Notes from Jeff York

Small business marketing thoughts from a marketing small business owner

Posts Tagged ‘money

Moving the needle

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mathteacherAnybody here love math when they were in school?

How about you marketing types? How much do you love math?

I know someone that loves math. Your boss. If you’re charged with marketing tasks, you had better know this is more than just being creative and clever. Your CEO (and your CFO) wants to know what have you done for the bottom line? Did the latest marketing campaign generate more sales? Did the most recent branding effort generate more recognition? If you spent money, you better have made money. Did you move the needle?

When I was Creative Services Director for a couple of television stations, my actions and initatives were constantly questioned (by myself and others) if they satisfied at least one of the three ‘R’s: ratings, recognition, and revenue. If my activity wasn’t geared toward moving the needle in one of those areas, then it wasn’t worth doing. And let’s face it, focusing on ratings and/or recognition is simply an indirect way to build revenue.

If you’re not being held directly accountable for your metrics, then your company is being done a disservice. If that’s the case, you would be wise to start building your own tracking systems. Or else, how are you going to know if new efforts are moving your company in a postive direction?

Does it have value?

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smartcarChristmas is right around the corner and the economy is still struggling. For all the reasons that we’re all now well aware of, banks and certain manufacturing sectors are on the brink of collapse. With continual bad news bombarding us throughout the 24/7 news cycle, you would think that everyone has cut up their credit cards and stashed all their money into their mattresses.

Yet, dig through doom and gloom stories and read the fine print. People are still spending money. What’s changed is the amount and the rational behind each purchase. What’s the driving force?

Value.

People aren’t spending money on new cars. People are spending money to keep their current cars on the road. People aren’t spending money on new houses. People are spending money on fixing up their current home and making it their castle. People aren’t spending money on vacations. People are spending money on high definition TVs and surround sound systems.

Why? People see value in these types of purchases. Keeping your current car on the road is cheaper in the long run than simply buying a new car when facing a big repair bill. Fixing up your home today makes your home more livable today and more valuable tomorrow. Vacations are nights out on the town are great, but night’s in with a nice TV and a sound system that rivals the theater is cheaper in the long run (really, how much is microwave popcorn?).

But you’re a business owner. How do you take advantage of this shift in thinking?

Simple. How do you project value of your goods and services to the customer? If you’re thinking about packing in your marketing efforts because of the economy causes you to believe that you can’t make money, then you’re examining your marketing efforts from the wrong angle. Talking about how your goods/services are cheaper doesn’t mean value. Today’s consumer is happy to spend more today for something that will perfectly suit their needs and last a long time.

Here’s an example. When gas broke the $4/gallon mark, you might have thought that owning a Smart Car dealership would be like printing money. Here’s a street legal car that drove forever between fill-ups. Once the initial wow-factor wore off, people took a good look at the car. It is an impractical two-seater with just enough room for the driver and his lunch. Consequently, it’s been months since I’ve seen one on the road. No value.

Focus on the value you offer your customers. Play up what’s in it for them. And keep marketing. The pie is smaller. If you want the same amount of income, you have a take a bigger slice of the smaller pie. That means taking from your competition. How do you do that? Smart Marketing.

How much are you worth?

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This weekend, I spent some time painting and staining my front porch before the Northeast Winter starts to roll in.  As I was standing on the ladder dabbing the wood with my paint brush, my mind started to wander to all the things I could be doing with my time that are billable.  For the entire 4 hours I spent on that front porch and subsequently mowing my lawn, I didn’t generate any income for my family.  This led me to think even more…what is my time on this ladder worth?

Let’s start with what I could have been doing.  I could have been prospecting.  In my line of work, there are a number of people that watch TV with a pad and pen.  They write down the names of businesses that are already on the air and they contact them.  Or I could have been writing some proposals.  There have been some ideas that I’ve been kicking around in my head that I think are very economically viable.  Once I start putting those ideas to paper, they tend to start to become real concepts that can be begun.  I could have been working on tutorials or some other way of learning something new.  And this was just the tip of the iceberg.

Some time between shifting from paint to stain, I got the idea that I was wasting money.

