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Today’s topic: Let’s talk about the promotions mix: Advertising.

Every entrepreneur has to find effective ways to promote their business. What exactly is promotion? A promotion is an activity that communicate the merits of the product and persuade target consumers to buy it.  Defining a promotion is simple enough, but spending your hard earned budget to promote your business isn’t so easy.  You have to feel confident that you’re making the best decisions.  

There are several types of promotions that you can focus your advertising efforts and budget on. Let’s take a look at each one of them.

Advertising. The most obvious member of the promotions mix is standard advertising.  You can advertise your business itself; selling or promoting your corporate image. This is sometimes called advocacy advertising.  This type of advertising is good for getting your name out there and getting consumers used to thinking of your company in a certain way.  Maybe you have a business that sells products to moms, and you want people to perceive your business as one that cares about education, or healthy lifestyles. This is called branding.   The advantage of branding is that potential customers gain product awareness and knowledge about your company, advertising is usually repetitious, and you usually achieve a wide geographic reach. If you have a tighter budget, you may choose to advertise a certain product, or category of products.  This type of advertising is sometimes called product positioning.  A common theme of this kind of advertising is direct competitor comparison.  In your ad, you tell why you are better then one or more of your competitors.    Some distribution channels for advertising are: radio, newspaper and internet.  Advertising on the internet is a completely different genre of advertising that we will take a closer look at in the coming weeks.

The disadvantage of advertising is that there’s a high absolute (immediate and out of pocket) cost, it can seem impersonal and standardized, and it can be ignored by consumers who feel they are being inundated with advertising clutter. This is especially true in internet advertising where the saturation level of advertising has definitely reached its peak.  Note: banner advertising has dropped to nearly 10% of the internet, where it used to be a major revenue generating channel.

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Today’s topic: Let’s talk about the promotions mix: Personal Selling

Personal selling, or face-to-face selling is particularly important in business-to-business marketing.  You, as the salesperson give an oral presentation to a client, customizing your presentation to their business needs.

The advantage of personal selling is that you have a chance to directly address customer objections and close the sale more quickly. The disadvantage is that it is very costly to do a face to face presentation. This is where your opportunity costs are accumulated: the time you spend preparing and delivering your personal sales call is time you could have spent doing other things.   Time is money, after all.

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by: Cecile C. Weich, Counselor at Law
I write this article for all frustrated executives, born-again housewives and all women who want to start their own business.
DO YOUR HOMEWORK! RESEARCH YOUR MARKET! AND MOST IMPORTANT: HIRE A LAWYER!

The lawyer will advise you in the intricacies of being an entrepreneur, should you be a corporation or an incorporated business entity. Remember, you will pay taxes on both business forms, but one may be less expensive than the other and more beneficial to your type of business. If you are doing business with a corporation, you may want to be a corporation for appearance sake. Your attorney must work with your accountant (the next person to hire along with your attorney), to determine whether your business should be a corporation.

Your personal assets may be involved at this juncture. Remember, whether or not you are a corporation, no bank will lend you money without collateral and the only collateral you, as a new entrepreneur will have, is your personal collateral, ie: your home, your car, your stocks and bonds. Although technically corporations are formed to avoid personal liability, a new entrepreneur will probably have to put up her own personal assets to secure the initial funding for her business.

After you have researched the market for your business, found a good location, you will be called upon to sign a lease to sign a lease for this location. Again, you must consult with your attorney for the best possible terms to enter into a proper lease with your landlord. Remember, a good lease can make or break your business.

Perhaps you have the kind of business that does not initially require outside space and you want to start up your business in your own home. A service business is uniquely suited for home offices. However, you must consult your accountant so that you take proper tax advantages of this business arrangement.

You must not neglect to speak to an insurance person so that you are properly and adequately covered for business and professional liabilities.

If you want to hire staff, you must consult with all of the professionals, especially your attorney, to determine whether this staff will be “on the books” or independent contractors. You must also consult with your attorney to understand the ramifications of the laws pertaining to sex and age discrimination as it relates to your “shop”.

What about your business equipment? Should you buy it new or used, or should you rent it? Again, you must speak to your attorney and your accountant to find out the best possible tax ramifications for handling office equipment.

Are you confused? Don’t be. If you are really determined to start your own business; if you have that “entrepreneurial spirit”, you are going to make it.

Cecile C. Weich is a Prominent Attorney and Lecturer and one of America’s leading authorities on Women’s Legal Rights. She has been featured and quoted in major publications including The Wall Street Journal, New York Newsday and The National Law Journal, and she has been a guest on many radio and television shows including Court TV, Phil Donahue, The Today Show, MSNBC, CNBC, McGlaughlin Report, Oprah Winfrey, and Larry King Live. Ms. Weich is also co-founder of the New York Association of Women Business Owners and was the New York state representative to the National Women’s Political Caucus, she has been married since 1958 and has two grown sons.

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Today’s topic: Let’s talk about the promotions mix: Sales Promotions.

Sales promotions: give something away or have a very good, low sales price on your product.

The advantage of this kind of advertising is that you attract attention and can achieve a quick response, but the disadvantage is that you can destroy your brand equity and disturb positioning (too many companies in any industry doing sales promotions encourages brand Disloyalty and brand switching. Think cell phones. ) So, sales promotions are really only a short term solutions to help drive quick revenues. Remember, you can’t claim your product is superior when incentives are always offered or the perception by consumers will be that your product must not be very good if it’s always being given away for free.

Incentive to encourage sale or trial

Contests, 2 for 1 deals, price specials, premiums, etc.

This is a short term strategy that encourages consumers to Buy Now!

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Business owners swear by the “good old boy” network.  That is, your best resource for business is a well-connected network.  It’s important to discern between social and business networking.  The two, while not necessarily mutually exclusive, are rarely the same, especially for younger business owners who are still socially bound to roommates, teammates and family members.   The folks in these networks are social connections and, unless you attended an Ivy League university with well-connected people, are rarely avenues to serious money.  Well-meaning friends can be the source of terrible business meetings and time-wasting, non-clients who can at best provide you with barter or small income opportunities.   (NOTE: Don’t underestimate the value of a good trade: I’ve traded services to have my house cleaned, my hair done and my house painted by some of the best in the business.)

What you are trying to find, every day, are business associates who may or may not become friends. Business associates are people in a decision-making position, have a budget and are serious about doing business. Social connections are people that are described as, “a real sweetheart” or “a good guy”.  Terms of endearment may be flags that people are social connections and not serious business prospects. It’s good to learn the difference so you can decide if you want to help someone out of the goodness of your heart. I assume that any time a friend has a friend who wants help that I wont be making any money. I’ll be doing a favor for a friend and having coffee with someone who might know or become someone with a real project.  

At the onset of any meeting, you should ask about budget.  Sit down with your coffee, smile broadly, and ask, “Do you have a budget for this project?”   It’s not rude to get down to business in a business meeting.  It’s a disaster to spend time and share ideas with someone and then be told that there’s little or no budget. 

It certainly isn’t a waste of time to meet new people, no matter what their circumstance, but remember the golden rule: to succeed in business you need to make sure that you are managing your time well and are always doing the most important thing you need to be doing.

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