The equation for business is simple: (volume x price) – cost = profit. Your goal as a business owner is to increase profit. To increase profit you have three options: reduce costs, increase price or increase volume. Effective marketing is about driving up volume or increasing price.
- Driving up volume comes from finding and selling to new customers or selling more frequently to existing customers.
- Driving up price comes from increasing the perceived value of a product. Customers tend to attach more value to a recognisable brand, where the product or service is conveniently accessible or where they experience high levels of customer service.
The following 15 marketing tactics provide you with ideas that should enable you to either increase volumes or drive up prices without incurring exorbitant costs. You will never be able to implement all 15 ideas, so pick one to start, implement it and monitor the progress…
1. Create alliance partnerships and ride on the shoulders of giants
Sipahh straws are innovative drinking straws that give milk flavour when it passes through the straw. The product was launched in South Africa by Strawtech, a small start-up company with virtually no capital. Strawtech created unprecedented media attention with the launch of its new product by securing a partnership with McDonalds.
Andrew Robinson, the young CEO of Strawtech gave McDonalds the exclusivity of the innovative new product for one month in return for positioning of the Sippah straw on a McDonalds TV and print advertising campaign.
After just one month, the product was known by many of the young target audience and when the straws were ultimately sold in stores, children were already keen to try them out. A number of South African entrepreneurs have created huge awareness for business and themselves by becoming the stars of advertising campaigns for larger corporations.
Nkhensani Manganyi of Stoned Cherrie featured on massive Nokia billboards and the owners of a Joburg City BMW dealership featured in an FNB print, radio and TV advertising campaign. This exposure cost them nothing but was worth a fortune.
Tactic: Identify and partner with a non-competitive company that targets the same customers you do. Do a combined marketing or advertising campaign that benefits both parties.
2. Engineer free publicity by pulling a crazy stunt
In October 2005, Vespa blanketed Johannesburg and Cape Town motorists with pink parking fines. More than 100 000 unsuspecting ‘offenders’ received parking fines for driving difficult-to-park, gas guzzling motor vehicles, instead of stylish Vespa Scooters.
On closer inspection of the traffic fine, most ‘offenders’ were relieved to find out that the fine was actually an invitation to experience the freedom of a Vespa Scooter for themselves. But some offenders raced off to their nearest police station to protest the fine, not realising that it was a marketing campaign.
Many newspapers, radio stations and magazines caught wind of this gutsy, cheeky but cheap marketing campaign and discussed it on talk shows and in news bulletins, resulting in media coverage worth hundreds of thousands of rands.
What can you do to create a stir that will garner the attention of the media, without destroying your brand or getting you locked away for illegal activity?
Tactic: Do something extravagant, cheeky or courageous to get radio show hosts and journalists talking about your efforts.
3. Speak Out
In 2003 Ciko Thomas and Litha Nkombisa left their cushy corporate jobs to acquire a BMW dealership in the Joburg City Center. Joburg City Auto was making losses when they acquired it yet over the past four years they have been highly effective in turning the business around by substantially growing the customer base.
They have had some good fortune and made some very clever moves to ensure that they acquired and retained customers. Their good fortune came in the form of FNB print, radio and TV adverts featuring “Litha the family man and Litha the business man” as a customer of FNB. One of their clever moves has been to speak about the business at every opportunity.
Ciko speaks at business schools, on the radio and at conferences about the challenge of acquiring and turning around a business. As a black entrepreneur, his story has wide appeal and he tells it with passion and energy. This feeds on itself because the more people hear him speak, the more they want to visit the dealership and buy cars.
Entrepreneurs can effectively market their business by telling its story in public forums. People love hearing entrepreneurial stories and if you are able to tell the story well, you will get lots of free publicity.
Tactic: Craft the story that outlines the development and growth of your business. Include humour, anecdotes and key lessons learned. Let other people such as conference organisers, lecturers and event managers know that you are happy to share the story with others.
Improve Your Offering
4. Be The Best
Nougat used to be just nougat before Sally Williams came along. Now you get nougat and Sally Williams nougat. At the core of the brand that has put South African nougat on the map is a product that evolved from a three year quest for the perfect recipe.
The result is nougat that is considered to be amongst the finest in the world and is in huge demand across Southern Africa. Making a great product or offering a valuable service is at the heart of being successful. Many businesses set out to create a world class product or offer top class service but over time get distracted and lazy and end up offering something that is just ok.
If you are operating on a level of mediocrity, no matter how good your advertising, PR or viral marketing people will eventually stop buying. If you constantly innovate to offer a product or service that is the best of the best, you will be amazed at how easy advertising, PR and all other forms of marketing become. What would it take for you to elevate your product or service to be considered the best in the world.
