Eight Marketing Mistakes
That Could Be Costing Your Business A Fortune In Lost Opportunities For
Growth And Profit 

Is there potential for improvement in your business? Are you making some of these common mistakes in marketing your business?

Just take our test by reading through and asking yourself whether you are making these marketing mistakes. Please be honest with yourself and it may help to grade your answer - Never, Sometimes, Always.

The issues are listed below and then repeated with comments.

1 Failing to do enough market research.

2 Failing to develop a Unique Selling Proposition (USP).

3 Failing to measure the results of marketing.

4 Using image or institutional advertising.

5 Failing to test sales promotion methods.

6 Not knowing the value of an average customer.

7 Failing to reward/thank existing customers.

8 Not having a system for encouraging customer referrals.

Here's the detail and an explanation of why each issue is so important.

1 - Failing to do enough market research.

Too many businesses haven't taken the time to really identify and understand their potential customers.

Do you know

• why some people buy from you and some buy from your competitors?
• who your main customers and prospective customers are and where they are?
• what they want and how they make their buying decisions?
• when they are likely to buy?
• how big the market is in the area you can serve?
• who your competitors are and your relative strengths and weaknesses?

 Have you looked at

• your current customers?
• customers who used to buy from you but have switched to your competitors?
• your competitors' customers who have never tried you?
• prospective customers who have never even tried the product and service but should want the benefits?

Do you stll think you do enough market research?

2 - Failing to develop a Unique Selling Proposition (USP).

What offer can you make to your target customers that makes your business special and unique?

Do your customers have a compelling reason to come to you and only you because they know that you can meet their particular needs so much better than anybody else.

If not your product or service risks being treated as a commodity.

Your product is little different from your competitors so the customer may as well buy on who is offering the best price.

If you don't have a USP, you risk losing your customers to any competitor who comes along and offers an attractive deal.

If you do have a USP in the minds of your customers, but you don't know what it is - your customers do have a very clear reason to buy from you but you don't understand it correctly - you risk making accidental changes. 

3 - Failing to measure the results of marketing.

There's an old saying

"Half my advertising doesn't work, but I don't know which half".

There seems to be some debate on who said it first but can you imagine saying it about all your sales promotions?

If so, that's a big problem.

Every business needs to understand where its leads are coming from and which leads convert into one-off or regular customers.

How else can you know whether your marketing should continue in its current form or should be changed?

4 - Using image or institutional advertising.

Have you based your advertising on examples from big companies that seem to promote the brand name but little else?

If so, it is probably generating few if any leads.

Small businesses can't afford to waste money building up a brand name. They need to give any prospective customer a good reason to make contact as soon as they've seen and read the advert.

Please think of adverting as "salesmanship in print" - it's intended to build a case for a prospect to buy.

You wouldn't expect your sales representative to make a call and just say "I'm from Bloggs, the widget distributor" and then not say anything else. But that's what a lot of advertising does.

Instead you'd want your sales rep (or advert) to make a case for the customer to buy - "Bloggs widgets - every widget in every size and colour - and delivered direct to your premises by 10:00am the next day or you get 10% off your bill for every day or part day we are late"

Now that's a compelling offer if you are a buyer of widgets and you appreciate service and quick delivery. It's especially compelling if your current supplier is unreliable - even if you have to pay more you know that you will only pay for benefits you get.

5 - Failing to test sales promotion methods.

When you start measuring results and you expect prospective customers to call, you can start testing different adverts, letters, telesales approaches and sales presentations.

Little things make a huge difference in response rates.

There's a story that Dan Kennedy, a famous American copywriter changed one letter in a headline in a magazine advert and nearly tripled the response. Isn't it incredible - just by adding an S - from "put music in your life" to "puts music in your life" - that such a small change can have such a big impact.

Please always remember better marketing offers almost unlimited upside leverage.

It costs you the same to advertise and receive 1 or 100 responses but your cost per lead and cost per new customer fall dramatically.

6 - Not knowing the value of an average customer.

I'm trying to get you to see effective sales promotion as an investment rather than an expense.

If it doesn't get results it's just a cost, but if a lead generation method covers its costs and generates a profit then you'd want to do some more wouldn't you?

It's an investment when you spend money and get more money back.

Let me give you an example.

Cost of advert £1,000

Sales generated from advert £5,000

Profit from those sales at 40% margin £2,000

So that gives you a net £1,000 profit after allowing for the cost of the advert.

