Small Business Insights

Marketing Shouldn’t Cost You Money. It Should Make You Money.

There’s an old quote from around a hundred years ago:

  • “Half the money I spend on advertising is wasted, but the trouble is I don’t know which half.”

The good news is that’s no longer true.  With digital marketing, we can tell exactly what’s working and what isn’t.  And that brings me to the point of this article: marketing shouldn’t cost you money.  It should make you money.

Small businesses that are getting started with marketing can start by spending small amounts – as low as $500 per month – and then take a share of the resulting revenue to ramp up their marketing and increase their income even further.

How does that work?  For example, let’s say a small solar energy company came to us for marketing.  We would start by looking at two things:

  • Who are their most likely customers?  (The target market)
  • What’s the best message to get their interest?  (Marketing content)

Based on discussions with the company, we might narrow the target down to people who live in a certain area, own their own home, and are at a certain income level.

Then we might brainstorm several different potential messages.  For example, we might focus on saving money. Or on the benefit to the environment.  We could then put content about each of those topics on the company’s website and social media pages and see which gets the most views.  And we would develop a few different ads with those different messages, run all of them, and see which get the most clicks.  We would then focus our advertising on the most successful messages.

Once the advertising results in increased revenue, the company can use that revenue to run the ads more often, creating a virtuous cycle that increases business.  This can work so well that some companies find they need to pause their marketing so they can keep up with the business generated.  That’s a good problem to have!

Would you like a “marketing machine” for your business?   Just answer some questions about your business below, and we will develop a marketing plan for your business at no cost to you.

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Posted on by Jay Zaltzman

Consumers planning to spend less

We’ve all heard about the pent-up demand that has led to increased spending lately and which is a major factor in the inflation we’re experiencing currently.  That increased spending has been particularly noticeable in the travel category.  Flights have been full and prices for transportation and accommodations have risen sharply.

In recent focus groups about travel, we asked frequent travelers if they intend to continue the increased pace of travel.  The answer was a resounding “no.”  Almost all participants had postponed travel plans during the pandemic and finally made those trips this year.  Now that those trips have been made, they are planning to go back to their normal travel frequency.

In other research, we’ve been talking to consumers about inflation and the impact on their spending.  While many talked about accepting higher prices and adding higher tips during the pandemic, now consumers are being more careful and looking to spend less.  My own personal experience: I was going to order a pizza online from a local restaurant, which I planned to pick up myself, until I noticed they added a “pickup fee.”  For me, that just crossed a line, and I decided to order somewhere else.  A few weeks later, I ordered from that restaurant again, and the pickup fee had disappeared.

What does this mean for marketers?  It may be time to return to emphasizing value and offering promotional deals.  Let’s find out how your customers feel about spending.  Email me at info at bureauwest.com.

Source: Bureau West research

Posted on by Jay Zaltzman

How people make spending decisions

I just read Dan Ariely’s 2017 book, Dollars and Sense.  Admittedly, the book is a few years old, but Ariely’s behavioral economics approach to how people spend is more relevant than ever (and co-author Jeff Kreisler has an amusing writing style!).  The book talks about the irrational ways we spend money and how we, as consumers, can spend smarter. 

Of course, as a marketer, it also makes me think of the flip side: how marketers utilize those same mechanisms to get customers to spend more.  That’s the duality we have to contend with: as consumers, we try to watch out for the very same methods we employ as marketers.  But let’s face it – if we don’t use these methods, there’s a chance our competitors will! 

Here are some of the highlights from the book:

  • Context matters: customers will pay more or less for something based on contextual cues, such as MSRP or where it’s being purchased (e.g., convenience store vs. supermarket).  Even when we know that the seller raised the list price to then offer a “sale,” it still impacts us.  (Yes, even you!)
  • Spending buckets: even though a dollar is a dollar is a dollar, people do “mental accounting.” For example, we might not be willing to spend any more on “luxuries,” but if that same expenditure gets reframed as “education,” then we are willing to spend on it.  Marketers should consider if there are ways to reclassify their products or services to a category customers are more likely to spend on.
  • “Fair” pricing: we consider whether a person or company “deserves” the price they are charging (rather than what it’s worth to us).  For example, we get annoyed at the locksmith who fixes our lock in two minutes and charges $80, but are willing to pay $120 to the locksmith who took two hours and broke the original lock in the process.  Even though we got a greater benefit from the two-minute job, it just seems wrong.  Marketers need to make sure they emphasize all the effort that went into the product or service (Artisanal widgets?  Hours of deep thought?) so customers will feel prices are fair.
  • The importance of language: not only can descriptions make products sound better, they can literally change the way we experience things.  That is, we will enjoy a product or service more when it’s described in a way that appeals to us.  So don’t skimp on copywriting: find out what makes your product or service enjoyable to customers and tell them all about it!

The main thing I took away from the book as a consumer: when deciding whether or not to make a purchase, we should look at opportunity costs, that is, how much pleasure will the purchase provide compared to other ways we could spend our money.

How do your customers make the decision to spend?  It’s worth finding out!  Let’s discuss – email me at info at bureauwest.com.

Posted on by Jay Zaltzman

Marketing: what do we do now?

I’ve been conducting brainstorming groups with fellow marketers (and if you’d like to join in, please let me know).  The big question that everyone is asking: what do we do now?  How can we do our jobs most effectively in these unprecedented times?  Of course, there is still a great deal that is unknown, but many heads are better than one!  Some themes are emerging:

  • Companies that pull back on their advertising now are making a mistake.  Those that are advertising are more likely to be noticed and remembered in a less crowded field.  Those that aren’t are likely to be forgotten.
  • Customers are trying new brands because of new shopping habits and supply disruptions.  Companies will have to work harder to make sure their customers will want to come back to them rather than stay with the new brands.  On the flip side, savvy companies will look for ways to keep those new customers.  This is a time to refocus on what your brand means to the customer and make sure your marketing conveys that.
  • We are currently in a transitional period, where people are dealing with self-quarantine and trying to figure out the impact of the pandemic on their lives.  Next will be the “new normal,” when people start to go back to work.  We will also likely be dealing with a significant recession.  These different phases will require different marketing strategies.

One example of the need to be agile and change strategies: people initially welcomed ads that talked about what constructive things companies are doing to help customers or help society deal with the pandemic, but they are tiring of them now.  There’s an amusing YouTube video entitled “Every Covid-19 Commercial is Exactly the Same” that captures that feeling.  Worth watching!

How do we figure out what to do when?  This is a good time to talk to your customers in an ongoing manner by using a market research online community.  Online communities consist of customers who have opted in to participate in multiple research activities for the same company (or category) over an extended period of time – frequently three to six months and sometimes years.  An online community is typically comprised of hundreds of customers who are kept engaged with a variety of research activities and rewards for participation. 

  • One important difference between an online community and other types of market research: you can talk to the same customers multiple times, which can be a great way to uncover how customers’ attitudes and needs change over time.

Is a market research online community right for you?  Let’s discuss! 
Call me at 760-469-9266 or email info at bureauwest.com.

Sources: Bureau West research; “Every Covid-19 Commercial is Exactly the Same,” YouTube, 4/15/20

Posted on by Jay Zaltzman