Effective target marketing skills for SMEs

By Matthew Kwan
Principal Consultant, Adams Company Limited
© Copyright. March 29, 2007

No matter companies big or small, marketing is always not cheap. Not only money you have to spend, but also resources to execute. Moreover, it is extremely hard to measure your success and return-on-investments (ROI). Therefore, it is very important for SMEs to have very clear ideas in mind what they need to do with marketing in order to remain competitive and yet maximizing their return with limited money and resources.

Here, I am summarizing the most important areas that SMEs should consider when they plan and do any marketing in an effective and target way:

Alliances – run marketing activities with your partners and maximize costs & resources
Benefits – always highlight your product/service’s benefits and values
Concentrate – focus 80% effort on the most strategic 20% of products/services
Dynamics – leverage your products/services strength to gain the maximum return
Environment – ready to adapt changes of business environment and ecosystem

Alliances
It is so easy for anyone to think and act in silo. However, with SMEs money and resources are limited, we really need to look out and find partners that are complementary to our business and do co-marketing activities with them. Not only it is a cost-effective thing to do but also it creates synergy and excitement to our customers as they may get better and more complete solutions to fulfill their needs. With combined forces,

  • We have much stronger bargaining power with the advertising agencies & channels
  • We present a much more prominent presence and image to our customers
  • We may broaden our reach to potential customers that are previously covered only by our partners

If you do not know where to start, just try to work with some professional organizations, chambers of commerce and some other associations that your potential customers may belong to.

Benefits
Too often we market our products/services with functions and features without really telling our potential customers the benefits and values of our products/services. Customer buying behavior typically is based on how fulfilling is the product/service to their immediate needs. Any good product/service need to address the needs of the customers by their values and not the functions or features. Customers are generally willing to even pay more if they get the perceived values and benefits they want. One simple way to check your marketing message to see whether it is addressing the benefits and values is to ask if the customer would miss anything for not buying your products/services. Some examples of the answers should be:

  • The customers are missing the opportunity to solve their problem or address their needs
  • The customers are missing the chance to save money or to earn time
  • The customers are missing the wave to catch up with the season or the trend

It is not easy at first when you try to write your marketing message and addressing your customers’ needs but it is absolutely essential if you want to differentiate your products/services with so many competitors out there!

Concentrate
Many of us have learned about the 80-20 rule but always do not know how to apply in real lives. I have seen many cases with SME’s they are trying so hard to get every possible income for the company but losing their focus to get maximum return from their core competency. Let me be a little bit more elaborate on this, we should really focus 80% of our effort/ money/ resources on top 20% of our products or services that are helping us to gain 80% return of our income. Obviously, it is just an indication but not an absolute rule, some may use 65% effort to gain 80% return…. etc. However, when we find ourselves using 50% effort in dealing with or promoting the bottom 20% of products/services, there must be something wrong with our time and resources management. It is a very loud alarm that we should be alert! So some basic questions to ask are:

  • What are our top 20% strategic products/services that are generating 80% revenue? How much time, money, man power are we spending in promoting this 20%?
  • What are the bottom 20% products/services we can put aside and not market now?

If we can master this 80-20 rule well in our business both sales and marketing, I am sure we can progress our business at a faster rate than we can imagine!

Dynamics
When we market our products and services, we should really try to leverage the strengths of all different products and services, so that our customers can relate them easily without thinking. It is very expansive to build individual brands for different products and it is an art to manage brands well. My recommendation to SMEs is to avoid as much as possible of introducing new brands unless absolutely required. However, the whole process should start when product/service managers and research & development managers decide which products/services to be launched to the market. Hence, when we launch new products and services, we should ask ourselves that:

  • Whether the new products/services are complementing the existing products/services? Can we do bundled sales?
  • Can we use an overall umbrella brand to cover both existing and new products/services?
  • Do the new products/services differentiate themselves well enough that customers will not be confused?

I can guaranteed you that creating dynamics for your products/services is very exciting especially when you see they are really helping each other to sell and grow.

Environment
Business world changes every second, we have to be ready and adapt changes as soon as required. We cannot blindly repeat what we have been doing in the past. We should be willing to change according to the environmental changes. The ecosystem of the environment changes so fast, our customers, competitors, channels, complementors may not be there forever. We have to keep our eyes open and keep reviewing our marketing strategy by challenging ourselves to see if our marketing strategy really fitting to the real world! Here are some of the principles:

  • We should stop using the same advertisement or we should make changes to the advertisement if there is no response from customers for a period of time
  • We should use different marketing channels to test out the best responses and cost-effectiveness
  • We should pay extra attention if there are seasonal effect to customer buying behavior…e.g. beginning and end of fiscal year, major holiday seasons…etc

The business environment is so volatile, no one can completely grasp the real situation but if we are diligent enough to notice, monitor and apply changes accordingly, we can make crisis to opportunities!

