According to the Federal Trade Commission (FTC) press release (5 Oct 2009):

“The post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.”

Given the core of social media is transparency and honest discussion, most bloggers and word of mouth marketers agree with this policy.   We have a published disclosure policy on this blog and have encouraged other bloggers and social media marketers to do the same in the past.  However, for social media marketing, the method for disclosure is not as straight forward.   We occasionally send tweets about our  (Seven Aspens’) clients and/or their products. How do you disclose in a 140 character Twitter message?

With potential hefty fines looming for violators, this is a good time to review your policies, ensure compliance and learn the best practices.  To assist in the education process, the Word of Mouth Marketers Association (WOMMA) is hosting a free webinar Thursday, October 8, to help explain what the new FTC regulations mean for marketers, advertisers and bloggers. Additionally, the Social Media Business Council provides a great Disclosure Best Practices Toolkit.

Apparently Twitter needed a Wingman to answer to the most common question of the Twitterverse, “How is Twitter going to make money?”

The Twitter Wingman

According to Wired’s Danny Dumas and Steven Leckart, Twitter is introducing the Wingman, a handheld, pager-like device for all things Twitter on the go.   So Tweeps, give it a look and, of course, then tweet about it.

Follow Dallas Marketing Services on Twitter.
You follow, we follow back.
Twitterific.

Even though many times there is more creativity in budgets than ads, the easiest way to get a marketer to groan is to tell them to do a marketing budget.

The Marketing Budget Process

The first step in establishing a marketing budget is to remember that marketing goals are simply a means to achieving business goals and should be viewed as such.  As with most things in life, almost anything is possible with enough time and money – it is just not a reasonable and sustainable approach.

For most companies, marketing is a method to get sales leads, so then the first question to be answered is:
What is the value of a qualified sales lead to your business?

If you already know – skip to the next paragraph.  If not, start by determining the average value of a sale, then subtract the fully-burdened (all of your expenses) cost of the sale, to get your profit per sale.   Now you know the estimated maximum to pay for a lead – you need to determine an amount less than this or you lose money.   All that said, this is a generalization – in the case of certain business conditions, like a start-up, many companies are on a (hopefully brief) the more you sell, the more you lose plan.  They just make it up in volume.

Next, determine how many leads you can reasonably handle and effectively close and your average close rate.   Now, just do the math to determine how many leads you need to fill the pipeline (if you can handle 5 sales per month and have 10% close rate, you need 50 leads per month).    Last, take the amount you have determined that is reasonable to pay per lead and multiply it by the number of leads you need to meet your sales goals.

That is your estimated optimum monthly marketing budget – if you pay more, you will be cutting into profits, if you don’t invest that amount in marketing, you will most likely be unhappy with the results.

Or  - you can do what most companies do – from the very large to the small  - and pull a number out of the air. Many times, this amount, is the amount “you can afford.”  This is reasonable – it is hard, especially in this time of restricted credit, to have money to spend that you don’t have.  However, at the same time, expectations need to be reset on the expected outcome.

Next up – putting that marketing budget to work with a tactical marketing plan.

“Reports of my death have been highly exaggerated.”

Samuel Langhorne Clemens (Mark Twain)

We last discussed Awareness Activities, the first in the three categories of marketing opportunities.   While I have been advised by some in recent times that offline marketing and advertising is dead-finished- no more, I think there are a few gasps of breath left in the offline marketing and advertising channel.

Direct Mail Direct Response (DMDR)

According to The DMA 2003 Direct Mail Response Rate Study, the average response rate for the 1,122 industry-specific campaigns The DMA studied was 2.61 percent.

