Advertising Your Small Business
We take a look at how businesses can get ahead with the help of advertising – and avoid its pitfalls
No business is an island; nor can you afford to run yours like one. Customers won’t provide you with business if they are unaware of you or the specific benefits you offer. You need to promote yourself.
Businesses promote themselves in a variety of different ways. If you operate within an established market segment, and have a large amount of target consumers/clients, then advertising may be the best and most cost-effective way of getting the word out about your business and its benefits.
This guide can help you decide whether and how best to advertise, and if so what form, content, and media to use. It will also help you to decide what budget you will need and determine whether your advertising has been successful.
Why should I consider using advertising in my small business?
There’s no bones about it – advertising is expensive, no matter what size of business you run. You should consider the following factors when deciding whether it is the best option for you, or whether it might be cheaper and easier to use alternative forms of promotion.
First of look at what is your target market is. What categories are common to them (i.e. age, socio-economic background, geographical area, business interest). Then identify what media is most suited to them – should only invest money in a campaign whose reader/viewership will substantially overlap with your target demographic.
Your next step is deciding what form the campaign will take. If you have a lot of detailed information to convey, for example, a web advertisement will not be effective – they work best when delivering messages of only a few words. In this case, a longer-form option such as an infomercial would be better suited to your needs. Finally decide what timescale your campaign needs to meet.
What should my campaign hope to achieve?
Your primary concern is, of course, to boost your sales. However advertising doesn’t just work by directly imploring customers to buy. It can help to build your brand, bolster your reputation, and make almost every stage of the sales process smoother and easier.
Establish exactly what it is you want you’re advertising to achieve. What do you want your campaign to do? A good advertising campaign could deliver one-off messages. If you have a special offer on your product or service, or if it has a benefit that your competitors lack, a campaign could clearly deliver this message to customers.
It can also prompt a specific action. If your business makes most of its sales on premises for example, you could run a campaign prompting customers to come and visit. Also help build brand awareness. The more aware your target demographic is of your brand and offering, the easier it is to achieve all sorts of business objectives – to launch new products, raise your prices, secure long-term contracts, and so on.
Finally it can help maintain customer loyalty. If you don’t advertise, you could see your existing customers drifting elsewhere – keeping your brand in the forefront of their minds ensures that their first though is of you when placing their next orders.
What should be the form and content of my campaign?
Once you have a clear idea of the objectives you wish your campaign to fulfil, you need to decide what form it should take, and what the content should be. Ads promote a single, tangible benefit. Establish the main reason a customer would buy your product/service, and communicate that reason in as clear and concise a manner as possible.
After this consider how this benefit can be communicated. Many products/services need to be demonstrated to communicate their benefits – an advert tailored to generate immediate sales will therefore not be suitable in this case.
Make sure to plan in advance. Media is often booked months or even years ahead of delivery. Make sure you will be prepared for the projected response once the advert is delivered. And finally work to a suitable timeframe. Work out what the likely lead time from advertising to action is, and when your target demographic will be most receptive to the advertising.
How do I decide what media is best to use?
With the advent of new technology and the increased connectivity that comes with it, there are now more varied forms of media than ever before. Choosing which will be the most effective for you to use can therefore be tricky. Remember that you will likely need to advertise in more than one type to get the results you require.
Make sure to interview members of your target market. What do they watch, read and listen to? Consider carrying out a paid survey. Also Look online, check how easy is it to get to your website and where do you most commonly see advertisements for businesses similar to your own?
Consider consulting a media buying agency. You might consider employing them to help find the most effective media for you to use. And finally have a look at BRAD.
Next, consider how using a particular piece of media will help meet your specific needs. Look at who watches/reads/views it? Does the reader/viewership overlap with your target market to a significant degree? Ask for a readership profile from those who own/run it.
What is its image/reputation? Does this fit with that of your business? And what are its circulation figures? Look for those audited by the Audit Bureau of Circulations. After this consider the costs of producing the ad and of running it, and look at what range of different advert types can it host? Investigate the rates for different size and position options.
