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  • Sieu thi dien may Viet Long - www.vietlongplaza.com.vn 3rd edition Marketing Without Advertising by Michael Phillips & Salli Rasberry edited by Peri Pakroo
  • A bout Nolo int th in pr lp yo u answer it, bo e Nolo can he esti on? Chances arHave a legal quand online. solve their lega l on has been to help people henever s, Nolos missi pense, and—wFo r three decade minimum of fuss and ex confidence, aproblems with hout a lawyer. possible—wit b done. you get the jo every tool av ailable to help ning all the we’ve offered h books contai O ver the years, ti cal, plain-Englis tasks. publishing prac y-to-day legal In the 70s, we began ctions necess ary to tackle da -by-step instru forms and step to work storm, we got mputers too k the world by , which took n personal co ng Trust Maker In the 80s, whe ill Maker and Livi e also ams such as W ts and bytes. W and de veloped progr nvenience of all those bi e speed and co any of our bo oks. advantage of th and CDs to m acked disks added form-p get legal that its best to 90 s. Recognizing useful, ploded in the started making the Internet ex fy chair, Nolo . Then in your own co m r and a modem informatio n while sitting with a compute lable to anyone formation avai up-t o-date legal in u can find enter, where yo in e Download C do your pened our onl easiest way to Most recently, we o l eProduct s. The fastest, nvenient, topica n directly to all of Nolos co and informatio liver specific forms , eProducts de own legal work r. your compute t. As Absolutely no andon our books in print? n we plan to ab to redesign Does this mea e will continue et expands, w e best and the Intern ss to the law th tech nology evolves products, m aking your acce l our current and improve al it can be.
  • “America’s leading source of self-help legal information.” 5555 —YAHOO! LEGAL INFORMATION ONLINE ANYTIME 24 hh u r s a d a y www.nolo.comAT THE NOLO.COM SELF-HELP LAW CENTER, YOU’LL FIND• Nolo’s comprehensive Legal Encyclopedia filled with plain-English information on a variety of legal topics• Nolo’s Law Dictionary—legal terms without the legalese• Auntie Nolo—if you’ve got questions, Auntie’s got answers• The Law Store—over 250 self-help legal products including Downloadable Software, Books, Form Kits and eGuides• Legal and product updates• Frequently Asked Questions• NoloBriefs, our free monthly email newsletter Our• Legal Research Center, for access to state and federal statutes “No-Hassle”• Our ever-popular lawyer jokes Guarantee Return anything you buyQuality directly from Nolo for any Law Books & Software reason and we’ll cheerfully re- for Everyone fund your purchase price. No ifs, ands or buts.Nolo’s user-friendly products are consistently first-rate. Here’s why:• A dozen in-house legal editors, working with highly skilled authors, ensure that our products are accurate, up-to-date and easy to use• We continually update every book and software program to keep up with changes in the law• Our commitment to a more democratic legal system informs all of our work• We appreciate & listen to your feedback. Please fill out and return the card at the back of this book.
  • An Important Message to Our Readers This product provides information and general advice about the law. But laws and procedures change frequently, and they can be interpreted differently by different people. For specific advice geared to your specific situation, consult an expert. No book, software or other published material is a substitute for personalized advice from a knowledgeable lawyer licensed to practice law in your state.
  • 3rd editionMarketingWithoutAdvertisingby Michael Phillips & Salli Rasberry edited by Peri Pakroo
  • Keeping Up-to-Date To keep its books up-to-date, Nolo issues new printings and new editions periodi- cally. New printings reflect minor legal changes and technical corrections. New edi- tions contain major legal changes, major text additions or major reorganizations. To find out if a later printing or edition of any Nolo book is available, call Nolo at 510- 549-1976 or check our website at http://www.nolo.com. To stay current, follow the “Update” service at our website at http://www.nolo.com/ update. In another effort to help you use Nolo’s latest materials, we offer a 35% dis- count off the purchase of the new edition of your Nolo book when you turn in the cover of an earlier edition. (See the “Special Upgrade Offer” in the back of the book.) This book was last revised in: April 2001. THIRD Edition APRIL 2001 Editor PERI PAKROO Cover Design TONI IHARA Book Design TERRI HEARSH Production SARAH HINMAN Proofreading SHERYL ROSE Index NANCY MULVANY Printing BERTELSMANN SERVICES, INC. Phillips, Michael, 1938- Marketing without advertising / by Michael Phillips & Salli Rasberry.--3rd ed. p. cm. Includes index. ISBN 0-87337-608-0 1. Marketing. 2. Small business--Management. I. Rasberry, Salli. II. Title. HF5415 .P484 2000 658.8--dc21 00-056863 Copyright © 1986, 1997 and 2001 by Michael Phillips and Salli Rasberry. ALL RIGHTS RESERVED. Printed in the U.S.A.No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means,electronic, mechanical, photocopying, recording or otherwise without prior written permission.Reproduction prohibitions do not apply to the forms contained in this product when reproduced for personal use.For information on bulk purchases or corporate premium sales, please contact the Special Sales Department. For academicsales or textbook adoptions, ask for Academic Sales. Call 800-955-4775 or write to Nolo, 950 Parker Street, Berkeley, CA94710.
  • Acknowledgments With special thanks to Soni Richardson and Michael Eschenbach, Daniel Phillips, Tom Hargadon and Mary Reid.
  • Full Disclosure Note All the businesses and business owners mentioned in the book are real. The great majority operate under their own names in the cities indicated. However, because some of our examples are less than flattering, and for other reasons, including pri- vacy, we have changed the names and/or locations of businesses in a few cases. In some cases, the businesses used as examples in the book do advertise—their marketing ideas are so good we included them anyway. In most cases, if a business used as an example does advertise, it is a small part of their marketing mix.
  • Table of Contents1 Advertising: The Last Choice in Marketing A. The Myth of Advertising’s Effectiveness ............................................... 1/3 B. Why Customers Lured by Ads Are Often Not Loyal ............................. 1/8 C. Why Dependence on Advertising Is Harmful ...................................... 1/8 D. Advertisers: Poor Company to Keep .................................................... 1/9 E. Honest Ads ....................................................................................... 1/12 F. Branding ........................................................................................... 1/14 G. Listings: “Advertising” That Works ..................................................... 1/152 Personal Recommendations: The First Choice in Marketing A. Cost-Effectiveness ............................................................................... 2/2 B. Overcoming Established Buying Habits .............................................. 2/4 C. Basing Your Marketing Plan on Personal Recommendations ............... 2/5 D. When Not to Rely on Word of Mouth for Marketing ........................... 2/73 The Physical Appearance of Your Business A. Conforming to Industry Norms ............................................................ 3/2 B. Fantasy: A Growing Part of Retail Marketing ....................................... 3/5 C. Evaluating Your Business’s Physical Appearance ................................ 3/11
  • 4 Pricing A. Straightforward and Easy-to-Understand Prices ................................... 4/2 B. Complete Prices .................................................................................. 4/3 C. Giving Customers Reasonable Control Over the Price ........................ 4/6 D. Internet Pricing ................................................................................... 4/95 The Treatment of People Around You A. Tracking Reputations via the Grapevine .............................................. 5/2 B. How Employees Spread the Word ....................................................... 5/3 C. Common Employee Complaints .......................................................... 5/7 D. Handling Employee Complaints .......................................................... 5/9 E. Finding Out What Employees Are Thinking ....................................... 5/11 F. Suppliers ........................................................................................... 5/13 G. Business Friends and Acquaintances ................................................. 5/17 H. Individuals Who Spread Negative Word of Mouth About Your Business .......................................................................... 5/19 I. Your Behavior in Public .................................................................... 5/206 Openness: The Basis of Trust A. Financial Openness ............................................................................ 6/3 B. Physical Openness .............................................................................. 6/5 C. Openness in Management .................................................................. 6/6 D. Openness With Information ................................................................ 6/8 E. Openness With Ideas ........................................................................ 6/11
  • 7 Deciding How to Educate Potential Customers A. What Does Your Business Do? ............................................................ 7/2 B. Defining the Domains in Which Your Business Operates .................... 7/7 C. Providing Information on Businesses in Established Fields ................ 7/10 D. Businesses in New or Obscure Fields ................................................ 7/13 E. Whom to Educate ............................................................................. 7/158 How to Let Customers Know Your Business Is Excellent A. Tell Them Yourself ............................................................................... 8/3 B. Help Customers Judge for Themselves ................................................ 8/7 C. Giving Customers Authority for Your Claims ..................................... 8/169 Helping Customers Find You A. Finding Your Business .......................................................................... 9/3 B. Convenience of Access ....................................................................... 9/5 C. Signs ................................................................................................... 9/7 D. Telephone Accessibility ....................................................................... 9/8 E. Listing Your Services Creatively and Widely ...................................... 9/13 F. Getting Referrals From People in Related Fields ................................ 9/15 G. Trade Shows and Conferences .......................................................... 9/1710 Customer Recourse A. Elements of a Good Recourse Policy ................................................. 10/4 B. Designing a Good Recourse Policy ................................................... 10/5 C. Telling Customers About Your Recourse Policy .................................. 10/8 D. Putting Your Recourse Policy in Writing ............................................ 10/9
  • 11 Marketing on the Internet A. The Importance of Passive Internet Marketing ................................... 11/3 B. Yellow Pages Plus .............................................................................. 11/5 C. What to Put on Your Site ................................................................... 11/7 D. Designing an Internet Site ............................................................... 11/11 E. Interactivity and Customer Screening .............................................. 11/14 F. How to Help People Find You Online ............................................. 11/16 G. Active Internet Marketing ................................................................ 11/1912 Designing and Implementing Your Marketing Plan A. Your Marketing List: The “Who” of Your Marketing Plan ................... 12/2 B. How to Evaluate Your List .................................................................. 12/3 C. Marketing Actions and Events: The “What” of Your Marketing Plan ... 12/5 D. Direct Marketing Actions .................................................................. 12/7 E. Parallel Marketing Actions ............................................................... 12/15 F. Peer-Based Marketing Actions ......................................................... 12/2113 The Last Step: Creating a Calendar of Events A. Marketing Calendar for an Interior Design Firm ................................ 13/2 B. Marketing Calendar for Jerry and Jess’s New Chiropractic Clinic ...... 13/4AppendixIndex
  • Introduction By the PublisherT ake a look around your whether you need a roof for your house, community and make a an accountant for your business, a math list of truly superior small tutor for your child or a restaurant for abusinesses—ones you trust so thoroughly Saturday night out, you ask for a recom-you would recommend them to your mendation from someone you considerfriends, your boss and even your in-laws. knowledgeable and trustworthy.Whether your mind turns to restaurants, Once you grasp the simple fact thatplumbers, plant nurseries or veterinarians, what counts is not what a business sayschances are good your list is fairly short. about itself, but rather what others say Now think about all the ads for local about it, you should quickly understandbusinesses that fill your newspaper, clutter and embrace the message of this brilliantyour doorstep, spew out of your radio, book. Simply put: The best way to suc-cover the back of your grocery receipts or ceed in business is to run such a wonder-reach you in dozens of other ways. How ful operation that your loyal and satisfiedmany of these businesses are on your list? customers will brag about your goods andMore than likely, not many. In fact, I’ll bet services far and wide. Instead of spendingthe most heavily advertised local busi- a small fortune on advertising, it’s far bet-nesses are among the businesses you ter to spend the same money improvingnever plan to patronize—or patronize your business and caring for customers.again—no matter how many 50%-off spe- It’s the honest power of this honest mes-cials you are offered. sage that made me excited to publish Mar- If, like me, you have learned the hard keting Without Advertising ten years ago.way that many businesses that loudly Uniquely among small business writers,trumpet their virtues are barely average, Phillips and Rasberry were saying thehow do you find a top-quality business same things I had learned as a co-founderwhen you need something? Almost surely, of Nolo—that the key to operating a prof-
  • I/2 MARKETING WITHOUT ADVERTISINGitable business is to respect what you do Marketing Without Advertising has beenand how you do it. This means not only updated to provide a new generation ofproducing top-quality services and prod- entrepreneurs with the essential philo-ucts, but demonstrating your respect for sophical underpinnings for the develop-your co-workers and customers. ment of a successful, low-cost marketing After many years of success, it’s a plan not based on advertising. But thisdouble pleasure for Nolo to publish an- isn’t just a book about business philoso-other new edition of Marketing Without phy. It is full of specific suggestions aboutAdvertising. Yes, lots of things about small how to put together a highly effective mar-business marketing have changed in the keting plan, including guidance concern-interim. To mention just a few, today ing business appearance, pricing,many of us routinely use fax machines and employee and supplier relations, accessi-e-mail to keep close to our customers, and bility, open business practices, customersome of us have learned to use the recourse and many other topics.Internet as an essential marketing tool. But Consumers are increasingly savvy, and in-some things haven’t changed. A trustwor- formation about a business’s quality or lackthy, well-run business is a pleasure to mar- thereof circulates faster than ever before.ket, and the personal recommendations of The only approach worth taking is to putsatisfied customers are still the best foun- your planning, hard work and money intodation of a successful and personally re- creating a wonderful business, and to letwarding business. your customers do your advertising for you. Ralph Warner Berkeley, California
  • Chapter 1 Advertising: The Last Choice in MarketingA. The Myth of Advertising’s Effectiveness ........................................................ 1/3B. Why Customers Lured by Ads Are Often Not Loyal ...................................... 1/8C. Why Dependence on Advertising Is Harmful ................................................ 1/8D. Advertisers: Poor Company to Keep .............................................................. 1/9E. Honest Ads .................................................................................................. 1/12F. Branding ...................................................................................................... 1/14G. Listings: “Advertising” That Works .............................................................. 1/15
  • 1/2 MARKETING WITHOUT ADVERTISING“Really high spending on advertising broadcasting your message to many unin-sales is an admission of failure. I’d terested members of the public, and “list-much prefer to see investments in loy- ing,” which is directing your message toalty leading to better repeat purchases specific people interested in the productthan millions spent for a Super Bowl or service, such as in the Yellow Pages.ad.” —Ward Hanson, Here’s where the figure about smallauthor of Principles of Internet Marketing. business and advertising comes from: From The Industry Standard, 4/10/2000. There are about 20 million non-farm busi- nesses in the United States. Of these, about two million are involved in con-M arketing means running a struction; another five million deal in first-rate business and wholesaling, manufacturing, trucking or letting people know about mining. A small minority (30% of the total)it. Every action your company takes sends generate customers by advertising. Thea marketing message. Building a business rest rely on personally knowing their cus-image is not something invented by a P.R. tomers, on their reputations and some-firm; it’s a reflection of what you do and times on salespeople or commissionedhow you do it. representatives. Of the remaining 13 mil- A clever ad is what pops into most lion businesses, 70% are run by one per-people’s minds when they think about get- son. It’s very rare for the self-employed toting the word out about their business. find advertising useful; the single-personThe fact is, most of us know little about business, whether that of a lawyer, doctoradvertising and a whole lot about market- or computer consultant, relies almost ex-ing. We are really the marketing experts clusively on personal recommendations.for our business because we know it bet- That leaves the percentage of businessester than anyone else. who might even consider advertising use- It may surprise you to know how many ful at less than 19%. We think most ofestablished small businesses have discov- them don’t need it either.ered that they do not need to advertise to There are four main reasons why adver-prosper. A large majority—more than two- tising is inappropriate for most businesses:thirds in the U.S., certainly—of profitable • Advertising is simply not cost-effec-small businesses operate successfully with- tive. Claims that it produces evenout advertising. marginal financial returns are usually fallacious. In this book we make a distinction • Customers lured by ads tend to be between “advertising,” which is disloyal. In other words, advertising
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 3 does not provide a solid customer your picture. It reminds us of the man in base for future business. Chicago who had marble statues of lions • Dependence on advertising makes a in front of his house to keep away el- business more vulnerable to changes ephants: “It works,” he said. “Ain’t no el- in volatile consumer taste and thus ephants in this neighborhood.” more likely to fail. James B. Twitchell, the author of Adcult, • Because a significant percentage of notes, “Although elaborate proofs of advertising is deceptive, advertisers advertising’s impotence are available, the are increasingly seen by the public simple fact is that you cannot put a meter (both consciously and uncon- on the relationship between increased ad- sciously) as dishonest and manipula- vertising and increased sales. If you could, tive. Businesses that advertise heavily agencies would charge clients by how are often suspected of offering poor much they have increased sales, not by quality goods and services. how much media space they have pur- Let’s now look at these reasons in more chased.”detail. Paradoxically, even though some small business owners are beginning to realize that advertising doesn’t work, many stillA. The Myth of Advertising’s advertise. Why? For a number of reasons: Effectiveness because they have been conditioned to believe that advertising works, becauseThe argument made by the proponents of there are no other models to follow andadvertising is almost pathetically simple- because bankers expect to see “advertisingminded: If you can measure the benefits of costs” as part of a business proposal.advertising on your business, advertising It’s important to realize that your judg-works; if you can’t measure the beneficial ment regarding advertising is likely to beeffects, then your measurements aren’t severely skewed. You have been sur-good enough. Or you need more ads. Or rounded by ads all your life and you’veyou need a different type of ad. It’s much heard countless times that advertisingthe same type of rationalization put forth works. To look at advertising objectivelyby the proponents of making yourself rich may require you to re-examine someby visualizing yourself as being prosper- deeply held beliefs.ous. If you get rich immediately, you owe According to E magazine, advertisingit all to the system (and presumably budgets have doubled every decade sinceshould give your visualization guru at least 1976 and grown by 50% in the last tena 10% commission). If you’re still poor af- years. “Companies now spend about $162ter six months, something is wrong with billion each year to bombard us with print
  • 1/4 MARKETING WITHOUT ADVERTISINGand broadcast ads; that works out to about history of advertising. In the mid-1980s its$623 for every man, woman and child in advertising agency, Foote Cone andthe United States” (“Marketing Madness,” Belding, used the first popular nationalMay/June 1996). Information Resources clay animation campaign. (Claymation is astudied the effect of advertising and con- trademark of the Will Vinton studios.) Thecluded, “There is no simple correspon- annual budget was over $40 million. Thedence between advertising and higher dancing raisins and their song “I Heard Itsales.... The relationship between high on the Grapevine” created such a popularcopy scores and increased sales is tenuous image that sales from dolls, other toys,at best.” mugs and secondary products generated To illustrate how pervasive the “advertis- nearly $200 million in revenue and re-ing works” belief system is, consider that if sulted in a Saturday children’s televisionthe sales of a particular product fall off program using the raisin characters. Raisindramatically, most people look for all sorts sales went up for the first two years of theof explanations without ever considering campaign, largely because cold breakfastthat the fall-off may be a result of counter- cereal marketers were so impressed withproductive advertising. the popularity of the ad campaign that Skeptics may claim that you simply can’t they increased the raisin content of theirsell certain consumer products, beer, for raisin cereals and joined in the advertising.example, without an endless array of After four years, the dancing raisin cam-mindless TV ads. We refer these skeptics paign was discontinued. Sales were lowerto the Anchor Steam Brewing Company of than before the ads started (Forbes,San Francisco, which very profitably sold June 17, 1996). By the early 1990s, the103,000 barrels of excellent beer in 1995 California Raisin Advisory Board had beenwithout any ad campaign. They believe in abolished.slow and steady growth and maintain a The Internet and World Wide Web haveloyal and satisfied client base. (See Chap- introduced a new test of advertising effec-ter 12 for details on how.) tiveness. Billions of dollars had been spent And consider this: The fabulously on advertising before the advent of thesucessful discount warehouse, Costco, had Web, yet no major offline advertiser wasprofits of 25% in 1999 thanks largely to able to create an online presence of anytheir cost-cutting business approach— significance. Even Toys ‘R’ Us, the majorwhich includes absolutely no advertising. American toy retailer, ranked far behind Even apparent successes may not be eToys in brand awareness online, despitewhat they seem. The California Raisin Ad- the fact that Toys ’R’ Us is a 25-year-oldvisory Board ran an ad campaign that pro- company and eToys lasted barely twoduced the most recognized ad in the years. For Toys ’R’ Us, decades of advertis-
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 5ing simply had no staying power (March they would obviously budget funds for20, 2000, The Industry Standard). One of promoting personal recommendations. In-the biggest successes on the Internet, deed, some businesses are apparently soeBay, used no advertising at all. unwilling to believe what market research One magazine with a significant audi- tells them—that personal recommenda-ence on the Internet is Consumer Reports, tions work and advertising doesn’t—thata magazine that carries no advertising. By they run ads like the one on the followingeliminating advertising from its business page.model, Consumer Reports is able to main- It’s not only large national corporationstain a high degree of integrity and cultivate that are disappointed in the results of ad-trust among its readers, who value the vertising. Local retail stores that run re-magazine’s objective information. deemable discount coupons to measure “Unlike many others who dispense the effectiveness of their advertising usu-online advice, Consumer Reports does not ally find that the business generated isn’taccept advertisements, does not earn a re- even enough to offset the cost of the ad.ferral fee for directing customers to spe- Despite this, supporters of advertisingcific merchants and does not repackage continue to convince small business own-and sell its data as market research to the ers that:companies whose products are reviewed” • The ad could be improved; keep try-(The New York Times, 3/22/2000). ing (forever). One giant aircraft manufacturing com- • All the people who saw the ad butpany, to look at the effectiveness of didn’t clip the coupon were re-heavily advertising an in-house computer minded of your business and mayservice through one of its subsidiaries, use it in the future. Keep advertisingconducted a survey to find out how its 100 (forever).newest customers had found out about it. • The effects of advertising are cumu-The results: 13% of these new customers lative. Definitely keep advertisingcame because of the advertising campaign, (forever).23% because of sales calls, 56% signed up But what about the favorable long-termbecause of recommendations of other sat- effects of continuous advertising? Isn’tisfied customers and professionals in the there something to the notion of continu-field and 8% weren’t sure why they had ally reminding the public you exist? Dr.chosen that computer service. Julian L. Simon, of the University of Illi- This is actually a fairly common survey nois, says no: “[attributing] threshold ef-result. Yet, as we can see from their fects and increasing returns to repetition ofbloated advertising budgets, very few com- ads constitutes a monstrous myth, I be-panies act on the information. If they did, lieve, but a myth so well-entrenched that it is almost impossible to shake.”
