3 Golden Rules of Pricing for Value

For any business setting the price of your products is one of the hardest decisions that you have to make (along with picking a brand name, choosing the logo colour, deciding on your range…!) There are a few different approaches that you can take, but the most important thing you need to do is build value. This post will discuss the role of value in pricing and show you the 3 golden rules for building your price on a value proposition.

What is Value?

Value is a perception. It’s the reason why a well cut, good fitting little black dress for $150 can be as savvy a purchase as buying 3 tanks for $20. The price paid is considerably different, but so is the expectation of quality, enjoyment and longevity. Value is the combination of all our feelings towards the item we are purchasing. To set the price, we need to understand the value of our product to our consumer.

Many years ago I was the category manager for a premium cosmetics and perfume company. When it came to setting the price on skin care products that were perceived to rewind the aging process, we set the price by analysing what the consumer would pay, based on what it was worth to them – the value they saw in the product. The product cost was around $10, yet the consumer valued it enough to be willing to pay well over ten times that amount.

In our post “How to Measure Success” we looked at how to analyse your gross profit and your wholesale margin, which are both valid ways to set your retail price. But some products are worth far more than they cost to produce, be it because of desired design, quality workmanship or inherent benefits, and this is where developing your price model around value is most beneficial.

3 Golden Rules of Pricing for Value

1.       Understand Value-Based Pricing

When you set price using a value based model your objective is to determine the level of satisfaction a customer derives from your product and what price they are prepared to pay for it. How valuable is the solution your product brings to their life? How long do they perceive it will last? How important are the attributes to them?

Defining value includes analysing tangible and intangible attributes – that is what we can and cannot touch. The price of a Mercedes-Benz is set by what the brand believes the consumer will pay. The value is based on what they can touch – leather seats, alloy wheels, superior styling; but also what they can’t – associations of prestige, confidence and luxury.

There is no formula for value-based pricing, as each product will have its own value. You may find it helpful to do a competitive review to see how others are pricing similar offers and also survey your target market to understand what your offer means to them.

2.       Create a Value Perception

Creating a value perception involves positioning your product or service in the market so that it is desirable. The more consumers want your product the more they will be willing to pay. How to do this depends very much on the type of product or service and who the target customer.

Generally speaking you can create positive value perceptions by paying attention to:

• The presentation of your brand elements including your logo, brand name and website / store front
• Building social media networks to have large numbers of engaged and active followers
• Educating your target on the benefits your product can bring (remembering both the tangible and intangible)
• Demonstrating brand advocacy through customer reviews and testimonials

 

3.       Maintaining your Value Proposition

When you use value-based pricing, your approach hinges on your target market buying into your offer and seeing the value in it. As it comes time to promote your product, the strategy you choose is critical. Thinking back to Mercedes-Benz, how often do you see an ad for Mercedes-Benz:

“Mercedes Benz A-Class, was $90,000, now $50,000. For three days only!”

A product that is marketed on its value needs to maintain that value and it can easily be tarnished. If you can sell your product for half the price you were charging, your consumer will start to question its true cost, and the value they see in it may decline.

Value adding strategies are the best way to maintain value in your product while creating new reasons to buy. The most well-known value add strategy is the free gift. Offering a free gift with purchase does not devalue the original product in any way, you may be directing some profit into funding the gift instead of using some profit to discount the gift.

Free gifts can also be used to drive multi unit purchases e.g. Spend $52 dollars to get your free gift, setting the spend qualifier above your key products.

With the rise of online stores, another strong value add offer is Free Postage on a required spend. Firstly, we suggest you have a flat postage rate in place e.g $6.95 Flat Fee Postage, that way you have created a value for the postage; then set a minimum spend to receive the postage free e.g. Free Postage on orders over $100. This will encourage multi unit purchases, delivering you more profit per transaction, helping you fund the free postage profitability.

Following the 3 golden rules of pricing for value has the potential to deliver you more profit than pricing to make a margin requirement. What is your product? Can you price for value? As part of our mini marketing plan, we analyse your competitors pricing models and give you recommendations on how you should price within the market. For more information visit our product page.

Until next time, V is for Value and I hope you found it valuable!

Mary-Anne

New Products and your Marketing Strategy

New products are launched in droves every year and the simple reason is that nothing sells like ‘new’. New product development (NPD) should form a key part of your annual marketing strategy, with the need for new ideas and innovation to keep your business competitive.

This post will help you through the new product development process, to ensure you create new product that complements your current portfolio, fulfils a consumer needs and meets profitability expectations.

What is a New Product?

Well to start off cryptically, a new product doesn’t always have to be new at all. Further, there are few products that are truly ‘new’; most are a new version of something else that already exists. (I’m telling you that to take the pressure off a bit).

New products can be:

• An existing product with a new feature or twist
  • E.g. GHD Hair straightener, now cordless
• A product line extension
  • E.g. Cherry Ripe being extended into a Cherry Ripe Sundae
• A redesign of an existing product
  • E.g. Mazda 6 2011 model vs 2009 model
• (and least commonly) A new product
  • E.g. The rain triggered awning for your clothes line

Identifying a Need for New Products

In an ideal world, small business would have enough time to mimic its corporate sized comrades and spend a month every year, undertaking a complete review of marketing and promotions strategy and developing a marketing plan for the following year.