Let’s talk about the economics for a minute.  Let’s say I’m able to hire someone to paint & stain my porch for $200 including materials.  I spent $50 in materials myself today.  So, by doing it myself, I saved $150, right?  Moving on, I could have hired a neighborhood kid to mow my small lawn for $10.  I did it myself saving a grand total of $160.

Was this a good idea?  Ignoring the health benefits (of which, I need to take advantage of as many of those as possible), I would have to say no.  The amount that I “saved” my family amounts to $40/hour.  I could have earned more by one of the other tasks that I listed.

Have you ever thought about your time in this way?  Most people haven’t.  Each hour you have is the same hour that the richest people in the world have.  What’s the difference?  In most cases, those people have figured out how to maximize the one thing they can’t get more of: time.

I hope you think about this the next time you go on vacation and feel guilt about it.  Do you know what vacation is?  A chance to recharge your batteries.  And that activity makes you more productive when you get back.  And more productivity means you make more money.  So take that vacation guilt free.  Tell them I said so.

Written by Jeff York

September 21, 2008 at 4:22 am

Get paid!

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Once upon a time, I ran a video production company.  On our website’s profile, I wrote that we would do the work for free if we could, but we have to pay bills.  If you love what you do, you would probably do it for free if you could.

But alas, like me, I’m sure you have bills.

One of my downfalls is that I don’t concentrate on the cash enough.  I blame that on loving what I do.  Just yesterday I was telling my wife that if I hit Powerball today, I would still do what I do.  I love it so much that there are times I forget to ask for the deposit.  Fortunately, I have people around me that keep me in line.

Do as I say, not as I do.

You may have real passion for what you do.  You may be focused on your primary responsibilities to the point that you have blinders on.  But trust me, you ability to continue to do that great work depends entirely on your ability to price your goods and services correctly and to collect accounts receivable.

First, before you can tell your clients/customers what you want to charge, you need to make sure that you are pricing correctly.  It’s OK to be more expensive than your competition if you provide more value.  Then the weight falls on your shoulders to illustrate and prove that you are worth it.  Market research and advertising are the tasks at hand here.

Then go get your customers.  You sign them up.  Get the cash.  You need cash flow to keep afloat while you’re executing.  If you’re like me and you are a service-based industry, then make sure that you have a payment schedule ready and fully understood by all parties.  Often when working on video projects, I ask for 50% up front and 50% on completion.  When working on multimedia projects, sometimes it’s 50% up front, 30% on reaching some milestone in the project, and 20% on completion.  With these examples, you can see that I’m getting at least half up front to get moving.

Thoughts?

Written by Jeff York

August 24, 2008 at 8:43 pm

Are you the right customer for me?

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Much is made of marketing customers searching hard for the right marketing company to help them grow. As there is a huge number of marketing organizations out there, customers/businesses must work hard to vet each one to find that special organization that has a mix of experience and expertise to help them move ahead of their competitors and grow.

Internally to the marketing companies, sales representatives spend enormous amounts of effort prospecting, qualifying, and landing leads and turning those leads into clients. The future of a marketing company depends on the ability to generate new project work.

However, smart marketing companies take that extra time before pitching a client to ask themselves “Is this prospect a good fit for us?” We’ve all heard of the 80/20 rule. As it applies to this former Production Manager, it means that I had to spend 80% of my time holding the hand of 20% of our clients. This is a reflection of finding a client that’s smart enough to know that they need marketing to grow, but is somehow uncomfortable with the cost they are spending or perhaps they don’t fully understand the process. Or maybe their superiors are directing pressure on them for the same reasons. Innocently, these clients place a drag on the process by not trusting that the agency they hired isn’t working 100% in their best interests.

Or worse. A green sales rep at the marketing company signs a client whom believes they know marketing better than the agency. Maybe they think they know graphic design because they own a pencil or web development because their son used iWeb. In any event, endless rounds of changes ensue dragging the process to a halt and raising expenses on both sides of the equation.

The bottom line here is knowing the importance of spending time analyzing your ideal client profile and targeting potential clients that fit that spec which will pay you dividends in the long run.

Do you spend any time determining who your ideal customer might be? How do you turn away business that might not be a good fit, especially if times are tight? Do you have any strategies that you might be able to share?

Written by Jeff York

June 28, 2008 at 1:03 pm