Tactic: Focus on improving the quality of your product and service until it is not only the best in South Africa but the best in the world.
5. Deliver Quick Turnarounds
“I want it now” is a standard customer motto in the modern culture of instant gratification. Delivering faster can be the simple marketing strategy on which to build your business. iBurst, a wireless internet provider, has achieved good growth by offering wireless internet in 48 hours.
Who would even think of choosing Telkom broadband with a three month waiting list? Scooters pizza has achieved similar success by offering pizza delivery in 39 minutes, or it’s free. Scooters have made taste secondary to the speed of delivery.
In the last six years in an already saturated pizza market they have managed to open over 100 franchises. If you could offer your service or product with faster delivery or in a more convenient location what would that do for your business?
Tactic: Create the fastest delivery time in your industry then commit to delivering quicker than competitors in your marketing material.
“You can have any colour as long as it is black”, was Henry Ford’s answer to a request for the model T to be sold in different colours. This was probably one of the greatest marketing blunders of all time. It cost Ford its position as the number one car manufacturer in the world, forever.
General Motors (GM) trounced Ford by offering a selection of cars for different segments of the market with customisation in colour and design, thereby building a car to meet customers’ needs. This strategy from the beginning of the last century is being redeployed with great success in the new millennium.
Levi jeans launched a made-to-measure programme with great success in 1995. Because every single body is unique in size, proportion and dimension, Levi’s began creating a pair of jeans for specific measurements. All a customer does is visit a designated Levi’s store to be measured by a professional after which they receive a custom-made pair of jeans.
Michael Dell became the youngest CEO of a Fortune 500 company by being the first to sell a customisable computer. How could you customise your product to increasingly meet your customers’ needs?
Tactic: Customise your product; make each product so unique that it fits each customer’s needs perfectly.
7. Offer Focused Choice
When I am travelling abroad, I find it intriguing to sit near the counter in Starbucks and hear the combinations of coffee drinks that are ordered: “Tall skinny vanilla latte with soy milk”, “Short, iced, decaf coffee with whipped cream”. Starbucks has turned coffee shops into a global phenomenon and it has done so partly by offering people a very wide choice in a very small area.
Starbucks’ primary focus is coffee, but it offers hundreds of different variations of coffee, which makes its stores a coffee destination. Few people can argue with the success of Starbucks. Local franchises such as The Fudge Factory with 25 flavors of fudge and Mozart Ice Cream Classics with 38 flavours of ice cream, have succeeded by offering a wide selection as a unique value proposition. You can do the same by focusing your business on offering the largest selection in your industry.
Tactic: Focus on a smaller number of products with a much bigger selection.
8. Bundle Products
Fruit and Veg City has been one of the true entrepreneurial success stories in South Africa in the past 10 years. They get customers to purchase more by bundling products with offers such as: 3 apples for R3,99. These bundles usually offer minor discounts over single purchases but they drive volumes right up as bundled products usually create the impression of value and customers love feeling like they are getting good value.
Tour companies such as African Encounters and Thompson Tours have made the travel buying process far simpler for customers by bundling flights, hotels and transfers into a single purchase from a single vendor.
This streamlines the process for the buyer and the seller. McDonalds bundles products in the form of McMeals. Instead of purchasing just a burger, McDonalds makes it convenient to purchase chips, a burger and a drink. How could you structure your product packages to serve customers better?
Tactic: Could you bundle your product in larger quantities that might be suitable for customers to purchase more. Could you bundle your product with other logical extensions of the product.
Make More Connections
9. Turn Customers Into Agents
Since the inception of Weigh-Less 32 years ago, the brand has continued to grow. An innovative business model beats the competition because it has created a support network around the products and services. Caring group leaders, all of whom are previous Weigh-Less customers, chair weekly meetings providing support for people who are trying to lose weight.
The company’s happy, successful customers are turned into agents to reach into communities and friendship groups, selling the service and helping people lose weight. Honey jewellery, Tupperware and Avon have all grown into substantial businesses by increasing volumes of sales via disbursed networks of self-employed agents, most of whom were customers before becoming agents.
Tactic: Recruit satisfied customers as sales agents, expanding your sales force into new areas and new networks.
10. Get Customers Talking
Word of mouth is the most powerful form of advertising, as illustrated in the Defending the Caveman example. Yet most businesses do not have a formal systemised referral system. Facebook the incredibly popular social networking website has achieved explosive growth by making referrals its core marketing strategy.
