Basics and Planning
Advertising and promotions is bringing a service to the attention of potential and current customers. Advertising and promotions are best carried out by implementing an advertising and promotions plan. The goals of the plan should depend very much on the overall goals and strategies of the organization, and the results of the marketing analysis, including the positioning statement.
The plan usually includes what target markets you want to reach, what features and benefits you want to convey to them, how you will convey it to them (this is often called your advertising campaign), who is responsible to carry the various activities in the plan and how much money is budgeted for this effort. Successful advertising depends very much on knowing the preferred methods and styles of communications of the target markets that you want to reach with your ads. A media plan and calendar
can be very useful, which specifies what advertising methods are used and when.
For each service, carefully consider: What target markets are you trying to reach with your ads? What would you like them to think and perceive about your products (this should be in terms of benefits to them, not you)? How can you get them to think and perceive that? What communications media do they see or prefer the most? Consider TV, radio, newsletters, classifieds, displays/signs, posters, word of mouth, press releases, direct mail, special events, brochures, neighborhood newsletters, etc. What media is most practical for you to use in terms of access and affordability (the amount spent on advertising is often based on the revenue expected from the product or service, that is, the sales forecast.)? You can often find out a lot about your customers preferences just by conducting some basic market research methods. The following closely related links might be useful in preparation for your planning.
Basic Methods to Get Feedback from Customers
Far too often, we think we know what our customers think and want because — well, we just know, that’s all. Wrong! Businesses can’t be successful if they don’t continue to meet the needs of their customers. Period. There should be few activities as important as finding out what your customers want for products and services and finding out what they think of yours. Fortunately, there are a variety of practical methods that businesses can use to feedback from customers.
The methods you choose and how you use them depend on what the type of feedback that you want from customers, for example, to find out their needs in products and services, what they think about your products and services, etc.
Employees — Your employees of usually the people who interact the most with your customers. Ask them about products and services that customers are asking for. Ask employees about what the customers complain about.
Comment Cards — Provide brief, half-page comment cards on which they can answer basic questions such as: Were you satisfied with our services? How could we provide the perfect services? Are there any services you’d like to see that don’t exist yet?
Competition — What is your competition selling? Ask people who shop there. Many people don’t notice sales or major items in stores. Start coaching those around you to notice what’s going on with your competition. (See Competitive Analysis.)
Customers — One of the best ways to find out what customers want is to ask them. Talk to them when they visit your facility or you visit theirs. (See Questioning and Listening.)
Documentation and Records — Notice what customers are buying and not buying from you. If you already know what customers are buying, etc., then is this written down somewhere? It should be so that you don’t forget, particularly during times of stress or when trying to train personnel to help you out.
Focus Groups — Focus groups are usually 8-10 people that you gather to get their impressions of a product or service or an idea. (See Focus Groups .)
Surveys by Mail — You might hate answering these things, but plenty of people don’t — and will fill our surveys especially if they get something in return. Promise them a discount if they return the completed form to your facility. (See Survey Design.)
Telephone Surveys — Hire summer students or part-time people for a few days every six months to do telephone surveys. (See Survey Design.)
First, A Word About Writing Ads
It’s almost useless to review lists of alternatives for advertising if you haven’t developed well-written ads. Writing ads is a skill. There are important aspects to think about, including the wording, graphics, arrangement of wording and graphics, coloring, how your audience will interpret the ads, their placement, etc. Poorly done ads can hurt you worse than not having ads at all. Therefore, very carefully consider getting help to write your first ads. (See Writing Your Ad.)
What Should You Write in Your Ads?
The answer to this question depends almost entirely on the reading and listening habits of your current and potential customers. This is where some basic market research can help you a great deal. A lot can be learned by using a few basic methods. (See Basic Methods to Get Customer Feedback and and Some Major Sources of Market Research Information.)
Before you write your ads, you should give careful thought to your unique selling position so you know what unique features and benefits to convey and to whom. Review information in Positioning.
Note that a common mistake among inexperienced ad writers is to write the ad to themselves, rather than to their current and potential customers. Your ads should clearly the benefits (of products and services) to customers, not the benefits to you —
clearly state the ads in terms that the customer will value, for example, easy access, low cost, easy to use, reliability, etc. Your ads should answer the customer’s question: What’s it it for me? Your ad should also specify what they are to do next. What action should they take and how do they take it, for example, who do they call and how.