We know however that in small business, time is consumed doing business and not necessarily developing business. The likelihood of you sitting down to an annual review is slim (if you can find the time, check out our service plan in Get Competitive with your Competitors) so you may find that for your business, identifying new products happens on an ad hoc basis.

Reasons why you may need a new product can include:

• Sales of existing products are dipping (see Product Lifecycle Management)
• A competitor has taken significant market share from you (see Get Competitive with your Competitors)
• Your customers keep asking you for a product that you don’t offer
• You have a successful product that you want to extend (see Product Lifecycle Management)
• Your market research has uncovered a white space opportunity (see Jargon 101)
• You’ve had a brilliant idea!

New Product Development (NPD) Process

In my last corporate role, I spent three years as Brand Manager working 80% on NPD. It would take up to 18 months from initial idea to development to product to the product appearing in store. The problem with big business is that there are so many people who have to sign off, that things can move very slowly. The motivation here for you and your small business is that with a good idea, you can be quicker to market; and with less overheads, be more profitable too.

5 Steps for Small Business NPD

1.Identify the market need

• It is not enough to want to launch a new product because competitors are closing you out of the market or because your current product is slowly declining. You need to identify a market need. What can your new product bring to the market that consumers want or need?

2.Develop a prototype and cost it

• A prototype can be as simple as drawing a picture with measurements and specifications, or sewing up a sample, or mixing up a batch, to as complex as working with a factory and paying to have a sample produced.
• Developing a prototype is usually the step that precedes costing; once the prototype reflects what the product needs to look and perform like, you are then able to compile the cost to produce it.
• When costing up your product, if it something you plan to make yourself, make sure you include a labour cost into your calculation. You may not pay yourself for every batch of cupcakes you make, but one day you might expand and need to pay someone, in which case you want that built into your cost.

3.Analyse your profitability

• Once you have developed your prototype and costed it, you now need to set a retail price and assess profitability
• You will want to set a retail price that allows you to wholesale it profitably. Again at first it may not be your plan, but you want to make sure you can profitably take this path if the occasion arises. Have a look at How to Measure Your Success  for tips on how to calculate Gross Margin and Wholesale Price.
• A tip is to calculate your Gross Margin using the Retail Price, to give you an idea of how much you will make when you sell direct and then calculate using the Whole Price to calculate how much you will make if you wholesale. You want to be profitable at both points. Generally you should make around 50% gross margin when you wholesale, although as a small business you may be prepared to accept less.

4.Refine your new product

• Based on the profitability you may need to remove elements from your prototype, seek out cheaper materials or brainstorm new ways to produce your product to have a profitable new product.
• You should test your new product idea, if you can, with your target market to ensure it does meet a need and the purchase price is accepted. This can be through your Facebook page or design a survey through Survey Monkey and incentivise competition e.g. Complete the survey for your chance to win a $20 voucher.

5.Plan your launch

• Assess if you need to run any existing products out, before launching your new product
• Create a plan to tell everyone about your new product. It is essential you shout about your new news; use your social media accounts, send an email to your subscriber list, feature it on your homepage, send out media releases.
• Run a promotion that benefits all your products, using the new product to boost overall sales. E.g. 50% off any other product when you buy our new personalised coffee plunger

New product development is an important part of your marketing strategy. ‘New’ brings consumers back to your brand giving them something different to look at; it keeps you competitive and growing and most importantly, it can have a halo effect on existing products.

Are you planning any new products for 2012, how did they come about?

Until next week, N is for New and also for planning your New Year ahead

Mary-Anne

www.wiseupmarketing.com.au

How to Measure Success

In my very first blog post (5 Steps to Host Your Own Census) I made this huge confession:

“Being a passionate and dedicated Marketer, over the years I have become near obsessed with measuring; measuring results, measuring profitability and of course measuring the target market.”

So as M drew closer in the ‘A-Z of Marketing’ series I was filled with excitement and jotted on copious post-it notes the measurables I wanted to share with you.

Measuring your performance, not just financially, but also your connection with your consumer gives you a reality check. It uncovers the true effectiveness of your strategies and guides you in how to improve your business and stay ahead of the competition.

5 KPI’s (Key Performance Indicators) for your Business

1. ROI (Return On Investment)

In the marketing sense ROI is used to analyse the profit on a campaign you have run, to determine the percent return on investment.The formula is:

This result would mean we had a 62.5% return on our investment. You will need to get a benchmark of what is acceptable for your own business and work to improve over time. A negative ROI means that you have lost money and in that case you would need to question the appropriateness of your strategy.

2. Wholesale Margin

Use this formula to determine the margin you are giving a retailer. Often the wholesale expectation sits between 45-55% of retail depending on the outlet.

Set the RRP you believe the market will accept for your product and then use this formula to calculate the wholesale margin you are giving to your retailer.

