if the marketing team is on side with the importance of incenting current customers to grow their business.

Have you contacted your customer base to let them know you're still there to support their needs? Have you sent a postcard, letter, email? Have you told them they're appreciated? Have you demonstrated your appreciation through a special offer only to your current customers?

If you haven't, you're missing an efficient, economical business growth opportunity. If you have a retail location, invite your current customers to a small wine-and-cheese party to show off your new merchandise and have some great loss leaders to show your appreciation. If you are in the service industry, perhaps a partnership that compliments your service could be a good appreciation gift (and then you can do the same for that business).

Everyone likes to be thanked. Especially when there's gifts involved. A promotional item with your logo prominently displayed would be an excellent gift. That way your business identity stays in front of them for a longer period of time. But make sure the gift matches your branding. Don't give away a cheap pen if your business represents expensive items.

Bottom-line is: you need to stay in touch with your current customers and give them a reason to do more business with you. And if you can get them to talk about you to their friends and family, even better. Don't wait for someone else to do this for you. Get on it, right now.

Do your homework

Stephane Dion and the Liberal Party have offered up such a terrific example of what can happen when you don't do your homework, that I couldn't resist. Their widely publicized plan, The Green Shift, may well get its time in court as it flies in the face of trademark, copyright and intellectual property laws.

Green Shift, a company in Toronto, has been around for approximately 10 years. So even if they never trademarked the company name, there can't be any question that it belongs to them. Perhaps the most irritating part of the story is that the Liberals were aware of this company and went ahead anyway. There is something grossly arrogant about thinking you won't get caught.

For small business, it is key to do your homework about all aspects of marketing your business. If you are incorporating, you must do a name search but when you are a sole proprietor, you can get away without one. But to save face and potential court and rebranding costs, you better make sure no one else is using the name.

Imagine the embarassment when your new business customers are suddenly faced with a new business name; and even more so when the explanation is that you didn't do your homework. What does this do to your business' credibility?

Keep in mind that your customers do business with you because they have developed trust in you. If you have so little respect for your business that you don't do your homework, why should they have respect for it?

And doing your homework isn't limited to just your company name or slogan. It pertains to how you market yourself. Learn some of the basics of marketing law. And then, for goodness sake, abide by them. Just because you see big companies flying in the face of good marketing laws, doesn't mean it is the right answer for small business. They can afford (apparently) the fines and loss of face. Small business can't.

Learn what your competitors are doing and saying. Then stay away from those things. Not only do you eliminate the risk of a lawsuit regarding intellectual property or copyright, but you also have to spend some time thinking about how you are unique. This helps you stand out from your competition because you aren't using their words and actions.

Don't take the lazy way out. Have the same passion for your homework as you do for making sales.

Even word-of-mouth doesn't happen on its own

One of the big news stories in the US this week is the purchase of XM by Sirius Satellite Radio. It's big news because of the discussions around competition and how the consumer is affected by Sirius buying up their competitors.

But I bring it up here because their marketing tactics could have foretold who was going to come out on top. A couple of years ago, I was working with a large financial institution on a project in which we needed some prizing. I chose a package from Sirius as the major prize and had to defend this decision with the senior executives. Their big question was, "How do you know Sirius will be around in a few years and that everyone won't have gone with XM?"

My answer was, "Their marketing". Now, beyond a shadow of a doubt, marketing has to be interpreted here as more than just advertising. I was never a big fan of the Sirius advertising, but they were managing their budget well. They became a supplier to Canadian Tire and other large retailers. They sponsored some great events. They had a terrific PR machine keeping them in the forefront of people's minds.

Where was XM?

And this is my point today for small and rural businesses. You have to get out there. It doesn't always have to do with advertising.

This week, I heard a story about a group of small business owners lamenting that they had made no sales. When asked what they planned to do to change this, they all said, "Nothing, word of mouth will get me sales eventually."

For those of you who have read some of my other blogs, you can probably imagine the screaming going on inside my head when I heard this. Word of mouth doesn't happen on its own. You have to start the cycle of referral with planned tactics.

