A Good Product:
You can't succeed without a good product. If you are in business, you
should want to provide your customers with a quality product or service.
If you have a good product, there are four ways to position your business
for success:
Have a Niche Product: create something that nobody else has
or provide a service that no one else is providing. If people need
the product and your business is one of the few in the country that
provides it, you can almost be guaranteed a national market for your
goods or services. (Then the Web is the natural place to promote your
company.)
Have the Best Product in Your Industry: some people will always
be willing to pay a premium price for the best product. That is why
some people buy a Mercedes rather than a Chevy. If you have the best
product or highest quality service, you can charge more, but your
market is usually smaller and your clientele more select. If you have
the best, don't compete on price - compete on quality and perceived
value.
Have a Good Value: if you don't have a niche product or the best
product in the industry, you can still build up a large market for
your company by providing a good value for your customers. MacDonald's
doesn't make the best hamburger in the world, but it does make a good
hamburger at a low price, and the company is almost in every industrialized
country in the world.
Give a Value Added Service: a VAR is a corollary of the last
two. If you have a service you give to your clients that helps them
build a better business, the clients will be willing to pay more for
your product because of the relationship you build with them over
time. For example, if you sell diagnostic equipment to a car
dealership but you also offer training on the new equipment to the
dealer's employees, the dealer will be willing to pay you a bit more
for your product and will choose you as a supplier over someone who
just sells the product and gives no service. Your training clinics
are a valuable service that the dealer cannot get from another supplier.
You may actually save them money, because it would cost the dealer
more to send the employees out of state to get the training.
A Marketing Mentality
Be warned! A good product is not enough! Good companies with good products
fail every day. One of the most common reasons businesses fail is a
lack of advertising. If no one knows about your product, nobody
will buy it. It's as simple as that. Most marketing gurus will tell
you that your advertising budget should be between 15% and 20% of your
total budget. That percentage may be greater if you are just starting
a new company or introducing a major new product. Many small business
owners are afraid to spend money on advertising; hoping word of mouth
will make their business succeed. Such thinking is a fatal mistake for
many businesses.
If you
are afraid to spend money on advertising, you don't have what it takes
to succeed in business. Period. The web will not help you. Fear
is ruling your future and you don't have the confidence to take the
necessary risks to succeed. All businesses ventures require risk and
a certain amount of faith: faith in your product, faith in your ability,
faith in the future, perhaps even faith in the fairness of the marketplace.
Without that faith and a willingness to take a risk for the sake of
future profits, you lack an essential ingredient to make it in business.
You
need to see advertising as an investment not as a cost. When looking
at your potential returns and future sales, you must see advertising
as a way of increasing your product sales. If a billboard advertising
campaign will cost you $10,000 this year and you can only see how
much money you will be spending, you don't have a marketing mentality.
A true businessperson looks at the potential return on his or her
investment in advertising. For example, if your average product sale
to the customer is $10,000 and the product costs you $5,000, you need only
2 sales from your billboard campaign to break even on your advertising
expenses. Just 3 sales means you've made more money than you've spent.
If an average billboard campaign will bring you 10 sales, why are
you looking at the $10,000 it will cost you instead of the $40,000
you will earn? Perhaps you should be spending $100,000 on your billboard
campaign. Again, if you don't see advertising as a means of
generating revenues, then you lack what you need to succeed in business.
You
need to have a long-term vision for advertising. You need to understand
how advertising works. It takes 21 impressions on radio, television,
and combined media to cause your business, product, name and contact
information to be remembered by the consumer. If you spend $1000 on
15 prime radio spots, don't expect any sales. If you do get some,
you're unusual. Most likely, the customer won't even remember your
business name by next week. Repetition is the key to learning and
remembering. Repetition is the key to advertising. Many business owners
are disappointed when they don't see an immediate increase in business
with an advertising campaign. They expect the phone calls to start
pouring in. Such expectations are unrealistic. What actually happens
is this: the more frequently the consumer hears your name, the more
familiar you become and the more comfortable they become with you.
If, for example, you sell tires, the consumer may not need tires the
week they hear the ad. But after hearing your name regularly for a
month or two, when it comes time to buy new tires, your name is going
to pop into their head, and then they will give you a call. That is
an example of how advertising really works. So you can see that if
you don't have a long-term vision, you lack what you need to succeed
in business.
Money for Advertising
I'm sorry to say it, but even if you have a good product, and you
have a marketing mentality, but you lack sufficient capital to promote
your business, you lack an essential ingredient for business success.
Many businesses fail because they are undercapitalized. They start out
with a good business idea, but they lack the money to make it work.
They spend all their resources on plant, rent, equipment and raw materials,
but they have no budget for advertising, and so they have no way of
letting the public know about their product. Such businesses usually
fail within three years, or they crawl along just barely making ends
meet, if they survive at all. You can succeed if you only have the first
two ingredients, but having money for advertising sure makes everything
a lot easier. So, the question I have for you is this: "Have you
budgeted your business for success?"
Why the Web?
A web presence should be one of the essential items in your overall
business plan for advertising and for sales. Just as you need a sales
force, regional advertising in radio, television, and print media, the
Web should be one more avenue for advertising and generating business.
It is part of your strategy and part of your plan. In fact, studies
show that the Internet address is replacing the phone book as the place
that young adults turn to for business and consumer information. If
you aren't on the Web, it's like not being in the phone book. If you
aren't there, people can't find you. Internet commerce and web procurement
are the wave of the business future. You need to make plans for this
future, or you will be left behind.
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