  • 1/6 MARKETING WITHOUT ADVERTISING
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 7 Using advertising to make your business television programs. The public was wella household word can often backfire; a acquainted with “ADM, Supermarket to thebusiness with a well-advertised name is World,” by the time it became embroiledextremely vulnerable to bad publicity. in a price-fixing scandal and had to pay Take the Coors brewery as an example. $100 million in fines. The moral of thisThirty years ago, after it had vastly ex- little story is simple. If these companiespanded its original territory and become a had relied less on advertising, their prob-household word throughout much of the lems would have been much less of acountry with heavy advertising ($100 mil- public spectacle.lion per year in the 1980s), the Teamsters’ Sadly, many small businesses make sac-Union waged a very effective consumer rifices to pay for expensive ads, never be-boycott against it. In Seattle, a strong ing certain they are effective. Sometimesunion town, less than 5% of the market in this means the quality of the business’sthe 1990s was drinking Coors. The Coors product or service is cut. Other times,of the 1960s, known primarily to its loyal business owners or employees sacrificecustomers in the Rocky Mountain states, their own needs to pay for advertising. Wewhere it had a third of the beer-drinking think it’s far better to use the money tomarket, was far less vulnerable to such a sponsor a neighborhood picnic, take theboycott. family on a short vacation or put the Or how about the stockbroker E.F. money into a useful capital improvementHutton, which spent many millions creat- to the business. As John Wanamaker, turn-ing a false advertising image: “When E.F. of-the-century merchant and philanthro-Hutton talks, people listen.” The image pist, put it, “Half the money I spend onbackfired spectacularly whenHutton was caught engaging inlarge-scale illegal currency transac-tions. The many jokes about whoreally listens when E.F. Huttontalks contributed to the dramaticdecline of the firm, which was ulti-mately taken over by another bro-ker at fire sale prices. Similarly, thehuge but little-known agriculturalprocessing company ArcherDaniels Midland, headquartered inrural Illinois, made itself a house-hold name by underwriting public REPRINTED BY PERMISSION: TRIBUNE MEDIA SERVICES
  • 1/8 MARKETING WITHOUT ADVERTISINGadvertising is wasted, and the trouble is, I “When I advertised, I seemed to attractdon’t know which half.” people who came because of the discount I offered. These clients often did not re- turn, would cancel sessions and generallyB. Why Customers Lured by were not repeaters. The people who were most enthusiastic, most loyal, and contin- Ads Are Often Not Loyal ued with their sessions were almost alwaysPerhaps the worst aspect of traditional ad- clients who had been personally referred.vertising, one apparent to anyone who Had it not been for the economics in-runs a retail store, is that customers who volved, I would probably not have learnedrespond primarily to media ads don’t usu- this important lesson: Personal recommen-ally return. The same truth has been dis- dation is the best advertising there is.”covered by magazines and publishingcompanies that rely heavily on junk mailsolicitations to sell their wares. The fact is C. Why Dependence onthat customers recruited through scatter- Advertising Is Harmfulgun advertising techniques such as TVspots, newspaper ads, direct mail, contests, To an extent, advertising is an addiction:unsolicited telephone sales and Internet once you’re hooked, it’s very difficult tofreebies rarely come back. Unscrupulous stop. You become accustomed to putting aInternet businesses such as DoubleClick fixed advertising cost into your budget,have used the Internet to invade your pri- and you are afraid to stop because of avacy and sell your e-mail address to other baseless fear that, if you do, your flow ofbusinesses who beseige you with so-called new customers will dry up and your previ-”targeted” marketing based on sites you ous investments in advertising will havehave visited and purchases you have been wasted.made. While of course there are rare occasions An example of this phenomenon familiar when a particular ad can produce lots ofto most owners of small service-type busi- business, it’s as rare in the small businessnesses comes from the experience of Laura world as catching a 30-pound lake troutPeck. She wrote to us that she used to ad- off a recreational fishing boat or winning avertise her assertiveness workshops, but $100,000 jackpot at a gambling casino. Thedue to financial problems discontinued the story of the great advertising success (theads. Instead, she started cultivating her “pet rock” fad of years ago is an extremeown community of friends and acquaintan- example) becomes widely known in theces for clients. Two years later, her busi- particular community and is picked up byness was thriving, and she noted: trade journals and sometimes even the
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 9general media. As a result, many inexperi- occasions. Palmer was a victim of her ownenced business people are coaxed into flash-in-the-pan advertising success. Be-spending money on ads. Overlooked in all lieving that “advertising works” had lulledthe hoopla is the rarity of this sort of suc- her into the false belief that she didn’t re-cess; also overlooked is what often hap- ally have to learn how to run a high-qual-pens to the person whose ad produced the ity business. There wasn’t much we couldquick profits. Flash-in-the-pan advertising really tell her except to start over, usingsuccess may bring an initial influx of cus- the solid business techniques and personaltomers that your business isn’t prepared recommendation approaches discussed infor. This usually has two unfortunate con- this book.sequences: many loyal long-term custom- Palmer’s business is in direct contrast toers are turned off when service declines as Gail Woodridge’s, who also specializes inthe expanding business stretches itself too wedding photography. Woodridge doesn’tthin, and most of the new customers will do any advertising in the conventionalnot be repeaters. sense, although she does list her services Mary Palmer, a photographer in San widely in places likely to produce refer-Jose, California, started her business with a rals, as discussed later in this chapter andsimplistic but traditional marketing strat- in Chapter 9. Her clients are primarily re-egy, advertising on her local newspaper’s ferred to her by wedding planners, bridal“weddings” page. Palmer was one of the gown and flower stores, friends andfirst photographers in her area to insert an former clients—people who know her andad for wedding photos. She very happily trust her to do a good job. Since this ap-took in $12,000 during the prime April-to- proach has meant that her business hasAugust wedding season. The next year she grown fairly slowly, she has had the time,advertised again, but this time her ad was and the good sense, to make sure that theone of many. Not only did the ad fail to many details of her business are in order,generate much business, she got few refer- including her office work and finances, asrals from the many customers she had well as her camera equipment, darkroomworked for the previous year. Concerned, supplies and filing system.Palmer called us for emergency businessadvice. Visiting her, we found her business to D. Advertisers:be badly organized and generally chaotic. Poor Company to KeepThe overall impression it gave was poor. Itwas easy to see why so few of Palmer’s It is estimated that each American is ex-customers referred their friends, or them- posed to well over 2,500 advertising mes-selves patronized her business for other sages per day, and that children see over
  • 1/10 MARKETING WITHOUT ADVERTISING50,000 TV commercials a year. In our ten or 20 pounds a week. True,view, as many as one-quarter of all these some people just might shed some ofads are deliberately deceptive. Increas- those unwanted pounds, but howingly, the family of businesses that adver- many will keep them off for moretise is not one you should be proud to be than three months? According toassociated with. Joan Price, in her book The Honest Truth About Losing Weight and Keep- ing It Off, 90% of dieters regain their What a Marketing Expert lost weight within one year. She ex- Says About Advertising plains, “Sorry, folks, there’s no miracle way to block, burn, rub, “Increasingly, people are skeptical of jiggle, vacuum, melt or wrap fat off what they read or see in advertisements. I our bodies. There’s no magic pill, in- often tell clients that advertising has a jection, cream or potion. If there built-in ‘discount factor.’ People are del- were, don’t you think it would make uged with promotional information, and the front page of all the newspapers they are beginning to distrust it. People and medical journals instead of being are more likely to make decisions based buried in an ad?” Nowhere in the ad on what they hear directly from other is there a mention of permanent people: friends, experts, or even sales- weight loss, because, of course, people. These days, more decisions are whatever the method it won’t work made at the sales counter than in the liv- over the long term. If the ad told the ing-room armchair. Advertising, therefore, truth, no one would use the service. should be one of the last parts of a mar- • Our friends bought their son a highly keting strategy, not the first.” advertised remote control car for —Regis McKenna, The Regis Touch Christmas. It had just hit the market, (Addison-Wesley, 1985) and our friends joined the long line at the checkout stand picturing the delight on their child’s face Christmas Do you doubt our claim that a signifi- morning. It was not clear to ourcant portion of advertising is dishonest? friends from the ads that the carDo a little test for yourself. Look through needed a special rechargeable bat-your local newspaper as we did one re- tery unit and when they returned tocent morning. Here are a few of the ads the store a week before the big daywe found: they were informed that the batteries • An ad for a weight reduction center were sold out and wouldn’t be avail- that promises its clients will lose five, able until after Christmas. They went
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 1 1 back week after week until finally, One type of dishonest advertising is es- two months after Christmas, the bat- pecially irritating because it’s a bit more teries arrived. To add insult to injury, subtle and involves magazines and news- the charger unit for the $50 car cost papers that you might have respected be- an extra $20. fore you discovered their policy. It works • An ad that offers home security at a like this: The publication touts the prod- bargain price in big letters sounds ucts and services of its advertisers in its like just the ticket to protect your news stories. For example, some computer family, until you read the fine print. magazines have been known to favorably In very tiny letters the ad explains review the products of their heavy adver- that the $99 price covers only the tisers, and small newspapers often fawn standard installation and that an ad- over the products and services of busi- ditional 36-month monitoring agree- nesses that can be counted on to buy ment is also required. In addition, a space. Once you discover this sort of telephone connection fee may also policy, everything the publication reviews, be required. even businesses that are truly excellent, is We won’t belabor the point with the thrown into question.many other examples we could cite from Devious advertising is rampant in ourjust one newspaper. Obviously, whether culture; from “enhanced underwriting” ofyou look in a newspaper, magazine or the public broadcast shows, featuring an-electronic media, it is not difficult to find nouncements that look identical to com-many less-than-honest ads. Even if you ad- mercial television ads, to paid productvertise in a scrupulously honest way, your placement (inserting brand-name goodsads keep bad company. The public, which into movies and TV). And we have come ahas long since become cynical about the long way from the dairy industry givinggeneral level of honesty in advertising, will free milk to children at recess. School dis-not take what you say at face value. For tricts across the country sell exclusive adexample, suppose you own a restaurant, space to the highest bidder on schooland instead of extolling the wonders of buses, hallways, vending machines andyour menu in exaggerated prose you sim- athletic uniforms. Channel One, whichply state that you serve “excellent food at gives participating schools video equip-a reasonable price.” Many people, cynical ment in exchange for piping ads into theafter a lifetime of being duped by puffed- classroom, is the tip of the iceberg. Corpo-up claims, are likely to conclude that your rations have begun writing the very lessonfood couldn’t be too good if that’s all you plans themselves.can say about it. Thirty years ago, a study done for the Harvard Business School made clear how
  • 1/12 MARKETING WITHOUT ADVERTISINGthe American public felt about traditional • Just do it (Nike)advertising: “43% of Americans think that • It’s a Maalox momentmost advertising insults the intelligence of • Winston tastes good like a cigarettethe average consumer. 53% of Americans shoulddisagree that most advertisements present • Not your father’s Oldsmobilea true picture of the product advertised.” • Travelers Insurance TV ad showing aThe chief reasons for hostility to advertis- child with the caption: “This is not aing are that it is intrusive and patronizing 4-year-old; this is $3.4 million in life-(73%), morally objectionable (50%), and time income.”false and misleading (36%). That the judg- We’ve all heard these slogans or onesment of the general public about honesty like them for so many years, and they’rein advertising has not improved is demon- so familiar, that we have to concentrate tostrated by this quote from the October even hear them and really pay attention to1983 issue of Advertising Age: understand if they are hype or simply not “Industry studies repeatedly show the true. And more of them bombard us everyimage of advertising very close to the bot- day. You can undoubtedly think of manytom of the ladder in comparison to other more with no trouble at all.professions. A study presented at a recent People are apparently so sick of tradi-industry conference shows advertising pro- tional advertising hype that occasionallyfessionals next to last, just above used car even counter-advertising is successful.salesmen.” Bernie Hannaford, who runs a diner Let’s take a minute to look at the adver- named “The Worst Food in Oregon,” wastising slogans of some of America’s most quoted in USA Today as saying: “I’m aprominent corporations. While the adver- lousy cook, and my father always told metising business considers the following slo- to tell the truth, no matter what.” Signsgans “good” advertising and not dishonest outside invite diners to “Come in and sithype, ask yourself, is this good company with the flies!” and warn, “Food is ter-for your business to keep? rible—service is worse.” • Bayer works wonders • Come to where the flavor is (Marlboro) E. Honest Ads • With a name like Smucker’s it has to be good Lest you become completely discouraged • You can be sure if it’s Westinghouse about the possibility of a better standard of • We build excitement (Pontiac) honesty in advertising, there is hope. At • Quality is Job 1 (Ford) least two nations, Japan and Sweden, en- • You asked for it, you got it (Toyota) courage honesty in their advertising. In
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 1 3
  • 1/14 MARKETING WITHOUT ADVERTISINGneither country do ads have “fine print” minimal. The legal standards for advertis-that contradicts the main message, nor do ing are discussed in The Legal Guide forthey permit the sorts of puffery and hype Starting and Running a Small Business, bywe are used to and which all too often Fred Steingold (Nolo.com).amounts to little more than lying. We mention the Japanese and Swedish Japan’s tradition of honest advertising is use of advertising to urge that, should youa long one. In the first century A.D., Chi- ever decide to advertise, you be sure yournese visitors were so impressed with the advertisements are scrupulously honesthonesty of Japanese businesses that they and that they are as distinct as possible inrecorded it as a main attribute of their cul- style, content and location from the gen-ture. This 2,000-year-old history of honesty eral run of other ads. For example, if youis today reflected in many details: Restau- limit an offering in a print ad in any way,rants display samples of their food in the do so in print as large as the offer itself. Ifwindow and quote prices in round num- you advertise a service, don’t overstate thebers, including sales tax and tip. If you see likely beneficial result of using it, and in-an 800-yen price advertised for an item, it clude a warning as to any risk.is the total price you pay. Nolo.com’sStephanie Harolde, who lived and workedin Japan, adds that Japanese businesses F. Brandingnever put down their competitors or usedcomparisons that intimated their product “Branding” has been a catch phrase in ad-was better than the competitors’. vertising for the past decade and brand In Sweden, whose culture is closer to managers can now be found in the mar-our own, there has been a more deliberate keting departments of large companies.political decision to foster truthful advertis- Branding is an ingenious response to theing. In that country, it has been against the fact that traditional advertising doesn’tlaw since the early 1970s to be deceptive work. The idea is to make a product orin advertising. To accomplish this, the gov- service so well known that its consumerernment not only extended its criminal recognition magically places it in the cat-code to proscribe deceptive advertising, egory of widely recognized and respectedbut also formed an administrative agency brands. The concept of branding is that ato enforce the law. As a result, the Swed- minor brand, Electronic Product X, can be-ish people now strongly defend the integ- come as well known as a major brandrity of their advertising. Perhaps someday such as Sony Electronics if Electronic Prod-we, too, will be proud of ours. uct X simply spends enough in advertising Deceptive advertising is technically ille- to “establish” its brand name.gal in the United States, but enforcement is
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 1 5 The problem with this concept is that many types of advertising do work fortrue brand identity is created when a com- small businesses.”pany produces quality products or services The types of “ads” that often work forand stands by them with solid warranties, small businesses include the telephoneproduct recalls and other methods to en- Yellow Pages, business directory listings,sure customer satisfaction. Running a busi- flyers posted in laundromats, goodness this way—not spending a fortune on Internet Web pages and “notification” typeadvertising—is what creates trust and ads placed in all sorts of appropriate loca-goodwill. In recent decades, several brand tions, from free “penny saver” newspapersnames were devastated when they did a to, in the case of a restaurant with latelousy job of handling problems with their evening hours, the program of the localproducts. Perrier, Gerber baby products, symphony.Sears Auto Centers and Firestone each mis- We make a major distinction betweenmanaged product recalls and took years to these types of ads directed at interestedrecover. Gerber was ultimately sold to new prospects and traditional print, broadcastmanagement, and Sears even damaged its and electronic advertising. In fact, we pre-reputation with its non-auto business. On fer to call these sorts of notices, whetherthe other hand, Tylenol handled a recall paid for or not, “listings.” One good rulebeautifully and made its brand even stron- to distinguish the two is that a listing isger. found where people are looking for it. A For a branding strategy to be effective, a traditional ad, on the other hand, like acompany must be vigilant about its prod- billboard in front of some lovely sceneryuct and service quality—and be prepared or a deodorant commercial in the middlefor emergencies. Without addressing these of an engrossing TV show, is usually intru-issues, a company’s reputation is a sitting sive and often annoying.target, waiting to be ruined. No amount of Another aspect of traditional advertising,advertising will be able to develop a good but not of listings, is that advertising agen-repuation for a company unless there’s cies get what amounts to a kickback forsolid product integrity behind it. selling an advertisement: They make most of their money from the discount the me- dia offers only to them. For example, anG. Listings: “Advertising” ad agency might sell you an ad for $100,000 and then buy media time for That Works $85,000. If you list your business in the“Hey, wait a minute,” you may be saying. Yellow Pages, even using a large ad, you“Traditional media advertising may not be and the ad agency are charged the sameas worthwhile as it’s cracked up to be, but rate. Putting up a successful website can
  • 1/16 MARKETING WITHOUT ADVERTISINGdraw hundreds of thousands of viewers, The Chamber of Commerce, employ-even if you create it yourself. In other ment and rental agencies, professionalwords, listings almost never have an ad newsletters, magazines and journals, andagency discount policy. special interest books, such as those We strongly encourage the use of list- geared to the writer or photographer, areings, and, for most businesses, insist on commonly accepted places to list goods orthe importance of having a website. In- services. And in some instances, newspa-deed, for most businesses, listings are es- pers have developed such strong special-sential, particularly Yellow Pages ads for interest sections that it also makes sense tobusinesses that people use primarily in an list one’s services there. For example, aemergency: a drain cleaning service, a travel agency specializing in charter flightsplumber or a locksmith, for example. List- to Asia might place a list of prices in theings in the phone book Yellow Pages— Sunday travel section. Similarly, small com-and, where appropriate, the Silver Pages munity newspapers exist primarily thanksfor seniors and ethnic Yellow Pages—are to local advertising, which usually consistsinvaluable. of listings of goods and services. Many In a few instances, the concepts of list- merchants find that this type of listinging and advertising have all but merged. does produce good results. Local schoolsFor example, in many areas of the country, and theater groups also depend on theWednesday is traditionally the day grocery support of the business community. Westores put items on sale. Thrifty shoppers consider those kinds of ads as listings oftherefore check the full-page lists (ads) of the best sort.items for the best bargains. In our view, In this vein, we have long been associ-this sort of advertising qualifies as a listing ated with the Common Ground directory,as long as it is placed where consumers a very successful cooperative enterprisenormally check. that publishes information in newspaper Similarly, in the computer software busi- form about businesses involved in per-ness, a great deal of software is sold at dis- sonal transformation. Interested peoplecount prices by companies that regularly subscribe or pick up a copy at coffeeadvertise their wares in computer maga- shops, health spas or wherever the busi-zines. The ads feature, in very small print, nesses listing in Common Ground feel it islong lists of available software. Sophisti- appropriate to leave a stack of papers.cated customers know to check these list- Since distribution is taken care of by theings first whenever they need software, people who list in the directory, the paperbecause the prices offered are usually has an uncanny ability to be located ex-lower than in retail stores. actly where people who are interested in the services listed are likely to find it.
