Archive for the ‘Marketing’ Category

Do Not Forget To Use a Call To Action When Running An Ad

May 8, 2011

by Doug Smith, President, The Woodhaven Group, LLC

Many companies forget that in marketing the key to increasing sales and business cash flow is an effective call to action, often times referred to as a CTA.

I have had many business owners and CEOs ask me why their advertising was not performing.  They had beautiful graphics or photos.  A great job was done of listing features and benefits.  Lots of money was spent on a beautiful logo.

But, what was missing?

Very simply, what was missing was a failure to include a call to action which is a reason for the prospect to act and take the next step in the buying cycle.

It may be saying “click here” on an e-commerce site but more often it is an offer the prospect cannot refuse. Here are a few examples that have worked for me:

  • Buy 2 get 1 free
  • Free shipping or delivery
  • 50% off the regular list price
  • A specific sale price also showing the regular price and the savings realized by the buyer
  • A free service such as free alterations with the purchase of a suit

There are 2 important tips to a winning call to action:

  1. The offer has to be real, legitimate and have a perceived value in the mind of the buyer.  Never inflate the regular comparable price just to make the offer look better.
  2. There has to be a deadline to act in order to create a sense of urgency.

Regardless of the marketing channel used, the next time your business runs an ad, in order to increase cash flow and sales, make sure to not forget an effective call to action.

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Will Groupon Increase Business Cash Flow?

May 4, 2011

by Doug Smith, President, The Woodhaven Group, LLC

I have to admit that I have not used Groupon or the other coupon sites from a seller standpoint at this time.

But I am intrigued by the potential these sites have to offer.

I know there are businesses that love what coupon sites do to sales and return time and again to using Groupon and sites similar to it.

Having said that, here are a few questions an owner or CEO should ask themselves before taking the online coupon plunge:

  • Who is your customer?  What do they really want and expect from your company?  While everyone likes a deal, do they expect you to be selling your products or services at 50% off?  Are they more price driven or value driven?  Any new prospect you attract should be similar to your existing loyal customer.
  • What is the impact on your brand?  What message do you want prospects and customers to hear from you?  Is the coupon call-to-action aligned with the value proposition your company has invested time and money in developing?
  • What is the cost to acquire a new customer?  You should know this.  What % of the coupon users will return to buy the next time at full price?  Run scenarios to see if you like the cost of customer acquisition.
  • What is the profit per sale and are you comfortable with that?  Run the numbers on gross margin and overall cost of marketing.   If the coupon site takes 50% upfront, what will you be left with after the sale?  
  • What is the impact on your existing customer? Will they expect the same offer even if they do not act on the coupon?  If you offer them the same discount as the coupon, would they have purchased anyway but at full price?  Do their expectations of your company change going forward?

Those are just a few of many questions to consider prior to using the online coupon channel of marketing.

Lastly, I would talk to businesses similar to yours who have used Groupon and similar coupon sites.  Ask them what worked and what they would do differently.  The beauty of Groupon and others like it is that you can learn from the experiences of others.

What do you want to accomplish from using online coupons?

Profitably increasing your business cash flow should be at the top of your list.

A Business Must Pry Loose Consumer Savings

August 4, 2010

by Doug Smith, President, The Woodhaven Group

It has been widely reported that businesses of all sizes have accumulated cash over the last year to reduce debt and have a cash flow cushion going forward.

Someone else is doing the same thing.

The consumer has decided that saving money is a good and needed strategy for themselves and their families.

The US government reported that consumers saved 6.4% of after tax income for the month of July.  This trend in increased savings has been happening now for a few months.  Compare this savings rate to 1%+ prior to the economic chaos that started in 2008.

Why is the consumer deciding to save more at this point in time?  Here are a few reasons as I see them:

  • It is no secret that consumers are trying to reduce any and all debt they have.
  • Uncertainty plays a major role in consumer psychology.  The consumer is telling themselves that caution is the best strategy and that means saving dollars until they can get a better “feel” on the future of the economy.
  • The consumer is becoming wiser.  Part of what got the consumer and the country into economic trouble was spending on unnecessary products and services as well as houses bigger than were needed.  You can add to that a few vacation homes.  Now the consumer is still spending, but it is on more necessities and less on “feel good” items with no lasting value. Some of the remaining dollars is going into savings.