Finally look at the opportunities that could be negotiated. Media outlets need to sell advertising space, discounts are often available for repeat advertising, or for unsold ad space purchased at the last minute.
How much should I spend on advertising?
As mentioned earlier, advertising is likely to be costly. Working out how much you should be spending depends on a number of factors.
Start of by considering your objectives. How far are you from achieving them, and how much will achieving them cost you? If you are entering a new market, or introducing a new product, you are likely facing some heavy spending. If you are an established name/brand, you may only need to spend sporadically.
Then look at what your competition is doing. You may need to match or even slightly exceed their level of advertising, which could be heavy.
Also check your previous costs. How much have you spent on advertising in the past and was it effective? And identify your expected worth of advertising. What are your sales margins? How much repeat business are you likely to get?
Finally come up with the timescale of your strategy. If you’re planning to raise awareness in the long term, as opposed to pursuing a short term sales spike, you should expect to pay more. And the media you’re considering. Some forms will cost a lot more than others – and higher cost in this area does not equal a successful campaign.
How can I tell whether my campaign has been successful?
Establishing whether or not your campaign has been successful, and to what extent, depends of course on what objectives you wished it to achieved.
Advertising that is designed to directly generate sales can be measured in terms of effectiveness relatively easily. There are several steps you can take to establish whether your advertising is doing what you want it to. Start by asking customers how they heard about your business and try use a dedicated free-phone number in each campaign. You can work out which of your adverts performs best by viewing the call statistics. Freephone numbers can be easily pointed at your existing number.
Also use unique codes embedded in the advertisements. Asking the customer to provide this code when buying allows you to establish which advertisement lead them to enquire. Reply coupons in print advertisements work on the same principle. Finally use reader reply services in trade journals.
Ads that are designed to build a brand image, or bolster your profile and reputation, are difficult to directly measure in terms of success. Make sure to conduct market research. This can tell you whether you are where you want to be in the minds of your target demographic.
How can I tell whether my campaign has been worth the costs?
The costs of a campaign are not simply limited to that of producing and disseminating the advertisement(s) – unless you have allowed for any extra staff and stock levels that you are likely to require, the campaign could badly backfire.
In order to predict how much you might spend, calculate the likely costs and add the costs of fulfilment. These will include any additional stock and staff you need to meet the increased demand, as well as the costs of goods, postage and delivery. Then detract these from the projected or actual additional revenue generated. Has it been worth the time and money spent to create and deliver the ad?
You also need to establish your conversion rate – the amount of responses that are generated into sales. If it is poor, the ad is not effective – you may need to reconsider your strategy.
Look at your price structure and check if it is suited to your target market, or is it too high. Also look at your employees. Have they received sufficient training and resources to handle enquiries? Finally check your follow-up literature, i.e. brochures. Does it provide suitable information? Does it match the claims of the advertising?
What are the alternatives to advertising?
Depending on your business needs, there are alternatives to advertising that are more cost-effective and may be better suited.
PR: If you’re concerned about building your reputation, good PR can achieve this at a lower cost over a longer term. You can also choose to do this yourself, have a look at our PR tips here for some help
Direct mail: It may be possible to gain access to a mailing list that overlaps significantly with your target market. Longer form, more targeted information can then be sent out at a lower cost than traditional advertising.
E-newsletters : These can provide longer-form information about your business to consumers and direct them to your business’s website.
Personal selling: For long-term, high-value customers this might be a more successful approach, since it feels more intimate and personalised.
Point-of-sale materials: Packaging, merchandising and other materials can incentivise consumer purchases.
Trade exhibitions and conferences: For very select markets, showcasing/appearing at relevant exhibitions and conferences might be the best way of reaching them.
Advertising can be a great way to target potential customers, increase your business’ reach and build up your brand. However it is also expensive and with social media and new technology constantly introducing new ways to attach and target clients so consider all routes before launching a campaign.