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 1 7 Nonprofits face the same challenge that from home, you list this fact as poignantlyfor-profit businesses do: They need to tell as possible on the corner telephone poleas many people as possible about the ser- or fence post. This sort of listing is sovice or product they provide. The Palo common that if someone in your neigh-Alto, California, Information & Referral Ser- borhood finds a pet, she is very likely tovice has come up with a clever way to dis- check out that same pole or fence. In ruralseminate a lot of information in a areas all kinds of information is posted inconvenient package. It puts out an easy- this way. When Salli was out on a walkto-use directory that lists some 200 local along her country road recently she no-agencies and organizations and gives the ticed a cardboard sign nailed to a pole:Service’s number for further information. “Warning! Don’t buy! Carl Chase [not his It’s important also to realize that listing real name] delivers wet wood and won’tcan take lots of forms other than paid return deposit. Ex-buyer.” There is nothingspace in publications. For example, in new about this. The Romans used to paintmany areas, if your cat or dog runs away information about upcoming gladiatorA PAGE FROM COMMON GROUND, A DIRECTORY OF BUSINESSES INVOLVED IN PERSONALTRANSFORMATION
  • 1/18 MARKETING WITHOUT ADVERTISINGfights on the walls of buildings, and the who live in a certain area will print a mapGreeks posted important notices on rotat- along with a short description of theiring columns at busy locations. work and host “open studio” weekends. For home service businesses such as Motels and bed and breakfast inns arechimney sweeping, babysitting and house good places for many small businesses tositting, the laundromat bulletin board is be listed as part of the establishment’s rec-where many people look for help. Col- ommended services.leges and universities are a good source Having a Web page is automatically afor language schools, tutors, dance instruc- “listing.” Helping people find your websitetors, typists and roommate referral ser- is a unique and specific marketing issuevices. In rural areas, being listed on the that we cover in every chapter and in de-Farm Trails Map (a guide for visitors inter- tail in Chapter 11. No matter what yourested in buying agricultural products) is business, there are sure to be many excel-one of the most important marketing tools lent places to list its availability at lowfor people selling fruit, nuts, vegetables, cost. slivestock and Christmas trees. And artists
  • Chapter 2 Personal Recommendations: The First Choice in MarketingA. Cost-Effectiveness .......................................................................................... 2/2B. Overcoming Established Buying Habits ......................................................... 2/4C. Basing Your Marketing Plan on Personal Recommendations ......................... 2/5 1. Trust ........................................................................................................... 2/5 2. Backing Up a Good Recommendation With Information .......................... 2/6 3. Responsibility ............................................................................................ 2/7D. When Not to Rely on Word of Mouth for Marketing .................................... 2/7
  • 2/2 MARKETING WITHOUT ADVERTISING“It is the thing you look for, ache for.” business obviously comes from selling a —Charles Glenn, Orion Pictures product or service at a price that substan- tially exceeds your cost to provide it. TheW e hope we have succeeded three main costs involved in doing this in in getting you to think any business are: about the dubious value • Providing the product or service theof advertising for your business, if you customer wants,hadn’t already independently arrived at • Getting new customers, andthis conclusion. Now it’s time to talk about • Getting repeat business.a marketing strategy that does work: per- Notice that two out of three of these cat-sonal recommendations. In our view, pro- egories have to do with attracting custom-moting personal recommendations is a ers. If you can accomplish both of them atsuperior, yet often overlooked, strategy to a reasonable cost, your business shouldattract and keep customers. prosper. The idea of people making recommen- Clearly, the customer who is referreddations to other people is so familiar to us comes to you at a lower cost than the onethat it often takes a big stretch of the who sees an advertisement. In addition, asimagination to understand what a signifi- we will discuss in more detail below, acant factor it can be in improving the prof- customer who is referred to you is bothitability of your business. Most business more likely to return and more apt to tell aowners have no idea just how powerful friend about your business than is the per-this tool is because they don’t know how son who responds to an advertisement. Toto use it efficiently. Yet ask yourself how better illustrate this point, let’s look atmany of the interesting people you have some businesspeople who have prosperedmet, places you have visited, and more to using a personal recommendation market-the point, high quality small businesses ing strategy.with whom you have had positive relation- Sam DuVall, who conceives of eatingships, have come to you from friends who places as theater, has owned very success-cared enough to tell you about them. ful restaurants: The Ritz Cafe in Los Ange- les and the Elite Cafe in San Francisco. The Elite Cafe was one of the first placesA. Cost-Effectiveness in Northern California to serve New Or- leans cuisine. Money was invested in goodThe overriding reason why personal rec- food, good service and in creating aommendations are a better source of new unique ambiance worth talking about, notcustomers than advertising is that they are in advertising. DuVall neither advertisesmore cost-effective. Monetary success in nor does any paid promotion in the con-
  • PERSONAL RECOMMENDATIONS: THE FIRST CHOICE IN MARKETINGS 2/ 3ventional sense, yet the Elite Cafe has “gripe and praise” forum where peoplebeen packed every night for years. When share their experiences, which have beenasked about his success, DuVall said, overwhelmingly positive.“Nothing works as well as word of mouth. Substituting personal recommendationsPeople believe in it.” for advertising doesn’t mean that you do The equally famous and exclusive Los nothing but hope that your customers willAngeles restaurant, Ma Maison, takes an tell others about your business. In fact, foranti-advertising stand still further, refusing most businesses, encouraging positiveeven to list its phone number in the Yellow word of mouth is an active and ongoingPages and totally depending on personal endeavor involving the creation of a mar-recommendations to produce customers. keting plan that goes to the heart of theAnd should you doubt this sort of market- business. For example, the Caravan Travel-ing approach can be successful except for ing Theatre Company of Armstrong, Britishthe most exclusive of restaurants, there is Columbia, relies heavily on personal rec-TGIFriday’s, an estimated $500-million- ommendations to promote its shows. Asgrossing restaurant chain that is part of the they travel from town to town in coveredCarlson Group (started in 1965 in New wagons pulled by Clydesdale horses, thisYork) that caters to singles. According to a naturally colorful group attracts a lot of at-July 1985 piece in Inc. magazine, Friday’s tention and creates good publicity in an“has marketed itself successfully without honest, fun way.spending a dime on advertising. And that is The Caravan Company doesn’t, how-not likely to change. . . . [According to the ever, just rely on this sort of attention. Atfounding president, Dan Scoggin], ‘if you’re the end of each performance, the cast asksperforming by a standard of excellence, members of the audience to encourageyou don’t have to advertise. People know their friends in the next town (they sched-and they’ll tell their friends. If you’re a res- ule shows in towns reasonably close to-taurant that is advertising, you must be me- gether) to attend. Often, audiencediocre.’” members get so excited about the show The most highly recommended restau- that they not only call their friends but ar-rant in the United States, the French Laun- range to join them at the next stop to en-dry in Yountville, California, has never joy the show with them.advertised. The movie industry is one of those most eBay, as noted in Chapter One, doesn’t obviously affected by personal recommen-advertise but encourages their users to dations. Even though well over a billionspread the good word by hosting a feed- dollars is spent every year on promotingback forum. To help assure new users that new movies, people talking to people isthe auction really works, eBay created a what really counts. According to Marvin
  • 2/4 MARKETING WITHOUT ADVERTISINGAntonowsky, head of marketing for Uni- B. Overcoming Establishedversal Pictures, “word of mouth is like Buying Habitswildfire.” This point is well illustrated bythe number of low-budget movies that Personal recommendations are also one ofhave succeeded with little or no advertis- the best ways to overcome a big hurdle foring—and by the number of big-budget a business that wants more customers: theflops. tendency of people to patronize the same Like the movies, book publishing is an- businesses over and over. The averageother industry where lots of money is tra- number of significant monetary transac-ditionally spent on advertising but can’t tions (not counting newspapers, carfare,begin to compete with the power of etc.) for a family in the United States isfriends telling friends about their discover- about 65 per month. This means that ifies. A few years ago, The Road Less Trav- you are typical, someone in your familyeled, by psychiatrist M. Scott Peck, was just opens a wallet, writes a check or handsanother psychology/relationship book lan- over a plastic card 65 times each month toguishing on bookstore shelves. Then a few pay for something. For most of us, thepeople read it, told their friends, and great majority of these transactions arestarted a chain reaction that’s still going conducted with people we have doneon. Today there are well over two million business with before. Consider your owncopies in print. habits. You probably tend to repeatedly The two people most responsible for patronize the same dry cleaner, hardwarespreading word of the book were one of store, dentist, plant nursery and exercisethe publisher’s sales representatives, who facility. If you’re like most people, it takeswas so impressed that he insisted that a substantial nudge to get you to changebook buyers at stores read the book, and a one of these business relationships.teacher in Buffalo, New York, who gave Given the fact that most people are fairlycopies to teachers and ministers she knew. stable in their daily business patterns, howAs a result, two churches invited the au- do you encourage a significant number tothor to speak, the local bookstore began give your business a chance? Or, put moreselling hundreds of copies, and the pub- concretely, how do you get people to trylisher (Simon & Schuster) took another your stress reduction class, law firm,look at the book. A promotional tour laundromat or the new computer you areboosted sales, which have kept rising. The selling out at the shopping center? Per-author has since published a teaching sonal recommendations are the answer.guide to the original book and a new Overcoming buying habits is difficult.book expanding on the ideas in The Road However, once you realize that the major-Less Travelled. ity of people locate a new product or ser-
  • PERSONAL RECOMMENDATIONS: THE FIRST CHOICE IN MARKETINGS 2/ 5vice based on personal recommendations, • Are your financial records in ordernot advertising, you have at least half the and up-to-date?battle won. To win the other half, you • Are your employees knowledgeablemust make your loyal customers, employ- about your product or service andees, suppliers and friends an integral part enthusiastic about working for you?of your marketing plan so that your busi- • Do you offer top-quality goods orness will be recommended enthusiastically services?and often. • Do your customers have confidence that if something goes wrong with the products or services you sell, youC. Basing Your Marketing Plan stand behind them? • Is your website being kept up-to- on Personal date? Recommendations Just the simple exercise of asking and answering these few questions mayOnce you have decided to base your mar- prompt you to make changes in your busi-keting plan on personal recommendations, ness. The rest of this book should helpyour next job is to understand why people you implement changes that will really al-go out of their way to recommend certain low you to take advantage of personal rec-goods and services and not others. What ommendations.gets them motivated to sing the praises of Before we deal with the many practicala business they think highly of? Have you techniques you can use to encourage cus-told a friend about a particular business— tomers to recommend your goods and ser-perhaps a seamstress, gardener, dentist or vices, it’s important to understand thecheese store—in the last six months? What elements that go into a positive recom-were the things about each of these busi- mendation. To succeed in the long run, anesses that caused you to recommend marketing campaign based on personalthem? recommendation must be in tune with all Most of this book is devoted to analyz- of them.ing these kinds of questions. But the an-swers can be summed up as follows: Ifyour business is truly worthy of being rec- 1. Trustommended, you will be able to answer allor most of the following questions in the Before you accept a recommendation fromaffirmative: someone, you must trust his or her judg- • Is your business running smoothly ment and integrity. Dr. Sidney Levy, chair- on a day-to-day basis? man of the marketing department at
  • 2/6 MARKETING WITHOUT ADVERTISINGNorthwestern University, explains it this “tasted fishy.” Did he confuse bouillabaisseway: “More personal than advertising and with borscht? Would you take seriously hissmacking of ‘inside’ information, word of recommendation of a seafood restaurant ormouth can be a uniquely powerful market- fish market?ing tool. If somebody you trust suggests Another friend, Linda Richardson, spentsomething is meaningful, that is more im- three months traveling around the U.S. andportant to you than information presented Asia studying coffee roasting methods inin an impersonal way.” preparation for starting her own coffee A good example is when a friend goes shop. Linda knows more about coffee thanout of his way to introduce you to some- anyone else we know, so when we took aone. Such introductions are explicit or im- trip to San Diego recently, we tried out herplied personal recommendations, and most favorite shop. The espresso was great, aspeople are careful about making them. we knew it would be. The difference be-When you are on the receiving end of tween Walter’s and Linda’s ability to makeone, you evaluate the person making the reliable recommendations is obvious.introduction as carefully as you do the Linda knew her coffee. Walter did notperson being introduced. For instance, know his fish.think of three people you work with and Finally, think for a minute about howthen imagine that each recommends a dif- many people you know who almost al-ferent pilot (none of whom you know) to ways steer you accurately, and others whotake you up in a small plane. Whom sound off on every subject whether theywould you be more likely to go with? know anything about it or not.Would you go with any of them? How Word of mouth works incredibly fast onmuch would your choice be influenced by the Internet. Even a seemingly innocuousthe person doing the recommending? e-mail sent to a good-sized mailing list with an instruction to “pass this e-mail on” can easily spread like wildfire. Some2. Backing Up a Good people like to keep everyone on their mail Recommendation With lists informed about things they deem im- Information portant—which can sometimes be virtually anything and everything. Our advice is toWe must also consider whether or not our carefully consider and check out informa-friends know what they are talking about tion before passing it on. A friend or busi-when they make a recommendation about ness associate might understand one “savea business. One friend, Walter, once or- a starving child, click on this website”dered bouillabaisse, tasted it, made a face scheme, but will quickly learn to mistrustand quietly sent it back, complaining it your judgment if you do it over and over.
  • PERSONAL RECOMMENDATIONS: THE FIRST CHOICE IN MARKETINGS 2/ 73. Responsibility can really trust you to stand behind your product or service should something goBecause of the nature of friendship, per- wrong.sonal recommendations carry with them adegree of responsibility for the outcome. Ifyour friend introduces someone to you D. When Not to Rely on Wordwho turns out to be untrustworthy, it can of Mouth for Marketingdeeply strain the friendship, and yourfriend must make a sincere attempt to We come now to an important warningmake the situation right or risk eroding about the power of word of mouth. Thereyour friendship. is an extremely good reason why many Obviously, carelessly recommending a American businesses may not want tobusiness can also strain a friendship. Imag- adopt a marketing plan based on the sortsine your feelings if a friend recommended of things we discuss in this book. This rea-a carpenter who tried to jack up the price son is simple. Word of mouth is just as ef-in the middle of the job, or a computer fective in getting out the bad news about aconsultant who screwed up your payroll business as it is to spread good tidings. Insystem and then disappeared two days be- fact, the Ford Motor Company estimatesfore payday. that a dissatisfied car owner tells 22 And if a product or service you recom- people, while a satisfied car owner tellsmend to someone doesn’t work out, it’s eight.not always clear what you can do to deal These figures may be going up; with thewith your friend’s hurt feelings. For ex- Internet, it is easy for knowledgeableample, if your favorite hairdresser gives people to complain to tens of thousands ofyour mother-in-law a frizzy permanent, other people—and they do.you will probably hear about it for years, A good example is the former website,whether you buy her a filet mignon dinner DrKoop.com. Dr. C. Everett Koop was aor not. well-respected Surgeon General in two Re- Given the responsibility that goes with publican administrations. He started amaking a recommendation, people will website that used his name to dispensenot recommend your business unless they medical information and advice. His sitefeel confident in it. As a direct conse- spent $147 million to solicit business onquence, your business policies and prac- other websites and was one of the mosttices concerning errors, mistakes and visited health sites on the Web. Why did itproblems are of great concern to your cus- fail? Negative word of mouth. Nurses intomers who make recommendations. They America had complained for years aboutwill recommend your business only if they rashes caused by rubber gloves and been
  • 2/8 MARKETING WITHOUT ADVERTISINGtold by Koop when he was the Surgeon poor quality merchandise successfully toGeneral that it was an imaginary problem. gullible viewers but were eventually de-When DrKoop.com was founded, word stroyed by word of mouth. One was agot out that Dr. Koop had been on re- miniature fire extinguisher, about sixtainer to a rubber glove company at the inches long, designed to be placed neartime he dismissed the nurses’ complaints. the kitchen stove, and the other, an aero-Moreover, “the site came under attack...for sol can of air used to inflate flat tires. Nei-failing to notify visitors that a group of ther product worked in an emergency, ashospitals had paid to be included in a sec- promised in the ads. In each instance ittion on community resources, and that took about six months for enough peopleKoop himself was receiving a commission to buy them, rely on them in an emer-for products sold on the site.” (Industry gency, and tell their friends what rottenStandard, April 17, 2000.) products they were. The advertising con- Certainly, if your product or service is tinued, but word of mouth was so power-no better than average, you should put ful that both companies were soon out ofdown this book and avoid like the plague business.a marketing plan based on word of mouth. We’ve also found, after years of givingBusinesses with average or negative at- marketing advice to small businesses, thattributes succeed only if they rely on such it’s bad practice to help a business devisethings as extensive advertising and high- a marketing plan to encourage personalrent locations. Such is often the case with recommendations unless it can handlebusinesses that cater to (or prey upon) more customers. Even if your business istourists. For example, in Boston’s wharf in decent shape, it may still not be runarea, there are numerous restaurants that well enough to handle the expansion thatBostonians sneer at but unsuspecting tour- a marketing plan based on personal rec-ists are eager to patronize. Many visitors ommendations will bring and still maintaindon’t know any Bostonians and don’t have its quality. When a business is not readythe benefit of the natives’ negative word of for expansion, a large influx of new cus-mouth. They don’t know that when they tomers can easily produce a waking night-trustingly order local lobster, far from get- mare complete with dissatisfied customers,ting a freshly caught crustacean, they are low employee morale and general frustra-being served lobster fresh from the freezer. tion at not being able to provide good ser- Even a media blitz won’t save an inferior vice. Naturally, when this happens,product from bad word of mouth in the customers will tell their friends, and along run. Two products come to mind downward business spiral begins.when we think of expensive national TV For example, a well-known shoe manu-advertising campaigns that initially touted facturer sent out a mailer advertising a
  • PERSONAL RECOMMENDATIONS: THE FIRST CHOICE IN MARKETINGS 2/ 9sale. Rasberry was excited as she has a catalogue was updated, the names of doz-very narrow foot and they advertised her ens of businesses that had failed in the in-size in styles she liked. When she went to terim had to be omitted. In a significantthe store, she was very disappointed as number of instances, the reason for failurenot one of the styles was available in her was that the business didn’t know how tosize. She was told by a frazzled sales- cope with the large volume of new orders.woman that they only stocked one of each It’s not only small businesses that arestyle in each size! Still, since she was vulnerable to this phenomenon. One ofpromised the shoes she wanted were the largest HMOs in the country continu-available from the warehouse, Rasberry ally spends large sums of money advertis-decided to order two pairs. A week later, ing for new clients while leaving theirshe received a phone call saying one pair current clients standing in long lines at thewas actually no longer being made. A pharmacy and unable to get appointmentsweek after that came a rather poignant with their doctors. When they finally arenote from the salesgirl and her manager able to schedule an appointment, they aresaying the other pair was also unavailable. allotted such a short time as to leave bothThey did enclose a 20% off coupon for her patient and doctor frustrated. The results:next visit. Needless to say there won’t be a an exodus of doctors who can no longernext time. tolerate the situation and dissatisfied cus- Another, dramatic example of this phe- tomers who are not shy to tell anyonenomenon occurred when The Last Whole who will listen. One of the authors lis-Earth Catalog (Random House), a publica- tened to the complaints of an elderlytion that reviewed thousands of high-qual- woman propped up on her cane as sheity products designed for simple living, waited in line for her medicine while an-sold over a million copies and produced a other patient went ranting down the hall-huge upsurge of orders for some of the way shouting, “Stop spending money forproducts reviewed. When a year later the commercials and get me a doctor!”
  • 2/10 MARKETING WITHOUT ADVERTISING Marketing Without Advertising Checklist 1. My product or service is up-to-date and is the best it can be. 2. I have an open, visible, understandable and very generous recourse policy, which is clearly posted on my website. 3. I can clearly describe my business and so can most of my clients, sup- pliers, friends and employees. 4. My pricing is clear and complete and tells customers what they need to know about my level of expertise and my target clientele. The price allows them to tailor elements to their needs. 5. My business is open in its financial information, management policies, physical layout and its operating functions. 6. My clients know as much as they want to know about my product or service, including the ways it is outstanding and unique. Referrals and evaluations from other respected people in the field as well as from customers are easily available and posted on the website. 7. Old clients and others who have lost track of the business can easily find it in countless listings, reference materials, Internet search en- gines, Web directories, and through neighbors and business associates. 8. I have a complete list with mailing addresses and phone numbers of my current and former clients as well as my suppliers, friends and in- terested parties. When relevant, referral sources are noted. 9. I have a current calendar of marketing events and regularly schedule activities of interest to which I invite my customers and other appro- priate associates. Everyone who attends feels a part of my community when they leave. 10. I know how big I want my business to be and am prepared to handle growth created by my marketing. I am prepared and alert to cutting it off whenever a new customer gets better treatment than an old client. s
  • Chapter 3 The Physical Appearance of Your BusinessA. Conforming to Industry Norms ..................................................................... 3/2B. Fantasy: A Growing Part of Retail Marketing ................................................. 3/5 1. Cleanliness ................................................................................................ 3/7 2. Smell ......................................................................................................... 3/8 3. Clutter ....................................................................................................... 3/9C. Evaluating Your Business’s Physical Appearance .......................................... 3/11
  • 3/2 MARKETING WITHOUT ADVERTISINGM ost of us give the physical be a customer and ask yourself whether appearance of our business the appearance of the business would in- a great deal of thought— spire your trust. If you feel you are just tooat least at the beginning. Signs, packaging, close to your business to really see it withwindow displays and office layout are all fresh eyes, elicit the help of a friend, or of-given great attention. Unfortunately, as the fer to check out another business in ex-months turn into years, we tend to de- change for getting an assessment of yourvelop sloppy habits. Window displays that own.were once cleaned weekly and redone Keep in mind five goals for yourmonthly now stay up a couple of weeks business’s appearance:longer and are rarely cleaned in the in- • It should conform to, or exceed, theterim. Employees who were once required norms of the business you are in.to look fresh and clean now sometimes • It should be squeaky clean.work in T-shirts and raggedy jeans, and no • It should have an appropriate smell.one has gotten around to fixing the dent • It should be uncluttered.in the delivery truck or thought to run it • Your website should be updated asthrough a car wash. often as is possible and appropriate. While the graphic presentation (espe-cially packaging, promotional material andlistings) of most businesses improves withtime, carelessness almost always creeps A. Conforming to Industryinto other areas. Sloppy storage areas and Normsrestrooms, messy bookshelves in offices,boxes of files piled in inappropriate places When your business’s appearance isn’tand half-dead plants in the corner of the what your customers expect, you riskoffice are all things that a business owner making them uncomfortable—even whenmay hardly see, but are sure to turn off the divergence improves the look of yourcustomers. If this is what it looks like in business. Customers have a fairly clear im-the visible parts, customers wonder, what age of what most businesses “should” lookmight lurk in the file cabinets and drawers like. If they don’t know it from their ownhidden from view? And more important, observation, they rely on movies, televi-who can have confidence in the skill of sion or magazines for models.management? When they encounter a business that Whether you are about to open a busi- doesn’t conform to these ideas, they feelness or have been in operation for some dissonance, the sense that something istime, review all of the key elements of the out of whack, out of balance. It’s an un-appearance of your business. Pretend to comfortable feeling that many people
  • THE PHYSICAL APPEARANCE OF YOUR BUSINESSS 3/ 3won’t be able to verbalize; they just know appliance store which displays a relativelysomething is wrong. small amount of merchandise works fine if The point is simple. If you give your it clearly communicates to customers thatcustomers something that they don’t ex- the appliances displayed are samples andpect, it is essential that you examine how orders are filled from a nearby warehouse.they will react to this divergence. In retail- Consumer Distributing, a discount retailing, for example, a large amount of hard goods chain, uses this model.densely packed stock is generally associ- Many types of businesses traditionallyated with low prices, while widely spaced have miserable surroundings. Auto scrapstock conjures up images of high price yards are an extreme example; manytags. A clothing store such as Ross’s Dress laundromats are another. This is almostfor Less, displaying racks packed with certainly one of the reasons why manyclothes, is presumably cheaper than a small yards have failed in the last fewstore such as Comme des Garcons, of San years. Customers will no longer put upFrancisco, Tokyo, Paris or New York, with greasy, dangerous surroundings. Ifwhere each display features a very limited the appearance of typical businesses likenumber of items. By tinkering with these yours is generally considered to be poor,customer expectations, you risk creating rising above the industry norm is an essen-confusion. A customer shopping in a jew- tial part of building customer trust. An ex-elry store that offers a few items, widely ample of a business that exceeds thespaced, would very likely find low prices industry norm is an optometrist who has adisconcerting and might wonder if the clear, meaningful display in the windowpricing were wrong, the goods were fakes, instead of the usual pile of empty eyeglassor worse yet, stolen. Disconcerting cus- frames and faded photos of models wear-tomers a little is by no means always bad. ing last year’s sunglasses. Another is aThe store selling bargain jewelry in an un- plumber with a clever and educationalcluttered atmosphere might well prosper, window display featuring different types ofassuming other marketing techniques were pipes and fittings instead of a couple ofused to reassure the customer. pink toilets. Similarly, auto repair shops Carefully planned deviations from the with clean offices, waiting areas and spot-norm can be effective. For instance, an in- less restrooms are a welcome improve-expensive restaurant can emphasize ment over the usual dirty, battered-lookingwidely spaced tables and a quiet atmo- garage waiting areas we have all come tosphere if this deviation from the expected dread.is clearly understood, as might be the case Professional office waiting areas provideif it used a name such as “Beggar’s Ban- another example where standards arequet.” Similarly, an uncluttered discount commonly low. A doctor, dentist, architect
  • 3/4 MARKETING WITHOUT ADVERTISINGor lawyer who has a well-designed office In the course of our work, we havewith comfortable furniture, often-changed been asked to go into a lot of business set-educational displays and materials about tings and suggest changes. Indeed, wethe particular area of practice, as well as a have done this so often that it has becomebroad selection of magazines less than six almost second nature to walk into a busi-months old, is still a welcome exception to ness and mentally redesign it. Perhapsthe norm. Many Nordstrom’s department you, too, have been tempted to do this. Ifstores make their atmosphere more pleas- not, why not begin? Think about how youant than most retail stores by inviting local would improve the appearance of the nextpiano teachers to play a grand piano in ten businesses you visit, keeping in mindtheir high fashion departments. It’s good that your redesign plan should work with,for the teachers, too, who can give out not against, industry norms. Once you gettheir cards. adept at this, apply the lessons you have Going beyond industry norms and com- learned to your own business.municating the improvements to your cus- British Airways wanted to keep custom-tomers should be a goal in any good ers happy, so asked regular customers onmarketing plan. The upholsterer across the the transatlantic run what they moststreet from our office, who currently dis- wanted. The answer was an overwhelmingplays two beautifully restored art deco “Leave us alone and let us sleep!” Passen-chairs in his window instead of the more gers wanted their own comfy universe,typical pile of fabric (which tells us noth- and they got it. British Airways first-classing about the quality of his workmanship passengers currently dine on a five-courseor his specialties), is a good illustration. meal with fine linen and candlelight in theAnd then there is a travel agent we know waiting lounge before they board the air-who decided that the usual run of travel craft, and then it’s to sleep right after take-posters was simply a bore and instead dis- off.plays (and changes monthly) period cos- The seat reclines almost to horizontal—tumes of the country he is featuring. In as close to a bed as you can get. The air-this regard, one of our favorite store win- line lends you a two-piece running suitdows is Campus Shoe Repair in that is like a nice pair of pajamas and pro-Westwood, California, near UCLA. It dis- vides you with a comforter and face mask.plays a mechanized cobbler resoling a If you don’t want to sleep, you have yourshoe, along with miniature replicas of a choice of movies at your own seat and anfootball, baseball glove, boots and other in-flight banquet.items the proprietor can fix.