The study found the industries that utilize direct and interactive marketing to achieve above average response rates were:

• Nonprofit Fundraisers (5.35 percent)
• Retail Stores (3.36 percent)
• Establishments Rendering Services to Businesses (3.34 percent)
• Manufacturing (3.17 percent)
• Personal and Repair Services (3.07 percent)
• Travel (2.98 percent)
• Computer & Electronic Products (2.86 percent)
• Packaged Goods (2.79 percent)

So, is direct mail still a profitable marketing tool? That depends, but direct mail is one of the easier ROI calculations to estimate. Simply take the cost of the piece you will be mailing, the cost of the list and labor, if applicable, to reach a total cost.  Next, determine estimated response rate (above), the estimated conversion/close rate and the average value of the sale (profit).

For example, if you mail 1000 pieces and estimate that 2.61% will respond (the average from above) and assume 20% of those will close, then the 1000 pieces should yield about 5 sales (1000 X 2.61% = 26 responders, 26 X 20% = 5 sales).  Now, just determine if the value of the 5 sales is more or less than the total cost of the mailing.  Then, remember these are only estimates and other variables such as the quality of the piece(s) mailed, the quality of the list and the frequency you will be mailing (one time vs a series) can vastly vary the results.

Publication Advertising

Advertisements in publications, especially industry trade publications, can be a great source for building brand awareness and generating sales leads.   Subscribe to all trade publications for the markets you serve, read them, study the ads and then determine which is the best fit for your offering and your budget.   If at all possible, plan a series of ads with a theme and consistent branding to build recognition with readers.

Trade Shows and Conferences

Trade shows and conferences can be used to build awareness, generate leads, find new customers, and maintain or improve current customers’ perceptions.   Trade shows are more effective in some industries than others, so just determine if the reward (other than visiting Vegas, etc.) justifies the expense.

These events present the following promotional opportunities:

♦ Network – meet prospects within the targeted industries to help build overall awareness of your product, set up meetings with other participants, invite clients or prospective customers to visit the booth

♦ Exhibit – Secure exhibit space, logo placement and name in event guide and other promotional assets

♦ Event Sponsorships – Overall show/conference sponsor or smaller, daily event sponsorships through show/conference

♦ Off-Site Event Sponsorships – Sponsor and off-site event that is not offered through the show/conference.  Examples would include dinner at a local restaurant, cocktails at local museum or exhibit, etc.

♦ Speaker – Speak at event or in topic driven forums to share insights and build exposure with industry decision-makers.

Next-> Opportunities: Online Marketing

Awareness

Definition: knowledge
Antonyms: ignorance, insensitivity, obliviousness, unawareness, unconsciousness
(Answers.com)

A marketing strategy is designed to outline a strategic process that allows businesses to concentrate their limited resources on the best opportunities to increase sales and achieve a sustainable competitive advantage in the marketplace. From the numerous potential opportunities that exist, a marketing plan can then be developed to provide a roadmap for the tactical initiatives that will be implemented.

At a high level, marketing opportunities can be compiled into three main categories:

• Awareness activities
• Offline marketing and advertising campaigns
• Online marketing activities

Today, we cover the first of the three:
Awareness activities

Awareness activities are just that – activities that build awareness of your product or service. They are most effective when targeted at a vertical market, an industry segment, or with advocates and influencers. The key here is exhibiting specialized or subject matter expertise within a defined area.

White papers: White papers are a powerful tool in establishing brand recognition and marketplace credibility. The most successful white papers are not sales brochures and do not mention the writer’s specific product or solution – they inform the reader of a specific trend or issue and identify potential new innovations or alternative ways to solve the problem.

Trade publications: Trade publications catering to identified verticals can be a great prospect for interviews and article submissions. This works especially well if used in conjunction with trade support – purchasing an ad for the purpose of building name awareness, while also requesting to be introduced to a writer to pitch the article idea.

Speaking engagements: Similar to trade publications, speaking engagements are a good opportunity to establish a presence within a vertical market. A call for speakers is normally listed on a conference website by the promoter about 9 months prior to the conference. Information is generally listed on desired presentation length, types of opportunities preferred, etc.

