11 Monstrous small business marketing mistakes and how to avoid them

Increase your profit potential by identifying - and avoiding - these 11 marketing mistakes.
MONSTROUS Marketing Mistake Number 1: Sinking a Fortune Into an Unproven Product
Is your business idea built on market research or a hunch?
Entrepreneurs often fall in love with their products or services before they determine if there's a real market, and they throw fistfuls of money into the venture. If you, your spouse, your uncle, and your neighbor think you've got a winning idea, that's simply not enough qualified input to run to the bank and drain your savings account!
Avoid this mistake by:

• Conducting your detective work (research).


• Testing your business idea with the real marketplace.

MONSTROUS Marketing Mistake Number 2: Believing That "If You Build It, They Will Come"
Do you think you have a product or service that will practically sell itself?
Trust me - you don't.
There is a misconception among small business owners that, with the right product or service, your customers will simply "find" you when you open your doors for business. Whether you have a physical storefront on a corner lot in the busiest part of downtown, or a graphically pleasing online storefront offering easy access to your hot products and services, your customers will not find you if you do not market to them.
The day you open for business is the day you put on your "marketer's hat" and never take it off. You must consistently move product, or schedule service time.
To stay in business you must profit.
To profit you must sell.
To sell you must market.
The good news is that, with a marketing strategy, you take the control out of your potential customers' hands and put it into your own. If you have a product that will "practically sell itself," then your marketing job will be easy. Just remember that the job must still be done.
Avoid this mistake by:

• Defining your niche market and USP (Unique Selling Proposition) that differentiates you from your competition.


• Developing a marketing action plan and strategy to reach your niche market with your USP message.

MONSTROUS Marketing Mistake Number 3: Trying to Reinvent the Wheel
Marketing is an age-old practice with some very basic principles. Yet, I'm sure you've read many marketing information products that stress the importance of being innovative and creative with your marketing efforts. It's easy to get caught up in the innovation process and forget that the REAL focus should be on results.
Avoid this mistake by:

• Emulating success instead of trying to create something completely new. Please note that I am not saying, "copy" what others are doing. Look at the basic structure of a tactic, campaign, advertisement, or event and use the same formula as a basis for developing your own tactics.


• Realizing great marketing ideas are used over and over again with just the right twist to make them fit a specific business. Focus on results, and choose imitation over innovation to create your own twist on a proven, winning technique.

MONSTROUS Marketing Mistake Number 4: Over-Preparing and Doing Nothing
The fear of failure can be powerful. So powerful that we do everything we can think of to prevent it. Yet, there is a point at which we are so busy preparing, organizing, and researching to prevent failure that we never get around to the actual marketing of the business. Here are two things to remember:

1. Activity is not productivity.


2. In order to sell a million of something, you have to sell the first ONE.

Avoid this mistake by:

• Doing something! If you believe in your business and have done your detective work, it's time to dive into the marketing pool. Start small, track results and build from there.


• Not being afraid to make a mistake. Mistakes are the entry to success. At the very least, a failed promotion means you have SUCCESSFULLY determined what promotion does not work. And, to learn what does NOT work is a valuable tool in getting you closer to discovering what WILL work.

So, go ahead. Fail a little. It will make your eventual successes even sweeter.
MONSTROUS Marketing Mistake Number 5: Boredom
When I was working for an ad agency many years ago, I had one client that was running an extremely successful ad campaign. After about six months, I received a phone call from the client. He wanted to develop an entirely new campaign. When I asked, "why?" he simply said, "I'm bored with the one we have."
What?
That client may have had the money to spend on a new campaign due to "boredom" but you and I usually don't. Yet, I've often seen my small business clients switch promotions for the same reason. This is detrimental to your business!
"Losing money" is a reason.
"Boredom" is not.
Avoid this mistake by:

• Remembering that, what is old to you, is new to an untapped target market. If you have a promotion that is consistently getting you results, stick with it until results show you its time for change.


• Testing new promotions without abandoning the current one. Then track results. Never swap a current promotion with a new one that hasn't been tested.

MONSTROUS Marketing Mistake Number 6: Relying on Networking to Generate Sales Leads
Joining the Chamber of Commerce and schmoozing at association meetings can put you in contact with vendors and possible joint venture partners, and will be invaluable exposure for you as a community supporter - but it will rarely generate substantial sales leads.
Everyone else who attends these "meet and greet" assemblies is there to do the same thing you are. You may be able to make some valuable contacts for future ventures and promotions, but one-on-one networking is time-consuming and results are unpredictable.
Avoid this mistake by:

• Treating networking opportunities the same as any other marketing tactic. Track results by determining your costs and measuring your payback.