In summary, we must be ready to adapt changes in our business environment and willing to work with other alliances to create the maximum effect in marketing of highlighting the benefit/values of our most strategic products/services with most of our effort by leveraging the strengths of different products and services. It is a very exciting and interesting game we are in!

Maximizing dollars on Web marketing – SME primer

By Matthew Kwan © Copyright. All rights reserved.
Principal Consultant, Adams Company Limited

January 26, 2007

With the advance of Internet and broadband connection, shopping behavior of most people nowadays has changed dramatically over the last decade. Suddenly, your company’s Web presence has become the gauging factor to the success of your company, SME is no exception!

So how can you maximize your dollars on Web marketing to get the best return on investment? Is there any ways that you can ensure the money is right spent? I am going to share here an “IDEAL” model that you may consider to follow:

  • I – Identify Your Customers
  • D – Decide Your Budget
  • E – Experiment Your Options
  • A – Assess Your Results
  • L – Leverage Others

1. Identify Your Customers
Any marketing books will tell you this same thing – first and foremost, you need to know who your customers are. That may seem obvious but sometimes we are just missing the target without really thinking through the process. It is not so much who exactly your customers are but what are their shopping behaviors and desires on prices, trends, attributes of products/services, other complementary products/services that will help your sales…etc You really have to spend time to analyze your customers, even getting market data to support your analysis. Without these data, I can guaranteed you that you will waste money on your marketing effort!

2. Decide Your Budget
Your marketing budget should not be fixed and it should be as dynamic as possible. Deciding your budget should be a process with reference to the return of sales enquiries through the use of the budget. For new start up companies I suggest to go a little bit more aggressive for the initial period until you are comfortable with the good sales pipeline. By aggressive, I do not mean to spend a lot but allow good amount of money for you to use with caution. The right amount should be relative to your company cash flow, you just should not spend more than you can afford. My hint to this is to include your marketing budget of your initial period to be part of your initial capital investment and the subsequent budgets to be part of your sales expense. In this way, you do not have to worry too much of you initial marketing budget becoming a burden to your expense in your overall cash flow planning.

3. Experiment Your Options
There are just too many options for Web marketing. You need to list them down and give them some priority and assign budget according to their priorities. However, with SME’s, I suggest to spend your dollars on proactive searching rather than mass advertising as it is too expensive to do. So here are some of the proactive searching options for your reference:

  • Search Engines: Yahoo and Google is the most widely used search engine these days in Hong Kong. Actually, you do not have to pay a lot in order to get started. For example, you just need to deposit HK$240 to Yahoo and start your keyword search sponsor link instantly. However, deciding which keywords to be used does required some good thought. My personal experience tells me that you are better off by including your city and product/service category in a phrase to avoid paying unnecessary amount of money to compete with the big company with tons of marketing budget. In such a way, the charge will be a lot cheaper than a standalone keyword. E.g. “cheap business service in Hong Kong” This actually makes a lot of sense as more and more people are searching by phrase rather than simply a keyword. Do remember that the keyword list must be revised constantly to get the best results.
  • Web Directories: most portal sites would have business directory sections that you can post your company information on them. A lot of these sites are still free of charge and welcome your postings. E.g. Yahoo, Timway, Trade Development Council, SMEcare.com…etc. However, it may take longer time to get your company information posted depending on each portal’s schedule.
  • Auction Sites: Yahoo, eBay, Red-dots, Go2HK are some of the popular auction sites in Hong Kong. Some SME companies are actually operating entirely using these sites to generate their sales. You may just need to pay very little per transaction to start selling.
  • Blogs/Discussion Groups: Blogs are getting very popular and if you can identify your customer interests, you should try to become members of their Blogs and Discussion Groups communities. After joining, you can post messages and point people to your websites for product/service information and etc. Most of these communities are free to join. On the other hand, setting up a blog of your own is very easy and it takes no time. By doing so, you are setting up a community of your own. The only matter is to maintain the content and keep it alive. It is very labor intensive to keep it living if you are not good at sharing thoughts!
  • YouTube: YouTube is a video broadcasting website and it has become so popular that you should consider using it as part of your web marketing strategy. There are actually SME companies using it as a mean of product introduction, training and even customer service due to its popularity and free of charge nature.

4. Assess Your Results
As mentioned above, you should spend your marketing budget wisely by assessing the results regularly. Most Search Engines will have tools to help you to generate reports for your analysis. However, these reports are only meaningful if you are tracking in parallel how your sales and enquires are being done through which web channel. It takes good discipline in doing so! To start with, I suggest to do daily and weekly review to ensure money is wisely spent.

5. Leverage Others
No matter your business is selling products or providing services, you will always have companies which may complement your products/services. My recommendation is that you should try your best in getting these companies to list and link your company website in their website as partner or show in related links. You should also do the same thing for them vice versa. In this way, you are building a network of alliances and I find it a very effective way to build both awareness and credibility.

Summary

Web marketing is an art and it takes time and effort to perfect. In this Internet age, we just do not have an option of opting out of Web marketing. However, if you are willing to try, practice will make perfect and you will certainly find reward f