Chat with us, powered by LiveChat Using the textbook, Strayer Library, and the Bachelor of Business Administration Library Guide, select and explain four effective and efficient ways for small business owners to promote | WriteDen

Using the textbook, Strayer Library, and the Bachelor of Business Administration Library Guide, select and explain four effective and efficient ways for small business owners to promote

 

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Chapter Ten Small Business Promotion: Capturing the Eye of Your Market

Copyright 2021 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

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The Need for Promotion

To get people to buy, you need to make an impression.

Those with interest are sales leads and the most interested are your prospects.

The marketing funnel shows how many prospective customers it takes to find one who will make a purchase.

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Figure 10.2: The Customer Development Funnel for Physical Products

There are three goals: get customers, keep customers, and grow customers.

Taken from Figure 4.11 of The Start-Up Owner’s Manual, ©2016, Steve Blank and Bob Dorf, used with permission.

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Figure 10.3: The Customer Development Funnel for Web/Mobile Products

This slightly different version of the funnel is for internet-based businesses.

Taken from Figure 4.17 of The Start-Up Owner’s Manual, ©2016, Steve Blank and Bob Dorf, used with permission.

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Promotion Using the PESO Model

Advertising is part of conveying your message to your customers.

Paid media – you pay for ad placement.

Owned media – your website, newsletters, emails, signage, etc.

Shared media – called word-of-mouth or referral advertising.

Earned media – public relations and press relations, or “free ink.”

Your promotional mix are techniques that will get you noticed.

Shared media embassies – your gateway to shared content.

Media partnerships – with companies, influencers, etc.

Media integration – where you develop contests, advertorials, etc.

Incentive media – such as sponsorships, brand ambassadors, etc.

At the very center of the PESO model is where your brand and your organizational identity fits, and where everything starts.

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Figure 10.4: The PESO Model: A Hybrid Model of How to Think about the Media Landscape

Source: Adapted from G. Dietrich, “The Four Different Types of Media,” Spin Sucks, June 24, 2013.

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The PESO Model: Your Brand

A brand may seem like the name a firm puts on itself and its products, but it is more than that.

A brand message should project what the firm is about.

Your product/service will likely evolve, so your brand would need to change to reflect this.

Think about what underlies your brand.

Your brand promise shows what your firm will do for the customer.

Branding builds from the value proposition, your competitive advantage, and what you want the firm to represent.

With small businesses, the entrepreneur is part of the brand.

As you develop your brand, you come to know yourself and your business.

You can now start to build the business out into the media landscape.

That starts with a focus on your owned media.

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The PESO Model: Owned Media

Organizational identity is your business/product/service name, including logos, symbols, characters, slogans, hashtags, uniforms, and packaging.

When picking a name, take care when using a personal name, avoid copyright infringement, and allow for future growth.

Owned media: domain name, logo, phone line, business card, brochures, sales packet/marketing kit, online support material, sign, packaging, and promotional novelties – all with a succinct message.

The overlap of owned and shared media are social media embassies.

Your firm’s own branded page on different social media sites.

Includes the usual, but also business directory sites, user review sites, catalogs, and sites like Amazon, eBay, Etsy, and others.

You can use a social media management platform or even pay a customer, friend, or family member to keep an eye on the sites for you.

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The PESO Model: Shared Media

Shared media is the ultimate form of free advertising.

Service providers get customers through referrals or word of mouth.

Social media sites have the possibility of viral marketing.

Creating and leveraging hashtags increases the viral impact.

Where shared media and earned media overlap lie media partnerships.

Potential partners include chambers of commerce, local business organizations, trade or professional associations, and others.

Other forms of media partnerships include sponsorships, co-branding, and co-marketing.

A key type of media partnership comes from influencers, either macro- or micro-influencers.

Donations and community service are other forms of media partnerships which can create publicity in a virtuous cycle.

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The PESO Model: Earned Media

Earned media occurs when others talk about your firm or products in the media and you did not pay them directly for the mentions, called free ink.

