You, like me, are self-employed. You know your industry, your product, your target audience. But, how can you get a handle on marketing? There are so many choices – enough to boggle the entrepreneur’s mind.
Think about what you want to accomplish by spending money (and/or time) on marketing. What are your marketing goals?
Here are two critical reasons why marketing in some form is needed by small business:
#1 – We need to acquire first-time customers. If we don’t get people to buy from us, we will not have a business – it is as simple as that.
However, it is generally too expensive to rely on first-time buyers for all of our sales. The first purchase from a customer can be costly. Thus, and this is no surprise…
#2 – We need to entice previous buyers to buy again.
For most businesses, it is much cheaper to get a past buyer to purchase again than to acquire a new one. Previous buyers know your product, the price point was satisfactory for them, and they may need add-ons or extensions that go with the first purchase. In addition, you do not have to start from scratch to find them, especially if you have been building a customer list or database with contact information.
Of course, some past buyers will never buy from you again. You need to accept that fact. They don’t need your product, they didn’t like your product or service, they prefer a competitor’s product, or have another option that is more accessible. They might be wrong, but you are not going to convince them otherwise.
Then, there are those in the middle, who are persuadable. If you make it easy or enticing enough to buy again, some of them will. Others will keep you in mind for the future – but have no interest right now.
In businesses where customers can be tracked, typically no more than 40% of first-time buyers buy again in the next year. Only 40% to 60% are likely to repeat – most only once more. And, just a small sliver of buyers will become “regulars.”
Once you understand these basics, you can now understand the collapse of the web-commerce “bubble” in the late 1990’s. Lots of new companies were getting into internet sales. They were luring top executives with huge salaries and stock options. They were running expensive television ads and buying billboard placements. The problem is no one was thinking about getting someone to buy a second time – and it was way too expensive to acquire names with the high cost of the marketing media they were using.
Are you working both sides of this equation? Are you finding ways to get and keep customers or clients? This is a particular challenge if you are a one-person shop, and you are responsible for both acquiring and reselling to buyers.
There is more to come in the weeks ahead.
Until we meet again –
The Entrepreneur’s Friend
The Entrepreneur’s Friend® is a registered trademark of Wheaton Consulting Group LLC. Photo credits: All photos were taken by Cynthia Wheaton and owned by Wheaton Consulting Group LLC except as noted. Coffee cup art by Jim Wheaton. Author support: Fellow authors from The Wrinklings and Light of Carolina Christian Writers Group.