Tell Me about It

(Crain's) - By Cynthia Hanson

CAUSE OF DEATH: LACK OF CIRCULATION

Marketing a new product or service is one of the hardest parts of running a small business. Just ask any entrepreneur who's blown a ton of money on an advertising campaign that flopped. But you won't, if you read on.

PROBLEM #1: You confuse marketing with sales.

Many new entrepreneurs wrongly expect their print advertising, radio commercials or direct-mail campaigns to translate into immediate sales. But marketing and sales are related, not identical.

SOLUTION: Have patience. And be aware that marketing is an investment.

Mike Tait, president of SMT Golf Inc., spent two years buying ads in golf magazines only to get frustrated when they didn't deliver the new customers he expected. "I thought that a $5,000 advertisement should generate more than $5,000 in business," says Mr. Tait, 44, whose Oswego company designs and imports golf club parts.

So what did he do? He hired a marketing firm.

"That's how I learned that building a brand and keeping my company's name in front of the customer is worth more than the cost of the ad," he says.

Research shows that it takes three to six exposures to an ad before a customer makes a purchase. So your marketing should be consistent to build up buzz and name recognition, which in time will bring in the new business you're seeking.

PROBLEM #2: You don't have a consistent message — or you use only one method.

Lack of cohesion among your public relations, advertising and direct-mail campaigns confuses customers, which hurts sales and sets up your business for failure. And by using just one medium, you lose out on reaching certain customers.

SOLUTION: Hire an expert and diversify early.

You don't need to spend megabucks on a multinational public relations firm, but be sure to choose one that has both key media contacts and a track record in your industry.

Andre Williams, 36, regrets not doing that when he hired a local PR firm to promote Kaze, a Japanese restaurant he opened in Roscoe Village two years ago. "The account executives weren't experts in restaurant marketing, so they weren't getting our message into the right hands in the Chicago food media," he says.

After Kaze's first year, Mr. Williams severed ties with that firm and hired another one that has been more effective. He also regrets relying exclusively on the first PR firm to get the word out.

"We should have had a multifaceted marketing program, with print advertising, Web-based advertising and direct mail," he says. "We're initiating those things now."

PROBLEM #3: You don't market to existing customers.

Sure you're busy pursuing new clients, but you can't assume your current ones will keep buying.

SOLUTION: Shift your focus — and your money.

If you don't stay in touch with existing customers, you risk losing them. That's what happened to Marky Bielat six months ago, when she opened her high-end shoe store in Lakeview.

Prior to opening Marky Exclusive European Shoe Boutique, she sold women's footwear (ranging from $300 to $1,400 a pair) at home parties on the North Shore. Once she opened her store, she spent her entire marketing budget on print advertising and didn't stay in touch with her suburban clientele. The result? She landed new city clients, but lost longtime customers.

"If I had it to do over, I would have mailed them a letter once a month, offering special promotions, private consultations and private parties at my new store," says Ms. Bielat, 32, who is now targeting them with a direct-mail campaign and trunk show later this summer.

For more help: Join a peer group and pick up a copy of "Guerrilla Marketing: Secrets for Making Big Profits from Your Small Business," by Jay Conrad Levinson.

©2006 by Crain Communications Inc.