GST TIPS: To remove GST divide by 1.1, to add GST multiply x 1.1, to work out the GST component divide by 11

 3. GM (Gross Margin)

Use this formula to determine how much money you will make from each item you sell. As this is Gross Margin, we are only concerned with the costs associated with making the goods or service.

This is the key way we measure if a wholesale price requirement will be profitable for our business. The formula is:

4. CTR (Click Through Rate)

The CTR tells us how many people are clicking through (clicks) our online advertisement as a percentage of the total times our ad was shown (impressions). We measure CTR on the banner and badge advertising we do on websites and also when we undertake pay per click campaigns E.g. Google AdWords, Facebook Ads. The formula is:

The CTR benchmark is different by business and will differ based on whether you operate in a broad or niche category. The DoubleClick Benchmarks Report, published in 2010  lists 0.10% as the CTR benchmark on static online ads.

5. CPV (Cost Per View)

We recommend our clients estimate a CPV when approached with an advertising opportunity. We are all often wondering “Should I advertise in this publication?” and “Is this advertising opportunity worth it? Measuring the CPV helps you to break down the advertising costs and assess them at a leads level. If you could buy a mailing list for $1,000 and it gave you 1,000 names you would say it was a $1 per sales lead. Similarly CPV is calculated with the formula:

You would then evaluate the CPV against how valuable the lead is. Further you may want to take the distribution and cut it down to what you believe is your target market, e.g. the distribution is 20,000 of which 5,000 are your target, say Elderly Couples on the Pension, you then would work out the CPV against just your target:

2,500
5,000

=$2

 Your CPV has increased greatly, but with few mediums that get in front of that target and the targets affinity with local newspapers, we would say it is a reasonable CPV.

Check your Web Stats to Monitor Web Traffic

If you have a website (is it even worth asking anymore?) you may feel uncertain at times as to whether anyone visits it, if it’s working as hard as it can for you and most importantly, is it converting browsers into customers.

Your web stats are measuring every interaction browsers are having on your website, all you need to do is logon and analyse them.

The two stats we pay the most attention to are both functions of time. When we undertake a Website Effectiveness Audit, firstly we look at the Bounce Rate. This is given as a percent and tells us how many people landed on our page and clicked off (bounced) straight away. A high bounce rate tells you that the majority of traffic to your site are arriving and deciding instantly you’re not the right fit. Work on decreasing your bounce rate by improving your home page appeal or direct traffic to the page most relevant to them e.g. product page, location page etc.

Dwell Time, is the other time based base measurement we encourage you to look at. Once we remove the people that ‘bounced’, we want to know how long the rest of our traffic stayed for. These are usually presented in bands of time e.g. 0-30 seconds, 31 – 2 minutes etc. Again we want our traffic to stay as long as possible, browse many pages and convert. If you have a very low dwell time, work on engagement with your traffic, add more images, a video, a blog, FAQs, any valuable content that will increase the time your potential consumer spends on your site, getting to know you.

We run a Website Effectiveness Audit for just $49.95 which includes a “Traffic Light Report” on how your website is performing, please get in contact if you would like to know more.

When you set out to measure success you need to remember that success looks different to everyone (and to every business). The key is to benchmark against realistic targets for your business.  Focus on how to be more profitable whilst exceeding your customer’s needs and your business will continue to grow.

Until next week M is for Measurement and also for Making it to the halfway Mark in the A-Z of Marketing!

Mary-Anne

www.wiseupmarketing.com.au

Long Live your Product (with Life Cycle Management)

Countless products are launched every year, landing in the market with a reason to be, a well thought out way to connect with the consumer and hope that the investment will pay off for the brand owner. But what comes next?

Product Life Cycle Management is the key to ensuring your brand thrives year in and year out. This post will help you understand its importance to your marketing strategy and give you the tools you need to identify the different stages of your products life cycle and strategies to maximise growth throughout.

What is Product Life Cycle Management?

I love a good analogy as much as the next marketer and this one was just too hard to resist.

Think of your product like roses in your garden, it is not enough to simply plant (your new product in the market), water it (with promotions occasionally) and expect it to flower year after year. At some point, its vitality is going to dwindle and you need to either deadhead them or dig them up and start again.

The product life cycle (PLC) refers to the stages a product travels through from launch to eventual obsolescence. Managing the PLC is an important part of your marketing strategy and guides you in adapting your approach by product, to ensure you are promoting, developing and phasing out products at the right time.

Four Stages of the Product Life Cycle

1.      Introduction

This is identified as the launch stage of your new product.  Sales are increasing slowly, as there is currently limited awareness. Costs are high with large amounts of advertising and promotion required as well as the product development and production costs having been incurred.

The introduction stage will see your business operating at a loss and so this is the most critical stage in your product lifecycle, ideally  you want to move through this stage quickly. Understandably this is where the  highest percentage of failure occurs.

Strategies for success during the introduction phase:

• Clearly define your market so that at launch you  are effectively targeting the consumer most likely to become your customer
• Build a dominant market position, stand out from  your competition, don’t just be a “me too” product, have a unique reason for consumers to connect with over the competition
• Pioneer something; be the first to launch, a true new product is rare but valuable (See Ideas and Innovation).

