Top 10 Small-Business Advertising Mistakes to Avoid

by Jean C. Joachim

Entrepreneurs who are experts at what they do are often not experts on advertising. They may make mistakes that can adversely affect their business. Here is my "top ten" list of advertising mistakes to avoid for small businesses:

10. Hiring the wrong consultants. Be sure that you don't pay an advertising consultant or agency on a commission basis. Commission agreements mean that the more you spend the more they make. That may lead to ill-advised recommendations. If you need to hire a consultant, be sure to check references. Find someone who is already working with a friend or colleague. Trustworthiness, integrity and intelligence can be hard, but not impossible, to find.

9.   Using space advertising that is too small. Don't waste money buying space ads too small to tell your story. Buy adequate space and save money by running it less often.

One exception is: if you have a product with a strong visual, then you can get along with smaller space. For example, a company that sells bow ties via catalog runs a one inch ad in the New Yorker. The ad doesn't say much, can't - no room. But it has a line drawing of a bow tie taking up most of the space with a web address along the bottom. Great ad. One picture gets across the whole idea.

8.   Not having a website. I don't care who you are or what you're selling, if you don't have a website you don't appear to be legitimate. Websites originated as sources of information for employees - the company directory, company rules, for example. Today, a website is an invaluable source of information, like a yellow pages listing with benefits.

As a potential customer, if I can't go online at my leisure and check out your business, what you sell, your location your phone number, then I'm not going to buy from you.

You don't have to have a complicated website. Just a simple site with basic information and an email address will do. It's not as expensive as it seems. Do you belong to an association? If so, see if they offer cheap website hosting. I have two websites through the Author's Guild and I only pay $9 per month for each.

7.   Not capturing customer data. If you aren't compiling your customers' contact information and setting it up for email and direct mail, you are throwing away a huge opportunity for low-cost or no-cost sales. No matter how small you are, you should be communicating regularly with your customers through email. Remember the old saying, "Out of sight, out of mind."

6.   Wrong kinds of communication with your customers. Are you emailing your customers regularly but not including a money-saving offer? If you are, then you may be wasting their time and yours. Never send an email to a customer that doesn't have a special offer. Making it time sensitive will make it more compelling.

5.   Not keeping track of the lifetime value of your customers. Getting customers is expensive. You don't know what you can afford to pay for a customer if you don't know how much revenue you can expect each one to generate over his or her lifetime with you. This number, called the "LTV" (lifetime value) should be recalculated over time.

You should know how many times a customer will buy from you and what their average expenditure with your business will be. Then you can establish a realistic budget to spend to bring in a customer and still make a profit.

4.   Not branding every message from your company. Branding means selecting a logo, color scheme, type font, tag line, overall look and other features that remain the same no matter what communication goes out from your company. Whether it's a TV commercial, newspaper ad, email communication or just a letter, every communication must uphold the image of your brand. This consistency creates awareness of your company, your products and services.

Company owners who keep changing the look of the company and product advertising and marketing confuse potential customers. Just because you're not a Fortune 500 company doesn't mean you should ignore branding.

Be completely rigid about branding. Insist on using it for every communication. You will make all your efforts work together toward brand recognition and increased sales.

3.   Lack of respect for creative talent. Copywriters get discouraged with clients who listen to their well-thought-out, targeted, tightly written copy only to say, "Yes, that's good, but my cousin Bernie says we should say..."

Do you know how frustrating that is? Copywriters stop doing their best when clients ignore their advice and use copy tossed off by every idiot they know. Everyone thinks he can write copy, but it's not true.

Find a top-notch copywriter you trust and stick with his or her copy. Don't tell them how to write; they don't tell you how to run your company. Tell Cousin Bernie to come and make some sales or handle customer service, but that you've got copywriting covered, thank you.

2.   Incorrect forecasting. Under buying or overbuying can kill a business. How do you know how much product will sell? There is no magic formula and mistakes do happen-that's why sales were invented. But if you use direct marketing, you should be able to read your results and project sales with reasonable accuracy. In fact, you might be able to use direct marketing results to help forecast retail sales.

For example, if the small black attaché case was a big hit in your catalog, perhaps it belongs in a highly visible spot on your sales floor? While results are not always easily translated from catalogs to retail, often they are. At least it will be an educated guess, made through proven responses and sales.

1.   "I don't need advertising. I rely on word-of-mouth." Word-of-mouth is great. It makes unheard-of movies hits; it makes unknown actors stars. But you can't control word-of-mouth. Advertising is the best way to get the word out the way you want it, when you want it, about your company, products and services. Even if you can't afford a big budget, some advertising is better than none. Ignoring advertising may make your climb to success uphill all the way.

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