MONSTROUS Marketing Mistake Number 7: Doing What Your Competitors Do
It's important to be aware of what your competitors are offering, but do not let it dictate the strategy you use for your own business.
If your competitor wants to be the low price leader, let him. Don't try to become the "lower price" leader. Chances are this will lead you to financial problems because it will thrust you into an ugly price war.
If your competitor wants to tout low prices, then you focus on value. Bargain hunters don't necessarily want the lowest price. They want the best VALUE. Make what you have to offer something of value.
Avoid this mistake by:

• Finding an unmet need or want of your target market, and fill it to differentiate your products and services from your competitors.


• Giving customers a reason to choose you over your competitors. Define your USP, and identify your niche market.

MONSTROUS Marketing Mistake Number 8: Not Targeting a Specific Market
If you believe your market is "everybody," you will struggle to attract people who will buy from you. The value of target (niche) marketing is one of the toughest sells I make to my clients. They understand the logic of it, but the "fear of losing a potential customer" gets the best of them.
Avoid this mistake by:

• Viewing the practice of niche marketing as inclusive, not exclusive.

Think of your business as part of a person's support group. It's logical to say, "Everybody needs a support group so my business should attract everyone." But, will it? People - your customers - want to go to a support business that understands their specific concerns, needs, and wants. Make sure you ARE that business by targeting a niche market.
MONSTROUS Marketing Mistake Number 9: Targeting a Market You Can't Reach or One That Can't Afford You
Targeting a niche market is the smartest way to market. Yet, targeting a market that is too specific will limit your ability to succeed long term. For example, a market that might be too specific would be: female pilots under the age of 35 who fly ONLY New York to London flights. That's a pretty narrow market to sustain your business in the long term unless you can capture the ENTIRE market with a product or service that has a high profit point and customers need to use or replace it often.
In that same vein, a market that is begging for the service or product you have but cannot afford it will also be a business impossible to sustain. Never compete for someone's rent money. Your target market must have the means to buy your products and services.
Avoid this mistake by:

• Creating your customer profile to identify characteristics of your potential buyers,


• Identifying a niche market,


• Examining the long term potential for new and repeat sales.

MONSTROUS Marketing Mistake Number 10: Focusing On Acquiring New Customers Instead of Promoting to Current or Previous Customers
When you first start a business you have little choice but to focus on gaining new customers. The cost of finding those new customers can be expensive, which is one reason it is so important to really target a specific niche. However, once you've made just one sale, you're ready to start looking at other marketing options.
Wouldn't you like to:
... slash your marketing costs by half or more?
... reach proven buyers for your service or products?
That little goldmine of proven buyers available to you "on the cheap" is already yours in the form of current and previous customers.
Any respected marketing guru, past or present, online or offline, will tell you that the biggest asset your company has is your customer base.
Avoid this mistake by:

• Realizing that, when a sale is finalized, it is the beginning of your relationship with that customer, not the end.


• Offering additional products or services to current customers. If you don't have your own to offer them, then develop a referral, joint venture or product bundling program so you can reap profits from your already-interested (and buying) customers.

MONSTROUS Marketing Mistake Number 11: Not Systematically Following Up on Leads
The least expensive part of business is making the sale. The most expensive is generating leads - finding the people who are interested in what you have.
Once you find people who express an interest in what you have to offer - whether they buy from you or not - you MUST develop a follow up system that will keep marketing to those interested prospects. A person who has expressed interest in your products and services is far more likely to eventually buy from you than someone who did not respond at all!
Avoid this mistake by:

• Curbing the tendency to become obsessed with generating more leads until you have exhausted the ones you already have.


• Developing an easy, systematic follow up for leads, designed to convert a "maybe" into a "yes."