2.      Growth

Once awareness has increased and with an appropriate distribution strategy, you will identify that your product is in growth, which will be when you first break even (this will be discussed in next week’s post on Measuring Success) and begin to make a profit.

When your product is in growth, the market has accepted your product and consumers are trialling it. This is the time to increase your distribution to make sure you are matching supply of your product with demand.

During growth, naturally, competitors will enter the market. Noticing a new popular product will motivate them to launch similar products in order to capture some of the market (see Get Competitive with your Competitors).

Strategies for success during the growth stage:

• Monitor pricing to ensure you stay competitive against new competitive offers
• Confirm your actual customer matches your forecasted target customer and adjust your message. For example we have a launched a building and construction product for children, but on researching sales we find out it is popular amongst teens. We therefore want to ensure our marketing and promotions do not exclude teens by being too “childish”
• Look for new distribution channels – use your sales history to sell the product in and growth your market share

3.      Maturity

Your product can be identified as being in its maturity phase when sales volume slows down and beings to plateau, that is becomes “stuck” at a certain level, stops growing and may be just slightly declining. This is the sign that action is needed or your product will begin to rapidly decline.

Products reach maturity for various reasons including competition reaching saturation, price wars giving unpredictable volume (this week’s special gets the sale) and the initial excitement for the product settling. This leads of course to a decrease in profit, both from a decrease in sales but also from an increase in promotional expenditure.

Strategies for success during the maturity stage:

• Apple is the first company that comes to mind that demonstrates innovative product lifecycle management. Realising most mobile phone users are on 18 – 24 month contracts, Apple releases a new modified iPhone around every 18-24 months, by addressing that the current model is reaching maturity and releasing an update they effectively refresh the product lifecycle back to introduction and growth every two years. The result is a loyal following that feels they are up to date with the latest technology and will not move to a competitive offer
• The Apple example illustrates the strategy of modify or relaunch. Create new news and interest around your product. Survey your customers (See Market Research ) to find out what is missing from your product; monitor your competition (see Get Competitive with your Competitors) and find out your competitive gaps; re launch your product to recapture market share and return your product to growth
• Look for new users or new uses for your existing product and develop strategies to communicate and increase awareness for your product with these groups
• Create new promotions, competitions and offers to maximise sales of your product while it is in its maturity phase

4.      Decline

This phase is identified by both a decline in sales volume and tapering off of profits. Allowing the product to reach decline should be strategic, meaning you identified the product in maturity and planned that it would not be refreshed, but instead would be deleted at some point in the future.

The choice to let a product decline can be as there is a new product planned for launch which will replace the current product but is not going to be positioned as an update or refresh.

Strategies to minimise loss during decline:

• Minimise spending promotionally rather than trying to stimulate sales with competitions and discounts, allow sales to taper off naturally
• Decrease the number of SKUs over time, so delete the worst performing sizes or colours first so you have a tighter offering in the market, then gradually run out of the product

The most important advice for using PLC management in your marketing strategy is to regularly review your sales volume and profitability; this is where the flags will be going up that will help you identify what stage your product is in, allowing you to plan your products life more effectively.

What stage in product life cycle is your product in? What are you planning to do, to maximise that stage?

Until next week L is for the life cycle of your products and also for the lifecycle of the rose, which evidently go from maturity back to growth every year, if only we could bottle that ability!

Mary-Anne

www.wiseupmarketing.com.au

Ideas and Innovation: Brainstorming for Small Business

Coming upon “I” in the A-Z of Marketing, I have to say, I was lacking inspiration (oh hang on there’s an “I” word); I didn’t need just any “I” word, I needed an “I” word that had something to do with Marketing and Small Business. Then I had an idea! Actually, the idea came to me during a swim, which is where I find a lot of my ideas start, so I decided to dedicate this post to Ideas.

The ways in which ideas can be generated and the techniques of pushing ideas past the barriers of what we know until we reach innovation are both paramount in keeping your small business at the top of its game.

Where do Ideas Come From?

“An idea is nothing more nor less than a new combination of old elements.”  James Webb Young

It always seems that there are some people who are just “full of great ideas” and others who are not. Ideas are our subconscious processing inputs and coming up with solutions, so it’s no surprise the more we sit and try to think of a great idea, the further and further it gets from our reach.

We all had an idea when we started our business, an idea of what we could offer a group of people that would be different in some way to the other options available. Had we sat down and thought, “I want to start a business, I just need a good idea” it is more than likely that we would have come up with nothing. But perhaps days later, when out on a walk, or having a shower, the idea would pop into our mind, as if out of nowhere.

So there lies the power of the subconscious. I read an article years ago and the crux of it was, to come up with a great idea, pose a question to yourself, then go and do something completely unrelated and with any luck your subconscious will do the rest.

But what do we do when the ideas won’t flow?

How to Brainstorm

Brainstorming is a creativity process where a group tries to find a solution for a specific problem by gathering a list of ideas spontaneously contributed by its members. It is a technique for finding alternatives to a problem. It is usually undertaken in a group setting, as the dynamic allows each new idea to generate other ideas, summed up best by the phrase “bouncing ideas off each other”.