In spite of this new pragmatic approach by the consumer, businesses still have to generate sales.  The consumer has not stopped buying. They are just buying less and being more cautious.  A company needs to capitalize on that mindset.  Here is how to do it:

  1. Know who your target customer is and channel your available marketing dollars at that customer.  As  a business, you do not have the luxury of using a shotgun approach.  That only wastes cash flow.
  2. Know which of your services or products is most desired at this time by your target customer.  Don’t make the mistake of emphasizing secondary products, styles, colors, sizes, or categories in your offering.  Lead with your strength.  Do research to find out what that is if necessary.
  3. The consumer right now appears to only be buying bargains.  So give them a bargain.  Find a way to promote your most wanted items to the target customer at a price point they cannot refuse. Then cross market and up sell to increase the average sale and bump up margin.
  4. Offer the best guarantee or warranty that you possibly can.  The consumer is not very trusting right now.  Let them know that once they finally decide to buy that they can have peace of mind that their purchase will not be a mistake.  Trust and credibility in the seller is currently an important part of the buyers decision-making strategy. 

The consumer has money to spend.  And they will spend it given a good reason to do so.

It is up to the owner or CEO to give the consumer a valid reason to dip into the increase in savings and spend it with your company.

Use This Easy And Proven Tip To Supercharge Sales

July 19, 2010

by Doug Smith, President, The Woodhaven Group

Are you a retailer?  Worried about whether you will  have enough cash flow from your business to buy inventory for the all important Christmas season?

Do this now with the fall merchandise coming into your stores and create the cash needed for fourth quarter. 

Hold a one day private pre-season Fall sale.

Follow these proven tips to make it a huge success:

  1. Send out a personalized letter only to your customer’s announcing that the sale will be for one day only.  Do not extend beyond this one day.  It creates a sense of urgency.
  2. Discount 40% on any merchandise purchased on this one day only.  This will especially work if you are a retailer that does not have your inventory on sale 24/7.
  3. Include in the letter a coupon at the bottom that must physically be presented at the time of purchase.
  4. Do not email this announcement.  Sometimes it is better to get something in hand that has to be brought to the store.  Save the online coupons for another time.
  5. If you sell apparel, offer free alterations for anything bought on this one day only.
  6. Personally sign the letter with your direct phone number listed.  Advise them that if they are going to be out-of-town that day to call and you will ring up the sale for them.
  7. No holds for a later decision.  At the end of this day the sale is over.
  8. Have all sales staff call their personal accounts and set an appointment to meet their customers in the store. Again, this creates a sense of urgency and shows that the sales staff cares about their customers.   
  9. Make the day a major in store event.  Maybe have wine, appetizers, live music. You get the idea.   

This sale can turn into an annual event that only you and your regular customers will know about.  It’s your own little secret. About the third year you do this event you will see some customers taking a vacation day from work just to be there early when the doors open.

A side benefit will be that you can get an early read on what  styles, colors, and fabrics the shopper is really going to be interested in for this fall and holiday season.  Now you have direction on what to buy for November delivery.

Also, don’t be surprised when your customer comes back  the week after the sale and pays full price for that item she chose not to buy the day of the sale.

Oh!……and one other benefit.  You have just supercharged your cash flow early in the shopping season.

Use Google TV Ads To Build Brand And Increase Cash Flow

July 16, 2010

by Doug Smith, President, The Woodhaven Group

As a small business owner or CEO you do not have the luxury of wasting the cash flow of your business while trying to build your company’s brand and increase sales.

One of the quickest ways to blow cash and profit is to invest too many dollars in the wrong marketing channels.

Most business owners have been turned off by TV because of the big ongoing expense and long lead time to produce and schedule a spot.  However, the biggest complaint I have always heard is the inability to truly measure the results of a specific TV spot.

Most small businesses that have included the Internet as part of a well executed  integrated marketing strategy  know about Google’s successful AdWords program.  What you may not realize is that for about the last 2 years Google has been incorporating the mechanics of the AdWords program into purchasing TV spots.

As a small business owner you can find programs on Cable TV and bid on specific spots on those shows.  By using keywords similar to those used in AdWords Campaigns, your company can target programs and times that work best for your marketing strategy.  Best of all, you can measure the results afterwards.

To find out more go to Google TV Ads here.

