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Business strategy and advice from the team at Straight Talk Group… you’re in the right place to get things Straight.


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Are You Burning Money On Random Marketing Activity?

The Other Half Of The Marketing Equation

A necessary evil, as far as most businesses are concerned; testing and measuring your results is actually the single most effective way to consistently increase sales. In fact, the most successful direct marketers are the ones that relentlessly test absolutely everything to do with the marketing of their business – and then evolve their strategy in line with the results.

How to get started:

1. Only test one thing at a time

Some people make the mistake of trying to test too many things at once; for instance doing a promotion, finding that it is unsuccessful, and then coming up with a totally different promotion and comparing it to the original. The best case outcome in this scenario is that the business owner will find which type of ad works best for them – but they won’t know why. Was it the format, timing, headline, content, delivery, target group..? The mystery remains.

A better idea is to test just one element at a time, in order to really nail the winning formula for your business. For example, if you use letterbox drops, you might like to measure which months they are most effective in. To do this, you will need to distribute the same flyer multiple times throughout the year. If you change design, copy or offer elements of the flyer during the testing period you will be unable to distinguish the market’s reaction to these factors from the timing of your delivery, and therefore will be unable to capitalise on the knowledge of when your market is most receptive in the future.

2. Never Assume

The people you want to engage are the only ones who can tell you how they want to engage. Sure, there are stats and studies, but every group of people is unique, and if you really want to connect you need to remember that.

3. Just because you’re sick of your ad, it doesn’t mean your audience is!

A famous letter selling Wall Street Journal subscriptions ran unbeaten for 12 years and earned the Wall Street journal $1 billion in sales. You can probably think of a few ads you’ve seen over the years that have been recycled for years. It’s a fact that people need to see an ad at least 6 or 7 times before they’ll act on it.

4. Include measuring tools in your ads and marketing to make your life easier

Testing and measuring doesn’t have to be a headache – you can make it simple by doing things like asking callers to quote a promotional code – then you’ll know exactly what prompted their enquiry. Or if you want to find out which month your coupons are most successful in, without the hassle of designing a new one each month, you could have them printed in 12 different colours and distribute one each month. That way you’ll find out both which month had the biggest uptake and how long the offers are taking to be claimed – another valuable piece of data for your marketing formula.

5. Compare apples with apples (or you might get a lemon!)

If you’re going to run your ad in two separate publications, you’ll need to do it at the same time. If you were to run the two ads a month apart, and one significantly outperforms the other, it will appear that you’ve found a winner.. or have you? Timing plays a big part, and can really throw your results.

The same applies to mail-outs. If you’re going to test two versions of copy to a direct mail list, make sure you use a sample of the list that is alphabetically segmented or totally randomly segmented. Don’t split test the campaign by postcode – you’ll be segmenting your audience by demographics, and will receive skewed results.

The bottom-line : keep your testing simple, and take the time to do it right. Find your winning formula, and keep using it for as long as it passes your continued testing! And last but not least, make sure your testing is based on two comparable items. Happy Marketing!

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How You Can Increase The Value of EVERY Sale.

 

Even if I know nothing about your business, I can almost guarantee that you want to have

 a) customers coming in more frequently

b) each customer spend more of their money with you on each occasion.

So how do we prompt this shift in buying behavior? How do we have our customer feel compelled to purchase TODAY, and to spend more with us? Well, you may like to consider making them a “sweeter” deal.

But remember this: “sweet” for the customer does not have to equate to “giving away profits” for you!

Everyone loves a deal. Look at the huge market out there for “coupon” sites like Scoopon, Spreets, Living Social.. etc. The 2013 consumer likes to feel savvy; as though their dollar has earned them the most it possibly can. 

You might like to consider if any of the below could be applicable to your business

  • · a discount for buying within a time frame,
  • · free samples with/before purchase, free
  • · upgrades, access to a community/membership program with/before purchase,
  • · Applying a loss leader in your marketing
  • · Applying the ‘do you want fries with that’ principle
  • · or an extended warranty;

Regardless of the nature of your business there are many types of  incentives that will be attractive to your customers – I cannot stress enough how important knowing your customers and what makes them tick is.

The most commonly used offer we all see is the humble sale. Stocktake sales, boxing day sales, liquidation sales.. they are all the same deal for the business: selling off merchandise at a lower-than-intended price. They are advantageous if you need to shift old stock very quickly, but in all other situations my advice would be to consider a different type of offer first.

The biggest mistake I see is businesses discounting as a marketing strategy.  You need to think about all the numbers and your profitability before offering a discount (even if the customers aren’t).

Consider the advantage of offering a “bonus item” or “value-add” with each full price sale instead of discounting. For example, if you sell blenders, you might offer a free Smoothie Recipe booklet – which is likely to cost you much less than a discount would, but attracts your market just as much.

Know your market and concentrate on  perceived value.  

There is a great story about a business owner in an affluent retail strip leaving an   employee in charge and giving instructions just before they left to drop the price on some jewelry items by 50%.  On their return they came back to find all of the stock they had previously found difficult to shift totally sold out – but was shocked to realize that the employee had in fact increased the price by 50%.

Now I don’t know if this is a story about the value of employees (or the lack of listening skills of some employees) but what it does demonstrate is that as a business owner it is imperative to know your customer before applying an ad-hoc sales strategy.

If you can get this strategy to work for you, you’ll be regarded as a reputable, helpful business that looks after its customers – and you’ll be protecting yourself from losing money on sale items!

What should I make offers on?

That’s easy – items (or combinations of items) that your clients don’t already typically purchase. If you’ve got a new product that you want people to try, packaging it with an already successful item is a great way to build awareness and get some feedback. Or, if you sell an item that people usually only purchase one of, you could do a deal like “buy 2, get the third free!” In most industries this will still be a win, profit wise. 

Say you sell shoes. Many of your customers will only be looking to purchase one pair of shoes. Lets guess that you are selling these spiffy stems for $180, and they cost you $80 to buy. If you were to offer the “buy 2, get the third free” deal on these, the  transaction value of the sale would be $360, at a cost of $240 to you, so your profit is $120. Compare this to discounting one pair by 40 % – this would mean selling each pair of shoes for $108, which means the same 3 pairs which you could have sold for the $360 package deal would now be going out the door for $324 – and at a slower rate, too. 

While we are in the shoe shop and making the most of  your sale season with your 2 for 3 deal; you might be tempted to apply the principle to other items. But before you do, consider this important point.  The “deal idea” is only an opportunity in situations where the sale wouldn’t have been likely otherwise.

Business socks are a great example of this.  Customers often buy 5 of these at once, so there is little point in making it more attractive to do so; you might as well get your full profit margin on items like this.

In a nutshell – The Top 3 tips I give for increasing the value of each sale are:

1. Be super Be clear on why you are making an offer (Is your goal to move stock, attract new clients, compete with other businesses, introduce a new item or simply to have a reason to contact your database/market? The motivating factor should play a major part in what type of deal you’ll offer.)

2., Know your customer’s needs and desires

3. Know what you want that offer to achieve before you start thinking prices or deals!

Happy Selling!