To allow ideas to flow, some say it is best to follow the “rules” of brainstorming:

• All ideas should be initially accepted without judgment or criticism. Negativity is a road block for idea generation.
• Ideas can be imaginative and impossible. Take a “no holds barred” approach, it is easier to later refine ideas than to make them more unique.
• Don’t limit the number of ideas generated; keep the flow until there are no ideas left. The more ideas that are generated the more likely the right idea will have been unearthed.
• Allow each idea to be combined, improved and expanded.

I found brainstorming works best in a group environment when you use a large writing area. Draw a big circle in the middle of the space and write your problem, each idea then branches off, ideas can be joined together and new
ideas can branch off existing ideas. This is also known as a mind map (especially useful if you only have yourself to brainstorm with)

What is Innovation?

Like milk and baby’s nappies, new ideas don’t stay fresh for long. In our post on Getting Competitive with your Competitors we talked about the need to adjust your strategy annually to stay ahead of the competition.

The ideas we have for our products and services when we start out may not be the best combination for ongoing success 12 months later. This can be due to competition, the consumer evolving or saturation in the market. In marketing we know nothing sells like new! Having worked as a Brand Manager for two international cosmetic brands, the power of “new” always amazed me. Mascara sales would peak at +50% when we introduced a new variant; perfume sales would peak at +25% when we added a limited edition to a current product. “New” gets people excited and it gives them a reason to buy again.

Innovation is the process of becoming better or more effective; it is striving to stay ahead, to be first amongst competitors, to deliver solutions to needs consumers may not have even realised. Innovative products create demand and instead of fighting to take a bigger slice of the existing pie, they expand the pie in size and then claim a bigger slice than was originally available.

Brainstorming for new ideas often leads to innovation; it is open minded, unrestricted problem solving approaches like this that allow innovative ideas to come through. To innovate we ask:

• Is there a better way of doing this?
• Could this product do more than what it does now?
• What are other industries doing, is there learning’s we can use from these?
• What is the ultimate version of our product or service?

In the Jack Collins book Innovate or Die, he says simply to ask:

• What can be added?
• What can be taken away?
• What can be adapted?

And renowned management writer Peter Drucker gave us three conditions that must be met for an innovation to be successful:

• Innovation is work. It requires knowledge, ingenuity, creativity, etc. Plus, innovators rarely work in more than one area, be it finance, healthcare, retail or whatever. This work requires diligence, perseverance and commitment.
• To succeed, innovators must build on their own strengths. They must look at opportunities over a wide range, then ask which of the opportunities fits me, fits this company. There must be a temperamental fit with the practitioner and a link to business strategy.
• Innovation is an effect in economy and society, a change in the behaviour of customers, of teachers, of farmers, of doctors, of people in general. Or, it is a change in a process, in how people work and produce something. Innovation must always be close to the market, focused on the market, and market driven.

The benefit of bringing innovation into your business is that it gives you an edge. You will not have to compete on price and you will not be concerned when new businesses emerge mimicking your offer.

We understand how hard it can be as a small business owner to brainstorm and even more so when your business is just you, but the opportunity to bounce ideas off others is invaluable. Make sure you take advantage of networking both online and offline to help you draw inspiration, develop new ideas and innovate to keep your business moving.

We also offer an email support program we call the Business Bounceboard, which allows for unlimited email support and advice. It’s a great way to get input on new ideas and be pointed in the right direction when you get stuck.

Until next week I is for Ideas and Innovation and hopefully for adding a little inspiration.

Mary-Anne

www.wiseupmarketing.com.au

How to Market a Small Business with a Small Budget

Starting a Small Business is an investment of time and money. As a small business owner, you invest large quantities of both and naturally you feel frustrated when the results don’t reflect what you’ve put in.

This post is a “How To”, giving you some ideas on making the most of your financial budget and time invested into your small business.

 

How to Advertise a Small Business

When you run a small business, you will find yourself inundated with advertising proposals. Every proposal that comes in promises you the earth and assures your investment will pay off in valuable sales or sales leads.

It can be hard to differentiate between the advertising requests you get. When it comes to weighing up a proposal, make sure you ask enough questions to assess if it’s right for you. At a minimum make sure you ask:

1. How many people read the publication / browse the website?
2. How are these figures compiled, are they externally audited? (i.e. are they real and trustworthy?)
3. What is the age / gender / location breakdown? or
4. Who is the age / gender / location target?

Compare the information you receive to your target market profile. Does the advertising fit your business? Does it closely target the consumers your product or service is aimed? Or does it cast a very wide net in which some of your consumers are present?

Estimating how many of your target market will view the advertisement helps you analyse the true value for money. You can work out the cost per view by dividing the cost by the estimated number of target consumers who will view the ad. For example; an investment of $1,000 to target 10,000 consumers costs us 10 cents per view, where as an investment of $100 that reaches 200 consumers costs us 50 cents per view.  Although the advertisement may reach a greater number of people, we are only interested in the cost per target consumer, as the rest is wastage for us.

How to drive PR for a Small Business

When you successfully drive PR for your small business, the benefits can far outweigh the time investment needed. With an increase of review websites, product and news blogs and traditional media branching into online spaces, there is more opportunity than ever before to get your product or service talked about.