Major Methods of Advertising (Repeatedly Getting Message Out)
? Brochures or flyers — Many desk-top publishing and word-processing software packages can produce highly attractive tri-fold (an 8.5 inch by 11-inch sheet folded in thirds) brochures. Brochures can contain a great deal of information if designed well, and are becoming a common method of advertising. (See Writing Brochures.)
? Direct mail — Mail sent directly from you to your customers can be highly customized to suit their nature and needs. You may want to build a mailing list of your current and desired customers. Collect addresses from customers by noticing addresses on their checks, asking them to fill out information cards, etc. Keep the list on-line and up-to-date. Mailing lists can quickly become out-of-date. Notice mailings that get returned to you. This should be used carefully and it can incur substantial cost, you don’t want to inundate your stakeholders with information so make the most of your message. (See Using Direct Mail and Mailing Lists.)
? E-mail messages — These can be wonderful means to getting the word out about your business. Design your e-mail software to include a signature line at the end of each of your e-mail messages. Many e-mail software packages will automatically attach this signature line to your e-mail, if you prefer. (See Netiquette – Techniques and styles of writing e-mail messages and E-mail vs. voice mail.)
? Magazines — Magazines ads can get quite expensive. Find out if there’s a magazine that focuses on your particular industry. If there is one, then the magazine can be very useful because it already focuses on your market and potential customers. Consider placing an ad or writing a short article for the magazine. Contact a reporter to introduce yourself. Reporters are often on the look out for new stories and sources from which to collect quotes. (See Classifieds of Newspapers and Magazines.)
? Newsletters — This can be powerful means to conveying the nature of your organization and its services. Consider using a consultant for the initial design and layout. Today’s desktop publishing tools can generate very interesting newsletters quite inexpensively. (See Newsletters.)
? Newspapers (major) – Almost everyone reads the local, major newspaper(s). You can get your business in the newspaper by placing ads, writing a letter to the editor or working with a reporter to get a story written about your business. Advertising can get quite expensive. Newspaper are often quite useful in giving advice about what and how to advertise. Know when to advertise — this depends on the buying habits of your customers. (See Classifieds of Newspapers and Magazines.)
? Newspapers (neighborhood) — Ironically, these are often forgotten in lieu of major newspapers, yet the neighborhood newspapers are often closest to the interests of the organization’s stakeholders. (See Classifieds of Newspapers and Magazines.)
? On-line discussion groups and chat groups — As with e-mail, you can gain frequent exposure to yourself and your business by participating in on-line discussion groups and chat groups. Note, however, that many groups have strong groundrules against blatant advertising. When you join a group, always check with the moderator to understand what is appropriate. (See Newsgroups (finding, using, etc.), Newsletters (free, on-line), Netiquette – Techniques and styles of writing e-mail messages and E-mail vs. voice mail.)
? Posters and bulletin boards — Posters can be very powerful when placed where your customers will actually notice them. But think of how often you’ve actually noticed posters and bulletin boards yourself. Your best bet is to place the posters on bulletin boards and other places which your customers frequent, and always refresh your posters with new and colorful posters that will appear new to passers by. Note that some businesses and municipalities have regulations about the number of size of posters that can be placed in their areas. (See Signs and Displays.)
? Radio announcements — A major advantage of radio ads is they are usually cheaper than television ads, and many people still listen to the radio, for example, when in their cars. Ads are usually sold on a package basis that considers the number of ads, the length of ads and when they are put on the air. . A major consideration with radio ads is to get them announced at the times that your potential customers are listening to the radio. (See Advertising on Radio and T.V.)
? Telemarketing — The use of telemarketing is on the rise. (See Telemarketing.)
? Television ads — Many people don’t even consider television ads because of the impression that the ads are very expensive. They are more expensive than most of major forms of advertising. However, with the increasing number of television networks and stations, businesses might find good deals for placing commercials or other forms of advertisements. Television ads usually are priced with similar considerations to radio ads, that is, the number of ads, the length of ads and when they are put on the air. (See Advertising on Radio and T.V.)