Invite friends and be able to look for your friends amongst other friends. In three years, the site has attracted over 10 million registered users and the 22 year old founder of Facebook, Mark Zuckerberg, was offered $1 billion for the company by Yahoo due to the massive user base built up through referrals.
He turned the offer down as he felt the company was undervalued at $1 billion. Referrals and word of mouth advertising has always been and probably always will be the most powerful tool for acquiring new customers.
Tactic: Create a referral system for your business. Start by encouraging customers to tell their friends. Streamline the process for your customers to refer your goods or service, by adding a function on your website where people can recommend or pass along a recommendation or a free gift to their friends.
11. Offer Giveaways
Planet Fitness offers a two week free training voucher for anyone interested in joining. It is obviously easier to sell something that is free of charge than to sell something that costs money. But it is also easier to sell something that costs money once you have people engaged with the product and using it.
Giving something away is a great way to generate prospects, just make sure you know who you are giving the gift to and that you can follow up with a sales call when the time is right. Why do you think so many software companies and web services allow a 30 day free trial?
Free trials are their most important lead for new sales. Just as BMW gives away free test drives to attract potential customers, offer something free to get traffic flowing to your business and convert the traffic to sales.
Tactic: Give something away that costs you little or no money. Ideally, make it information based. Make the gift appropriate for your customers to ensure that you are attracting high quality prospects.
12. Create A Community
Cyclelab in Fourways, Johannesburg, is way more than a bicycle shop. Andrew McLean, professional cyclist and the founder of Cyclelab has played an integral role in developing the sport of cycling in South Africa and fostering a community of cyclists in Northern Johannesburg.
Cyclelab offers spinning classes, a cycling club, regular rides, weekends away, newsletters, and a coffee shop. All of this increases the number of people who take an interest in cycling in the area and drives up sales in the retail store.
Creating a community around an activity associated with a business enables the business to continually reach potential and existing customers and creates an intimacy that enables the business to push up prices without chasing customers away.
Land Rover creates communities of 4×4 drivers, scrap book shops create communities of scrap book fanatics in their area and Harley Davidson creates communities of middle aged men and women pretending to be tough motorcyclists all over the world.
Tactic: Consider creating a club or organisation linked to the product or service that you sell in your business. Use this as a means to grow interest in the product or service and develop strong relationships with customers.
13. Train Customers
Analysts predicted failure when Apple decided to enter the retail market a few years back.. Today Apple retail stores have the highest sales per square foot of any store in the US. Part of their success has been to empower customers to be effective in using their products.
If you walk past the Apple store in Sandton Square on a Saturday morning you will see a group of Apple users sitting being coached on the use of Apple products and software by one of the in-store experts. These free training sessions get users into the store, empower new users to make the transition from PC to Mac and generally drive up sales.
This strategy has been employed effectively by Apple stores across the world. Could you offer training sessions to customers to coach or empower them to be more effective in using your product or service? If you could, would this give you the opportunity to connect with them more regularly and get them to form a deeper relationship with the company.
Tactic: Offer training to customers to empower them to be more effective in using your product or service.
14. Store & Use Information
The Gordon Institute of Business Science (GIBS) was started just six years ago. The incredible growth of the institution can be attributed directly to the business school’s database. GIBS cleverly began running forum events featuring interesting business speakers early on in the lifecycle of the school.
These events attracted a broad range of people onto campus and GIBS captured the personal and business details of all these people and stored them in a database. This database has evolved and grown over time as more and more people have attended workshops, programmes and forums.
Now, when GIBS markets a programme, the database is mined for people who will have a direct interest and need for the programme in question. A database can be a source of competitive advantage for any company, large or small. Try to capture as many details as possible from as many customers as possible and store this information in an accessible database – the information will become incredibly useful sooner than you think.
Tactic: Create a system which records every customer’s details. If you are going to market to this list make sure you obtain the customer’s permission first.
15. Reward Great Customers
Exclusive Books is South Africa’s leading book retailer. One element of its marketing strategy is the Fanatics loyalty programme. All goods purchased qualify for points, each quarter members are awarded with Fanatics Rewards Vouchers which can be used to purchase more books.
This strategy keeps customers coming back to the stores again and again and rewards them for spending. Kauai Food and Juice offers a similar programme.
Purchase 12 smoothies and get one free. Ster-Kinekor has managed to dominate the South African cinema scene largely due to its movie club programme with low price movies and a free movie every so often for regular customers. What programme could you design to ensure that customers keep coming back again and again?
Tactic: Design a loyalty programme that rewards customers for purchasing from your company and provides an incentive to get them to come back.