Have a go at writing your own press release if you have the time or get it done professionally if you have the money. Send out your press release to every contact you can and don’t forget to hound your local paper – they need to be supporting small business in their area and that includes yours!

How to get the most out of your Website

We all pay attention to the colour scheme, the layout, the pages and the pictures, but often critical data such as the Title Tag and Meta Data which aren’t seen by browsers, but are read by search engines, are neglected.

Maximise the money you invest in your website by knowing how your target consumer searches, then ensure your content, title tag and meta data are all maximising these search strings, so your website screams at search engines “PICK ME! PICK ME!”

We run a Website Effectiveness Audit for $49.95 and this often diagnoses the key reasons why your website isn’t ranking in searches and bringing in the traffic you wanted it to. When your website is search optimised, it runs effectively and delivers you more profit against your initial investment.

How to get the most out of your Social Media

The biggest investment you will put into your Social Media is your time and when you start out that seems like something you have in volumes, but as your business grows, your time budget shrinks.

Limit the amount of time you spend on Social Media each day, as it can easily be a distraction from what your true business is. We recently read this great article on “Why Social Media is a Waste of  Time” and thought the tips for time maximisation here were fantastic.

Budget your Social Media time investment so it is split between:

• Networking / Attracting New Consumers
• Following Up on Enquiries
• Sharing Valuable Content

There are great tools to help you manage content across multiple Social Media outlets at the one time, I personally love Hoot Suite to manage Facebook and my new Twitter  account simultaneously.

How to Ask for Help

Lastly, sometimes we need to admit we can’t do it all, whether it is because we are not qualified or we simply do not have enough time.

Paying an expert for a few hours of advice saves you time and money in the long run, rather than muddling through trying to learn and execute simultaneously. The more technical the problem, the more valuable the help will be.

Reach out to small businesses that can help your small business. There are a multitude of virtual assistant businesses that give you the support systems of working in a big business without the actual staff and spacing costs. Could someone else manage your Inbox? Could your Social Media content be executed on your behalf? Would you finally get that PR Campaign out if it could be printed and stuffed into envelopes for you?

Sometimes the best H word in Marketing is HELP!

Until next week H is for “How To” and for not being afraid to ask for help.

Mary-Anne

www.wiseupmarketing.com.au

Get Competitive with your Competitors

Competitors are the concern of all businesses, no matter their size. Too often we wait until sales have dropped unexpectedly or enquires are down until we look at what the competition are doing. In this post we will discuss how to get competitive with your competitors, to ensure you stay at the front of the pack and connect with your target market.

How to Identify your Competitors

When we ask our clients who they see as their competitors, they always have a list of 3 or 4 businesses offering the same or similar product or service. When we do our competitive analysis as part of our Mini Marketing plan, we generally find quite a few more.

Why the difference? As a business owner, when you look for competitors you tend to think as a business owner. “My business is selling flowers online. What other major online florists are there?” When we identify competitors for a client, we
think like a consumer “My mum’s birthday is coming up, what could I get delivered to her?” All of a sudden we find fruit baskets, chocolate hampers and gift vouchers as competitors for our online florist.

We see most businesses as having two types of competition:

Direct Competitors

These are the companies offering the same or similar product or service. These are our most obvious competitors, but not always our biggest. E.g. Gilette vs Schick Razor, Cornflakes vs Weet Bix, Channel 7 vs Channel 10 etc

Indirect Competitors

These are the substitutes for our type of product or service. These are not always as obvious and are where we need to think like our consumer and understand the options available to them. E.g. Razors vs Wax Strips, Cereal vs Toast, TV vs
watching a DVD etc

So to identify your competitors, consider the substitute categories too and you will have a more complete idea of who your competitors are.

Update your Market Analysis

Many businesses start off with a Business Plan or a Marketing Plan or some points in a notebook on how they could turn their hobby into an income stream. As part of this planning process, formally or not, we tend to do a Market Analysis.

We ask ourselves:

• Where does my offer sit in the market?
• Is there demand for it?
• Are there competitors? Are they doing a good job?
• Is the market saturated with offers or is it fairly open for a new entrant?
• Is that market a good size or is it small and niche?
• What are consumers willing to pay?
• What is my competitive advantage?

We do a fairly thorough job in attempting to answer those questions. We launch our business and we rarely reassess. When we ask our clients who they see as their competition, they stop and think, they even do
some fresh research and overwhelmingly we hear “Wow! Now that I’m looking I’ve noticed a few more have popped up”.

We recommend a scheduled maintenance program (just like servicing your car)

Don’t Get Mad, Get Even

Just like when you launched and took share from other players, new businesses are launching all the time and a few are after your piece of the pie, these competitors want to take your consumers and make them their own.

If you follow our scheduled maintenance program above, we are sure your top 5 list of competitors will be constantly changing and we are sure you will find new entrants that look and sound surprisingly (and frustratingly)
like they are trying to be you!

It’s a compliment really; they are competing with you because you are on their top 5 list. Your business is being perceived as successful, credible and desirable and so you are a threat.

