My dry cleaner is not structurally big but I admire his business resilience. He is ever having one form of promotion or the other going, e.g. “dry clean 10 for four free, etc." His customer receipt also has provision for clients’ telephone numbers and may God save you if you volunteer a mobile number because he will bombard your set with text messages. It is worse if he has your email address!
What I like about this struggling man who almost burnt his entire face in a recent “factory accident" while he was producing his locally branded starch, is his passion for wanting people to be aware of his business. Ironically, I have not been forthcoming despite his several pleas for professional help – I actually advised him to have his starch product registered by the appropriate regulatory bodies. The costs, which he found prohibitive, discouraged him from seeking execution from my end.
But how far can he go with the text messages and emails especially when he does not own a portal? The truth is for his kind of business, I thought advertising would be a waste: I could not help remembering John Wanamaker, a good Christian merchant of Philadelphia who in the 1870s expounded a witticism that has almost forever become an economic law with us: “Half the money I spend on advertising is wasted," he said. “The trouble is I don’t know which half." Wanamaker is remembered not only for inventing department stores and introducing price tags he also became the first modern advertiser when he bought space in newspapers to promote his stores.
Wanamaker’s witticism perhaps draws credibility from his Christian way of neither advertising on Sundays nor telling small and unimportant lies- he actually created the concept of “truth in advertising." My ebullient dry cleaner has therefore been consistently deprived of my professional counseling as a result of my strong belief in Wanamaker’s conviction, which is not entirely fictional. According to ZenithOptimedia, a market- research company, the worldwide advertising will likely be worth $428 billion in revenues this year (The Economist, July 2006).
Greg Stuart, the boss of the Interactive Advertising Bureau (IAB), a trade association, in one of his organisation’s posts to me, estimates that advertisers waste $112 billion a year in America and $220 billion globally, or just over half of their total spending. Coincidentally, Wanamaker was accurate! But the question is: “Does my dry cleaner need to advertise his business?" In the broadest sense, any effort that promotes one’s business might be considered advertising, e.g. a brochure, a radio spot or a trade show booth. But “advertising" usually refers to commercial messages in media such as newspapers, magazines, radio, television, billboards or the Yellow Pages and they would have been paid for.
It is believed that 5% of an entrepreneur’s gross sales should be budgeted for advertising, and that it must be ensured that the money is spent judiciously, e.g. the business can only advertise to its potential customers, i.e. its target customers.
Different businesses require different types of advertising and promotion. I was reliably informed by one of my old school mates that UREN Waters Ltd. was owned by one of our mates who now resides in the United States. Compared to Eva Water, my friend’s company is small though I disagree with the popular belief that a well-established business may not require as much as advertising as a newly established business. UREN (if it is still around) does not advertise as much as Eva, for example (though it is understandable because Eva is owned by the almighty Coca -Cola). What effect(s) did Eva’s entry have on Ragolis? Funny enough, I do not get to see Ragolis around these days, too.
Ours is beginning to look like an elusive world where businesses face new economic and competitive dynamics. Every business needs strategies for winning new clients. Through creative advertising and promotion activities a business can win new customers and generate income, which helps the business to further grow. So how can a small business successfully advertise its product, service, etc? Before you advertise, you must be convinced that what you do really requires that you engage advertising. You should then know your target market, your competitive position, and the differentiating aspect of your business as well as the key benefits of your product or service.
Do not just advertise to people that are not potential customers; and while selecting the appropriate media for advertising, ensure that your target customers are effectively reached. As my dry cleaner and I considered cost-effective ways of advertising his business, I quickly did a critique of the various media as follows: Newspapers are a cheap way of reaching a mass-audience. However, because they feature so many ads, there is a risk of losing yours in the clutter.
Though magazines offer a slightly better opportunity of catching a reader’s attention than newspapers do, they are usually more expensive. Magazines best serve businesses with well- defined target customers, e.g. restaurants, entertainment and specialty shops. Radio is relatively cheap provided you have a strong geographic or demographic target and it is high-impact too. However, costs are usually a bit higher than for print ads.
While Television advertising is extremely high-impact, it is expensive to buy spots on major stations. “Yellow Pages advertising" is not common with us in Nigeria but it does deliver people who are ready to buy. Outdoor advertising offers high visibility and cost is relatively affordable. But it is popularly referred to as a “reminder medium" because billboards and transit ads are best used in conjunction with other media of advertising.
Ironically, the growth in Internet advertising is made possible by small business advertisers who are embracing the affordability and targeting capabilities which online advertising gladly offers. Most companies (including small businesses) have websites these days. If you have a well structured website chances are you will reach a large number of your potential customers. Internet advertising is relatively cheap and can be targeted very effectively. It is therefore suitable for smaller advertisers who may find mass media campaigns quite expensive and wasteful. Eager to have a campaign broken, my excited friend wanted to know the specific steps to take. Small businesses must always be guided by the objectives of their advertising, namely to: get their customer’s attention and influence his/her behaviour; interest their customer in their products and services; create a desire to buy; and get the customer to make a repeat purchase of their goods or services.
Your advertising message must be simple and clear for it to be easily understood. To achieve this it is safe using one single message, e.g. the “Starch that Renews your Clothes Always." Your claims must be real and credible otherwise it could spell your doom. If you can afford it, use coupons, codes and specials to measure your ad headline, timing, and placement. A good headline, for example, is very important to the success of the advertisement.
It is also strategic that small businesses establish presence in items such as the brochure, email and company literature where they display full contact information like email address, phone and/or fax number, and company address. The ad must be relevant by describing the product, service, etc. The ad should not be copying competition- it must strive to be fresh and unique, generating curiosity and showing customer benefits.
It is often posited that in order for a business to keep its share of the market, advertising expenditures may need to equal, if not surpass what competitors are spending. I remember telling my dry cleaner that one-shot ads would not work; repetition of ads is inevitable. That is because for him to make an impact, he will have to run his advertising several times; advertising has a cumulative effect and it takes time for your advertising to get results and when it does, you should be ready to grapple with increased demand.
I tend to subscribe to the view that small businesses should try one advertising medium at a time, and give it a chance to work. However, they can combine the efforts of PR, direct mail, special events, trade shows, newsletters, brochures and other marketing tools. Effective advertising is about leaving an impression on a consumer and having a poor response may not be the fault of the medium; most times the problem is the message.
Yes, the entrepreneur can advertise, but small business advertising is not a short cut to marketing a company. Rather it takes planning, testing and constant exposure to be able to have an impact on your small business. However, if executed professionally, small business advertising can turn out to be a winning strategy (Darrell Zahorsky 2006).