Anyone will tell you, to get the best return on marketing money spent, advertise to existing customers. If you have never advertised before and want to dip your toe into marketing, start by mailing a post card to the customers in your database. I promise you will re-coup the money you spent and then some. But growing outside your customer list is riskier and takes much more thought.
In the past, FAB has recruited new customers through traditional marketing i.e. Google, TV, newspaper, direct mail, and radio. (Did I just call Google traditional marketing? Wow!)
Know your 4 P’s
Years ago, to learn the language of marketing, I took a beginners college course on advertising. In this course the professor said, “Don’t let the tail wag the dog”. By that, he meant know your four “P”s: Product, Price, Placement, and Promotion. Most people start with promotions (the tail) and work backwards.
Product – mine is flags, banners, flagpoles, and the feeling of pride that comes with your purchase. (Feelings are products; think church.)
Price – this is usually thought to be a dollar amount, but it could be the emotional cost, or time-spent.
Place – this is your distribution channels. How easy is it for the consumer to shop, buy, and have it delivered? (Storefronts are currently suffering in this area)
Promotions – the advertisement. A mix of marketing including public relations, internet, and traditional channels.
An outcome of last year’s pandemic was that many people and businesses, alike, found they enjoyed their stay at home and have opted for early retirement. These changes created acquisition opportunities for businesses that want to grow.
In 2020 FAB purchased OurCornerMarket.com and increased our sales by 4%. We later purchased AboutFlags.com out of Pennsylvania and, again, increased our sales.
At the time, having never bought a business before, these acquisitions were scary for both me and the seller. I learned that to be successful in negotiations, we both – meaning the buyer and the seller – had to feel heard and rewarded. (Be wary: Small businesses are never worth as much as the founder wants to believe and that is a sensitive subject to breach.)
Rule of Thumb
To overcome my trepidation of buying another company (fear of the unknown) I began to think of the acquisition as part of the marketing budget. Something I do all the time.
With that mind set, I analyzed the advertising money that it would take to grow my current company against the sales volume and customer list of the new business’s purchase price. And voila! Sudden clarity of the risk vs rewards and what the new company’s value is to me.