The best way to get even is to be even better at what you do. With our scheduled maintenance program, every month you are going to review your top 5 competitors and as part of that you should look at:

• What part/s of their offer is stronger than yours?
• What part/s of their offer is weaker than yours?
• How are they promoting?
• How many touch point’s they have? E.g. Website, Storefront, Blog, Twitter, Facebook Page, Newsletter
• How you can stay up to date with their touch points E.g. Subscribe, Like, Follow, Visit

Then take that information and learn from it. Learn how to put your own spin on what you see as working well for the competition. For example, if you are an online florist and a competitor has just put up a section on what flower for what occasion, think how you could implement a similar page, but in a way that it reflects your brand and its communication style.

Competing with your competitors requires you to invest time in monitoring the competition regularly. At a minimum, aim to do the annual review – you’ll be glad you did! We offer a thorough competitive review a part of our Mini Marketing Plan package and sometimes it really works to have an outsider look in with a fresh perspective. Get in touch if you’d like to know more.

Until next week C is for Competition and also for creativity.

How to Brand for Success

You know the importance of brands, you see them in your everyday life however, do you realise how years of exposure and experience have built up your perceptions of those brands and have shaped the interactions you choose to have with them? This post will give you a greater understanding of what a brand is and how you can brand your business for success.

What is a Brand

A brand is the combination of tangible and intangible benefits that work together to create a value. That value is known as brand equity. Your brand encompasses your name, logo, colour and sounds. It distinguishes you from the competition and when successfully executed will foster positive connections to your consumer.

Brand Perception

Every time you see, hear, touch, smell or taste a brand, you are forming opinions and as those opinions are processed, you develop brand perceptions. Put simply, brand perception is how favourable or unfavourable a consumer feels about a brand at any point in time. Brand perceptions are constantly shifting; think of your experiences from being a child to now, how has your brand perception of McDonalds changed? As a child you probably felt it was the best place to go for lunch, as you got older you started to feel differently. You formed different opinions about the McDonalds brand and your perceptions evolved meaning you might not connect with the brand like you once did.

Building a Brand

Building a brand is not a short term strategy. To be successful, brands need a balance between time and investment to grow; limited time and high investment is one strategy but for most of us starting out we build our brand with limited investment and so we need to appreciate that it will take time.

With limited investment word of mouth becomes the most cost effective way of building a brand. The more people are talking about you positively, the more desirable your brand will become. Social Media has increased the simplicity of maximising word of mouth promotion, but don’t get caught up in the numbers game. Having 3,000 “likers” on Facebook means little unless they liked you to connect with your brand, not just to win a prize or to get a like back on their own page.

Just as people invest in property to build equity from its increase in value, we aim to build equity in our brand to increase its value to our consumers.  The equity comes from perceptions of trust, quality, reliability and value for money. As these
perceptions grow in our brands favour, so too does the value of our brand. The more valuable your brand is perceived as being, the more desirable it is to your consumers as your brand equity increases so too will demand.

How to Brand

5 Brand Strategy Truths

1. Stand For Something

What to name a new business seems to be one of the most widely debated topics during the start up phase, with everyone having an opinion and the business owner struggling to make what seems like the most critical decision. My advice is to take a breath and relax. Your brand name doesn’t need to be too clever, cute or catchy. Think about the brands you come in to contact with. The most traditional come from family names – Arnotts, Kelloggs, Myer while the modern seem to make no sense at first but over time they became familiar – Ikea, Apple, Nespresso. The most important factor for a brand is ensuring it stands for something, something you can explain and something that will make a connection to your customer, adding value.

2. Get To The Essence Of It

Brand Essence is a single statement that defines what your brand stands for. The Brand Essence will guide everything you do, from what you sell, to how you promote, to the tone of every message you send out. The Brand Essence will become the reason why consumers choose you instead of the competition. Crafting a unique, inspiring and motivating Brand Essence will engage your consumers and create loyalists. Your brand essence, if succinct, can become your tagline complementing your brand name and logo.

3.       Repeat Yourself, Repeat Yourself, Repeat Yourself

We all know that the more times our brand is seen the greater recall it will have. After all repetition goes a long way to developing memory (remember learning your times tables – we recited the same lines over and over again until we could sing automatically “3 times 5 is 15, 4 x 5 is 20”, along with some mumbling here and there). Brand everything you can. Anything that leaves your desk should leave with a brand on it, as every product is a mini advertisement for your business. If you make a product, ensure you attach a label with your brand on it (and your website if it will fit). If you import a product put a label on it “distributed by” with your brand. Develop a digital signature so every email goes out with your brand name and how to find you. Repeat it enough times and it will start to be remembered.