  • THE PHYSICAL APPEARANCE OF YOUR BUSINESSS 3/ 5B. Fantasy: A Growing Part usually fantasy-land creations on a minia- of Retail Marketing ture scale. Many retail business interiors are sketches of a fantasy, with images andFor many centuries there has been a trend artifacts on the walls and in the aisles.to mix fantasy and product sales. Today, Restaurants often invoke a fantasy atmo-the trend has grown to such an extent that sphere, whether is it is Olde England withall businesses need to think about fan- leather benches, wooden beams and imita-tasy—especially when considering a tion pewter mugs or a Polynesian islandbusiness’s appearance. with bamboo, fish nets and tropical paint- Medieval trade fairs in Europe and West ings.Africa had clowns, dancers, musicians, Many direct-mail catalogues are 100%puppets and storytellers to create a festive fantasy creations. They show people inatmosphere. The fantasy that these enter- landscapes and exotic settings with distinc-tainers were trying to create was “para- tive clothing and accoutrements for sale.dise.” Today, businesses create fantasies In many cases the descriptions of the itemsthat stimulate demand for their products. read like an exotic travel brochure. We have fantasies in the form of physi- The growth of direct-mail catalogues incal locations; Disneyland is a good ex- the past two decades has played a role inample. Disneyland has a fantasy accelerating the active use of fantasy inturn-of-the-century Main Street, jungles business. There are many cases of cata-and underwater worlds. At Tinseltown Stu- logues that paved the way for retail storesdios near Disneyland in Anaheim, Califor- in keeping with the catalogue’s fantasynia, you can totally indulge your desire to theme, from Smith & Hawken andbe a star at a fantasy Academy Awards cer- Crabtree & Evelyn to Victoria’s Secret andemony. Customers at Tinseltown are not The Sharper Image.treated as guests but as screen idols. Once In traditional businesses, it is hard toyou enter through the door you are bar- know how much fantasy to invest in. Araged by autograph seekers, the paparazzi, law office that has a modest investment inreporters and TV crews. As you walk shelves filled with law books (rarely useddown the long red carpet, all eyes are on anymore, in the electronic age) and high-you. Tinseltown lives up to its slogan of back leather chairs is better off than a“taking unknown people and turning them similar office resembling a sterile dentalinto screen legends.” waiting room. But putting a large invest- Many retail stores go directly for a ment into maple burl paneling, a fireplaceDisneyland-like reproduction. Victoria’s Se- with a real fire and a courtroom railingcret lingerie stores, for example, have a might not be justified.racy boudoir ambiance. Store windows are
  • 3/6 MARKETING WITHOUT ADVERTISING Gone are the days when a vacation ho- with information and suggested conversa-tel is sought for its uniformity. Today’s tions for the would-be academic.pleasure traveler who can afford it seeks Our favorite recent example of a busi-the thrill of a unique experience. She ness that fully comprehends the notion ofwants to escape the familiar and try on a fantasy is in Tokyo (always the leadingnew identity—if only for a weekend. Bill edge in marketing) near Roppongi Corner.Kimpton operates several such fantasy-ori- This retail store was named after an imagi-ented boutique hotels; the one we person- nary island with an imaginary culture. Inally enjoy is the Triton near San the store is everything one could buy on aFrancisco’s Chinatown. The Triton is a trip to this island: clothes, sandals, jewelry,showcase for local artists. A dreamy, flow- fabrics, art pieces for the wall, furnitureing mural of pastel hues covers the wall and incense. The design of everything wasand ceiling of the lobby. Handcrafted perfect to the last detail and was a synthe-tables and lamps and rock and roll music sis of elements from Southeast Asia. All thecreate a mad-hatter tea party type atmo- pieces for sale are custom-made for thesphere. Like most of Kimpton’s boutique store.hotels, the occupancy rate is around 80%. Whatever your business, it is worth A new business based entirely on fan- thinking about the fantasies concerningtasy, such as a multimedia production your product or service that would supportcompany, needs to put a significant invest- additional sales. Think boldly, because wement into the fantasy appearance of the are in an era of bold immersive fantasies.workspace. Fantasy is the industry norm in Doctors, lawyers, chimney sweeps and taxithis emerging field. drivers are not immune to this emerging No existing business is exempt from marketing trend. We have already seenthinking about the fantasy aspect of busi- doctor’s offices that feel like a science labness. Whole new businesses are being cre- and sell books, videos and magazine sub-ated out of the consumer’s immense scriptions about their specialties, includingappetite for new fantasies. toy medical equipment and hospital uni- We can expect to see marketing in the forms—all done with style and profes-near future where the customer who fanta- sional dignity. We already know of taxisizes being an academic can order an en- drivers who drive outrageous classic cars,tire cozy, academic reading room with a sell models of their vehicle and offer pho-complete wall of books, bookshelves, tos of the passenger sitting in the driver’sframed prints for the wall, a leather chair, seat, properly attired.reading lamps, Persian carpets, suitable One client, Terry Miller, a women’sclothes, pens, eyeglasses and videotapes clothing designer and manufacturer whose business is based in San Francisco (the
  • THE PHYSICAL APPEARANCE OF YOUR BUSINESSS 3/ 7Terry McHugh store), had been selling to draped with a design the women weremajor department stores for many years. currently sewing. She also displayed el-Finally, she grew tired of having to pro- egant sketches and pattern swatches onduce a high volume of top quality goods the walls near the design table, cleaned upunder tight time pressure on a slim profit the table itself and created a little sittingmargin and then wait months to be paid. area complete with the new editions ofSensibly, Miller decided to cut back on de- high-fashion magazines such as Vogue andpartment store sales at the same time she Elle. Most important, she removed priceopened the doors of her manufacturing tags from the garments in the work room;studio to customers and developed a direct only the clothing in a separate sales roomsales business. Unfortunately, her direct was tagged. Miller also kept the boxessales business took off with all the pizzazz used to ship clothing to stores such asof a cold turtle. Bloomingdale’s and Saks stacked promi- Convinced that her direct sales concept nently in the workroom. Direct saleswas a good one despite the poor results, doubled in two months and doubled againMiller called in one of the authors for a in four.consultation. When Michael visited her Later she moved to a retail store that hasmanufacturing studio, he realized immedi- a design and manufacturing section thatately that the physical setup was not what could have come from anyone’s fantasy ofmost people would expect from a top-of- what such a set-up should look like. Herthe-line design studio. Too many details business is booming, and she’s looking toconflicted with the romantic popular im- expand.age of what such a business should looklike that people see in movies and on TV.For example, the women sewing the gar- 1. Cleanlinessments had unattractive piles of cloth andracks of hangers next to their stations, the Cleanliness is crucially important in alldesign table was cluttered with books, pa- businesses, and is perceived by the publicpers and the occasional abandoned coffee as a measure of management competence.cup. Worst of all, the finished clothing Despite this, most businesses, whether re-hanging on the racks in the work space tail, wholesale, restaurant, consulting ordisplayed price tags. professional, are not clean. If you doubt it, Michael recommended that Miller rede- think about how many businesses yousign her studio to conform more to her know that are spotless. Not very many, wecustomers’ image as seen on TV and in the bet. And those that do meet this high stan-movies. Miller agreed to give it a try. She dard are almost surely very successful.brought in several mannequins, which she
  • 3/8 MARKETING WITHOUT ADVERTISING Years ago, when gasoline stations were 2. Smelltrying to attract customers, many displayedsigns extolling how sanitary their Smell is such an important, but often over-restrooms were. These signs often stated looked, aspect of a good marketing planthat the restrooms were for the conve- that it’s worth focusing on in detail. Goodnience of customers and if everything smells can be an incredibly powerful partwasn’t perfect to let the management of the image of many businesses—and in-know. Some large oil companies even had appropriate ones can ruin it.strict national inspection programs to sup- The smell of disinfectant can be a posi-port their claims. Then along came the tive attribute in a medical environment andgasoline shortage, and many gas station a definite negative in a bakery. Certainlyoperators became so arrogant they forgot the location of bathrooms and the result-about time-tested good business prin- ing smells in a retail store, coffee shop orciples, including clean restrooms and medical clinic can influence clients veryfriendly service. While there are, of course, strongly. For example, the authors visiteda number of complicated economic rea- a well-known luncheon restaurant thatsons why so many gas stations have failed boasted great sandwiches accompanied byin the last few years, certainly one is that a fashion show, but left after five minutesmost are so poorly run that customers because they were seated close to thehave absolutely no reason to be loyal to restroom, which reeked of cleansers.them. Restrooms remain a good barometer Peet’s Coffee stores in the San Franciscoas to how well a business is run. Bay area are a famous instance of a busi- By contrast, part of the phenomenal ness that owes a large part of its success togrowth of several national franchises, in- a magnificent smell. Over 30 years ago,cluding McDonald’s, Supercuts and Midas Mr. Peet opened a tiny neighborhood shopMufflers, is directly connected to their to sell the coffee beans he imported andreputation for cleanliness. Before these roasted on the premises. Coffee drinkerscompanies changed industry norms, many could not resist the aroma of fresh-roastedhamburger stands, barber shops and brake coffee that permeated the immediateshops were notoriously dirty. In each of neighborhood. When they ventured inside,these instances, the commitment to be ex- they were met with a pleasant surprise—atremely clean was powerful enough to little coffee bar where they could enjoy atransform an industry. superior cup of coffee for a reasonable price. These and other techniques contrib- uted to Peet’s becoming the first extremely successful coffee store in an area of Berke- ley, California, that has since become fa-
  • THE PHYSICAL APPEARANCE OF YOUR BUSINESSS 3/ 9mous as the first true gourmet ghetto in 3. Cluttermodern America. The original Peet’s wasthe model for Seattle’s Starbucks in its Small neighborhood grocery stores tradi-early days. The many coffee stores in our tionally have a problem with clutter, notneighborhoods are there at least in part only because they are inefficiently de-because Mr. Peet opened the windows signed to handle the high volume of in-next to his roaster, and the customers coming products but also because they areflooded in. often short of storage space. This is one Fine Design, which sells furnishings, an- factor that led to the success of 7-11 ortiques and sweaters in New York City, Quick-Stop type convenience stores,uses pine boughs to fill the store with a which feature an open, uncluttered lookpleasant aroma around the holidays. Al- that is much more appealing to many cus-though this technique may sound obvious, tomers.we encounter very few businesses that use Cleanliness and lack of clutter aren’tsmell positively. Unfortunately, smells only important to retail stores, of course.more commonly detract from the atmo- For example, one of our editors recentlysphere. Ice cream stores—because sugar reported stopping by the office of theand oil don’t smell good—top the list. company that delivered diapers for his Good smells aren’t an effective market- baby. The dirty, sloppy office looked likeing technique only for retailers. A real es- it belonged to a poorly run machine shop.tate broker friend in Dallas, Scott Park, is Recordkeeping was so disorganized that itvery successful in the residential market. took five minutes to find the correct ac-One of his approaches is to fill the houses count card. In addition, the counter washe is showing with fragrant fresh flowers dirty, the windows hadn’t been washed re-and to bake an apple pie in the oven at a cently and there was no display material,very low temperature for the four to six publications or anything else to create ahours that a house is typically shown. feeling that anyone cared about babies. In- Similarly, in the Urasenke Tea School in deed, the whole atmosphere was so dis-New York, which teaches students the tra- heartening that he cancelled the diaperditional art of the Japanese tea ceremony, service, even though the diapers deliveredthe teachers wipe with a moist rag the to his house had always seemed cleantatami mats the students walk on, to bring enough.out the delicate bamboo-like fragrance of Or how about a picture framing shopfresh tatami. that, of all businesses, ought to be aes- thetically pleasing. The one down the street sports streaky windows behind which are piles of dusty frames and dull
  • 3/10 MARKETING WITHOUT ADVERTISINGracks of unassembled frames instead of simple and straightforward. Many peopleframed artwork that would capture the at- may not remember the days when searchtention of passers-by. engine sites typically were cluttered with Nearby there is another marketing disas- banner ads and blinking messages almostter: a store large enough to run ads on to the point of obscuring the search resultstelevision that has for months had seven themselves. Since the intuitive measure ofsloppy handwritten signs stuck to its glass search engine competence is the ability todoor with yellowing scotch tape. The signs deliver a focused group of results, Googlearen’t even of the temporary “closed for communicated the correct message: avacation” variety; they appear to be per- clean uncluttered page with nearly 98% ofmanent. To make matters worse, the store white space. Google rose to be one of thesells eyeglasses! top three search engines and established In the late 1950s, Lawrence Ferlinghetti, the cleanliness norms for the industry.well aware of the industry norms for small When Salli brought her new-to-her car inindependent bookstores, was determined for its first tune-up at the C&W Ford repairto let his staff and customers know that shop in Sebastopol, California, she wastheir store wasn’t going to have the typical surprised and impressed with how unclut-dingy cave-like atmosphere. He built his tered and clean the shop was. The placeidea into the name of his now-famous City she had been taking her car to did a goodLights Bookstore, which was truly a pleas- enough job but always left her with aant, bright and uncluttered store. His cus- slightly queasy feeling. The carpet in thetomers appreciated this innovation. Today, waiting room was stained and full of lint,this idea has been copied by bookstores and the entire office was grungy. Shenationwide, including many of the national couldn’t quite see through the grimy win-chains. Interestingly, it has most enthusias- dow where they worked on her car. Thetically been adopted by a very profitable contrast was amazing. At the Ford com-three-store California business named A pany, every tool was in its place, the shopClean Well-Lighted Place for Books, which was open, airy and clean and the officethrough its name elevates its inviting atmo- sparkled.sphere to the position of the centerpiece Now it’s time for you to do some work.of its marketing strategy. Look at your business as an outsider On the Internet, one of the best ex- might, using the checklist below to evalu-amples of an uncluttered website is ate whether your business conforms to orGoogle, one of the first online businesses exceeds industry norms, is truly clean,to understand the allure of keeping a site smells appropriate and is free of clutter.
  • THE PHYSICAL APPEARANCE OF YOUR BUSINESSS 3/ 1 1C. Evaluating Your Business’s and architecture; inside aspects such as Physical Appearance cleanliness, lighting, etc. Step 2. Rate your business on each ofStep 1. In the “Your Business” column, list the elements you have listed as “poor,”the key aspects of the physical appearance “adequate” or “excellent.” Use the “Com-of your business. We can’t do this for you ments” column to describe specific details.because there are thousands of types of Step 3. Also in the “Comments” column,businesses. To give you ideas, we’ve in- make a note of any particular elements included at the top of the worksheet a list of your business that differ significantly fromelements that commonly apply to retail industry norms, and ask yourself if theand wholesale businesses, organized by positive reasons for this difference arecategory: outside elements such as signage clearly communicated to your customers.