Successful marketing is all about testing concepts, measuring results, making adjustments and testing again.

Whether you want to build brand or develop a top-notch direct response program, I suggest your company test Google TV ads.

Leverage your knowledge and experience with Google AdWords to become more productive with your TV budget.

10 Creative Ideas To Increase Sales Now!

July 13, 2010

by Doug Smith, President, The Woodhaven Group

As a business owner or CEO you must create and maintain positive cash flow in your business.  It is your #1 priority.

Let’s be clear where that cash flow is not going to come from.  The amount of loans to small businesses fell in the 1rst quarter of 2010 compared to 2 years earlier.  Banks and other private lenders are being more choosy about who is getting any type of small business loan.  Regardless of good cash flow projections and collateral, some businesses still are not receiving the lines of credit needed to operate their businesses.

As an owner, I would not automatically assume funds will be available from my local lender.      

There is one solution that will work.  The small business owner must find ways to increase sales.  The smart owner has already cut expenses, gotten extended terms from suppliers and probably tapped into personal investments.  More sales will bring more of the business cash flow your company needs to survive and grow.

Your company will need to do creative and unique tactics to spring loose the purse strings of the consumer or business who is your customer.

Start doing these 10 things today to increase sales:

  1. Learn more about the needs and wants of your customer.  Find better solutions to their problems and market to that.  In one word, “listen” to the individual customer more than before.  You may find that there is a whole category of products or services your company should have been selling to him that will increase your sales.
  2. Monitor and use social media.  There are many ways to use social media to generate sales.  The overriding method is to use social media to build relationships with customers and noncustomers.  Monitor for  complaints about competitors and offer a solution.  Monitor for complaints about your own company and be there to take ownership of the problem.  Incorporate surveys, contests, and links to websites, including your own.  All of this can position your company as a credible source of information. The end result will be an opportunity to create a new customer.
  3. Use email marketing to strengthen customer relationships.  This is not an opportunity to just email blast special offers constantly.  Instead, use emails to target a message about the benefits of your product, new information on your industry, an interview with a local business leader or an update on coming events involving your company.  Email marketing is an inexpensive way to stay in touch with your customer.  A call to action can still be included to trigger additional purchases.
  4. Get lapsed customers reinstated.  If you sell to other businesses then call on the company.  If you sell to consumers then send a personalized letter to each customer with a special coupon.  Don’t let them forget about you.
  5. Offer extended terms.  Help your customer finance the purchase.  Chances are your customer needs your product.  Here is a way to show that you are there to help them.  Instead of normal 30 day terms, extend out to 60 or 90 days.  Of course, make sure this offer is to creditworthy customers.
  6. Offer an unusual promotion.  Check the gross margin of your most popular products and offer something different to pry loose the spending of your prospect.  It may be a discount, a free service with purchase or a bundling of products.
  7. Run a 3 day limited promotion.  Make it unadvertised and exclusive to your customer database.  Communicate this with an email and followup contact by phone or in person.
  8. Offer a special after hours private shopping event.  If you are a retailer, tie in with a local not for profit and include their database in the invitation list.  Have a portion of the proceeds go to the charity.  Include wine, music, and giveaways at the event.  This could easily be held on a Saturday or Sunday evening.
  9. Create a white paper.  Your prospects and customers are probably having cash flow issues also.  Offer tips on how to save cash.  This will work for both businesses and consumers.  They will appreciate the free advice and use their new-found cash to spend on your products or services.
  10. Ask for and get testimonials.  Then send them out with a promotion to both prospects and customers.  There is no method of advertising more effective than a third-party advocate.  By including existing customers it will reinforce that they made the right decision by buying from your company. 

Use one or more of these ideas to pump up sales and increase cash flow.  Keep track of results and show your banker the action plan, goals, and the resulting increase in sales. 

You may see your banker wanting to make a loan to this well run growing business of yours.

Outsourcing Can Save Time And Increase Business Cash Flow

June 3, 2010

by Doug Smith, President, The Woodhaven Group

If your company is not considering outsourcing some of your everyday business  functions then you are missing out on a golden opportunity to increase your business cash flow.   