4.       Consistency Is Critical

Brand is King. All Hail the King. We must worship our brand identity and pay our respect to our brand with consistency. This means your logo should present the same across your business cards, website, flyers and beyond. Further than that, if you use a tagline then you need to consider when you will use it. It may not be practical to always use it, but as long as you keep it consistent e.g. always on printed materials, but not on your product you will still be maintaining consistency.  Develop a short brand identity guide and send it with your logo if someone else has requested to use it. Have your designer give you a version of your logo on a black background and one on a white background. Stipulate in your brand identity guide when to use each so external parties know what to do if your logo won’t work on their very dark website

5.       Brands can Evolve

In most big organisations, every 12 – 18 months they research the market and get a read on how their consumers feel about their brand. They compare this to the previous year and to the competition and create strategies to exploit their strengths and defend any weaknesses. This can mean a tweak to the logo to appear more modern, a change to the tagline to reflect a new brand essence or an update to the product mix to be more competitive, and so thereby evolving the
brand. Many small businesses worry about making changes to their brand, but it is important to remember that brand evolution is natural and is a sign you are shifting to remain competitive. Generally I would say any small change is
survivable. You can change an element of your business name but not all. Aim to think big at the beginning – will Julia’s Gifts for Girls service your business long term? Or are you better starting as Julia’s Precious Presents with a tagline “Girly gifts to treasure” that could evolve to “gorgeous gifts to treasure” if you decided to add toys for boys.

How to brand your business will depend of course on the unique factors such as your target market, your competitive environment and your offering. Get in touch today and tell us about your business and we can work with you on strategies to increase your brand equity or have a look at our current packages.

Until next week, B is for Brand and also for vanity.

Mary-Anne

Wise Up Marketing Solutions

A is for Analysis

To start at the very beginning is a very good place to start (or so we have heard), so where better to start our A to Z of Marketing than at A.

A is for Analysis. When I started in marketing well over a decade ago, the era of the long lunch, the fluffy campaign and the big budget with no accountability were on the way out (poor me) and ROI (return on investment), measurement and metrics were the new rage. It suited me fine as I am a numbers girl at heart, but over the years I have had staff come and go with the terrible realisation that todays marketing roles are almost accounting roles in disguise (with better shoes and more interesting events).

5 Easy Areas for Analysis

1. Analyse your Web Traffic Stats – if you have a website, you have access to very valuable information just waiting to be analysed! It is believed that a new visitor to your website spends around 6 seconds deciding whether your business meets their needs, is credible and trustworthy. So how do you know if you are succeeding?

By analysing your website traffic you can begin to understand:
– where traffic enters and exits your site
-how long they stay
-what pages are browsed; and
-sometimes even demographic information.

Half a day a month spent analysing your website traffic can give you some powerful insights into how to adapt your page to ensure you are maximising your traffic.

2. Analyse your Current Customers – if you sell a product, you have already succeeded in connecting with your target consumer. They found you, they trusted you; and they have initiated a relationship with you and your business. Asking each customer a few questions as part of your checkout process gives you the opportunity to collate data that you can analyse. Consider asking “Where did you hear about us?” “What’s your favourite Website?”. A quick question can give you a deeper understanding of who your consumer is and will help you target your message to them.

3. Analyse your Past Performance – when we do our Mini Marketing Plan for our clients, the first step we take is to have them fill out our Business Analysis Tool, which is really a survey of the business’ past. We use this tool to analyse what the business has done and also to consider what has and hasn’t worked before to find clues as to what the target consumer might be like. You can analyse past performance by looking at the results you received and then interpreting what they mean. For example, you have distributed over 500 flyers with an offer (always use a coupon code so you know where the responses have come from) but you only received 5 redemptions. You sent an email out to 100 subscribers with the same offer and got 25 redemptions. On analysing this I would think that perhaps your target consumer responds better to offers they can instantly action or your consumer doesn’t pay attention to flyers. I would analyse over a period of time and if this trend held true, I may decide not to use flyers anymore.

4. Analyse your Competitors – when sales are down and enquiries have gone quiet don’t go straight to market with a deal or fear the end is coming. Analyse your competitors. This is as easy as searching for your product or service, and seeing what comes up. Think like your consumers; how did they find you? Are you a bakery? Do most people find you by walking past? Go for a walk around the local area. Has something else popped up that you didn’t know? Look at the supermarket, have they changed their pricing strategy. Or do you sell Dog Outfits online? Start searching in different ways “cute dog clothes“, “designer puppy outfit“, “dress for my dog“, look at the websites that come up, think your consumer could shop at any of these, analyse the strengths and weaknesses and form strategies of how you can improve your offer.

5. Analyse your Profitability – profitability put simply is income minus your expenses, but do you keep track of all your expenses? So many small businesses muddle the line between the owners and the business and expenses are often covered by an owner without them being factored in against the income of the business to really understand profitability. Analyse the profitability of your business as a whole every 3 months or so. Think of it like a household budget – add up all the payments in, then take away every single expense incurred to determine whether you made a profit or a loss. Analyse the expenses to see if savings can be made. Also analyse the profitability of individual campaigns. For example, if you advertise in a publication for $1,000, and your product delivers you $10 profit per sale, you will need to sell 100 products for the campaign to be profitable. Unless you go back and analyse campaign profitability, you can’t be sure it is a cost-effective way to target your consumer.

What analysis do you do in your business? Are you often surprised by the results?

Until next week, here is some more of what A is for http://www.enchantedlearning.com/Aisfor.shtml

Mary-Anne Amies

Wise Up Marketing Solutions