  • 3/12 MARKETING WITHOUT ADVERTISING Physical Appearance That Develops Trust Outside Inside Sales Staff Sales Materials Product Mail Order/Online signage cleanliness clothes neatness protected answers key questions display clutter breath clutter well marked clear meaning architecture lighting teeth understandable return address exciting cleanliness smell car clean standard sizing design consistent style neighborhood spacing, general identifiable completeness dated convincing spacing, merchandise prompt labels amount of stock decor ADEQUATE EXCELLENT POOR Your Business Comments ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ ________________________ _______________________________________ s
  • Chapter 4 PricingA. Straightforward and Easy-to-Understand Prices ............................................ 4/2B. Complete Prices ............................................................................................. 4/3C. Giving Customers Reasonable Control Over the Price .................................. 4/6D. Internet Pricing ............................................................................................. 4/9
  • 4/2 MARKETING WITHOUT ADVERTISINGA crucial element in any good all the circumstances of the transaction. marketing plan based on build- For example, if you specialize in selling ing customer trust is a sound bulk goods, your price per unit should gopricing policy. Pricing is a key factor in de- down as volume increases, at a regulartermining your customers’ expectations. To and reasonable rate. A produce marketuse a somewhat exaggerated example, a that offers grapefruit at “25 cents each orclassy saloon that has cognac on its menu four for a dollar” is sure to drive away cus-for $3.99 and serves it in a plastic glass tomers. A customer may not do the arith-will never be considered trustworthy. Simi- metic the first time he visits the store, butlarly, a lawyer or architect who charges eventually he will note that the retailer is$37.75 an hour will have a very difficult misusing a standard marketing device bytime convincing potential clients that she charging the same amount for volume pur-does high quality work. chases rather than offering customers a Some pricing tips: small discount to encourage such pur- • Make your prices straightforward and chases. easy to understand. Similarly, the parking garage that adver- • Pricing should be complete, includ- tises in big letters “75 cents for the first ing everything a customer expects. hour” and then charges 75 cents for each • In setting your prices, give the cus- additional ten minutes is attempting to tomer reasonable control over the mislead its customers. You may park in purchase transaction. such a place once, when you are late for • On the Internet, you may need to an appointment and don’t have time to break prices down to the lowest read the fine print on the sign carefully, useable unit. but you are almost certain to go some- Let’s look at each of these elements indi- place else next time, even if it means park-vidually. ing a few blocks farther from your destination. Confusing and misleading incremental prices aren’t the only way a business canA. Straightforward and Easy- abuse its customers’ trust, of course. There to-Understand Prices are many ways to list prices in a misleading way. For example, how do you feel about aIt’s important to make sure your pricing rug cleaner who offers to clean “five roomspolicy does not confuse or mislead your for $89,” and then, in small print, defines acustomers. The price you state should re- room as being 6’ by 8’? Although this mightflect the total cost of the transaction. It appear to border on the dishonest, it is ac-should also be an honest one considering tually a typical practice in the rug cleaning
  • PRICINGS 4/ 3business. Rug cleaners who avoid this type know how much it charged and feared theof pricing, however, are appreciated by worst. Enough said, we hope.their customers. For example, a friend re- Don’t be afraid to be redundant. No onecently told us about a service that prided gets angry at a lawyer who finds threeitself on cleaning any rug, regardless of ways to tell you her hourly (and incremen-size, for a fixed price, and doing up to tal) rates for consultation, research andthree throw rugs free as part of every job. court time, but everyone dislikes gettingWe plan to try that business next time we an unexpectedly large bill after servicesclean our rugs, and if it is as good as are rendered. For instance, many people inclaimed, will surely tell others. the home contracting business don’t in- To be clear, a price should also be easily form their clients of their overhead anddiscernible by all potential customers. This profit billing. A naive client assumes theis particularly important for service busi- contractor works as a salaried person in-nesses, which don’t have a tangible prod- stead of growing a business as in otheruct to which a price can easily be fields. Naturally the customer goes ballisticattached. Many potential customers shy when they see 20% or more “tacked” ontoaway from some businesses simply be- their bill.cause they don’t know what the service Chapter 10 discusses in detail the issuescosts and for one reason or another feel of customer recourse and warranties (alsoshy about asking. So, whether you run a part of any description of price). People of-typing service, a commercial fishing boat ten want to know if they will get theiror are a child care provider, tell customers money back if they are not satisfied, andclearly how much your service costs be- under what conditions deposits, partial pay-fore they have to ask. For example, a typ- ments and full payments are refundable.ist might do this with a fact sheet listingprices of $3 per page or $30 per hour,with a 20% surcharge for rush work that B. Complete Pricesmust be done after 5 p.m., a 50% sur-charge for rush jobs typed after midnight, The completeness of a price is determinedand $1 extra per page for statistics and ad- both by the norms of a particular businessdress lists. and by general honest business principles. If you doubt that communicating prices Ideally, your price for a particular good orcan be a big part of any marketing plan, service should include everything that athink about how many times you have typical person expects to pay for, and ashied away from patronizing a particular little bit more.business or service because you didn’t Examples of incompleteness in pricing that annoy customers are:
  • 4/4 MARKETING WITHOUT ADVERTISING • Computers priced without keyboards and orange juice as part of the room price. or software. Speaking of hotels and pricing, there is • Hotel room prices for rooms without nothing more annoying than a confusing private baths. phone policy. You have probably stayed • Legal fees for incorporating a busi- (most likely only once) at an establishment ness that don’t include state registra- that charged an exorbitant rate for calls tion fees. and as you were checking out were pre- • “Price-fixed” meals that don’t in- sented with an extra $10 or $15 charge for clude coffee. those few calls you made back home. • Expensive flowers that don’t include If you are a regular traveler, chances are greens. you will return to establishments that offer • A high-priced suit that doesn’t come extra amenities. In one little neighborhood with free alterations. restaurant in Kyoto, Japan, customers who Surely you can think of similar examples sit down alone are given the latest editionin your field. Also, pay particular attention of the daily newspaper after the food or-to the fact that customary pricing practices der is taken. The restaurant rarely has anin some businesses do not give customers empty seat.a very good deal. In this situation, a busi- To take an example of how somethingness can quickly build customer trust by extra can make a big difference, consideroffering a little extra. For example, in most how the Japanese auto companies success-communities, it is customary for a used car fully captured a large part of the U.S. autodealer to sell cars “as is,” with the expecta- market. They established a reputation fortion that they are probably in such rotten good value, at least partially because theycondition that they will expire ten minutes priced cars to include most of the optionalafter a purchaser takes title. By contrast, a features that purchasers of American carsused car dealer that offers a real 90-day customarily paid extra for, such as a radiowarranty violates this custom in a positive, or outside rear view mirror. By contrast,business-building way. pricing in the U.S. auto industry is so con- Similarly, the norm in American hotels fusing that Consumer Reports magazine,and motels is a bathroom supplied with which rates products, has had to developsoap, towels, washcloth, shampoo, condi- an almost impossibly complicated formulationer, shower cap, water glass and toilet to compare prices, and even sells com-paper. To this, many establishments have puter printouts to help readers determineadded fax services, modem plugs for por- what they are paying for.table computers, body lotion, bathrobes, In some industries, no service at all isslippers, shoe cleaning supplies, dispos- the norm—and nowhere is this more evi-able toothbrushes, free newspapers, coffee dent than in the Internet service provider
  • PRICINGS 4/ 5(ISP) business. Almost everyone has horror nightmare of misunderstanding betweenstories of the constant busy signal, being business and customer and result in theput on endless hold, or only being able to worst kind of word of mouth about theaccess the provider through e-mail whose business. Trustworthy businesses in thesesystem always seems to be down. Rasberry fields must go out of their way to identifyhas found an ISP, Monitor.net, that not all items included and not included inonly has a friendly human that answers their price and be sure this information isyour phone calls if your computer crashes, accurately communicated to customers.but immediately answers questions that are And when a customer makes changes toe-mailed to its technical support staff. You the original bid, a trustworthy businesscan be sure that Monitor.net benefits from writes them down accurately along withthe customer loyalty engendered by these the extra charge and has the client readbusiness practices. and sign the “change orders” so there A friend rented a car at a New Jersey air- won’t be any surprises.port for a few weeks, and when he went This is especially important when deal-to pay his bill there was a large additional ing with inexperienced clients who maycharge for a dirty, bottom-of-the-line not be familiar with industry norms. Youchild’s safety seat that could have been should go out of your way to clarify itemspurchased retail for half that amount. that are excluded from a bid, even if suchNothing had been said about this extra exclusions are standard in your particularcost when the car, with baby seat, was re- business.served. Contrast this unpleasant and ex- For example, a website designer, whenpensive example with the young couple quoting a price to build a client’s site,who moved to Hawaii and had to rent a should make it clear from the beginningcar for a few weeks before theirs was exactly what the customer is expected toshipped over. Not only was the car seat provide, such as graphics, text or anyfree, but when the couple’s own car ar- other features that will be available at therived and they returned the rented car, the site. In addition, it should be clear to therental company offered to rent them a customer that the price does not includebaby seat for a few dollars until they could maintaining the site. Similarly, if a housebuy their own. painter customarily charges separate fees If in your business, bidding on a job is for paint and labor, or a building mainte-the norm, as it is in house painting, con- nance company expects the buildingsulting or carpentry, the issue of “com- owner to supply cleaning equipment andpleteness” in pricing is a fairly common supplies, the business should say so fromand often sticky problem. If it is not ad- the beginning.dressed forthrightly, it can develop into a
  • 4/6 MARKETING WITHOUT ADVERTISING Carefully consider whether everything C. Giving Customersyou do on a job is included in the price Reasonable Control Overyou quote. If you identify extras that youcharge for separately, ask yourself if there the Priceis really a good reason for the additional If a customer has to buy too much, too of-charge. How much would you lose if you ten or in inconvenient units to get a goodincluded some or all of the extras in your price, your pricing policies simply do notbase price? Next, ask yourself whether engender trust. Customers should have ascharges for extras are really fair. Finally, much choice as you can give them overcheck whether you adequately communi- the final price or the amount of goods orcate your pricing policy to your customers services they want to buy.by asking yourself how many of themhave ever been confused as to what was Good examples of businesses that pro-and wasn’t included in your price. If even vide customers with a high level of controla small number have been, you obviously over pricing include:need to make some changes. • A car repair garage that phones the A store that solved an unusual price- customer before installing an unex-completeness problem was Filene’s, a pectedly high-priced replacementfancy French store in San Francisco known part.for its expensive, beautiful handbags. A • A hardware store that sells nails bylarge portion of Filene’s business involved weight as well as by the bag.sales to Japanese tourists and • A laundromat that has washers andbusinesspeople. dryers in several different sizes so For the first six months Filene’s was that a customer with a small loadopen, many Japanese customers were an- doesn’t have to pay for a large one.noyed by the addition of a sales tax to the • A printer who tells the customer thatprice of their purchases. In Japan, all preparing a page layout that can bequoted prices are in round numbers, with put on a larger press will mean athe sales tax included. Filene’s solved the lower unit cost.problem by using the Japanese method of • A bike repair shop that takes theprefiguring tax into the final price rather time to show customers how tothan adding it on, and only had to explain make their own routine repairs.to its non-Japanese customers that the • A natural foods store that gives cus-price includes sales tax. These customers tomers credit for recycling peanut-were delighted, because the total price butter tubs.was less than they thought. Interesting • A lawyer who encourages peopleproblem. Interesting solution. with a self-help bent to do a portion
  • PRICINGS 4/ 7 of their own work on routine matters generous discounts for the larger amounts. and discounts the fee accordingly. Sonoma Compost is located at the county • A picture framing shop that has a fa- landfill and “recycle town.” As a bonus to cility for customers to do their own its customers, if you bring your trash or framing at a reduced rate. recyclables in you get a 50% discount on Your pricing goal should be to give your up to five yards of screened organic com-customers maximum choice of sizes, post on that day. This “bring a load . . .amounts, hours of time purchased and so take a load” offer is very popular.on—consistent, of course, with the sensible Bad examples of pricing situations inoperation of your business. For example, if which the customer is treated with little re-someone asks for plain ice cream rather spect include:than the “Strawberry Delight” you have on • Lunchmeat packaged only in largethe menu, you may make a loyal customer amounts.if you not only serve the ice cream without • Undertakers who promote super-the fruit sauce, but also subtract an appro- fancy, overpriced caskets and keeppriate amount from the bill. the reasonably priced ones out of A good example of a business that offers sight, and when asked for the “plainflexible pricing is Sonoma Compost in pine box” wrinkle up their noses andPetaluma, California, which provides pre- attempt to make customers feelmium quality compost and mulches made cheap and uncaring.from recycled organics. It has a very clear • Service businesses and professionalswritten pricing policy and offers a wide who bill a half-hour for a five-minutevariety of mulch. The customer has com- phone call without making this incre-plete control over the pricing and can or- mental billing policy clear to clientsder as little as 1 to 2,000 yards, with before the fact.
  • 4/8 MARKETING WITHOUT ADVERTISING • Appliance repair businesses that • A car rental company that, instead of charge an arm and a leg to come and prorating by the hour, charges for an check out a problem, even though extra day when you keep a car an you have already accurately diag- hour or two too long. nosed it. A Different Pricing Mechanism: Online AuctionsThe Internet has provided the opportunity for services to be auctioned at charitableindividuals to be sellers in a large market, events. Such price-entertainment activityparticularly with the growth of online auc- can be useful publicity.tions. In the last few years, auction sites have One caution is worth considering. In thebecome enormously popular as garage sales 1990s the term “commodity” came intoand flea markets have migrated online. Be- use with a specific meaning: a product orsides allowing sellers and buyers to bargain service that is so standardized in qualityover prices, selling items by auction also of- and performance that it can be industriallyfers entertainment value. Case in point is produced and replicated. The word has aeBay, a lively online auction that has suc- negative connotation because it meansceeded in large part because it has figured that the lowest cost producer will be theout how to form an online community. most successful in a business dealing with For small businesses, auctions can be an a commodity. You can unintentionallyopportunity to obtain publicity for their make your product or service appear to beproducts and services. By auctioning off a a “commodity” by offering too manyfew examples of their product or service samples in auctions. If your product or ser-online, the business can not only generate vice does become perceived as a com-sales but gain exposure. This strategy is not modity, you will be faced with othernew; it has been common since the mid entrants in the market who will aim for the1970s for businesses to donate products and lowest cost of production.
  • PRICINGS 4/ 9D. Internet Pricing lower than buying a whole book. Nolo also sells downloadable eGuides whichIf you’re in the business of selling informa- contain focused information about specifiction, particularly over the Internet, your legal problems for users who simply wantpricing strategy needs an additional con- to answer a particular question, rather thansideration. Perhaps the biggest impact of to buy a whole book. Like Nolo’sthe electronic revolution on media busi- WebForms, the eGuides are considerablynesses is the fact that information can now less expensive than books.be efficiently packaged and delivered to One piece of the puzzle that’s still beingcustomers in entirely new ways. One of worked out is how to efficiently collect mi-the most popular developments has been cro-payments online. Due to credit cardto deliver smaller packages of information, transaction fees, it’s generally not profit-such as individual articles from The New able to conduct individual transactions forYork Times or single tracks from popular anything less than $5 or so. Several com-CDs. Besides developing a system for dis- panies have been working on paymenttributing small information packages systems to overcome this problem; at the(many ingenious systems continue to be moment, the most successful appears to beintroduced by pioneering online busi- PayPal (www.paypal.com), in which usersnesses), you’ll need to figure out how set up a PayPal account connected to anmuch to charge for them, and how to col- online bank. As payment methods on thelect payments efficiently. Internet improve, people will become One example of an information package more comfortable paying twenty-five centstailored to the Internet infrastructure is for just one article, photo or graphic; fiftyfound at Nolo.com’s website. Nolo offers cents for a favorite song or $2.00 perdownloadable WebForms which address a month for a service that reminds them ofparticular need such as buying a car or ex- birthdays, events and personalized news.ecuting a promissory note. For example, As online customers increasingly expect toone form allows the user to appoint a tem- be able to purchase just what they wantporary guardian for their minor child and nothing more, it’s important for onlinewho’s traveling abroad with someone media purveyors to remember to breakother than the parent. The customer pro- down your product or service into smallervides the information online, and the packages and price them accordingly.document is instantly generated and avail-able to download, all for a price much
  • 4/10 MARKETING WITHOUT ADVERTISING Evaluating Your Pricing Policy YES NO Some customers complain about prices. Some of the trivial but necessary things I offer with my basic product or service (for example, keys, base stands, containers, refills, etc.) are priced at an amount that is more than people expect. My product or service is offered in enough different measures that by and large my customers can buy what they need. My product(s) can be bought in more than one unit of measure (bunches, pounds, bags, lugs, liters, cartons, gross, boxes). My services can be bought in time increments convenient to my cus- tomers (days, half-days, hours, minutes, etc.). My pricing practices are written down on: (flyer, price sheet, website, the wall). Any exceptions from my standard pricing practices are well explained (for example, senior citizen discounts are stated on a sign with large type). I estimate that approximately ____% of my customers pay for more of my product or service than they really need or want, because: _________________________________________________________ _________________________________________________________ I estimate that approximately _____% dont buy all of my product or service that they really need because: _________________________________________________________ _________________________________________________________ My volume discounts are: _________________________________________________________ _________________________________________________________ My volume discounts are available to: _________________________________________________________ _________________________________________________________ s
  • Chapter 5 The Treatment of People Around YouA. Tracking Reputations via the Grapevine ........................................................ 5/2B. How Employees Spread the Word .................................................................. 5/3C. Common Employee Complaints ..................................................................... 5/7 1. Unequal Treatment .................................................................................... 5/7 2. Arbitrariness of Management ..................................................................... 5/8 3. Exploitation ............................................................................................... 5/8D. Handling Employee Complaints .................................................................... 5/9E. Finding Out What Employees Are Thinking .................................................. 5/11F. Suppliers ....................................................................................................... 5/13G. Business Friends and Acquaintances ........................................................... 5/17H. Individuals Who Spread Negative Word of Mouth About Your Business ..... 5/19I. Your Behavior in Public ................................................................................ 5/20
  • 5/2 MARKETING WITHOUT ADVERTISINGT he way you treat employ- quite likely to have a friend who either ees, suppliers and friends knows Joe or knows someone who does. is an important element in Think of it this way. If you have 400gaining and keeping the trust of your cus- friends and acquaintances (although thistomers. In fact, it is not an exaggeration to sounds like a lot, if you include old schoolsay that positive relations with all of them chums, business associates and casual so-is one of the invisible foundations of any cial acquaintances, you probably knowsuccessful business. Why? Because how lots more than that), and each of themyou relate to these people is routinely also has 400, you have an immediatecommunicated to your customers and po- friendship network of 160,000 people.tential customers. (There will probably be some overlap be- tween your friends and your friends’ friends, but just the same, the numbers areA. Tracking Reputations impressive.) These 160,000 friends of your friends are linked in the same way to 64 via the Grapevine million people, or about one-third of theAssume you live in Kansas City, Missouri, adult population in the United States.and a friend tells you about Joe Green, a You can try a similar experiment yourself.skilled bootmaker, who specializes in just Randomly pick the name of anythe type of custom-made boots you want. businessperson in the Yellow Pages of an-Aside from Joe’s name and occupation, other city. Next, ask any friends who live oryou know nothing about him. A few days do business in that city if they know any-later, when you decide to call Joe, you one in that or a related business. If they do,find you can’t get his number from your call that person and ask about the personfriend because she’s left on an extended whose name you picked. Chances are thatvacation. if they don’t know the person you are look- You consider giving up the hunt, but ing for, they can refer you to someone whothen, looking at your old battered boots, can. If there is either very good or very badyou wonder if you can find Joe yourself. news about this person’s business, you’reBut no Joe Green is listed in the phone even more likely to find him.book. You decide to persevere and ask The point of these exercises is not tofriends and acquaintances if they know teach you to run your own detectiveJoe. No luck. Your next step is to ask them agency, but to illustrate that even in ourto check with their friends who might large and complex society, we are stillknow him. Believe it or not, at this point amazingly connected to each other, espe-there is an excellent statistical chance that cially when we run a business that affectsyou will locate Joe. One of your friends is the lives of other people. It follows that it doesn’t take long for an interested party to
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 3learn a lot about us from those we deal his manuscript was returned after threewith regularly. If you mistreat your em- days with the most perfunctory two-sen-ployees or suppliers, they’ll spread the bad tence rejection form letter. The pages ofnews. Similarly, if you go out of your way his manuscript appeared to have been un-to treat these people well, the good word touched and they forgot to take out hisspreads. Sometimes this cover letter. Needless to say an outragedinterconnectedness is hard to believe, be- James has told everyone this story, includ-cause just about all small business owners ing other authors.feel pretty isolated at times. And it’s true How often have you been asked if an-that the word about your business (good other business pays its bills to suppliers onor bad) may be dormant for a while, but time? We know dozens of smaller compa-when someone does inquire about your nies that are reported to have poor em-business reputation, it will wake up and ployment practices, slow or erraticpromptly continue its journey from person payments to suppliers and bad recordsto person. when it comes to dealing with indepen- Rasberry was at the local Hospice Thrift dent contractors. These poor businessStore one rainy afternoon and the popular practices are not an infrequent conversa-store was filled with shoppers. A young tion topic among businesspeople at tradewoman lugged a vacuum to the checkout fairs, coffee shops or over lunch, and forstand and the person next to her com- good reason; most small business ownersmented, “You don’t want that vacuum.” can’t afford to deal with people who don’tShe preceded to tell a horror story of her pay their bills on time or who otherwisemotor conking out in the same model after treat them badly.only two months of use, and that whenshe read the small print in the warranty itexcluded the motor. Other customers start- B. How Employeesing putting in their two cents worth, and at Spread the Wordthe end of ten minutes the thrift store putthe vacuum in the trash out back. One of the easiest ways for anyone to James, a well-known author, had learn about how you run your business isworked on a book for over six years and by talking to your employees. Becausein the process interviewed several hundred your employees’ lives are so intertwinedpeople. A publisher was mentioned to him with yours, and because you affect themby several people as being “just perfect” so directly, your treatment of them will al-for this book. Having published many most automatically be communicated tobooks in the past, he could pretty much their friends and family, even if inadvert-choose his publisher but decided to give ently. And remember, because your em-this one a try. Imagine his dismay when ployees spend more time with you than
  • 5/4 MARKETING WITHOUT ADVERTISINGanyone outside of their immediate family, • Whole Foods operates with a wide-they know about you and your business in open financial system. Sensitive fig-a way few others ever can. ures on store sales, team sales, profit How you run your business may be re- margins, even salaries, are availableported indirectly when employees make to employees in every location. Thesuch statements as: company shares so much information • “I’m exhausted; the inventory is such so widely that the SEC has desig- a mess that I had to work late last nated all 6,500 employees “insiders” night.” for stock-trading purposes. • “I don’t know when I’ll get a vaca- To return to our Coors beer example tion; no one has made an entry in from Chapter 1, in an amazing series of the general ledger in three months.” public statements, the Golden, Colorado, • “Don’t phone this week; everyone’s company so alienated many of its Chicano nerves are on edge. Two people quit employees that their union led a boycott a few weeks ago, and we are trying against the company. to do their work as well as our own, Syndicated business columnist Milton and it looks like the boss isn’t going Moskowitz, along with co-authors Robert to replace them.” Levering and Michael Katz, responded to • “The boss poor-mouths all the time, the concern so many Americans feel about but he’s always getting twenties out the quality of the companies they work for of the cash box.” by writing a best-selling book. In The 100 • “I have to hold my paycheck for a Best Companies to Work For in America day because there isn’t enough (Doubleday, 1993), the authors describe money in the bank to cover it.” the practices of 100 American companies If you have any doubt about how fast in detail. Working conditions, pay, ben-word of your treatment of employees is efits, firing and promotions policies and allpassed along, consider these examples: sorts of other information of importance to • Many American Jews, as late as the employees are discussed. 1950s, avoided one major brand of How did the authors get all their “inside” gasoline because of their belief that information? While the task was time-con- the company had an anti-Jewish em- suming, it wasn’t as difficult as it might ployment policy in the 1930s. seem. The reputations of businesses, even • TWA was one of the first major air- those with only a few hundred employees, lines to hire black pilots. Years after such as Celestial Seasonings and Odetics other airlines had also broken the (both of which were included in the 100 color barrier, many black Americans best list) are really quite well known. still went out of their way to patron- Not only do employees know a lot ize TWA. about their own employers, they know a great deal about the employment practices
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 5of others in their line of business. For ex- practices. The same was true for compa-ample, Moskovitz, Levering and Katz nies with policies that encouraged employ-learned that companies with outstanding ees to study for advanced degrees (Bellreputations in promoting blacks Labs), companies where retirement poli-(Cummings Engine, Levi Strauss and cies are outstanding (Johnson Wax), andPolaroid) and women (Hallmark Cards, even companies that have great partiesFederal Express and Nordstrom) were (Advanced Micro Devices) or employeewidely known and respected for their gardens (Control Data). Cody’s Bookstore: “Finding Good People and Keeping Them” Cody’s Bookstore in Berkeley, California, is ties they serve which includes treating em- as much an institution as the university in ployees fairly.” whose shadow it sits. Its fame for diversity Ross is pleased that his 60 employees and completeness of stock is rivaled only elected to join a union, because “it keeps by the reputation for erudition and exper- management more professional and consis- tise its employees enjoy. tent in our treatment of employees.” He The bookstore trade has traditionally thinks that encouraging good, experienced been noted for low-paying salaries. The staff to stay by paying a decent wage is work is desirable, and employees are often money very well spent. “In a bookstore with viewed as an “easy come, easy go” propo- over 140,000 titles,” he says, “new employ- sition. This causes high turnover, low mo- ees just aren’t very valuable. Finding good rale and a perpetually inexperienced staff. people and keeping them is the key to a Anti-traditionalist Andy Ross, owner of store’s success.” In keeping with this theory, Cody’s, is a believer in paying as high a Cody’s employees receive, besides a rela- wage as possible and treating his employ- tively high salary, a profit-sharing plan in the ees as his most valuable resource. He even form of a healthy annual bonus based on did several surveys to make sure that his merit (judged by Ross and the five employee wages are high relative to other bookstores. managers) as well as the store’s profits. And this kind of care for employees pays Another way Ross has found to maintain off in healthy sales, high employee morale good employee relations is to encourage and customer loyalty. their participation in the store’s operations At a time when many small bookstores by delegating responsibility while trying not are going out of business due to the so- to look over too many shoulders. “Besides called “superstores,” Cody’s continues to the fact that employees come up with great grow. Ross’s perspective is that ideas, their morale is an important ingredi- “bookselling at its best is not just a job. In- ent for the business to run right—a factor dependent booksellers bring their own that is often overlooked in the bookstore unique sensibilities rooted in the communi- business,” he says.