? Web pages — You probably would not have seen this means of advertising on a list of advertising methods if you had read a list even two years ago. Now, advertising and promotions on the World Wide Web are almost commonplace. Businesses are developing Web pages sometimes just to appear up-to-date. Using the Web for advertising requires certain equipment and expertise, including getting a computer, getting an Internet service provider, buying (usually renting) a Web site name, designing and installing the Web site graphics and other functions as needed (for example, an on-line store for e-commerce), promoting the Web site (via various search engines, directories, etc.) and maintaining the Web site. (See Building, Managing and Promoting Your Web Site and On-Line Advertising and Promotions.)
? Yellow Pages –The Yellow Pages can be very effective advertising if your ads are well-placed in the directory’s categories of services, and the name of your business is descriptive of your services and/or your ad stands out (for example, is bolded, in a large box on the page, etc.). The phone company will offer free advice about placing your ad in the Yellow Pages. They usually have special packages where you get a business phone line along with a certain number of ads.
? Promotional Activities Through the Media (Reporters, Newspapers, etc.) Articles that you write — Is there something in your industry or market about you have a strong impression? Consider writing an article for the local newspaper or a magazine. In your article, use the opportunity to describe what you’re doing to address the issue through use of your business. (See Basic Writing Skills.)
? Editorials and letters to the editor — Often, program providers are experts at their service and understanding a particular need in the community; newspapers often take strong interest in information about these needs, so staff should regularly offer articles (of about 200 to 900 words) for publication. (See Managing Media Relations and Basic Writing Skills.)
? Press kits — This kit is handy when working with the media or training employees about working with the media. The kit usually includes information about your business, pictures, information about your products, commentary from happy customers, etc. (See Managing Media Relations.)
? Press releases or news alerts — They alert the press to a major event or accomplishment and requesting, e.g., it get included in the newspaper; they explain who, what, where, why and when; some include pictures, quotes, etc. to make it easier for the reporter to develop an announcement or story. (See Managing Media Relations.)
? Public service announcements (PSA)s — Many radio and some television stations will provide public service announcements for nonprofit efforts. Usually, these PSAs are free.
Other Promotional Activities and Events
? Annual reports – Disseminate these to key stakeholders; they’re ripe with information if they include an overview of your year’s activities, accomplishments, challenges and financial status. (See Annual Reports.)
? Collaboration or strategic restructuring – If you’re organization is undertaking these activities, celebrate it publicly. (See Organizational Alliances.)
? Networking – Spread the word to peers, professional organizations and those with whom you interact outside the organizations, e.g., educators, consultants, suppliers, clients, etc. (See Networking.)
? Novelties — It seems more common to find ads placed on pens and pencils, coffee cups, T-shirts, etc. These can be powerful means of advertising if indeed current and potential customers see the novelties. This condition often implies additional costs to mail novelties, print T-shirts, etc.
? Presentations — You’re probably an expert at something. Find ways to give even short presentations, for example, at local seminars, Chamber of Commerce meetings, trade shows, conventions, seminars, etc. It’s amazing that one can send out 500 brochures and be lucky to get 5 people who respond. Yet, you can give a presentation to 30 people and 15 of them will be very interested in staying in touch with you. (See Presenting.)
? Relationships with key stakeholders — Identify at least one representative from each major stakeholder group and take them to lunch once a year. What seem as short, informal exchanges can cultivate powerful relationships of interest and concern.
? Special events — These tend to attract attention, and can include, e.g., an open house, granting a special award, announcing a major program or service or campaign, etc.
? Special offers — We see these offers all the time. They include, for example, coupons, discounts, sweepstakes, sales, etc.
Sales forecasting is the process of organizing and analyzing information in a way that makes it possible to estimate what your sales will be. This document outlines some simple methods of forecasting sales using easy to find data. Books containing simple and sophisticated techniques of forecasting sales can be found in libraries and business oriented book stores. If you sell more than one type of product or service, prepare a separate sales forecast for each service or product group. There are many sources of information to assist with your sales forecast. Some key sources are:
? Neighbouring Businesses
? Trade suppliers
? Downtown business associations
? Trade associations
? Trade publications
? Trade directories
Factors that can affect Sales.