A key issue is how newsworthy your material is – it should have public recognition, public importance, and public interest.

Media outlets offer a media kit of their publication schedule, topics, etc.

Start-ups can use a business profit kit to share with the media, or develop a press release using the AIDA formula.

Public relations create a favorable opinion of your firm.

Investor relations do the same for investors, advisers, mentors, and companies with whom you may form important relationships.

Media integration occurs where earned media and paid media overlap.

Contests are a specific form of lead generation.

Another technique is placing advertorials.

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The PESO Model: Paid Media

Forms of paid media include: promotional video for building awareness, audio, print for complex information, locational promotion including OOH, and network advertising.

Advertising costs (CPM) ranging from least to most expensive: online, out of house, radio, television, and print.

With online campaigns, measure goals using key performance indicators (KPIs) and track your organic traffic.

Use search engine optimization (SEO), adding the best keywords and description tags to your web pages.

The overlap between paid and owned media is incentive media.

The best known form is affiliate marketing.

Related to affiliates are brand ambassadors.

Other forms include native advertising, and a variation called sponsored content.

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Developing Your Promotion Strategy

With so many promotional options, a plan is crucial.

In the marketing plan is a one-page overall strategy with a detailed list of the goals, types of activities, and anticipated outcomes of your plan.

These are the main components of your media content strategy plan.

Include future promotional efforts, their schedule, platforms you will use, your budget and costs, and how you will measure success.

Start-ups should focus on brand and owned media, branching out to shared media using social media embassies.

Look for opportunities for partnerships and earned media through affiliates or influencers.

Experience will help you decide on types and amounts of media integrations, paid media, and incentive media to use.

Getting the word out is the purpose of promotion.

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The Process of Personal Selling

Personal selling follows a general formula.

1. Prospect and evaluate.

2. Prepare by finding out what you can about the clients.

3. Present a logical and compelling argument for purchase.

4. Close the sale using one of a number of techniques

5. Follow up to avoid customer’s cognitive dissonance.

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Customer Retention: Keeping and Growing Customers after the Sale

It costs five times as much to get a purchase from a new customer compared to an existing one.

The general approach to keeping customers is customer retention (CR) and there are three major elements to CR.

One is handling problems that crop up after a sale.

The second is customer relationship management (CRM), which focuses on monitoring and promoting customer interest and loyalty.

The third is growing customer sales, which builds from the customer development model and lean business practices.

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Customer Retention: Handling Post-Sale Problems

The ultimate test of any business is how they handle adversity, and complaints are the most frequent example of that ultimate test.

Most dissatisfied customers do not report their dissatisfaction to the company and a third report their dissatisfaction to others.

In reality, most complaints are justified, so use this four step approach.

Prepare yourself and listen.

Accurately reflect.

Apologize and start generating solutions.

Implement and follow up.

The goal is an arrangement the customer thinks is fair.

Avoid using “company policy” as a reason for inaction.

Marketing is about sales and nothing generates cash like sales.

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Customer Retention: CRM in Two Steps

Step 1: Gathering the Data.

Gather performance and contact data from existing customers.

Examples of contact data:

Person, firm, source – unique ID, demographics and contact information, firm information, and source.

Example of performance data:

Purchases, non-purchase events, follow-ups, follow-throughs.

Step 2: Analyzing the Data.

Customer vector reports.

Sales process reports.

Sales outcome reports.

The simplest, and most important analysis is sales by customer.

It is believed that 80 percent of sales come from 20 percent of customers.

Identify those 20 percent and keep them happy.

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Customer Retention: Growing Customer Sales

Selling the same product to the same customers is market penetration, while selling the same customers a new product is product expansion.

When looking for new customers, you seek market expansion or diversification if trying to sell them new products.

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Source: William O. Bearden, Thomas N. Ingram, and Raymond W. Laforge, Marketing: Principles and Perspectives, 4th ed. (Burr Ridge, IL: McGraw-Hill/ Irwin, 2004), p. 57.

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Customer Retention: Mechanics of Growing Customer Sales

Additional sales take four forms in the physical world.