  • 5/6 MARKETING WITHOUT ADVERTISING In a small business, the payment of then pays at least slightly more, even ifwages and benefits takes on particular im- they have to cut their own income to do it.portance. Employees need to feel they are They reason correctly that their employeesbeing treated fairly. An open book policy will be proud of the fact that they are val-in which everyone knows what everyone ued highly and as a result will not onlyelse makes, from the boss to the teenaged work harder but spread the good word.delivery boy, is an excellent idea, espe- Malden Mills, in Massachusetts, producescially when the business genuinely tries to Polartec®, a fabric made from recycledpay people fairly. (See the discussion of plastic bottles. It is an exemplary company“openness” in Chapter 6.) known to be a trend-setter in employee/ We all know of companies (big and employer relations and to have an incred-small) where most of the employees ibly high rate of employee productivity.scrape by on minimum wage while the Aaron Feuerstein, the owner, a spry manowner keeps the amount of his own pay of 70-something who quotes Shakespeare,and benefits a secret, plays golf twice a is dedicated to improving the earth’s envi-week during business hours and drives a ronment and pays his employees well.Mercedes to work. This kind of behavior Some years ago there was a big fire at thealmost always results in low employee mo- mill, and business was shut down.rale and gives pause to customers. Cus- Feuerstein informed his worried employ-tomers will consciously or unconsciously ees that their wages and salaries would beask themselves whether the fact that the paid through the period of reconstruction.employees are treated unfairly means that Needless to say, his employees love theirwhen push comes to shove, their concerns boss, and the mill was up and runningwill also be held hostage to the owner’s within the month. The feelings of the em-needs. On a more positive note, we know ployees toward Feuerstein, the mill andof more than one small business owner the product is demonstrated through highwho regularly checks on wages paid by productivity, love of the company missionsimilar businesses in their community and and incredible loyalty.
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 7 Job Applicants Deserve Good Treatment, Too Don’t forget to extend good practices to monotypeset work and then gives them a your hiring process. Unfortunately, when gift of a hand-pulled page done by a famous it comes to interviewing prospective em- typographer. Other creative businesspeople ployees, many companies don’t pay develop similar techniques to be sure the much attention to people’s feelings. They people they consider for a job have a good forget that each applicant will learn interview experience. enough about their business to form an These gestures make a great deal of sense opinion and spread it. Pay attention to for two reasons. First, they acquaint others this in the light of its effects on personal in a personal way with your business and let recommendations. For example, one them know you care about people. Second, small electronics manufacturing company a large proportion of the people interviewed we know gives a nice sample as a gift to may find work in your field, and you are everyone applying for a job. This helps very likely to have to deal with them in the cushion the fact that, inevitably, a major- future. ity of those interviewed are not offered a Use the same concerned approach with job. Another very effective approach is occasional and part-time workers, freelancers used by a printer we know, who shows and others who come into contact with your job applicants examples of his business on an occasional basis.C. Common Employee 1. Unequal Treatment Complaints An unequal treatment complaint is a syn-The most common areas of employee onym for any differences in pay, workcomplaint are unequal treatment, arbitrari- rules, expense accounts, job opportunitiesness of management and exploitation. Let’s and perks that an employee doesn’t under-examine the causes of each of these stand or accept. The best medicine to bothbriefly, and look at some suggestions that cure and prevent the recurrence of thisshould help avoid, or at least ameliorate, nasty infection of your workplace is to em-problems. brace a system of open books and an open management style, complete with well-defined personnel policies and fre- quent performance reviews. And keep in
  • 5/8 MARKETING WITHOUT ADVERTISINGmind that, legally, company policies on va- 3. Exploitationcation, sick leave, promotions and otherimportant matters must be applied in a In the small business world, complaintsnondiscriminatory manner. that management is exploitive usually point to an atmosphere in which financial data is kept secret and there is a percep-2. Arbitrariness of Management tion that some employees (often the own- ers) get a disproportionate share of theA complaint that management is arbitrary financial returns. This sort of complaintstems from much the same problems, but also commonly occurs when employeesalso usually signals that important business observe customers and suppliers com-policies are being developed in secrecy, so plaining about the treatment they receivethat employees don’t know what the busi- from management with no apparent re-ness is doing and why. dress or explanation from the company. One good example is a public relations You’ll often hear this kind of complaint infirm whose top management decided to businesses where it is routine to use highlydrop one client, whom their financial competitive language like:records showed was unprofitable, and put • “No matter what else you do, youextra energy into another one which was have to win.”more profitable. Unfortunately, the infor- • “A lot of people are out to screwmation was secret and the decision was you; the only way to handle that isnever explained to the rest of the staff. to screw them first.”The company dropped by the P.R. firm • “As long as the bottom line iswas in the recreation business and was re- healthy, there is nothing to worryspected by the staff for a number of good about.”policies, while the one that got the extra • “What they don’t know won’t hurtattention was in a business that several them.”employees of the P.R. firm didn’t respect. • “If we didn’t do it, someone elseBecause the reasons for the decision were would.”never explained or discussed, several em- Again, the best methods of preventionployees quit. and cure for employee feelings of exploi- An open management style, involving tation include a commitment to open fi-employees in decision-making to the maxi- nancial records and an effort tomum extent possible, is the best way to compensate employees fairly.prevent this sort of complaint from devel- One company that successfully followsoping in the first place and curing it if it these practices operates a resort/confer-does (see Chapter 6). ence facility near Tucson, Arizona. When it
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 9began, the company took over and remod- D. Handling Employeeeled an old and respected hotel. The exist- Complaintsing staff was initially careless and did notrespond to the new management group. How you handle employee complaints isFinally, the resort manager, with the ap- central to how your business is viewed byproval of the owners, posted the monthly employees and ultimately the public,financial report in the kitchen area, where which hears about how you treat them.employees could see it. Not one employee Creating a positive way to encourage andasked any questions for almost two deal with complaints is a sign to your em-months. Finally, at a newly organized bi- ployees that you care about them and thatmonthly staff meeting, one of the oldest they are appreciated. Again, the idea isworkers asked why the figures showed the simple. If employees truly feel that theirbusiness was losing money and expressed concerns are taken seriously, they willconcern that the business could not sur- walk an extra mile (or maybe even ten) forvive the coming months. The key financial your business because they will regard itissues were discussed, and the concerns of as their business too.management that sloppy staff performance Perhaps the best example of the value ofwas contributing to the problem were a procedure for handling employee com-aired and fully understood by every em- plaints is a company with one of the worstployee. Morale changed overnight. Worker records: the United States Postal Serviceproductivity improved so much it amazed (USPS), a semi-private organization thateven the workers themselves. The out- was partially separated from the U.S. gov-come was visible in the quality of upkeep ernment in the late 1960s. Because theof the grounds, the dining room service, USPS was originally a government bureau-and particularly in the behavior of the cracy it retained a rigid structure that wasfront desk staff. Before long the figures inappropriate for the type of employee re-posted on the kitchen wall showed a lations that prevails in the commercialhealthy profit. market. The consequence became evident in the late 1980s and well into the 1990s when several USPS employees killed their The Employer’s Legal Handbook, by supervisors and other employees in the Fred Steingold (Nolo), explains your workplace. The American public becamelegal responsibilities as an employer, in- greatly alarmed as the horrors of work-cluding your duty to treat employees in a place homicide spread to other industries.fair, nondiscriminatory manner. During this time the phrase “going postal” was commonly used to mean workplace homicide. TV comedians suggested that
  • 5/10 MARKETING WITHOUT ADVERTISINGwhen a flag flew at half mast over a Post Finally, a tight procedure to keep com-Office this was a sign that it was hiring plaints confidential is obviously a crucialnew personnel. part of any formal complaint procedure. In All of this changed when the USPS intro- the best circumstances, an employee com-duced employee mediation services in the plaint process should also include an ap-late 1990s. Throughout the United States, peals process for serious matters wherein hundreds of cases per week, postal em- management’s judgment may warrant aployees are offered free mediation ser- second opinion.vices, with paid time off to mediate all If you don’t have a good grievance pro-disputes and disagreements with manag- cedure, an employee who feels there is noers, supervisors and fellow employees. internal structure to deal with a problemThe consequences have been very positive about termination, demotion or salary mayand as the success becomes recognized, seek help outside the business. This cansimilar commercial enterprises have copied often mean either that employees will suethe Postal Service. you, or try to organize a union. For ex- In most small businesses, there is an in- ample, we know a small wholesale busi-formal complaint structure. An employee ness which recently—unilaterally andwho doesn’t like something tells the boss without consultation—changed a series ofor a supervisor face-to-face. This process is employee rights and benefits. In the viewgenerally workable as long as the prob- of management, the benefits conferred onlems are minor and the business small. the employees by the change were muchHowever, when a business employs more greater than what the employees lost inthan five or six people, a formal process, perks. So when the employees turned toincluding personnel reviews, makes it the Teamsters Union, management waseasier to deal with a wide array of prob- initially both flabbergasted and angry. Itlems that are not so minor. never occurred to them that the employ- Even in very small businesses, a formal ees, suddenly facing a whole new set ofemployee grievance process should be work rules, some of which they thoughtwritten, posted and given to each em- were very unfair (for example, loss of payployee to sign. The grievance procedure for lunch hour), went outside the companyshould specify where and how to com- for help because there was no fair griev-plain about all types of potential problems. ance and appeal procedure or, for thatIt should discuss in detail how the com- matter, any process that allowed them toplaint will be investigated and, if neces- communicate their position to manage-sary, be formally considered and resolved. ment.
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 1 1 Sample Employee Grievance Procedure Here is material excerpted from the formal pany president and another employee cho- grievance procedure of a 20-person soft- sen by the person filing the grievance. There ware development company. It isn’t a com- is no appeal for final decisions of this group. plete grievance plan, but illustrates some of Grievances concerning ethical behavior the issues that should be covered. of employees or management concerning Grievances concerning personnel re- termination of employment, matters of ille- views: The person with a grievance is to gality, public issues, discrimination: The write a letter to the chair of the grievance procedures shall be the same as above, ex- committee requesting a hearing time and cept that the full grievance committee shall date. The chair will hear the matter, put be called. The person filing the grievance comments in writing for the employee per- letter can specify individuals to be excluded sonnel file and take whatever actions are from the committee where their presence necessary in the matter. No further appeals would directly bear on the grievance matter. are provided. If the chair of the grievance Appeal on the decision of the committee committee is a direct supervisor of a party can be filed with the Chairperson of the involved, the latter shall be sent to a com- Board, within two weeks of the final deci- pany lawyer who is the alternative chairper- sion of the grievance committee, and the son. Board shall as a whole make a final decision Grievance concerning salary, benefits or at its earliest convenience. office working conditions: Same as above All personnel involved in the grievance except that the grievance committee chair process are expected to maintain confidenti- shall include in the deliberations the com- ality when requested.E. Finding Out What ment of trust so that your employees will Employees Are Thinking feel confident in saying negative as well as positive things.One good way to find out what your em- If your business is larger, you may wantployees think about you and the practice to rely, at least to some extent, on a writ-of your business is to ask. If you have only ten questionnaire. Here is a sample whicha few employees, you may want to talk to you can adapt to your needs. Give it toeach individually or have a series of meet- employees and allow anonymous re-ings, taking care to establish an environ- sponses.
  • 5/12 MARKETING WITHOUT ADVERTISING Employee Questionnaire EXCELLENT ADEQUATE POOR The working conditions here are generally… The working conditions, compared to other jobs Ive had, are… Handling of serious employee problems that are brought to managers is… When most employees describe the business management they say… I know the established policy for handling employee problems and grievances. YES NO THERE ISNT ONE It is… I know the established policy for handling employee wage disputes. YES NO THERE ISNT ONE It is… I know the established policy for handling conflicts between employees. YES NO THERE ISNT ONE It is… When someone is fired most fellow workers know the circumstances in which the employee can appeal the decision within the company. YES NO THERE ISNT ONE The appeal process is… YES NO I am paid fairly. I know what others are paid. Most employees know their jobs. Most employees understand the direction, policies and goals of the business. Comments and suggestions for improving working conditions: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 1 3F. Suppliers countants, bankers, maintenance people, office supply stores and a variety of neigh-It has long been remarked that the tallest borhood businesses. Those of you in retail,buildings in a society reflect its central con- wholesale or restaurant businesses must re-cerns. Only a century ago, church spires late to many more.defined the skyline. They were replaced by From the marketing vantage point, sup-the buildings of major industrial concerns. pliers can be seen as similar to familyToday, bank buildings, insurance compa- members who share the same house. Yournies and office towers filled with invest- actions have immediate and important ef-ment companies and law firms dominate fects on each other. When at home a childthe rest. A focus of all these businesses is leaves the cap off the toothpaste, the nextcredit and credit-worthiness. person must deal with the dried-up glob As a nation we have been taught to trust on the end of the tube. Similarly, your fail-the integrity of these giant financial enter- ure to pay a printing bill on time meansprises because of their track records. How- your printer may have to deal with theever, some of these institutions, such as nasty mess of not having enough money tosavings and loans, have proved themselves pay his bills.unworthy of trust. A number of huge but Both at home and in the business com-financially troubled banks have been sold munity, how you handle problems isto other huge banks to avoid failure. It may quickly noticed by others. At home, if younot be too soon to wonder what institu- yell and scream and make the erring childtions will replace the banks on the top feel miserable, chances are she will act outfloor of urban America. her resentment in some way. The same is When it comes to small businesses, true when problems develop in business. Ifpeople are judged more on how they treat you make little or no effort to view prob-their creditors than on how big their head- lems from your suppliers’ point of view,quarters is. Having a good record in paying you have no right to be surprised if yourbills is insurance against negative stories relationships with them deteriorate. Thebeing circulated about your small business. surprising thing is that people so often ig-Having an extra-good record can be a posi- nore their suppliers’ needs—in spite of thetive marketing tool that can work to im- fact that even a modest effort to communi-prove your business when the people you cate about your business difficulty will go adeal with spread the positive word, as they long way towards solving it.inevitably will. The worst mistake a small business Every business has suppliers. They vary owner or manager can make is to ignoregreatly depending on the business, but al- the fact that many of your primary businessmost everyone must deal with lawyers, ac- concerns are, at bottom, the same as those
  • 5/14 MARKETING WITHOUT ADVERTISINGof the businesses you deal with. This is pay the printing bill. Given this somewhatparticularly true when it comes to taking in marginal financing scheme, it is not surpris-enough money to meet payroll on time, ing that printers who deal with small pub-pay off bank loans and generally fulfill fi- lishers routinely keep tabs on how each isnancial obligations. Far too often, small doing. They constantly tune into the bookbusinesspeople become so manic about business grapevine to check on who ismaking their accounts balance at the end keeping up on their accounts payable and,of the month that they forget that their sup- more important, who isn’t. It’s amazing howpliers have the same needs, that their ac- quickly word gets around when someonecounts payable are someone else’s begins to slip up. The reason that this word-accounts receivable. of-mouth system works so well is that all Think of it this way: When it comes to sorts of people (bookstores, wholesalers,economic survival, businesses, especially graphic artists, freelance editors and dozenssmall ones, are like links in a fence. If one of others) in addition to printers absolutelybusiness doesn’t fulfill its obligations, the need to know that they are dealing with afence is weakened. If a large number don’t, solvent publishing house, and take the timethe fence collapses. For this reason, every to find out.small business owner knows which ac- When even a modest amount of negativecounts pay promptly, carefully and consid- information about a particular publisher iserately. Surely, in your business, even small spread, the results can be disastrous to thataccounts take on disproportionate promi- business. Part of the reason for this is thatnence if they pay you slowly and always books (unlike most types of merchandise)make excuses. By the same token, you can are typically returnable by a bookstore tosafely assume that, though you may be only the publisher for at least a year after pur-a small account to someone else, they know chase—but obviously not if a publisher de-very well how you treat them. The criteria clares bankruptcy. If a bookstore, or worse,they use in judging you are the same ones a large chain of stores, learns that a particu-you use: how promptly you pay, and how lar publisher is way behind in its bills, theyhonest and forthcoming you are in explain- are likely to make a special effort to quicklying the reasons for any delays. return all of that company’s overstock, hop- How does all of this directly affect mar- ing there is still time to be reimbursed.keting? Let’s consider the book business. This sort of loss of trust can quicklySmall publishers, of which there are literally snowball; we’ve seen it sink several pub-tens of thousands, often pay the printer late. lishing companies that might otherwisePart of the reason for this is that many of have been able to cope with their short-these publishers depend on sales from the term financial problems. For example, thefirst few thousand copies of a new title to computer book field went from boom to
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 1 5bust between 1982 and 1984. Several small other. Accordingly, whenever we give ad-publishers failed and others teetered on the vice to small businesses with cash flowbrink of insolvency as nervous bookstores problems, we urge them to immediatelyquickly returned perfectly salable books to notify their suppliers, by phone, about thecompanies rumored to be in trouble. The problem, explain their plan to solve it, andbookstores sensibly feared that if they de- ask for permission to delay or modify pay-layed and the books didn’t sell, the pub- ments. We have never seen a reasonablelisher would be out of business. request along these lines refused. Often, Two revolutions have occurred in the this sort of interaction actually improves re-book business that reflect the way that lationships. We know of several instancescommerce and technology have responded in which the positive communications thatto these supplier trust problems. The first developed during a crisis resulted in sup-was implemented by the pioneer of online pliers helping their customers finance theirbook sales, Amazon.com, who established expansion once the crisis was past. In onea fully automated online publisher account- instance, when the Japanese economy de-ing system. The system orders a small clined for five years in the early 1990s, annumber of books to be kept in Amazon American company that sold pre-fabwarehouses, and automatically reorders by houses to the Japanese was encouraged bye-mail as books sell. The system pays auto- the cooperative Japanese distributor to shiftmatically every 60 days and the publisher the business in several directions, all ofcan track the entire accounting online. The which resulted in new and rapid expansionsecond innovation has been publishing-on- when the Japanese economy finally pickeddemand. Publishing-on-demand uses com- up in 1996. In other instances, suppliersputer printing technology to print one who were kept in the picture liked whatbook at a time. The publisher pays the they learned and actually invested in theprinter for the set-up costs for a book, and business.then orders any number of books as the If you want to know how your suppliersbooks sell. This has fit in perfectly for the feel about you, why not ask? Here is aniche markets of small publishers with questionnaire you may want to give to sev-small market books. Both of these revolu- eral of them.tions occurred in response to the problemsof supplier trust and credit. Of course, most businesses face a cashflow problem at one time or another, andsuppliers help finance these periods. Thereis nothing wrong with this as long as allconcerned are honest and open with each
  • 5/16 MARKETING WITHOUT ADVERTISING Questionnaire for Suppliers I have found in my dealing with ______________________________________________ NAME OF YOUR BUSINESS that you and your key employees are generally: EXCELLENT ADEQUATE POOR Accessible when I need you… Reliable in your payments and financial projections… Polite in your general business dealings… Reliable in doing what you promise on time… Able to handle any problems with your product and services satisfactorily… Careful and neat when it comes to recordkeeping… Generally trustworthy in all dealings… Comments: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 1 7G. Business Friends and ing strategy because they have a predispo- Acquaintances sition, often a strong one, toward seeing your business prosper. Unfortunately, de-There is a direct connection between a spite this predisposition, we often heargood small business marketing plan and friends, or even business acquaintances,how your friends think about and under- say something like this: “I don’t really un-stand your business. derstand what you do or how your busi- A friend is someone who is connected to ness as a public health research (or solaryou by mutual esteem, respect and affec- energy, land use, or waste disposal, etc.)tion. Acquaintances are people to whom consultant works.” Or, “I know you distrib-you have been introduced and are socially ute shoes (or books, candy, tape recordersfree to speak with again by recalling an or trees), but what that really means is aearlier encounter. This latter group in- mystery to me.”cludes, for example, school classmates, fel- The point should be clear: Friends canlow employees, members of the same be extremely important in your effort tomilitary unit and people you come into market your product effectively, but only iffriendly contact with at trade meetings, you give them a reasonable chance toconventions and continuing education help. How do you do this? By keepingcourses. your social network aware of your opera- Satisfied customers have some of the tion—your joys and disappointments asqualities of friends. In at least one impor- well as the nuts and bolts of how yourtant way they share values with you, since business works. Sometimes months go byyou both view your business with esteem. without talking with our friends about busi-However, because your relationship is ness. In order for friends to recommend usprobably limited by a business context, we have to make the effort to keep themthey are in most instances more like ac- current. It’s worth the effort to periodicallyquaintances. Certainly, like acquaintances, make a phone call or fax a poem or car-they have the right to approach you with- toon you think a friend would enjoy alongout a new introduction. They just call up or with an update about any changes in yourwalk up and say, “You fixed my plumbing business. An added benefit is that it helpsa few years ago and did a wonderful job. keep your friendship network healthy.How’ve you been doing lately?” They even When you e-mail business associates newshave the right to subject us to bad jokes. about your business be sure to include“You’re the guy with the shade shop. I’m your friends on the list. Friends will oftenglad to see you hanging in there.” let you know when you are going in the All of your friends, family and acquain- wrong direction, and will be there to listentances should be involved in your market- and help put your problems in perspective.