Press releases: Well-written press releases are a great marketing and search engine optimization/link building opportunity. Once the release is written, edited and ready to be published, it should be distributed to maximize awareness and create inbound links to the website, which should include social media sites like docstoc, posting to web sites, and using a PR distribution service such as PRWeb.

Advocates & influencers: As key industry contacts are established, utilization of these resources as influencers can provide one of the fastest ways to achieve recognition and credibility in the marketplace. Build a contact database , even if it is a spreadsheet, an regularly contact these important influencers.  Networking opportunities and speaking engagements at conferences and trade shows provide a great opportunity to meet and establish relationships.

Customer testimonials: Authentic customer testimonials that have specific and quantifiable information and data points can be one of the most effective marketing methods available. Don’t wait for your customers to volunteer their testimonial – most don’t. Ask them for it or, even better, write it for them and have them approve it.

Bloggers: Bloggers are industry experts (well, sometimes) with an easy method of access – their blog. Find bloggers in your industry or market, then subscribe and read the blog consistently before jumping in with comments. Once you have an idea of the types of discussions that occur, begin providing meaningful, relevant comments on posts. Be authentic and don’t add comments filled with links to your website or promoting your product.

Next-> Opportunities: Offline Marketing

In a similar manner, marketing positioning is the point guard of your marketing communications. Positioning defines and controls the overall identity of your product or service and involves the art of ensuring the unique benefits of your offering are effectively communicated and matched with the prospective customer’s needs and desires.

Time and thought should be devoted to crafting an optimized marketing positioning statement.

• What position do you want to occupy in the customer’s mind?
• What are the truly unique product attributes and benefits of your offering?
• Are these benefits already considered relevant and perceived as valuable by the potential customer?
• What else is perceived by the customer as a similar, better or worse offering?
• Why?

Market Messaging

Good market messaging clearly communicates the key ideas of the positioning statement to the customer in a straightforward, consistent manner that leads them to action.  Great market messaging makes it a memorable experience.

Is Your Positioning an All Star or a Bench Sitter?

Positioning and messaging are topics that many small businesses consider too difficult to tackle and/or are simply stuff that corporate marketing teams, agencies and consultants like to discuss to make them sound important. While the latter part of the statement may be partially true, any business can and should seek to have an All Star positioning statement and marketing messaging.

Customers have a perception of your offering with or without your input. Isn’t it time to run some offense, control the message and ensure clear communication occurs at all points of customer contact?

Please contact us with your marketing service, website design,

social media marketing, search engine optimization
and new product consulting needs.

Next-> Opportunities: Awareness Activities

- Generally attributed to either Albert Einstein or Ben Franklin

Remember back in the good old days when small business marketing was simple? Get a sign printed for the door, place a yellow page ad, maybe mail something a few times a year and then go to the annual trade show. Ahhh…. I can almost hear the click of the Selectric Typewriter as a secretary types up the new changes the year on the marketing plan.

Wow. What happened?

Oh yeah, that.

So, the question is this: How closely does your 2009 marketing plan resemble your 2000 marketing plan? 2005? 1995?

Two things close to the top of many businesses’ “I don’t want to think about it” list are marketing and change. But, if your marketing plan isn’t changing at the same pace the world is, you probably aren’t maximizing your marketing ROI.

Marketing is simply communicating to people why they need your product or service. To effectively communicate, you have to reach people where they are, in a manner that interests them. If your marketing tactics don’t change at the same pace that your market or audience is changing, then you’re left behind. To start, challenge every thing that you have done in the past. If the best answer for not trying something else is:

“We’ve always done it that way.”

“That’s what our competitors do.”

“Well, that ad is already done, so let’s just use that one.”

then, it’s time to question how your marketing budget and marketing plan can be re-vamped to more effectively deliver a better return on your investment.

Next-> Positioning and Messaging

Targeted Marketing

Target marketing is a term used to define a company’s approach towards focusing marketing and sales efforts toward specific market segments.  Examples range from broad:  business to business (B2B) or business to consumer (B2C) to very specific, such as small businesses within a 4 digit SIC in a specific geography.