Seasons Family formations Fashions or styles
Holidays Births and deaths Population changes
Special Events Political events Consumer earnings
Competition, direct External labour events Weather
Competition, indirect Productivity changes
? Product changes, style, quality
? Sales Motivation plans
? Credit policy changes
? Service changes, type, quality
? Shortages, inventory
? Labour Problems
? Shortages, production capability
? Shortages/working capital
? Price changes
? Promotional effort changes
? Distribution methods used
Sales Forecasting for a New Business
These steps for developing a sales forecast can be applied to most kinds of businesses:
Develop a customer profile and determine the trends in your industry.
Make some basic assumptions about the customers in your target market. Experienced business people will tell you that a good rule of thumb is that 20% of your customers account for 80% of your sales. If you can identify this 20% you can begin to develop a profile of your principal markets.
Sample customer profiles:
1. Male, ages 20-34, professional, middle income, fitness conscious.
2. Young families, parents 25 to 39, middle income, home owners.
3. Small to medium sized magazine and book publishers with sales from $500,000 to $2,000,000.
Determine trends by talking to trade suppliers about what is selling well and what is not. Check out recent copies of your industry’s trade magazines. Search the Business Periodicals Index (found in larger libraries) for articles related to your type of business.
Establish the approximate size and location of your planned trading area. Use available statistics to determine the general characteristics of this area. Use local sources to determine unique characteristics about your trading area.
How far will your average customer travel to buy from your shop? Where do you intend to distribute or promote your product? This is your trading area.
Estimating the number of individuals or households can be done with little difficulty using Statistics Canada [or U.S.] census data. Statistics Canada’s Family Expenditure Survey can identify what the average household spends on goods and services. BC Stats has population forecasts for areas in British Columbia. Information on planned construction is available from a variety of sources. Directories like Contacts Target Marketing, BC Manufacturers Directory, or the Yellow Pages can help identify names of companies located in your trading area.
Neighbourhood business owners, the local Chamber of Commerce, the Government Agent and the community newspaper are some sources that can give you insight into unique characteristics of your area.
List and profile competitors selling in your trading area. Get out on the street and study your competitors. Visit their stores or the locations where their product is offered. Analyze the location, customer volumes, traffic patterns, hours of operation, busy periods, prices, quality of their goods and services, product lines carried, promotional techniques, positioning, product catalogues and other handouts. If feasible, talk to customers and sales staff.
Use your research to estimate your sales on a monthly basis for your first year.
The basis for your sales forecast can be the average monthly sales of a similar-sized competitor’s operations who is operating in a similar market. It is recommended that you make adjustments for this year’s predicted trend for the industry. Be sure to reduce your figures by a start-up year factor of about 50% a month for the start-up months.
Consider how well your competition satisfies the needs of potential customers in your trading area. Determine how you fit in to this picture and what niche you plan to fill. Will you offer a better location, convenience, a better price, later hours, better quality, better service?
Consider population and economic growth in your trading area.
Using your research, make an educated guess at your market share. If possible, express this as the number of customers you can hope to attract. You may want to keep it conservative and reduce your figure by approximately 15%.
Prepare sales estimates month by month. Be sure to assess how seasonal your business is and consider your start up months.
Sales Forecasting for an Existing Business
Sales revenues from the same month in the previous year make a good base for predicting sales for that month in the succeeding year. For example, if the trend forecasters in the economy and the industry predict a general growth of 4% for the next year, it will be entirely acceptable for you to show each month’s projected sales at 4% higher than your actual sales the previous year.
Credible forecasts can come from those who have the actual customer contact. Get the salespersons most closely associated with a particular product line, service, market or territory to give their best estimates. Experience has proven the grass roots forecasts can be surprisingly accurate.
Sales Forecasting and the Business Plan
Summarize the data after it has been reviewed and revised. The summary will form a part of your business plan. The sales forecast for the first year should be monthly, while the forecast for the next two years could be expressed as a quarterly figure. Get a second opinion. Have the forecast checked by someone else familiar with your line of business. Show them the factors you have considered and explain why you think the figures are realistic.
Your skills at forecasting will improve with experience particularly if you treat it as a “live” forecast. Review your forecast monthly, insert your actuals, and revise the forecast if you see any significant discrepancy that cannot be explained in terms of a one-time only situation. In this manner, your forecasting technique will rapidly improve and your forecast will become increasingly accurate.
Basics Of advertising