To unbundle is to break a product/service into components.

Up-selling is selling accessories to higher-quality versions.

Cross-selling means to sell related products.

Referrals is a major way to grow sales.

In the online world, a next-sell is an attempt to prime customers to make their next purchase.

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Sales Forecasting

One piece of the marketing efforts that feeds directly into your financial projections, is knowing what your sales will be.

First, determine how many prospective customers you need.

A key issue in determining your number of customers is assessing your hit rate or how many prospects it takes to make one sale.

The next step is to estimate the average amount of sales per customer.

Now create your sales forecast:

Prospective customers X Hit rate X Sale amount = Sales forecast.

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End of main content.

Copyright 2021 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Because learning changes everything.®

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Accessibility Content: Text Alternatives for Images

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The Need for Promotion – Text Alternative

The graphic shows a funnel with you and your firm shown above the top of the funnel. You use your value proposition, your target market segments and the PESO model to gather one thousand impressions going into the marketing funnel.

In the throat of the marketing funnel, those one thousand impressions turn into two hundred leads and through personal selling, into twenty prospects. Of the twenty prospects, you get two sales. Due to customer retention efforts, you retain one loyal customer.

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Figure 10.2: The Customer Development Funnel for Physical Products – Text Alternative

Rather than a traditional vertical funnel, this concept uses two horizontal funnels joined in the middle at the narrow ends. The funnel on the left is the “Get Customers” funnel and the funnel on the right is the “Grow Customers” funnel. The section in the middle is the “Keep Customers” section.

The left-hand, Get Customers funnel has inputs at the wide end of earned and paid media. This passes through ever narrowing bands of awareness, interest, consideration, and finally purchase. The purchase feeds a viral loop back to awareness.

The right-hand funnel, Grow Customers, also consists of four sections of ever narrowing bands, which are referrals, cross-selling, up-selling, and un-bundling. The referrals section provides a viral loop to the opposite funnel’s awareness section.

The section in the middle, where the two funnels meet is the Keep Customers section and is comprised of customer satisfaction surveys, loyalty programs, product updates, and customer check-in-calls.

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Figure 10.3: The Customer Development Funnel for Web/Mobile Products – Text Alternative

This slightly different version of the customer development funnel has the same three sections of Get Customers, Keep Customers, and Grow Customers.

The left-hand funnel, Get Customers, again shows inputs of earned and paid media but only consists of two narrowing sections: acquire and activate. The activate section provides a viral loop back to the acquire section.

The right-hand funnel, Grow Customers, consists of four ever-narrowing sections with one section differing from the funnel for physical products: referrals, cross-selling, next-selling (differs), and up-selling. The referrals section provides a viral loop to the opposite funnels acquire section.

The middle section of Keep Customers consists of: blogs, RSS, emails; outreach programs; contests and events; product updates; and loyalty programs.

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Figure 10.4: The PESO Model: A Hybrid Model of How to Think about the Media Landscape – Text Alternative

This Venn diagram consists of four factors: shared media, earned media, paid media, and owned media. Where the four intersect is the brand and brand promise.

Shared media consists of word-of-mouth mentions, social media mentions, and hashtags. Earned media contains things like media relations, media kits, press releases, public relations, investor relations, and guerrilla marketing. Commercials and ads, packaging, infomercials, product placements, search results, sales, coupons, flyers, SEO, out-of-home ads, newsletters, and e-books all comprise paid media. Finally, owned media consists of names, domain names, websites, email, direct mail, logos, business cards, phone lines, stationary, brochures, flyers, signs, sales packets, online material, and promotional novelties.

Where each of these sections overlap lie circumstances where specific promotional opportunities await. Where shared media and owned media overlap lie social media embassies, such as company social media pages, business directory sites, user review sites, catalogs, and Amazon, eBay, etc. Incentive media lies where owned media and paid media overlap and consists of affiliate marketing, brand ambassadors, native advertising, and sponsored content. In the area where paid media and earned media overlap lies media integration, such as contests and sweepstakes, lead generation, and advertorials. Finally, the last overlap between earned media and shared media are media partnerships, such as trade or professional organization memberships, local organization memberships, sponsorships, co-branding, co-marketing, influencer marketing, donations, and community service.