  • 5/18 MARKETING WITHOUT ADVERTISINGJust as important, they will know enough recommendations without a strong friend-to really appreciate your successes and cel- ship and peer group network. For othersebrations. And, of course, they will actually (say a drain cleaning service or a butcherhelp you sell your product or service. shop), the good opinion of friends may not For example, if you are a landscape ar- be so crucial as is listing the availability ofchitect and often lunch with the lawyer in your service in all the right places, but it isthe next office who shares your enthusiasm still helpful.for soccer, don’t forget to make her knowl- Even a dentist, however, can do a greatedgeable about the nitty-gritty of what you deal to establish a good friendship networkdo, how you get business, how much you in a hurry. One extremely kind and good-charge and so on. Sooner or later your hearted dentist we know did just this bylawyer friend will find herself in contact following his best instincts. New to awith someone who needs some landscap- strange town, with few friends and verying done—perhaps a business which con- limited resources, he spent every spare mo-sults her about zoning problems connected ment visiting old people’s homes and fix-with a new building. When this occurs, ing the teeth of the indigent residents free.you want her to be able to mention your After a few months, when it was apparentbusiness confidently and knowledgeably. that he was sincere, some of the peopleBe sure to remember to tell others that who worked at the convalescent homesyour business benefits from referrals and to began to call him for appointments and re-show appreciation when they give you one fer their friends. The local dental societyby expressing thanks in person or by send- was so proud of his work that establisheding a note, flowers, a gift certificate or dentists began to refer their overflow.whatever is appropriate. Within a couple of years, our public-spir- The opinion your business peers have of ited friend had enough patients that he wasyou is also very important to your busi- able to buy the old Mercedes he had al-ness. Being in contact with people in your ways coveted. To his credit, however, hefield is one of the best ways of learning still drives it over to one or another of theabout new products and innovations that old people’s homes a couple of afternoonsmay be directly useful to you. In addition, a month and fixes teeth for free.consulting people in your peer group net- La Blue’s Cleaners in Sebastopol, Califor-work is one of the common ways potential nia, has been in business for more thancustomers check out your business as part 40 years. In addition to providing pick-upof deciding whether or not to patronize and delivery service to homes and offices,you. For some businesses (for example, a they are known in the community for ex-new pediatrician or chiropractor in town), tending a hand to the temporarily unem-it may be difficult to create good personal ployed. If you are out of work they will
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 1 9custom dry-clean and press one suit or one to you, you usually decrease the effect ofdress and launder two shirts or blouses at her malice. You also let others know thatno charge. This information is posted on a you are objective about the problems insign inside the store which says “This is your relationships. Finally, your efforts toour gift to you so you will look your best be more than fair will probably get back toat your next job interview.” Customers re- the person and may cause her to treat youally appreciate it, and you can be sure that more fairly in turn.when they are back among the employed Second, mediate or arbitrate your differ-they bring their business to La Blue’s. ences with this person, if it’s appropriate. Mediation is a process in which arguing parties select someone who helps themH. Individuals Who Spread reach their own agreement. In arbitration, Negative Word of Mouth the parties agree in advance to let some- one else make the final decision. Both About Your Business techniques are good ways to avoid long- term hostility and the negative word ofMost of us want to be liked, if not consid- mouth that flows from it. And when aered perfect or adorable. However, unless business openly promotes these alternativeyou are a very rare person indeed, you dispute resolution techniques in an honestprobably have at least a person or two effort to resolve differences without initiat-buried somewhere in your network of per- ing a formal court action, it gains a reputa-sonal relationships who consider you the tion for honesty and fairness.first cousin to a scorpion. It’s important to Even if the person who dislikes youhave a strategy for dealing with those few won’t try to resolve a dispute through me-misguided souls who have chosen you or diation or arbitration, at least others af-your business for their hostility. This is im- fected by the dispute will know you haveportant, of course, because negative word done your best. It takes a thick-skinned in-of mouth about a business, especially dividual to resist the pressure of his peerswhen someone goes out of his way to to work things out.spread the bad word, can have truly bad Despite this good advice, many peoplelong-term consequences to your business. find it hard to admit some people feel Here are two strategies that often work negatively about them. A four-year-oldwell: friend, Joshua, has a philosophy that may First, emphasize the positive attributes of be helpful in encouraging you to do thisthe person who dislikes you whenever exercise. One day Joshua came home frompossible. When you emphasize the posi- pre-school and told his parents about a kidtive attributes of someone who is hostile who had called him a series of truly ugly
  • 5/20 MARKETING WITHOUT ADVERTISINGnames. The parents, who were themselves District Attorney and judges in their countysomewhat upset, were surprised when and even the lawyers who had sued them.Joshua indicated very little concern. When Simons and her colleagues invited one ofthe parents questioned him about his feel- the lawyers to the local meetings of theings, Joshua replied, “He just needed California Association of Independentsomeone to pick on. He really doesn’t Paralegals. They had him to lunch. Theyknow me.” invited him to speak at their meetings. He We also like the approach of Virginia invited them to speak to a bar associationSimons, an independent paralegal in lunch. They told him that if he thoughtBakersfield, California, who has had a lot they were doing a bad job that they wereof experience dealing with attacks from open to having him teach them to do bet-bar associations. She was sued by a bank- ter. The District Attorney’s office is now aruptcy trustee in federal court, charged member of their advisory committee.with practicing law without a license be-cause she had helped customers preparetheir own bankruptcy forms. She told each I. Your Behavior in Publicof her customers what was going on andthat the suit was being brought in a effort Two people were sitting behind us on anto put her out of business, not because of airplane talking about a client in very nega-incompetence on her part. Several of her tive terms. The conversation was so vitri-colleagues, who were also targeted by the olic that our ears perked up. When theylocal bar, joined forces with Simons. They mentioned the name of the client and thegot their clients to sign petitions on their name of their own firm (a national ac-behalf. They went to bankruptcy court counting organization), we were shocked.when it was in session and took notes as It didn’t speak very well of their own com-to any unequal treatment given to non- pany to be so negative about a client in alawyers representing themselves. Twenty- public place, and some of the mud theyfive people from all over California were slinging stuck to their company.showed up in court to support them, and A far more blatant example of how im-they won their case. portant our public behavior can be to our Instead of gloating or spreading negative business success occurred during a Sanword of mouth about the bar association, Francisco restaurant strike, when a psycho-they decided to open up the lines of com- therapist punched a picketer. A prominentmunication with their opponents and con- newspaper columnist picked up the item. Itvince individual lawyers that many people certainly wasn’t good for his word ofcouldn’t afford them and needed the ser- mouth in the psychotherapy business.vices of paralegals. They contacted the
  • THE TREATMENT OF PEOPLE AROUND YOUS 5/ 2 1 It’s often difficult to think of ourselves in and respond by beating up the offendinga public sense, always being a representa- machine, anyone present who recognizestive of our business; to know that our lan- you will probably view you as a highlyguage, appearance and personal dealings volatile person. (This, of course, is unfor-shape our customers’ attitudes. But it’s tunate, we hasten to add, because kickingtrue, from small town America to the larg- a machine that has done you wrong canest city. sometimes feel very good.) In the back of A businessperson must always be “on,” their mind they may hold this image ofto a certain extent. For example, if when you for a long time, and it may shape theirmaking copies at the local self-serve copy future dealings with you. sshop, you lose 50 cents in the coin slot
  • Chapter 6 Openness: The Basis of TrustA. Financial Openness ....................................................................................... 6/3B. Physical Openness ......................................................................................... 6/5C. Openness in Management ............................................................................. 6/6D. Openness With Information .......................................................................... 6/8E. Openness With Ideas ................................................................................... 6/11
  • 6/2 MARKETING WITHOUT ADVERTISINGO penness in business is definitely sphere of secrecy. On the other hand, a not a strategy taught in business business that is obviously open with its school. Sadly, the currently pre- customers is so refreshing that this policyvailing view is that it’s best to “play your itself stimulates positive recommendations.cards close to your chest” about almost ev- Promoting openness in your businesserything from the way a product is made counters the accurate public perceptionor a service delivered to profits to pay that most businesses watch out for theirscales to who qualifies for what business own interests while often ignoring those ofperks. This is a serious mistake. Openness their customers. For many years, this tradi-builds customer trust, which, as you tion found support in our law under theshould know by now, is the prime requi- doctrine of caveat emptor, or “let thesite of any marketing without advertising buyer beware.” These days, courts andcampaign. legislatures have shifted much of the re- If you doubt that openness leads to sponsibility for selling safe products totrust, consider the public sector. These business, but there is still a widespreaddays we require public officials to report feeling in the business community that iftheir campaign finances and top officers in consumers aren’t canny enough to watchpublicly held corporations to report their out for their own interests, they deserve tosalaries and stock transactions. Similarly, be taken advantage of.nonprofit organizations that receive tax As a result, customers tend to be warysubsidies must file a public financial state- both when dealing with individual busi-ment; and even private corporations that nesses and the business community gener-seek to raise funds in the financial markets ally. For example, these days, someonemust publish much of their financial data who reads in the newspaper that a localand supply the Securities and Exchange Merchants’ Association favors a particularCommission with even more. In short, political position is likely to conclude thatopenness in financial dealings is fast be- the position promotes the merchants’—notcoming a fundamental legal requirement in the public—interest. And although this isall sorts of contexts. not always true, it is an understandable as- Despite this powerful trend, and despite sumption when you consider how manythe fact that openness obviously contrib- industries, from those making birth controlutes to building customer trust, many small devices and drugs to those making autosbusinesspeople still try to hide as much as and insulation, have at times cynicallythey can about their financial and operat- placed their own interests before those ofing affairs. This is a miserable policy, espe- their customers.cially from a marketing perspective. How open is your business? Can peopleNothing destroys trust as fast as an atmo- see what you do and how and where you
  • OPENNESS: THE BASIS OF TRUSTS 6/ 3do it? When they are interested, do you when he ran into several problems.explain the technical parts of it they don’t The first was that he had borrowed tounderstand, or do you jealously guard this the limit of his personal credit to keepinformation as a “trade secret”? Is your his business going, and the secondprofit-and-loss information generally avail- was that the printer still had an out-able to your customers? Do you let your standing bill from the first edition.customers know in advance what they can Howard had pre-sold some of the newexpect of you if there is a problem with editions at less than $12, and that wasyour product or service? the break-even point by later calcula- An attitude of openness should be built tions. What was he to do?into all of the details of the way you con- Howard first considered and rejectedduct your business: your pricing, your accepting advertising in the manual.treatment of employees and your willing- Although it would have bailed him outness to answer questions about your prod- of his financial problems, it woulducts and services. have been at the expense of credibility among his readers. What he did, in- stead, was to announce that he had aA. Financial Openness problem and described it to a group of bicycle product manufacturers at aThe few leading-edge businesses that actu- trade show. They too thought it was aally post or publish their financial informa- bad idea to take ads. After his an-tion where their customers can monitor it nouncement, two people came to himconstantly get surprised and pleased reac- and offered to co-sign a loan for him.tions from customers. It’s one of thosesimple, excellent ideas that customers intu- Small businesspeople are reluctant toitively understand and respond to. It open their books for much the same rea-should be standard procedure for all top- son many people are timid about appear-notch small businesses. If you don’t know ing in a bathing suit. They don’t wanthow powerful this technique can be, con- people to know that they’re in less thansider this example from our book Honest perfect condition. This sort of shyness isBusiness (Clear Glass, San Francisco, unwarranted, because openness is reassur-2000): ing regardless of the actual financial condi- tion of the business. Howard publishes the finest bicycle This point is clearly illustrated by Chris repair manual for the 6,000 bicycle re- Andersen, who runs a construction com- pair shops in the United States. He pany in Stockholm, Sweden. Chris promi- was ready to print his second edition nently posts his financial records on the
  • 6/4 MARKETING WITHOUT ADVERTISINGwork shed near his current construction even the electrical appliances are the mostsite. When asked at a recent small busi- durable ones on the market. This is open-ness conference, “Doesn’t your smallness ness of a unique form. The products them-worry your customers?” he answered with selves cry out, in an organic, simple way,a resounding “No. People can see from my to be trusted.balance sheet that I can afford to finish A fascinating San Diego, California, com-their project,” he explained, “and that’s pany with 240 employees, Action Instru-what they primarily care about. When they ments, has a unique explanation for itsoccasionally see that I have underbid a job commitment to openness, which it callsand am not making money on it, they rave “the rights of ownership.” Action, whichto their friends about what a great deal began in the early 1970s and expects tothey got. And when I make a profit, they pass $100 million in annual sales soon, hasalways say they are coming back to me for a five-part openness program:the next job and they expect a lower bid.” 1. In the center of its main building, One effective open marketing approach which houses a cafeteria and meet-was initiated by a store that opened a few ing rooms, is the InfoCenter, whereyears ago in Tokyo called “No Brand.” It each department posts all of its cur-now has over 200 locations throughout Ja- rent financial and operating reports.pan. No Brand sells a wide range of prod- 2. Each employee has an “Owner’sucts and, true to its name, none of them Manual,” which explains how thehave brand names. We might call it “ge- company works and how to read theneric” in English, but it really isn’t, since InfoCenter reports. Not all employeesall products are top-of-the-line quality and are, in fact, owners, but most are.the “generic” concept in the U.S. has gen- 3. Daily at 9 a.m. there are announce-erally been marketed as bottom-of-the-line ments over the public address systemor economy quality. The Japanese stores about crucial issues of the day andare very small, 600 square feet, but very about visitors expected that day.efficient. Clothing is of the highest quality 4. A newsletter keeping everyoneand the materials are all natural: cotton, abreast of important company newswool, linen or silk. The packaged foods comes with each paycheck.are organic, with no additives. Paper and 5. On Fridays, starting precisely at 4cardboard products are from recycled ma- p.m. and ending precisely at 5, is theterial. All products come in limited colors: $100 Million Club, which anyone canblack, brown, beige, tan, white or natural. attend (50 to 75 employees comeThe whole store is designed to give the regularly). It’s an informal talk by ansense that you can completely trust what outside guest about business, man-you buy. Nothing secret is added, nothing agement, the industry or related sub-harmful lurks in unknown ingredients, and jects.
  • OPENNESS: THE BASIS OF TRUSTS 6/ 5B. Physical Openness of shoes line the walls so that their entire stock is out in the open. You know for aOne of the most interesting business de- fact if they have your color and size.velopments in the United States has been Or consider the case of Berkeley Fish.an increased physical openness in the Since this small store moved its sushi-mak-workplace, which has been enthusiasti- ing area from the back of the store to thecally supported by customers. For in- front window, people gather to watch thestance, small photo developing shops have Japanese delicacy being prepared. Manysprung up where customers can watch the are so impressed that they come in andmachine that processes their film. It’s also purchase some for the first time.reassuring and fun to watch your car via This strategy could be followed withvideo as it’s being repaired. Restaurants success by all sorts of other retailers, butand bakeries that have designed their for the most part, it isn’t. Most businesseskitchens to be clearly visible to their cus- still prefer to do much of their work in atomers announce that they have nothing to back room, far from public view. Are wehide. Hospitals invite fathers and other alone in suspecting that this is often forclose relatives into the delivery room dur- good (or should we say bad) reason?ing childbirth so they can see exactly what Whether you run a garage or small radiois going on. station or fish hatchery or beauty salon, Can this approach be made to work in ask yourself how you can change theyour business? Absolutely. A Step Ahead in physical layout of your business to let yourPetaluma is California’s oldest shoe store, customers better see what you do. Theand we can see why it’s been in business harder this is to do, the more they are sureso long. Instead of just the ordinary dis- to appreciate your efforts and the moreplays and the rather mysterious curtained- likely they are to comment favorably aboutoff stock room of most shoe stores, boxes your business to others.
  • 6/6 MARKETING WITHOUT ADVERTISING Avoiding Conflict by Being Open With Clients Jim Sullivan is an activist in the land preser- the client must have trust in the landscaper vation movement, writer and landscape or conflicts are likely to develop. contractor/designer who lives and works in “To develop trust, I try to be absolutely Sonoma County, California. He has found open about everything I do. I put all the that being open with clients is essential to specs of the particular job into every con- the success of his business. He describes it tract, and write the contract on a computer. like this: Then I print it out and read the entire four “Often a client approaches me with a de- or five pages to my client. While this may sign idea he wants a bid on, and a problem sound tedious, I have learned the clearer can arise when they don’t have enough our understanding, the fewer problems that money to implement their plan. If you can will arise. Reading aloud with the client be open with your client and create a good makes it easy to discuss any questions they atmosphere, usually you can mutually rede- may have and make necessary corrections sign to reduce costs. One problem is that in before work begins. The more precise de- the landscape business most of the money a scription we work out the better. It also client spends is not visible. The actual plants, gives me a chance to explain all the ’hid- for instance, are only a small part of the cost. den’ work that must be done for a really ex- The bulk of the cost actually goes into plan- cellent job.” ning, overhead, soil reconditioning, irriga- A building contractor we know does all of tion, transporting materials, site preparation the above and also adds his profit and over- and labor. Because these costs are invisible, head on the estimate instead of the usual practice of “hiding” these figures in the bid.C. Openness in Management are mistakes. When employees have an overall perspective on the business opera-In addition to building trust, openness has tion, they can make better decisions wherethe great advantage of increasing business it most counts: at the lowest level of op-efficiency. When each employee has to be eration.given detailed instructions and requirescareful supervision, a large hierarchy ofmiddle management is inevitable, and so
  • OPENNESS: THE BASIS OF TRUSTS 6/ 7 The Open-Book “Revolution” Here’s what Inc. magazine (cover story, “Teach the basics of business…. Some June 1995) had to say about the radical idea [employees] believe that revenues are the of giving employees lots of financial infor- same as profits. Or that profits are whatever mation about the companies they work for: a company has in the bank. Not many em- “Companies large and small have been ployees can tick off the expenses a com- inventing an approach to making money pany must pay. that is as radical as it is simple. The open- “Empower people to make decisions book revolution. More and more CEOs have based on what they know…at Foldcraft (a discovered what was missing from all the chair manufacturer in Minnesota) every past decade’s management cures—and unit is accountable for its own numbers— have invented a new way of running a com- and every man and woman in that unit pany that overturns a hundred years of shares in the accountability. managerial thinking. The new system gets “Make sure everyone—everyone!— every employee to think and act like a shares directly in the company’s success, businessperson—and it gets astonishing re- and in the risk of failure…. sults.… “Manco, a box manufacturer in Balti- “There are a few basic principles and by more, sets annual targets for net earnings now, a lot of people...have experience put- and return on operating assets. If employ- ting those principles to work in companies. ees hit both targets, the company ’Makes “Get the information out there…not only bonus,’ meaning that employees collect what they need to know to do their jobs ef- payouts ranging from 10% to 50% of their fectively but how the division or the com- total compensation. Want to know the pany as a whole is doing. prospects? Check out that lunchroom wall.” A wonderful example of this kind of Organization” to “An Introduction to Sys-openness is Scandinavian Airlines (SAS). tems Development.” The second year’sSAS “study circles” were created so that subjects range from “Strategic Develop-each employee can learn about basic man- ment” to “Planning for the Next Genera-agement issues, such as the long-range tion of Aircraft.”plans of the company. In the first year’s Even more important than bringing man-study circles, there are ten topics covered, agement-level issues directly to each em-with about six hours of tapes and study ployee, SAS publishes a weeklyper topic. Topics range from “A Functional newspaper that presents and explains cur-
  • 6/8 MARKETING WITHOUT ADVERTISINGrent financial information about the enough to demystify your precious infor-company’s operations. In one edition, the mation, they will feel more comfortable,financial information was even broken satisfied and appreciative of what you’redown into subsidiaries such as hotel and doing for them.catering services that the company oper- Few people outside the particular pro-ates. fession understand how a dentist, lawyer The newsletter includes letters from cus- or architect evaluates a particular problem.tomers (including complaints) and an Too often, the professional works like aopen forum for staffers. For instance, in “black box”: the client feeds in a problemone issue Jan Sorenson complains that a and out comes an answer. The client hascompany brochure “is pure nonsense” and no real understanding of what a root ca-Nancy Johnson, in reservations, suggests a nal, temporary injunction or soils test is allbetter way to handle prepaid tickets. about. The paper has very detailed operational To change this situation, a doctor caninformation as well. For example, a chart stock the waiting room with material (writ-on the back page shows the amount of ten, audio cassette or, increasingly, com-available seating on various routes for the puterized) that answers medical questions.coming three weeks. A real estate broker’s office can hand out information going into detail on all proce- dures for selling a house. A bank can ex-D. Openness With Information plain how its policies make its loans or checking accounts a better deal than otherMore and more businesses sell information banks.instead of, or at least in addition to, tan- If you find yourself reluctant to give outgible products. Think about why you go to free information about the details of whatoptometrists, lawyers, stockbrokers, banks you do, you should rethink what you’reor real estate agents: you need the special- charging your customers for. Are youized information only they have access to. afraid that if you give them information If you’re in a business or profession that they’ll realize they don’t need you? If so,trades in information, being open about perhaps openness isn’t for you unless youyour finances and how you organize your are willing to change some fundamentalworkspace, while important, are clearly aspects of how you work. However, if younot the only elements in your efforts to be come out from behind the professional jar-open. Your real task is to be open with gon your colleagues hide behind and letyour customers by giving them the maxi- your customers in on the maximummum amount of information about what amount of useful information without pay-you do. If you trust your customers ing you to interpret it for them, you will
  • OPENNESS: THE BASIS OF TRUSTS 6/ 9find that your work satisfaction will im- Advice by E-mailprove because you are now helping edu-cated participants rather than ignorant Michael’s offer to do telephone consulta-skeptics. And at least as important, your tion in the first edition of this book nowincome will go up too, because your cli- has a new twist, thanks to one of hisents will surely tell many others about phone clients, The Center for Traditionalyour refreshingly open and honest busi- Medicine in Cambridge, Massachusetts.ness practices. When the Center decided to plan a new Here is a questionnaire to help you mea- marketing event, instead of phoningsure how open your business is. This is Michael again for advice, they sent him aimportant and well worth the time it will postcard asking three questions and offer-take to complete. The authors’ years of ing multiple choice answers for each.consulting experience with small business Michael cried “brilliant!” and instantlyclearly demonstrate that the more boxes added the Postcard Question Service tomarked with an “X” on the right-hand side his repertoire. Soon afterwards, he beganof the page, the more effective the market- offering this service by e-mail.ing program. Few “X” marks is a red flag You can obtain an e-mail Multipleindicating serious problems. Choice Consultation for just $10. (Be- cause of the background information re- quired—see the information on telephone consulting in the Appendix—this offer ap- plies only to businesses who consult with Michael on the telephone first.) For infor- mation on how this service works, see Michael’s website at http://www.well.com/ user/mp/mwa.html. This is also a new form of accessibility (see Chapter 9).
