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Marketing and advertising are the keys to business success. After all, every company needs new clients. In fact, for many businesses, advertising expenses are second only to payroll. And for extremely marketing-driven companies, such as mail order sales, advertising may be the number one expense. But unlike other business expenses, advertising and marketing costs traditionally increase at a much more drastic rate than inflation, which makes it difficult for smaller companies to remain competitive.
Therefore, acquiring new clients as easily, inexpensively, and effectively as possible is critical to the success of most small businesses. And the ads small businesses buy have to work. Buying advertising for a low cost is one thing, but making sure the advertising you’re using is highly effective is another. For example, you may get a great deal on advertising space in a particular publication, but if that ad doesn’t reach your target market, then you wasted your money. But that doesn’t mean you have to pay top dollar for effective ads.
You can use the following five strategies to cut your marketing costs without sacrificing the effectiveness of your efforts.
1. Seek and Gain Publicity
Media publicity is like free advertising, only better. It gives you more prestige than traditional advertising. Unlike a full-page ad that your company purchases for thousands or even millions of dollars, a full-page story written by a neutral third-party reporter builds your credibility and expertise. Publicity also makes you a celebrity, which is a powerful advertising advantage.
How can you get publicity? Faxing press releases to different media outlets is a very effective and inexpensive method of getting their attention. Find something controversial; something tied in with celebrities; or a timely, hot topic that relates to some aspect of your business that you can talk to the media about.
Once you have the publicity you can use it over and over again in your marketing efforts. Simply including a public relations article in your mailings can make a dramatic impact on your response rates. Any article you are in or television show you appear on can be reprinted, recorded, and reused in your marketing efforts to establish credibility.
2. Buy Print Advertising on the Cheap
Magazines and newspapers are like airlines. If you call an airline three hours before the plane takes off, you can probably get a ticket for a fraction of the regular cost. At that point, the airline just wants to fill their empty seats. It costs them the same amount of money to fly the plane whether those seats are filled or not, so they might as well fill them with paying customers. Newspapers and magazines are in the same predicament: if they haven’t sold all their ad space by the time they go to print, they’re likely to offer discounts. They have to print anyway, so they would love to sell those empty pages—even for as low as ten cents on the dollar. This is called random-page advertising.
These ad rates aren’t usually publicized; otherwise the publications would lose all their regular advertising revenue. Realize that although you can purchase the space for cheap, certain conditions exist. The ad has to run on the day when the publication has the extra space, rather than the day you choose. They can run the ad on whatever page they want, not the page you choose. Also, your ad has to be direct response, meaning it only provides a toll-free phone number, not your business address. Some ad agencies specialize in purchasing this type of ad space and can help you secure these low rates.
3. Buy Television Advertising on the Cheap
Television stations will also sell direct response advertising time on an availability basis. As an advertiser, you can send the station a schedule or a proposal of advertising for the month, and you can buy time at reduced rates as long as your ad is direct response. However, if the station gets another advertiser who is willing to pay the full rate, they will preempt your spot. So in a given month, they’ll run anywhere from fifty to seventy-five percent of the spots you’ve ordered.
Going in to this situation, you know that whatever spots you get will be at the direct response rate, which could be as much as fifty percent lower than the conventional rates. Remember, you aren’t buying ad spots during a specific time or a specific show. These ads usually run late at night, because large image conscious corporations usually buy these prime spots. Big companies often feel late night ads depreciate their image, but smaller companies that need to get the maximum value out of each advertising dollar can go on at any time.
You can approach media outlets and negotiate over these opportunities, but on your own, you probably won’t know if you’re getting the cheapest rates available. Therefore, you may be better off going through a savvy media buyer who knows the exact availability and costs for these opportunities.
4. Find a Mentor
Every industry has a marketing guru who’s already paid his or her dues and learned how to market effectively. These gurus often package marketing materials, ideas, and strategies you can purchase and apply to your own company.
Finding one of these gurus or another mentor who has been in your situation can cut your learning curve dramatically. Your mentor could be a public relations firm or an ad agency, or you can purchase pre-packaged marketing materials that already have a proven track record within your industry.
5. Establish an Effective Referral-Generation Program
Referrals are very important because when a potential client hears about your company from a friend or other trusted source, they automatically feel more comfortable with your products or services. But before you can get referrals, you need to earn the right to be talked about. In other words, you have to treat your clients well enough that they would want to refer their friends and acquaintances to you.
Next you have to ask for referrals. This is simple, but often overlooked. You won’t get referrals without asking your current clients. And when you ask for them, you’re likely to get them.
Finally, you need to reward the person who gave you the referral with a small gift or discount on additional services. Behavior that is rewarded is often repeated. So if a client sends a referral to you and is rewarded for it, they’ll likely do it again. And those clients who are referred to you in the first place are more likely to refer other people. In a sense, they are trained that way. A solid referral system can be a powerful marketing entity for your company. In fact, many companies operate solely on a referral basis.
Better Marketing for Less
Business is all about profitability, and a business that can’t afford conventional advertising needs to know how to advertise and market their products and services on a shoestring. To cut your marketing budget, use publicity to build your expertise and build a buzz around your business. Look into opportunities to purchase print and broadcast ad space at reduced, direct response rates. Seek a mentor in your industry who knows how to market effectively and inexpensively. Then develop a solid referral system to bring new people in the door. These strategies give everyone, starting from the smallest business owner to a large company, an opportunity to improve their bottom line and be successful.