As the size of an emerging market

In developing their business plans, companies of all sizes face the challenge of determining the size of their markets. To begin, companies must present the size of their "relevant market" in their plans. The relevant market equals the company's sales if it were to capture 100% of its specific niche of the market. Conversely, stating that you were competing in the $1 trillion U.S. healthcare market, for example, is a telltale sign of a poorly reasoned business plan, as there is no company that could reap $1 trillion in healthcare sales. Defining and communicating a credible relevant market size is far more powerful than presenting generic industry figures.
The challenge that many firms face is their inability to size their relevant markets, particularly if they are competing in new or rapidly evolving markets. On one hand, the fact that the markets are new or evolving is the reason why there may be a large opportunity to establish them and become the market leader. Conversely, investors, shareholders and senior management are often skeptical to invest resources because, since the markets do not yet exist, the markets may be too small, or not really exist at all.
In developing over 200 business plans for emerging ventures, venture capital firms, SMEs and Fortune 500 spinouts, I have encountered the challenge of sizing emerging markets numerous times and has developed a proprietary methodology to solve the problem.
To begin, it is critical to understand why traditional market sizing methodologies are ill-equipped to size emerging markets. To illustrate, if a research firm were to use traditional methods to size a mature market such as the coffee market in the United States, it would consider demographic trends (e.g., aging baby boomers), psychographic trends (e.g., increased health consciousness), past sales trends and consumption rates, price movements, competitor brand shares and new product development, and channels/retailers among others. However, conducting such an analysis for emerging markets presents a challenge as several of these factors (e.g., past sales, demographics of the customer when there are no current customers) don't exist because the markets are presently untapped.
The methodology required to size these new markets requires two approaches. Each approach will yield a different approximation of the potential market size, and often the figures will work together to provide a solid foundation for the market's potential. I call this first approach "peeling back the onion." In this approach, I start with the generic market (e.g., the coffee market) that that company is trying to penetrate, and remove pieces of that market that it will not target.
For instance, if the company created an ultra high-speed coffee maker that retailed for $600, it would initially reduce the market size by factors such as retail channels (e.g., mass marketers would not carry the product), demographic factors (lower income customers would not purchase the product), etc. By peeling back the generic market, you eventually will be left with only the relevant portion of it.
The second methodology requires assessing the market from several angles to approximate the potential market share, answering questions including:
o Competitors: who is competing for the customer that you will be serving; what is in their product pipeline; once you release a product/service, how long will it take them to enter the market, who else may enter the market, etc.
o Customers: what are the demographics and psychographics of the customers you will be targeting; what products are they currently using to fulfill a similar need (substitute products); how are they currently purchasing these products; what is their degree of loyalty to current providers, etc.
o Market factors: what other factors exist that will influence the market size - government regulations; market consolidation in related markets, price changes for raw materials, etc.
o Case Studies: what other markets have experience similar transformations and what were the customer adoption rates in those markets, etc.
While these methodologies are often more painstaking than traditional market research techniques, they can be the difference in determining whether your company has the next iPod or the next Edsel.

Marketing is a system that no event

Small business marketers love the chase. Love the new fangled way to make the phone ring. They love to think of a marketing promotion as a single event. But it's precisely this view of marketing that holds most small businesses back. They fall prey to the "marketing idea of the week" and never fully explore what it takes to create and build a completely functioning, consistently performing, marketing system.
In this article I am going to outline the basic steps that any business can follow on the way to creating their very own marketing system. But first let's explore this word system in the context of marketing. Small business owners have no problem thinking systems when it comes to say, accounting or hiring. When it comes to marketing though, all bets are off. It's as if they are waiting for magic fairy dust to fall upon them with the next great marketing innovation.
Look, effective marketing is little more than creating and operating an effective marketing system. Now, when I use the word system I mean several things. 1) The system is documented - You can't have a system or a step in a system unless you write it down. 2) The system is built on sound marketing principals and 3) You constantly measure, innovate, and refine the system.
Okay, so on to the system building steps.
1) Narrow and define a target market - Small business owners love to say yes. "Sure we can do that." The next thing you know the target market is roughly anyone they think will pay them. You must commit to a narrowly defined target market and you must focus all of your attention upon serving that market like no one ever dreamed of. A narrow marketing focus might be - Estate Attorneys - as opposed to Law Firms.
2) Discover and communicate a core message for that market - Until you can show how your firm is different and offers something unique, you will always compete on price. You must find a way to tell your newly defined narrow target market why you have something to offer that they value. Your core message might be - We show estate attorneys how gain all of the business they can handle - as opposed to: We help law firms.
3) Develop multiple forms of permission based lead generation - No one like to be sold to and more and more advertising is falling on numb ears and eyes. Your lead generation system must be built on several fronts, such as public relations, referral marketing, strategic partnerships, and targeted advertising. Your lead generation message must offer the target market a reason to want to know more. Forget about the sale, look for ways to build trust.
4) Construct a lead conversion and customer reselling process - No amount of leads in the world will help your business if you don't efficiently turn those leads into clients. You must have a plan that maps out what you will do when phone rings, when you make the sales call and when it's time to do more business with the clients you already have. Most small businesses completely ignore this aspect of their marketing, but this is where the real success in marketing lies.
5) Create educational based marketing and presentation materials - Forget about the glossy sales brochure, use your marketing materials to teach how your firm is different, how you solve real problems, how you work, why you work, what you believe and your marketing will be much more successful. Your web site must come from this point of view as well.
6) Define the most important marketing success indicators - Setting marketing goals for such things as leads, appointments, sales, phone calls, referrals, impressions, mentions and anything else you can think to measure is how you turn marketing into a game and how you keep score of the game. Everyone loves and game and the only way to improve something is to measure how well you are doing in the first place.
7) Build an annual marketing calendar and budget and stick to it - Once you have spent the time and energy to think through steps 1-6 you need to commit your plan to a marketing calendar and then allocate (or at least think about) the money it will take to implement your plan. Once you create a calendar it is much more likely that you will look at the tasks assigned to each month like a "to-do" list. So, instead of whining that you should do more marketing, you simply scratch each item off your list and plan for the next. It's an amazingly simple but effective device.
Okay...now the last bit of advice.
Every system needs a champion. Either find someone in your organization who does little else but operate the system or hire a marketing professional and charge them with helping you develop, implement and run the system.
Properly fed and maintained, this little marketing system can become the engine that drives your firm's climb to the top.

