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Chapter 1
Find New Products for
Current Customers
The most expensive part of any business is acquiring customers. The best way to build your business is to selling more products to the same customers.
My mail order business geared to new moms spent a bundle bringing in new customers. We expanded our business by selling unique products that appealed to new mothers, such as good quality audio tapes for mother and baby, books not easily found in big book stores, and simple, quality puzzles for small hands.
Incremental sales of these and other products increased our customersâ lifetime value to our company. The more a customer is worth, the more we could afford to pay to acquire them.
If we had tried to expand our company by selling totally different products, we would have had the high cost of acquiring new customers to buy the new products, and we would not have had the additional products to increase their lifetime value. Through time, that strategy would have put us out of business.
Epilogue
Stay focused on increasing sales within your customer base. Donât waste money branching off in the wrong direction.
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Chapter 2
Stick to a Budget
Spend time preparing your budget and put together a budget committee. It may help to have several people examining your expenses and projecting sales.
Include spending to support your sales staff, your overhead costs, and, of course, advertising. You need an advertising budget; without advertising it may be very hard to bring in customers and make sales.
However, once you have a solid advertising budget, stick to it. If your advertising agency or consultants try to convince you to spend more than you have allotted, donât be swayed. If they are getting paid on commission, they make more money if you spend more. They need to figure out how to get you the biggest return within your budget.
No one knows your business as well as you do. Therefore, consultants cannot tell you what you can afford to spend on advertising. If your advertising is successful and sales increase, then you can afford to increase your advertising budget, based on results.
Epilogue
While advertising is essential, donât spend to the detriment of other aspects of your business.
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Chapter 3
Consultants on Commission?
Commission arrangements with the sales staff are good for the company; you only pay out when sales are made. But commission arrangements with advertising agencies or consultants work against you, because the more you spend, the more they make.
You canât be sure that a recommendation to use expensive billboards or network television is really going to work for youâis it recommended because it will create income for your consultant?
In all my years of advertising, I never worked for an agency that charged the clients on commission; we charged fees based on hours. When I began my own agency, I charged by the project.
If you are paying by the hour or on a project-by-project basis, create an advertising plan with an estimated number of hours you will need to execute the plan. Also, create an agreement in which additional hours will not be charged without prior agreement.
Epilogue
By holding your advertising advisers to reasonable fees not tied to your spending, you can have more trust in what they are recommending to you.
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Chapter 4
Opportunity Budget
Set aside funds to create an opportunity budget. During my 30 years in the advertising business, Iâve had to turn down some amazing, last-minute deals for clients because there was no money left in the budget.
When you deal with as many magazines and newspapers as I, you get 11th-hour calls, sometimes even after the closing date, when another advertiser has missed the materials deadline. The bargain of a lifetime is at your feet, but, if there is nothing left in your budget, you canât take advantage of the special deal.
A good way to be prepared for such opportunities is to leave 10 percent of your budget unplanned. You never know when you may have the chance to ride along with another companyâs mailing at a reduced rate or get a special price to advertise in a new magazine.
What about an unexpected success? Did you have an ad with a special offer produce more business than expected? Use your opportunity budget to repeat your advertising successes.
Epilogue
Missing special opportunities that come your way because you donât have an opportunity budget can hurt your business.
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Chapter 5
Define Your Unique
Selling Proposition
Create a strong, unique selling proposition (USP) for your product or service. Avis Rent A Car Systems, LLC first used theirs as their advertising slogan: âWe Try Harder.â The words We Try Harder appeared on everything. The public began to believe that they did try harder, and Avis began to grow.
Your unique selling proposition defines who your company is and what it is selling in a few words. Sometimes a unique selling proposition can be just two words, such as American Express: âunlimited credit.â American Express was the first credit card not to impose a credit limit on it customers. For years, it ran ahead of the pack, just because it had the best unique selling proposition.
In the early years, Burger King made great inroads on McDonaldâs with its short but meaningful unique selling proposition: âflame-broiled, not fried.â Geicoâs USP, âsave 15 percent,â got it off the ground.
Once you have a solid USP, use it on stationery, your Website, and so on. Your USP is who you are. Donât hide it.
Epilogue
A USP guides all advertising and defines who a company is and what its products and services are.
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Chapter 6
Be the Best You Can Be
As an employee, you have to cut corners to preserve money at all costs. However, sometimes saving money damages the image, reputation, and integrity of a business.
While I had to do that for others in the past, when I worked for myself, I refused to cut corners, and was proud of the services we provided. If a customer called up to complain about an error, we reprinted and reshipped the stationery by priority mail at our own expense. I never asked for proof of an error or required a customer to mail back the faulty product; that is tantamount to calling your customer a liar. Our âno questions askedâ policy has led to many reorders.
When you own the business, always strive to sell the best products and services, make the best offers, and have the best customer service. Be proud of what you do, and allow yourself to look in the mirror every morning and know that your company has integrity.
Epilogue
Being the best lifts your spirits, even through hard times. Quality wins in the marketplace.
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Chapter 7
Big Ideas Mean Big Business
What is a big idea? How about Nikeâs âJust Do It,â American Expressâs âDonât Leave Home Without It,â and Geicoâs âEven a Caveman Could Do It.â
A big idea is a concept that gets across your USP in a memorable way with few words and great visuals. Sum it up with a good tagline that paints the picture. The big idea should make your company, products, and services different, better, more affordable, or more desirable.
When the big idea is right, the slogan will write itself. The most fantastic big ideas become part of pop culture, such as Geicoâs gecko and cavemen.