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Customer Retention: Growing Customer Sales – Text Alternative

This graph plots products as either the same or new on the horizontal axis and markets, either same or new, on the vertical axis. This results in four possible combinations.

If you offer the same products to the same customers, this is market penetration. Offering new products to the same customers is product expansion.

If you offer the same products to new markets, this is market expansion and if offering new products to new markets, this is diversification.

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Chapter Nine Small Business Marketing: Customers and Products

Copyright 2021 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Because learning changes everything.®

The Marketing Process

Product, price, promotion, and placement are the 4 Ps of marketing.

The customer development process focuses specifically on meeting the needs of the customer, hopefully leading to a new product/service.

The product development process perfects the product or the innovation within the product.

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Customer Roles

When you buy a product/service and use it yourself, you are the end user, and the purchaser.

In organizations, a person or office is the purchaser for other end users.

Yet another person may be the decision maker who determines what will be bought for end users, then the purchaser places the order.

For individuals or organizations, an additional role is the influencers making suggestions/recommendations to people in any of these roles.

Understand these roles to better understand your customers.

Use the roles to help map out the purchasing process.

Closely related to this is the idea of the customers’ budget cycle, or for major purchases the capital budgeting cycle.

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Initial Customer Profiles

A customer profile starts with face-to-face interviews.

The goal is an unbiased sense of how customers think about the issue your product/service helps resolve or improve.

Analyze results by looking at the customer job.

Identify their pains or the gains they wish they could achieve.

Find out how they deal with the pain or gain right now.

Locate where there is a possibility for something better.

What if interviews show customers are unresponsive to your solution?

You can change or pivot your product/service to better fit the customers’ pains and gains.

Or pivot your customer base to those willing to purchase your product.

© McGraw-Hill Education

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Target Market

Target market is one of a set of nested terms for the market sizes.

Total available market (TAM).

Serviceable available market (SAM).

Serviceable obtainable market (SOM).

Penetrated market (PM).

There can be more than one target market.

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Target Market – The Target Customer

Ways to find your target customer.

Benefit matching – the closer customers’ needs/pains/gains align with features of your product/service, the happier they will be.

Long-term value (LTV) or customer lifetime value (CLV) – go after the customer who will bring the most revenue and profit to your firm.

Influencer impact – word of mouth or social media exposure can lead to sales from customers you did not know to target.

Minimizing churn – keeping existing customers is more valuable than finding new ones.

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Target Market – Finding First Customers

First customers are a key challenge for a start-up and though sales for cash are good, there are other nonfinancial benefits.

Feedback.

Testimonials.

Sharing on their social media accounts.

Three ways to find first customers are:

Family and friends – they may not need or use the product.

Early adopters – likely to impulse buy but more difficult to find them.

People in pain – they appreciate your product the most and provide feedback but they are even harder to find.

Connecting with the people in pain is the most useful and may be worth discounting, or giving away, your product to obtain a chance at follow-up.

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Target Market – Thinking about Customer Service

Use outstanding customer service to convert customers into fans.

Show interest in and concern for everyone in your business – customers, employees, suppliers, and the community.

Go the extra mile for these people.

Take time to be nice to all these people.

Be honest and open in how you operate.

When mistakes are made, fix them.

Keep in mind the SERVICE acronym as a way to teach employees what outstanding customer service entails.

Social, enthusiastic, responsible, vibrant, intelligent, courteous, engaged.

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Segmenting Your Market

Most products/services work best with particular markets.

Successful entrepreneurs leverage this idea using market segmentation to identify the best market(s) for their good or service.

Segmenting divides the total market into manageable pieces.

Your target market is the segment(s) you select on which to target your marketing efforts.

Geographic segmentation.

Demographic segmentation.

Benefit segmentation.

Psychographic segmentation.

Some compa

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