The Who of Your Promotional Strategy
No business can be all things to all people, and no business has an unlimited amount of money to spend on its promotions. You will need to be sure you direct your effort and money to your target market.
The better you can identify who is in your target market, where they live, what magazines and newspapers they read, what television stations they watch, and what radio stations they listen to, the higher the probability that you will be able to get their attention and influence their behavior. If you can identify your target markets demographics, then you can check the listenership, viewership, and readership profiles for various media, including local radio stations, newspapers, magazines, and television stations. For example, if you are opening a clothing store and the primary target market is teenage girls, then you should review the rating of radio listenership in your geographic area. Most radio stations have a copy of the ratings. You will be able to determine which radio station has the highest listenership in that age category. The A. C. Nielsen rating service does the same for television viewership.
The What of Your Promotional Strategy
The what involves determining the message you should communicate to your target market. Your promotional strategy is intended to take people who may have varying degrees of interest in your type of goods and services and get them to become your customers. You will need to know who they are, who they are currently buying from, why they are buying the goods and services, and to what extent they are still customers in search of a business.
Your promotional strategy is intended to get the people in your target market to modify their behavior. The message you send to the people in your target market must be tailored to their mental frameworks. Your message must also provide the incentive for them to do business with you. Your promotional strategy should be based on: (1) Who do you want to influence? (2) What do you have to offer them that is better than the competition? and (3) What do I need to communicate to them to get them to become my customers?
Your promotional strategy should emphasize your competitive advantage(s). Successful promotional strategies are based on the concept, If everyone is offering a steak, then you must sell your sizzle! You must know what your target market values. Your strategy should highlight your businesss unique selling points/propositions.
The When of Your Promotional Strategy
There are four major intervals for promoting your business. The first is preening promotion. It is very important for a new business to generate customer interest before your business opens its doors. You want your target market to be anxious for your business to open. Some businesses do teaser advertising. A teaser ad may be, the countdown has begun; there are only 60 days until Company of Miami opens. This business may do teaser advertising by erecting a sign where the business will be located.
Your business will also need to provide ongoing promotions. Your existing customers will need to be kept informed about developments in your business. You will also need to let potential customers learn about your business and its sizzle. Most new businesses tend to have a token grand opening promotion and do little after that. You need to develop an ongoing promotional program that will keep your business in your target markets minds. If the world doesnt know about your mousetraps advantages and the market doesnt know where your door is, then you will not sell a single mousetrap.
The Where of Your Promotional Strategy
Your promotional strategy will only be effective if its message gets to your target audience at the appropriate time. The where of promotional strategy involves the media you use to communicate with your target market. There are numerous avenues or media available for promoting your business. The key is to know which media will produce the best results. The media to be used will depend on to whom you want to direct your message, the nature of the message, and when it needs to be presented.
Each type of media has advantages and disadvantages. Television offers color, movement, sound, and broad geographic coverage. Radio offers a means to get to a large number of people at various times of the day and night. Newspapers offer daily coverage to a large percentage of an areas households. Direct mail permits you to send your message to a specific group of people. Billboards take advantage of a captive audience while people are in their automobiles. There is no one best medium for all businesses. There is no one best medium for every type of message.
When asked which medium is the best, the answer can only be, The one that does the best job of attracting customers per dollar cost. Your promotion budget also influences media selection. You want to get the best return per dollar invested in promotion. One medium may cost less than another, but you need to determine which one will do the most effective job of getting your message to your target market. businesses frequently evaluate media in terms of the cost of reaching each 1000 potential customers.
The How Much to Spend Part of Your Promotional Strategy
The question of how much money to spend on promoting your business is very difficult to answer. Some businesses spend a certain percentage of projected sales on promotion-related activities. If, for example, you are trying to generate sales of $ 100,000 for the first year, then you may want to review trade data on your type of business to learn what percentage of sales you should spend on advertising. Bank of America reports that the average ad expenses for apparel stores is 2 to 3 percent of sales; for bookstores, 1.5 to 2.5 percent of sales; and for gift stores, 1.5 to 2.5 percent of sales. These figures reflect annual budgets for existing businesses. Your first years promotional budget will need to be a larger percentage of sales because your business will be unknown and you will be trying to divert customers from other businesses. The percentage-of-sales method may provide a general idea of how much to spend, but spending a certain percentage of sales on promotion does not guarantee that you will generate that level of sales.
The best way to determine your promotional budget is to identify what you want to accomplish. This is known as the target approach. If you want to have 8 people come to you each week, then you need to determine what type and amount of promotion you will need to do to achieve that goal. You may find it will take 3 primetime radio spots per day on two different radio stations; a two column, 3inch ad in the local newspaper on Mondays, Wednesdays, and Fridays; 2 billboards located on two major thoroughfares; and 1000 direct mail promotions per month to achieve your goal. The target approach recognizes that you must reach a critical mass before your promotions will have an effect on the market.
The percentage-of-sales approach indicates what businesses spent. The target approach determines what you think it will take to achieve your sales goal. The target approach is particularly appropriate for a new venture. There are two other approaches businesses may use to determine their promotional budgets. Some businesses simply try to match their competition. They monitor the number of radio spots aired and the amount of ad space in the newspaper. The businesses then match their major competitors promotional program.
This approach has two flaws. First, it assumes that your competitors are doing the right type and amount of advertising. Second, if you dont do a better job of promoting your business than your competition, why should your target market do business with you? The other approach to developing a promotional budget is based on how much you can afford to spend. This may be the least effective approach. It assumes that you have allocated money to all of the other aspects of your business. Any money that is left is what you can spend on promoting your business. You must recognize that you need to do promotions to generate sales. If you hope to have enough sales to leave you with enough money to do promotions, then you have things backwards.
It is interesting to note that most people are reluctant to spend much money promoting their business. This reluctance is quite natural. Money spent on promotions offers no assurance that it will bring in enough customers to justify the expense. One of the sayings about advertising is, Only one-half of advertising works. The problem is that you dont know in advance which half it will be! However, promotions should be viewed as an investment that is necessary to generate the level of sales needed to produce your targeted level of profit.
The Promotional Mix
Most of the discussion of promotional strategy has been focused on advertising. Promotion also includes the name you choose for your business, its sign, personal selling techniques, point-of-purchase displays, special sales promotions, public relations, and publicity.
Publicity may be particularly important for a new business. Publicity is defined as media coverage for which you dont pay. Many radio stations, newspapers, and television stations do features on new businesses when they open. If your business is the first of its kind in your area or if it has some special sizzle, you may be able to get the media to do a special feature on it. You should make every effort to get in touch with the media before your business opens. Publicity can be equivalent to thousands of dollars of free advertising. Publicity is also valuable because potential customers tend to pay more attention to features than to advertisements.