Most individuals outsource many of their personal activities and don’t think twice about it.  You can have someone else fill the cavities in your teeth, repair the engine in your car, or even make coffee for you every morning.  Hello Starbucks!  Think of the opportunities to outsource important daily functions in your company such as payroll, cleaning, accounting, IT, invoice billing and processing, human resources, areas of marketing such as public relations, web design, pay-per-click, SEO, media buying and even the call center.  One important area that has been getting outsourced for some time is the manufacturing of products and component parts.

Is it really worth considering for your company?

The benefits are many and the savings  bring more cash into the company to help drive marketshare of the all important core products.  Here are just a few of the benefits:

  1. Less space to rent or own.
  2. Can eliminate office furniture and work stations.
  3. Can reduce the number of computers, monitors and printers
  4. Forget the telephone on that desk that no longer exists.
  5. Less hiring, interviewing and training expenses and the time that goes with it.
  6. No employee benefit cost needed for outsourced employees.
  7. Fewer people problems for your top managers to deal with which means they have more time to focus on increasing sales to your best customers. 
  8. Savings can be channeled into testing new marketing strategies to bring on additional customers.
  9. The company will have flexibility to expand or contract an outsourced function as business conditions dictate. This is a critical benefit in these uncertain times.
  10. Speed of execution.  Having specialists who live the outsourced function daily should assure that what needs to get accomplished is done more efficiently and quickly than managing it inside the company.  When I outsourced manufacturing I found that we got the finished product to the end customer 7 days faster than before.  That dramatically increased customer satisfaction and improved cash flow.
  11. Your company can build a strategic alliance with your outsource partner.  This can allow you to stay more current on technology and new processes than if you went it alone.  The partner  may even introduce you to a new customer.
  12. Quality level  of the outsourced function improves.  We already mentioned speed but when you combine more speed with better quality the company gains a competitive edge when outsourcing.  This edge includes increased  reliability and credibility in the eyes of your customer which allows the company to ask a higher price for its products. The result is more sales and increased gross margin.
  13. Outsourcing allows your management team to concentrate more on all aspects of customer service.  While this area is outsourced in many companies, I prefer to take the savings from outsourcing other functions and improve this critical function into a core competency.
  14. It can reduce the fixed cost of equipment that has to be acquired to stay current with technology, especially in the area of manufacturing.    

Like everything else in your business, the management team must constantly measure the results of outsourcing a specific area or function to make sure the expected  return on investment is being realized.  Some owners and CEOs outsource a function and forget about it. It is important to understand that outsourcing becomes another area of the company that needs to be managed in order to assure success.

Has your company had success outsourcing?  I would like to hear about your experiences.

Increase Sales And Cash Flow With Crossmarketing Alliances

May 26, 2010

by Doug Smith, President, The Woodhaven Group

As a business you must increase sales while not overspending on marketing.  If this is done well, your company will realize more profit and an improved net worth.  The increase in cash flow will allow you to do such things as pay down debt, expand into other markets and contribute back to the community.

The challenge lies in the ability to effectively market your product or service by spending your available dollars wisely.  The marketing options are many.  Depending upon the target customer you may invest in TV, radio, newspaper, special events, trade shows, sponsorships, direct mail, or the many forms of internet marketing.  There are some companies that still telemarket, use billboards or even canvas door to door.  The form of marketing that worked last year may not work this year.  As a CEO  I knew the head of marketing had one of the toughest jobs in the company.

In spite of all the marketing channels available to a company I always thought there was one method that was extremely effective and underutilized.  Executed correctly the marketing cost could be extremely low.  I am talking about using crossmarketing alliances.  What is that?  It is where separate companies with different products market to the same customer together.  In the eyes of the customer there is synergy in the offering coming from the combined approach of the companies.  The customer perceives this combination as added value.

Confused?  Here is a simple example to illustrate a cross marketing alliance that works well.  Think of the bride and groom.  Now think of all the things that have to be coordinated for the wedding.  Imagine if the couple can receive a suggestion from the florist they like to use a specific bakery for the cake and then both companies suggest a reputable photographer.  This can continue with the tux or wedding dress store, limo service and even the location for the reception.  There might be discounts used for the referrals.  This approach works for both the business and the customer. The customer gets what they want and the money the business saves on marketing can increase cash flow and add to profit.  More sales, more cash, and more profit is always a good payoff for a winning marketing strategy.