That's a pretty clear case that you should carry on and advertise again but what if you only had half the response? Is it worth advertising if you get £1,000 of margin on sales?

That depends on what level of these new customers come back and buy again.

If 50% of them come back you'd get another £500 margin every time they made all made a repeat purchase.

So successful advertising is still an investment if you take into account the lifetime value of the customer.

How much should you spend to get a customer?

It all depends on the profit you can make while they are a customer. That value is called the lifetime value and it's an important number to know.

7 - Failing to reward/thank existing customers.

Do you put all your marketing efforts into generating new customers rather than showing your appreciation for existing customers?

Do you offer prospects really good prices that you don't offer to the people who buy the most from you?

If you do - and they find out - what do you think that does to their loyalty as a customer?

8 - Not having a system for encouraging customer referrals.

Word of mouth recommendation is probably the most successful lead generation approach.

An advert or a salesman can tell you that "Bloggs widgets are the best money can buy". But it's much more credible when someone you know and trust and who uses them regularly tells you the same thing.

One approach is to just wait for customers to tell other people about the fantastic products and services you offer. But you might be waiting a long time.

We all have too much to think about. Unless someone comes along and says "I'm having terrible problems finding a reliable widget supplier" your best customers won't think about recommending you.

It's not that they don't want to help you out. They just don't think about it.

That's why it's important to have a referrals system where you can prompt your customers to give referrals regularly.

There are many different systems that you could use. Jay Abraham has identified 93 referral systems.

Results

How did you get on?

Admitting to one or two of the failings isn't too bad especially if you answered "sometimes" rather than "never".

You'll know from your experiences of the other factors that what I've written works so I've given you something to think about which is great. Just stop and consider how you can change.

More than two suggests that there could be big opportunities for growth and profit if you improve your marketing.

How much do you think these mistakes are costing you per year in lost sales and profit? £10,000?, £25,000? Maybe £100,000 per year or even more?

And how long have you been making them? One year, two, five? That adds up to a lot of money that could have been in your bank account.

If you don't do anything about these issues for a few more years, it means that even more money is lost. Hopefully it makes sense to you that it's now time to take action.

Do you want to do it yourself or bring somebody in to help?

If you want to read books and/or listen to audio presentations yourself in a self-study programme then you can't go wrong with Jay Abraham.

Follow the link and you can see the different options of his material that are generally available. You'll also see that I am a keen student of Jay's work.

There are many other different sources of marketing material and specialist books on customer value and pricing could really make you think.

Commit yourself to buying some books and reading them or audio programmes and listening to them in your car as you drive to and from work.

The statistics for people who buy but don't read improvement books is shockingly high. Don't let it happen to you.

We recommend that you go through the book/audio once to get the big picture and then go back through it again. This time making notes about what you are going to do.

Then review your notes and pick out your ten most important items. You've now got a manageable list and you can start thinking about actions - who, what and when?

But remember you are trying to correct issues that are costing you money. The longer you take before turning words into actions, the more any delay is costing you.

Better to bring somebody in?

If you'd rather bring somebody in to help, should you call a specialist marketing consultant or a general business coach?

It depends on how the other issues in your business and the consultants and coaches you contact.

Have you tried our tests for business owners, finance, sales and employees? If you have and you believe that marketing is the dominant problem then you're probably best going to a specialist marketing consultant, if you can find a good one.

Remember that we base our fees on the extra profits that we help you to generate so I recommend that you try to find a marketing consultant who will work on the similar basis for at least part of their fees.

If the consultants you contact are not prepared to take any of the risk, then you need to ask yourself whether you should.

But if you know that you have issues in the other areas of the business that you need to deal with, can you manage and coordinate different functional specialists?

If you can only deal with one, are you clear which is the higher priority? Will sales problems hold back your marketing improvement plan? Or is the problem a bottleneck in your operations?

If you are unsure or you think it will be a problem to deal with a number of different specialists then a business coach is your best option.

Call me, Paul Simister on 0121 554 4057 if you live within 2 hours drive of Birmingham or email me at paul@plancs.co.uk.

We can have an informal discussion on the phone without any commitment or obligation.

If things seem to make sense to both of us, we can then arrange to get together to see if there really is potential in your business and check that we will work well together. Again, even at that stage, there is no obligation to buy.

Take a look at my Business Coaching Blog it is packed with news, views, recommendations, advice and resources for:

• Marketing
• Internet Marketing
• Sales Training
• The Business Growth Superstars

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Last updated 2007-12-11