The more targeted the marketing, the more likely the company can efficiently use their marketing resources. Additionally, a targeted approach provides the ability to:

♦ Demonstrate Specific Expertise.  A focused approach within a specific market allows for a depth of knowledge to be obtained that can be utilized to better communicate with prospects and customers.   Simply put, people prefer to purchase from a company familiar with their industry and needs.

♦ Emphasize Unique Benefits.  Within a specific market, unique benefits inherent in the offering can be emphasized to “customize” the offering and personalize it to the purchaser.

♦ Focus Marketing Spend.  Spend your valuable time and money marketing to the most likely market segments to purchase your product.

♦ Utilize Awareness Marketing Activities. Trade publications, speaking engagements and white papers can be highly effective tools in building brand recognition and credibility within the segment.    Influencers and advocates providing a recommendation or endorsement can help extend a program’s popularity within a specific market or industry segment.

♦ Increase Referrals.  Buyers are more likely to recommend a business when they recognize that “you know what you’re talking about.” Nothing promotes word-of-mouth faster than being an established expert in a vertical marketing field.

Finding Your Target Market(s)

As we addressed in our last post in this series, businesses should invest time in analyzing their existing customer base to uncover buyer behavior and characteristics.

Next, decide on your target market segments, such as:

Vertical markets:  Industry marketing is one of the best methods to segment your market, as it provides a tremendous opportunity to reap the rewards identified above.  Decide on the segments, identify their SIC or NAICS codes and then create an industry information repository for reference.  FURL is an excellent online tool to collect and archive information by industry.

Small and medium-sized businesses (SMBs):  Many companies spend vast resources to hook the big fish when they might have found it far more profitable and attainable to catch a lot of small to medium-sized fish.  If your product or service is a fit for the SMB market, consider customizing your offering for this large segment of the market.

Specialty market segments:  Many companies overlook potential market segments that may occur based on a special need or creative use of a product.  For example, while most flat screen TVs are purchased for people wanting to watch television, graphic designers, web designers and stock traders frequently use large, flat screens as monitors, creating a non-standard, specialty market for the product.

Market Segmentation Resources

One of the best, and free, resources to obtain market segment information is the US Census Bureau.  The Economic Census profiles American businesses every 5 years, from the national to the local level and provides a vast amount of data ranging from industry to geographic to business owner surveys.

Next-> Competitors, Learn from Them

Well, I guess someone had a bit of a marketing database glitch.

Know Your Customers

Nearly every business continually tries to find more customers.   It’s the foundation of growth.    One of the best places to begin looking for more customers is your existing customer base.   Logic has it that if someone has already found your product to solve their wants or needs, then other similar customers may want your product as well.

Start By Learning Everything About Your Existing Customers

Every business, regardless of size, needs a customer database, the more detailed the better.    Information should include:

♦ Customer contact information

♦ Buying history, preferences

♦ Demographic information

♦ Psychographic information

♦ Geographic information

Enriching Your Database

Don’t have all the information on your customers?  Add it after the fact. How?   Ask them.   Survey them.  Research them.   Find out why they purchased initially and what they like best about your product or service.   Discover where they find information to make their buying decisions. Identify SIC codes from the OSHA database and NAICS codes from the NAICS Association. Find additional information on small and mid-sized businesses at Manta.

Using Your Customer Database to Find New Customers

Analyze your existing customers to determine common characteristics.   Craft your marketing message with positioning targeting the features most desired by your existing customers.  Purchase mailing lists with similar geographic, SIC codes and the correct demographic information .  Create a marketing message that addresses customers’ concerns throughout the buying process  - whether in email campaigns, advertisements, landing pages, forms or at the time of purchase – ensure well-timed content is available at each stage, based on knowledge gained from your existing customers.

Next-> Target Markets and Segmentation