Similar to Sirius, rural and small businesses can increase their sales, and their chance of still being in business a year from now, by getting out there with whatever means are possible. I'm not talking a huge advertising campaign. I'm talking specific, economical tactics that have an excellent chance of returning the investment.

Event-based marketing is a good example. Develop or sponsor an event and promote the dickens out of it. Use media releases, posters in your neighbourhood variety store and post offices, develop an inexpensive postcard to carry with you and hand out everywhere you go.

You don't have to spend a fortune to get your business into the front of people's brains. But you do have to be creative with your tactics and messages. As a rural or small business owner, you have to set the ball in motion so word of mouth can develop. Take advantage of networking opportunities like your local Chamber of Commerce. Attend their events and hand out your postcards or business cards and talk up your business like crazy.

Once you have a few satisfied customers, then word of mouth marketing stands a chance. But if you can't get a few people talking, word of mouth will never do you justice.

The little card tells a big story

I've been seeing a lot of small and rural businesses' business cards lately. You can really tell the ones that have been designed and printed on home computers. You can also tell the ones that have been designed and printed professionally.

I have to guess that the businesses putting their face forward with business cards designed on their home computers and printers just don't realize the message this sends to their potential customers.

So here's the scoop:

Your business card is your first contact with a good portion of your customer base. You hand them over at networking groups and at every meeting you attend. They hang around in people's day-books, pockets and in weird places in their cars. You should never underestimate the value of great looking business card.

Unfortunately, too many rural and small business owners think the business card is a throw-away and not worth an investment. Think again. Your business card tells your story, represents your brand and has more staying power than almost any other kind of printed marketing.

So what message do you think an unprofessional, flimsy business card relays?

What it says is, "I don't really care about my business. I probably won't be around in six months so don't worry about losing my business card. I don't have enough pride in my business to bother about looking professional or reliable."

I've still got business cards from people I met 10 years ago. And you can bet the quality of the card reminds me why I have done business with them, or why not.

Your business card sets the tone for all the rest of your marketing - your stationery, your print ads, your website.

So say, for instance, your customer base is highly educated people with a disposable income. If your business card is messy, cluttered and on cheap paper, do you think this customer base is going to trust you?

It isn't rocket science. Get your business card designed and printed so you can be proud to show it off. You'll find your customers believe in you faster and you'll also find yourself being more excited to hand your cards out to others.

And the first to go is the marketing budget

When sales go down, as many industries will see in the next while because of the state of the American economy, the accountants start making their lists of cutbacks and layoffs. This is true in big business as well as rural and small business. And one of the first things to go, in the majority of cases, is the marketing budget.

Accountants see marketing as a cost centre. There is no direct line from marketing to increased revenue in an accountant's mind. It is the sales department that brings in the revenue. So cutting back the marketing budget will save money, right?

Wrong!

If you cut back on your marketing spend, how will your customers learn all the great things about your business? If anything, you should plan to increase your marketing budget to support your sales during times of lean coffers.

I've lost count of the number of times I've had this discussion with accountants and actuaries. Okay, for their sakes, I'll change what I just said (plan to increase your marketing budget) to leave the marketing budget alone - leave it at the same level it's at before your business starts to shrink.

This is where having the right marketing team in place is so very important. Your messages have to be fine-tuned and extremely targeted during the lean times.

I've just had the pleasure of working with a bunch of brand new business owners as they build their business plans. Needless to say when you're first starting your business, times are lean as well.

It was painful for me. They were being told by the class facilitators that a reasonable marketing budget is between two to five per cent of their annual sales projections. Of course, they were also coached that they should decide what they needed to do to market their business and plan an appropriate budget. Not one of them went above the five per cent mark, and most went with two per cent. Needless to say, these percentages were created by accountants.

Brand new businesses should be planning a bigger marketing spend to get the word out and promote strong sales. With a tight, skinflint marketing budget, their business will grow slowly and may not survive the first year.

Economies of course make sense when times are lean, but it's important to look at the big picture. If you cut back your marketing budget, what will support your sales team and deliver your message to your customers?