How can separate companies market themselves to the same customer.  Here are a few ways:

  • Share the cost of direct mail or brochures where each business’s product or service is featured.
  • Hold events or shows together and invite the same targeted customer.  An example is a Bridal Fair.
  • Pass out coupon books with each company featured.
  • Display an ad , sign or presentation in each others business location.
  • Offer a bundled package of services or products for one price.
  • Write testimonials for each other.
  • Mention the other company on Twitter, Facebook, or in a blog post.

Those are just a few ideas.  The key is to think outside the box.  Not sure this approach is right for you?  Here are some other examples of companies that could benefit from crossmarketing services:

  1. Web designer, SEO agency, email service, copywriter, video production company.
  2. Painter, plumber, electrician, handyman, home cleaning service.
  3. Attorney, CPA, insurance agent.
  4. Veterinary, kennel, pet grooming, pet store
  5. Landscaper, lawncare company, deck company, tree service, fence company
  6. Auto repair, wrecker service, car rental, car wash.
  7. Dry cleaner, seamstress, shoe repair, fire & water restoration.   

I suggest you have your mangers brainstorm this topic at the end of your next management meeting. You may be surprised at some of the workable combinations they will discover.

Remember, the next time you want to save some marketing dollars and increase cash flow try using a crossmarketing alliance.

Use The Lifetime Value Of A Customer To Increase Cash Flow And Profit

May 19, 2010

by Doug Smith, President, The Woodhaven Group  

To grow your business you need to retain your most profitable customers.  By keeping a customer who is profitable for the company it adds stability to the organization while increasing all important cash flow.

Lose customers and your business will find itself spending expensive upfront marketing dollars always acquiring new customers to replace ones that went to the competition.  Marketshare does not increase, profit becomes stagnant at best and cash flow suffers.  Consider it lost opportunity.

Some owners and CEOs say that they are satisfied to always be prospecting for the next new customer.  Losing customers, in their opinion, is just a cost of doing business.

These owners would not think this way if they took the time to calculate the lifetime value of a customer.  What is a customer worth?  Knowing this number gives the owner information that helps in developing and executing sales, marketing and operational strategies.  This knowledge becomes a competitive weapon allowing your company to utilize unique promotions or incentives since it becomes easier to identify your true return on investment per customer.

The lifetime value of a customer is really the profit generated from the sales of a customer over the liftime of buying from your company.  It is best to calculate using  group averages broken down by product category.  This allows you to then decide where to spend the most dollars to retain a specific group of existing customers.  Also, based upon the lifetime value of certain groups it shows marketing and sales where to invest the most dollars to acquire new customers.

The best example of explaining  the lifetime value of a customer calculation was in a Harvard study years ago. Read the Harvard customer study here.

As a CEO of a department store I not only knew the lifetime value of the lady shopping but also the lifetime value of her husband and 3 children as a family group.  I knew that if I satisfied the 3 children growing up shopping in the store I would have their 3 families as lifetime customers when each of them got married and had kids.  You can imagine how I calculated the lifetime value of a multigenerational family.  In some cases I had 3 generations of the same family as loyal customers.  It made an easy decision to happily accept that returned gift after Christmas.

The takeaway:  Know the lifetime value of your customer and never take that customer for granted. Now when you lose an upset customer because of poor customer service you know exactly how many dollars just walked out the door.

Use A Baseline Measurement To Track Change In Performance

May 14, 2010

by Doug Smith, President, The Woodhaven Group

Here is a simple tip from the field of medicine that will increase your productivity, cash flow and overall profit performance.

I  cannot believe how often management in any type of business I see fails to do this.

And that is to start with a baseline measurement when making a change.

The best at using baseline measurements is the medical community.  The Doctor, nurse, or hospital always starts by getting your beginning weight, cholesterol reading, red blood cell count, blood pressure, temperature or some other measurement to help them track the rate of progress, or lack thereof.

As management, we need to do the same in order to assure ourselves that cash invested is getting the results we want.  If you are going to invest additional dollars in some new program or project you want to know that you will get an expected payback within an acceptable period of time.

You can have all the metrics, measurements, and progress points you want but it is imperative that you start with an accurate beginning baseline measurement from which you can track the expected improvement.

Think about that the next time you initiate a new energy savings program, search engine optimization strategy, increase in media spend, bonus program or any of the many tweaks and adjustments you make every month in your business.

Did you have a starting point to measure against?

If it works for your blood pressure it may also be a remedy for your business.