The process of change in marketing approaches

In a world economy that is in constant flux and undergoing turbulence, more companies are realizing that their most precious asset is their customer base. An even more important realization is the need to satisfy the whims and fancies of these customers in order to survive in these increasingly competitive markets. Organizations that do not act on this dictum have suffered the loss of market share or worse, total annihilation. Such dire consequences have awakened many organizations to rethink the way they see marketing. Thus, there is urgency for an organization (be it products or service providers) as a whole to develop appropriate holistic customer-focused strategies to ensure that the customer remains at the core of their organizational thinking.
With the rapid advancement of information technology (especially the rise of the Web) and the increasing difficulties of meeting customer's needs and wants (for example, their expectations of 24 / 7 customer service especially for online transactions), there is a shift from a traditional marketing approach to customer targeted marketing. Many organizations and marketing consultants are emphasizing the need to allocate more funds to apply new-found knowledge of consumer behavior in new products development, build better customer relationships through customer loyalty and retention programs.
This purpose of this paper is to raise the awareness of the need to concentrate marketing efforts towards the customer rather than the inward-looking traditional product-focused arrangement. And more importantly, the paper will shed light on how an organization could go about in making this important transition in this current competitive market.
Marketing Approaches Explained:
Before I proceed to discuss the shift in the marketing approach, it will be appropriate to explain briefly the two marketing approaches separately for greater clarity.
Traditional Marketing-The 4 Ps of Marketing:
The marketing mix or what is commonly known as the 4 Ps is a framework for marketers to implement a marketing concept. It consists of a set of major decision areas that a company needs to manage in order to at least satisfy consumer needs. According to Kotler et al. (1999), the mix is a set of "controllable tactical marketing tools [...] that the firm blends to produce the response it wants in the target market" (p.8). Hence, in an effective marketing program, all of those elements are "mixed" to successfully achieve the company's marketing objectives.
The traditional marketing mix contains four major elements, the "4 Ps of marketing". As defined by Kotler et al. (1999):
1.Product: Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. In includes physical objects, services, persons, places, organizations and ideas.
2.Price: The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.
3.Promotion: Activities that communicate the product or service and its merits to target customers with a view to persuading them to buy.
4.Place: All the company's activities that make the product or service available to target customers.
With the rapid changes surrounding organizations, the traditional marketing mix of the 4 Ps has been criticized for being too myopic in this current market situation. The traditional marketing mix has also been disparaged for being too product-focused and for taking an overly inward-looking strategy with regards to the organization's resources and capabilities in production matters. This is antithetical to attending to the more important organizational goal of satisfying the desired needs and wants of customers.
In addition, the Web and E-commerce revolution has played a major role in alleviating customers' ability to shape their relationships with the company. This has led customers to expect companies to market their products and services in ways that reflect more directly their individual needs.
These changes have prompted enterprises that wish to stay ahead of their competitors to shift their traditional marketing approach to customer-targeted marketing.
Customer Targeted Marketing:
In customer targeted marketing, the customer becomes the central focus of the organization's strategy and activities, rather than the product itself (which is the prime concern in traditional marketing). The organization's paradigm shift in marketing requires a company to build a commitment to quality and to listen critically to the customer to determine the market needs and how the company can meet those needs more effectively.
One of the major characteristics of the approach is to focus on each customer's interests and interactions with the organization to deliver targeted, personal messages. This would require the company to be constantly gathering information about their customers in an effort to better serve them and, most importantly, to retain them as loyal customers. As suggested by Peppers and Rogers (1998), the organization would need to use various techniques and strategies (possibly with the help of information technology and the Web), such as focus groups, in-depth interviews, customer surveys, attitude testing and so on to obtain information about consumers for more effective marketing of a product or service. With these customers' data and feedback, the organization will apply the knowledge to develop more customer-centric products and services and/ or to improve existing ones. In addition, the information will be shared within the organization to encourage employees at all levels to focus on creating maximized customer value and loyalty.
Why Customer-Targeted Marketing?:
In order to have a competitive edge and to satisfy increasing levels of customers' desires, companies realized that they have to see their customers as individuals rather a homogeneous mass of similar tastes, values and buying behaviors. Due to such transformation, companies need to be more customer-focused in its overall marketing strategy. This has resulted in organizations adopting a customization strategy to increase customer's loyalty to their products and services. For example, in banking and insurance industry, there has been a move towards greater customization. Standard products/services have been given way to a varied menu of features from which customers may select their own preferred combination.
In view of these changes, companies that understand the asset value of each customer, and that tailor their marketing efforts (and their costs) to acquire and sustain the highest-value assets, will win over less-adaptable traditional marketing approach of the 4 Ps.
The Process of Transition:
In order to strategically change from a traditional marketing approach to customer targeted marketing, an organization must be aware of these following areas:
Paradigm Shift. A company must fully understand that customer targeted marketing requires a shift in the organizational mindset, and not just structural organizational changes. They must realize that their sole purpose is to continuously satisfy customers' needs and wants. Thus, to ensure a smooth transition from a traditional marketing approach to customer targeted approach, an organization must reflect and ask itself questions as to what areas need to be analyzed and to understand the ramifications of such a transition in the organization. On the other hand, an organization needs to realize the negative consequences for not willing to be a more customer-focused marketing organization.
Customer Targeted Planning. As in any organizational change initiative, proper planning is needed. The objective of planning customer-centric marketing strategies is to find win-win opportunities with customer and to identify the best mutual opportunities for your customers and your company. This requires the organization to see the issue(s) from the customers' perspectives and to strategically plan the organization's resources around them.
In short, the organization's shift to customer-targeted marketing should embrace these three important points:
1.Planning should focus on customer wants and not looking inwardly at company goals
2.Focus on the honest feedback and suggestions through creating different channels of communications. Listen to the customers, rather than forcing them to listen to you.
3.Integrate your customers in every aspects of your business, from new product design to after-sales services and more.
Organization-wide Responsibility. For the approach to be successful, members need to understand the new philosophy of marketing and embrace it organization-wide. Many organizations tend to underestimate the degree to which every facet of the enterprise needs to be involved in the process and to be integrated into the actual customer relationship.
Organization Redesign. An organization has to assess the roles of all functional departments interacting with customers to ensure that they add value to customers instead of increasing the costs. By reorganizing the company with the customer as the focus, many departmental roles and responsibilities will have to be redesigned. And when that happens, the employees will have to adopt new work processes that would be more customer-centric in nature.
Human Resource Training. There is a need to develop customer-focused human resource through customer behavior training, across the functional departments. By investing in such training at all levels, the members will be more knowledgeable, more autonomous, and more efficient in anticipating and meeting the needs of the customers.
Use of Information Technology. With the advancement and increased affordability in information technology, more companies are able to collect available data on customer purchase behavior more efficiently. For example, technologies ranging from checkout scanning to Internet cookies are commonly used to track customers' buying behaviors. Companies that employ such technology will be more adept at acquiring new customers, retaining existing customers, and cross selling than those who do not.
Enhanced Customers Communications. With the use of the Internet as a medium for targeted communication, this allows companies to be in touch with customers at less than one-hundredth of the cost of more traditional snail mail, brochures or flyers. Communication through emails with the customers is almost free, and the customers can retrieve communications almost immediately. However, this has also resulted in customers having 24 / 7 service expectations of these companies.
Customer Targeted Measurement. An organization must be able to measure and evaluate the success of their customer targeted marketing strategy. In most cases, traditional measurement techniques such as profitability, market share and profit margins are used to measure the success. There should be an added emphasis given to developing measures that are customer-centric and which are able to assess the marketing strategy. Customer acquisition costs, conversion rates, retention rates, customer sales rates, loyalty measures and customer share within a brand are some examples of customer-centric measures than a customer-focused organization can adopt
Conclusion:
The need for survival has provoked many organizations to shift from traditional to customer targeted marketing. The market conditions surrounding us will continue to change at an accelerating rate and customer's expectation will continue to rise. Hence, without any doubts, more and more companies will adopt a customer-targeted marketing strategy with increased intensity.