  • 6/10 MARKETING WITHOUT ADVERTISING How Open Is Your Business? SOME CUSTOMERS ALL CUSTOMERS ACCOUNTANT We are willing to answer the following specific EMPLOYEES ATTORNEY FRIENDS questions about our business to: FAMILY wages... rent... cost of goods... source of supplies... financial problems... profits and losses... specific techniques... I personally will show or explain in detail: How I do what I do... How my equipment works... How I price a product or service... How I keep track of time... How I keep track of costs... My financial statements are available to anyone YES NO who wishes to see them...
  • OPENNESS: THE BASIS OF TRUSTS 6/ 1 1E. Openness With Ideas In 1977, RCA developed a video player requiring a specialized video disc. It didMany businesses deal in what has become not license this product to others and triedknown as “intellectual property.” Intellec- to monopolize what it correctly saw as atual property consists of ideas, designs, phenomenal new business. Unfortunatelytrade secrets and practices, as well as pat- for RCA, Matsushita and Sony developedents, copyrights and trademarks that you videotape players that produced similar re-own. sults (the Beta and VHS systems). Both Licensing is the main way that owner- were licensed to many manufacturers. Byship of intellectual property is shared. For 1983, RCA’s basically excellent productexample, books are licensed to filmmak- was so isolated in the marketplace that theers, films are licensed to video cassette dis- company canceled it. A few years later ittributors, toy designs are licensed to was clear that of the two surviving sys-manufacturers, promotional advertisements tems, the one which had been licensedare licensed to local TV stations and inven- most widely (the VHS system) was scoop-tions are licensed to manufacturers. ing up the lion’s share of the business. Another way that intellectual property There are lots of similar examples ofcan be made available to others, of course, companies refusing to license their intellec-is simply to give it to them. A restaurant tual property losing out to others who werecan make its recipes available to its cus- more open. Audio tape is one, where reel-tomers, a computer programmer can post to-reel and eight-track systems lost out toa program online for public use and an small cassettes because the Dutch Philipsauthor can give away his poem. company licensed the systems for making Many businesses, of course, neither li- and playing the tapes to virtually anyonecense nor give away their legally protected interested at a very reasonable rate.property but try to monopolize it for their Two Internet businesses offer the bestown gain. The world is full of secret for- and most recent examples. The Web-mulas, patented inventions and fiercely de- browsing boom was virtually created byfended trademarks. Like other sorts of the founders of Netscape who gave theirsecrecy in business, most businesspeople Web browser software free to consumersnever question their monopolistic practices. and only charged businesses for the li- They should. A small business that tries censes. The Internet server business hasto monopolize intellectual property treads been revolutionized by Linux, a free soft-a very dangerous course. To illustrate this ware program that has become a majorpoint, let’s look at a big business example force in the formerly closed server marketof a product that most people are familiar dominated by Microsoft. Linux is served bywith. the community of “volunteer” program-
  • 6/12 MARKETING WITHOUT ADVERTISINGmers around the world and by commercial Simply that those who are most open tobusinesses that have also grown up to pro- including others in what they are doingvide service to large corporations. are far more likely to prosper than those What is the moral of this for small busi- who don’t.nesses that develop intellectual property? Generous Marketing Proves Historic Success The late Andrew Fluegelman, formerly edi- users. Into this environment stepped one of tor of PC World and senior editor of the most astounding marketing achieve- MacWorld, prominent computer magazines, ments in history. Marc Andreeson started authored a program to allow certain types of distributing, free, a program called computers to talk to each other, called “PC Netscape. Netscape was elegantly simple at Talk.” Instead of selling this program, the outset and allowed good graphics, di- Fluegelman gave it away, in the process re- rect access to files that were made public fining a marketing strategy now known as on the Internet and easy movement to other “freeware.” Those who were given a copy of distant files. The new environment was “PC Talk” were encouraged to voluntarily quickly called the World Wide Web, and send a licensing fee to Fluegelman. If they Netscape became the standard. did, they qualified for free program updates. Netscape charged commercial users for The result is a computer business legend. its program and sold its services for internal With no advertising, Fluegelman’s program corporate use. The company sold public became a substantial success, bringing in shares of stock in early 1995 and created a over $200,000 in 1984 alone. Indeed, until sensation that played a direct role in lifting his untimely death in 1985, Fluegelman’s the whole domestic American stock market total revenues from “PC Talk” exceeded the nearly 30% in one year. Then Andreeson’s net return of all directly comparable pro- company achieved another historic first by grams, many of which were marketed with generating revenues in excess of $100 mil- expensive advertising hoopla. lion in its first year of existence. Fluegelman’s program allowed computers Marketing Without Advertising deserves a to link to networks, which in the early tiny amount of credit. The 1986 edition of 1980s were new and limited. By 1993, this book was the first published account of computer networks were beginning to grow generous marketing, the RCA, Dutch and the Internet had several million active Philips and Fluegelman stories.
  • OPENNESS: THE BASIS OF TRUSTS 6/ 1 3 At this point you may be saying, “Great a greater effort to sell it if she has an exclu-story, but what’s the point for my small sive deal. In reality, the small manufacturer,business? I don’t write software, splice artist or craftsperson faces the same situa-genes or have a pantry full of secret reci- tion as do giants like RCA and Philips. Thepes.” While the issue of licensing and the exclusive agreement makes it much harderprinciple of generosity in marketing doesn’t for your ultimate clients to find and buycome up often for small businesses, some- your product or service because it inevita-thing very similar does commonly occur for bly results in severe restriction of the manyall providers of goods (and sometimes, ser- ways it can be sold, displayed and mar-vices) under the guise of exclusive market- keted. Indeed, no matter what the incen-ing agreements and exclusive territory tive, it is almost never worth signing anagreements. exclusive agreement of any sort. Some- We have seen many businesses con- times this means making a tough decisionfronted with a retailer or wholesaler who to turn down what seems like a very lucra-says, “I’ll carry your product only if I can tive deal. Do it. Never let short-term greedhave an exclusive agreement in this area get in the way of long-term good businessfor selling it.” At first examination, it makes practices. ssense: The retailer or wholesaler may make
  • Chapter 7 Deciding How to Educate Potential CustomersA. What Does Your Business Do? ....................................................................... 7/2B. Defining the Domains in Which Your Business Operates .............................. 7/7C. Providing Information on Businesses in Established Fields .......................... 7/10D. Businesses in New or Obscure Fields .......................................................... 7/13E. Whom to Educate ......................................................................................... 7/15
  • 7/2 MARKETING WITHOUT ADVERTISINGF A. What Does Your Business or the most powerful marketing force—positive Do? recommendations—to work,most businesses have a major communica- Before you can sensibly design a market-tion job to do. After all, if people don’t ing plan based on personal recommenda-know the details of the goods and services tions, you need to articulate a clear, easilyyou offer, they are unlikely to be effective understandable statement of what yourin recommending your services to their business is about.friends. But before you can design an ef- A statement of what your business isfective marketing plan, you must decide: may seem so obvious to you as to not 1. The general kind of information bear mention. It isn’t. After working with people need to know about your many small businesses, we have learned business so that they can tell others that the business owner who can clearly about you, and communicate what he does is the excep- 2. What specific groups of people you tion. When many of us are asked what we want to target for your educational do, we make statements such as, “What efforts so that your marketing plan don’t I do?” or “Isn’t it obvious?” or “You based on positive recommendations know—pretty much what the average will be maximally effective. small office CPA (financier, vet, etc.) This chapter helps you focus on these does.” This sort of vagueness usually existsissues. Once you’ve decided them, Chapter even in seemingly straightforward opera-8 deals with the specifics of getting your tions such as bicycle repair or independentmessage across effectively. grocery store businesses. Before we get into the details of how to Charmian Anderson is a therapist who isbest spread the word about your business, excellent at marketing her services. Shehowever, we suggest you run a little test started her practice in San Francisco withas to how accomplished you already are in the few clients she acquired while finish-disseminating information about your busi- ing graduate school, but needed more.ness. Ask ten friends and acquaintances— Anderson discovered early on that men-people you live near, or participate in tioning the fact that she was a therapistsports with or know from the PTA or a so- with a Jungian bent didn’t generate muchcial club—to give a brief description of business, so she decided to concentrate onyour business. How well do they describe describing her business in a way herwhat you do? Could they convincingly tell friends and potential clients could easilyothers about what you do? Or do they understand. To do this, she created andneed more information to really recom- memorized a simple 25-word statement: “Imend you? help successful people with executive jobs
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 3or their own businesses who have short- be based on this fact. The truth is, how-term emotional problems such as divorce, ever, if you assume that your business hasfamily stress or trauma.” She includes it in to do only with cooking, you will considerher written flyers and other materials and only a part of your possible market.delivers it orally at all sorts of gatherings, Let’s see what happens to your market-including meetings of businesspeople—the ing options if you consider these addi-kind where you stand up and tell who you tional facts:are and what you do. • Your pots are stored somewhere, so The brevity and clarity of her statement you are also part of the “kitchen stor-allow Anderson’s friends and supporters to age” domain.actually find potential clients for her be- • Your pots must be cleaned, so youcause they have a concrete way to com- can add the “cleaning” domain.municate what she does. By contrast, her • If some cooking methods, such asearlier definition of “I’m a therapist” was boiling and steaming, work in yourvirtually useless. pot while others, such as frying, Obviously, to create a good description don’t, you might conclude that youof your business, you must thoroughly un- are in the “health” business.derstand it yourself. Surprisingly, many • Your pots (their color, shape, finish,businesspeople, even those who have etc.) will play an aesthetic role in theworked in a field for a long time, haven’t kitchen, so you are in the decoratingfully thought out all aspects of their busi- domain.ness. By broadening your own thinking about One place to start is by developing a what your business is, you may well endclear understanding of the broader domain up defining it in ways you haven’t thoughtin which your business functions. Let’s of before. Some of these new ways maytake an example. Suppose you manufac- turn out to be keys to developing a suc-ture a cooking pot. It would be easy, but cessful marketing action plan.only partially correct, to say you are in the Each of our businesses is dependent onbusiness of making cooking pots. To de- other businesses. This interdependence isvelop a meaningful description of your pervasive and shapes our activities. Think-business—one that will help you develop ing about that interdependence can helpa marketing strategy—you must consider improve your self-definition as well asthe role of the pot in the lives of your cus- help others place you in the spectrum oftomers. The idea is to look at all the pos- commerce. An architect is a cog on a bigsible ways your business touches wheel that includes her graduate educa-customers’ lives. Pots are for cooking, so tional institution and the contractors, engi-any marketing strategy should presumably neers, landscapers, decorators, lawyers and graphics people she works with.
  • 7/4 MARKETING WITHOUT ADVERTISING Consider another example. In 1850, the your business attracts attention only in thequill pen used by secretaries to copy price domain. Many grocery stores neverdocuments could be repaired by a wide go much beyond this sort of marketing. Inrange of semi-skilled craftspeople using other words, they implicitly describe theirmany readily available materials. By con- business as “food for sale at reasonable ortrast, keeping a contemporary copy ma- low prices.”chine in operation is a far more complex But what about broadening the defini-task. To start with, the copier is dependent tion of your grocery store to include theon the proper electric power supply. It fact that the food your customers buy theyfunctions within a limited temperature and must cook, clean and store. And when youhumidity range and requires a certain type think about cooking, don’t forget that aof paper and very precisely manufactured significant percentage of your customersfluids and powders. Further, it needs regard the preparation and eating of foodhighly specialized maintenance by people as an important hobby, and a few elevatewho show up with a trunk full of replace- it to the status of a religion. Thinkingment parts that are impossible to get any- about all of this might prompt you to:place else. • Put on a demonstration of how to The copier, then, is clearly in many do- cook an unusual vegetable currentlymains: repair service, complex parts main- in season. This would be an excel-tenance, reproduction, electrical apparatus, lent way to both focus attention on ainformation transfer, chemistry, xerogra- produce department aware enoughphy, aesthetics and toxicology (some fluids to carry the vegetable in the firstare poisonous). Each of these domains has place and to show your customersan impact on the marketing of copy ma- that you think of food in ways otherchine manufacturers, wholesalers, retailers, than how much it costs.consultants and repair people. • If you are located in a congenial To understand all the aspects of your neighborhood or a small town wherebusiness and define the wide range of do- such events are popular, you mightmains in which you can legitimately sell invite some local chefs to make theirwhat you do, ask yourself these questions: favorite barbecue sauce. Pass out • What exactly is the role of my busi- samples of chicken dipped in the ness in the life of my customer? sauce as part of a contest to crown • How many domains does it touch? the local Barbecue King or Queen. For example, suppose you own a small • Invite a nutritionist to autographgrocery store and your only marketing books inside your store.technique is having periodic sales, featur- • Set up a display of kitchen storageing discounted items. When you do this, systems.
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 5 • Demonstrate how to make a casse- Many of these things are done by stores role in a microwave oven. that understand how to view their product • Have your local Tupperware dis- in domains other than price. By broaden- tributor set up the food storage con- ing their view of their business, they are tainers and explain how they keep able to broaden their marketing plan. Un- food fresh. fortunately, the great majority of busi- • Invite a cookbook author to sign nesses have yet to really take advantage of copies of his book in the store. the concept. In other words, they define what they do too narrowly. Boiling Down What You DoWhen we are approached by friends whose A photographer’s card read as follows:small service businesses are slow, we often • photograph valuables for insurancesuggest a very simple technique that draws recordson the principles discussed in this chapter. • am very patient with babies and smallWe ask the service provider to list four childrenthings she does on a 3x5 card and include • frame photos, andher name, phone number, hourly rate and • make home visits.available hours. Their next step is to dupli- Within two weeks after each of thesecate the card and give it to friends and ac- people sent their cards to twenty friends,quaintances. Even this simple type of both were busy.description always generates business. One reason this simple card approach is For example, a bookkeeper friend who effective is that it forces you to describeneeded more customers listed: your business in terms that make sense to • check reconciliation potential customers. Your description tends • preparation and filing of quarterly tax to fit the customers’ language and speak to returns their immediate needs better than a • general ledger posting, and nondescriptive title like “bookkeeper,” • making budget projections. “photographer” or “therapist.”
  • 7/6 MARKETING WITHOUT ADVERTISING What My Business Does The following is a definition of what my business does, in about 35 words: We support—with information, training, and equipment and whatever _______________________________________________________________ else is needed for greater safety and enjoyment—individuals who are in- _______________________________________________________________ terested in kayaking. We offer good storage and beach areas, help them _______________________________________________________________ form clubs, offer trips and support others in the industry. _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ What My Business Does The following is a definition of what my business does, in about 35 words: We help individuals and businesses effectively define their aesthetic _______________________________________________________________ and spatial desires. We use our skills and talents to organize the rel- _______________________________________________________________ evant businesses, products and technologies to create the desired _______________________________________________________________ goals. We work best with groups of five to 50 people. _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 7B. Defining the Domains in what consultants you use, and make a list of them. Last, think over the general func- Which Your Business tions you fulfill (the major domains in Operates which you operate) from a customer’s per- spective. Below are two examples.By now you should be convinced that a Now, put your lists together, think aboutclear, creative definition of your business them and refine them. Once you do, youis an essential basis for a marketing action should be able to describe your business.plan, and that you simply cannot develop If your business has a Web page you willconcrete marketing steps until you know find this domain exercise has an additionalwho you are aiming at and what, exactly, value. The current structure of the Web al-you offer. Once you know what your busi- lows websites to list key words calledness does, you can focus on those ele- “meta-tags” on their website that are notments that make it unique. visible on the Web page itself. The meta- Start by listing the domains your busi- tag is read by search engines and in manyness operates in. To help in this process, cases can be useful in helping customersexamine your list of payables to see with find you. The “meta-tag” is a perfect placewhom you really work on a continuing ba- to put the relevant words that define thesis. Now, review your checkbook to see domain of your business.
  • 7/8 MARKETING WITHOUT ADVERTISING The Domains in Which Your Business Operates The major domains in which I operate (taken from my payables) are: water safety equipment, marine suppliers, sports clothes, ______________________________________________________________________ navigation equipment, equipment storage, imported kayaks ______________________________________________________________________ The major domains in which I operate (from looking at checks paid to my consultants) are: sports clubs, emergency first aid, environmental science, fabric technology, ______________________________________________________________________ salt water lore and tradition, water safety education ______________________________________________________________________ The general functions I fulfill (the major domains in which I operate) from a customer’s perspective are: recreation, health, stress reduction, weight control, travel, ______________________________________________________________________ family fun ______________________________________________________________________ EXAMPLE FOR A WATER SPORTS EQUIPMENT BUSINESS The Domains in Which Your Business Operates The major domains in which I operate (taken from my payables) are: lumber yards, hardware stores, paint suppliers, specialty catalogs, county ______________________________________________________________________ refuse site, insurance companies, electrical sub-contractors, plumbing sub- ______________________________________________________________________ contractors, moulding company ______________________________________________________________________ The major domains in which I operate (from looking at checks paid to my consultants) are: accountant, law firm, materials specialists, architects, painters, mac-users ______________________________________________________________________ group, computer programmers ______________________________________________________________________ The general functions I fulfill (the major domains in which I operate) from a customer’s per- spective are: bring dreams to reality, create an efficient, utilitarian, aesthetically pleasing ______________________________________________________________________ environment, child safe play areas and entertainment centers for the family ______________________________________________________________________ ______________________________________________________________________ EXAMPLE FOR A CONSTRUCTION COMPANY
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 9 Bob Schwartz’s Tarrytown Conference CenterBob Schwartz incorporated his vision of a narrowest bottom-line sense, Schwartz orga-business conference center into a larger do- nized a wide range of conferences atmain than just meeting facilities: the do- Tarrytown, including the friends of Margaretmain of ideas and issues. Bob took over a Mead discussing anthropological issues,beautiful country estate in the rolling hills Judith Crist with weekends on film and ajust north of New York City and turned it number of creative thinkers discussing theinto the Tarrytown Conference Center. By social concerns of business. Tarrytown’sthe beginning of the 1980s, he had made it reputation began to grow.into one of the most successful and presti- To this Schwartz added a School for En-gious corporate meeting centers in the U.S. trepreneurs and later a School forBob’s background was in journalism, work- Intrapreneurs (see Chapter 8). He also cre-ing for Time-Life and helping found New ated a 15,000-subscriber mailing list for aYork magazine; also, along with his wife, Tarrytown newsletter, which reported on thehe opened a small Japanese inn in the exciting diversity of the conference center’sCatskill mountains, long before there was a activities and provided background materialsingle sushi bar in the U.S. on guest speakers and their ideas. All these experiences combined to give As Schwartz’s view of his business broad-Schwartz the necessary skill to create the ened, he continued to add new projects. ForTarrytown success. In his favor, the bases example, he organized a conference and awere well covered from the start—the estate group—The Tarrytown 100—made up ofwas beautiful, and he hired superb people many of the most innovative entrepreneursto run the hotel and dining facilities. But in the U.S. This project is not only glamor-plenty of conference centers have both of ous and fun, but also will enhance his pri-these attributes and still fail. Schwartz’s ge- mary market as many of the youngnius was to realize that corporate execu- entrepreneurs take their places at the headstives, who were his principal market, were of future Fortune 500 companies. Sayshigh energy people like himself, interested Schwartz: “The power of an idea or a visionin the world, ideas and the excitement of is the driving force behind a successful mar-social issues. While other conference cen- keting strategy, and the ‘whole’ has to fit to-ters focused on “strictly business” in the gether perfectly.”
  • 7/10 MARKETING WITHOUT ADVERTISINGC. Providing Information on provide such exceptional service. Skeptical Businesses in Established customers are like amateurs; they know enough to doubt. Michael suggested that Fields they develop five humorous stories about service calls made at odd hours and re-Those of you who are in well-established count them on radio talk shows and at realfields—anything from a grocery or bakery estate luncheons, chamber of commerceto a television repair shop or retail clothing meetings and similar occasions. The realstore—normally need not be concerned message of the stories, of course, is thatwith communicating the basics of what you Joseph’s really does make house calls atdo. You are fortunate because the public any hour; that message will come throughhas a pretty good knowledge of your type the humor of the stories.of business. If you show a group of strang- It’s not too difficult to figure out what aers your business card, you can expect the bed store might offer, but the Berkeley De-great majority of them will generally under- sign Shop offers a whole lot more than thestand your business and know at least usual mattresses and box springs. Michaelsome of the reasons why they need you. Lavin, the owner, is in the business of sell-Obviously, however, these people won’t ing a good night’s sleep. He has done ex-know what special services and extras you tensive research during his 25 years in theoffer, such as the women’s clothing shop business on how to make a comfortablethat does minor alterations at no extra mattress and is extremely knowledgeable.charge, the grocery store that delivers, the Lavin usually spends an hour and some-laundromat that serves free coffee, the times two with a customer as they try outused auto parts company that delivers to different mattresses and learn about whatcommercial accounts, the bakery that ac- goes into a comfortable night’s sleep. Ascepts phone orders for specialty cakes and part of his initial research he gave awayso on. To fully enlist the positive energy of beds to physical therapists in exchange foryour friends and acquaintances, you must their feedback. He also had them comegive them something to talk about. Your into the store two nights a week for a yearjob is to make sure they are aware of the to answer customers’ questions. And laterthings that set you apart. Lavin installed a pressure-mapping com- A business Michael consulted with, puter that greatly facilitates a custom matchJoseph’s Sewer Rooter of Los Angeles, has between mattress and customer. As you liebeen in business more than a decade and on the bed, Lavin receives an instant read-makes service calls 24 hours a day, seven out on the monitor indicating your particu-days a week. Joseph’s problem is convinc- lar pressure points.ing a skeptical public that it really does
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 1 1 When you leave the Berkeley Design the business, if not the affection, of poten-Shop you are a truly educated customer, tial customers. A bondsman who acceptsand after a night’s sleep on your new mat- collect calls, takes personal checks or jew-tress will probably tell all of your friends. elry in an emergency, is open 24 hours and To take another example, almost every- has a radio dispatched car and national ser-one has some idea of what a bail bonds- vice should emphasize these facts.man does. Just the same, a bondsman who A bank is another business that doesn’tprovides better service can do a lot to gain need to be explained to potential custom- ers. So, rather than bore people with expla- nations of check cashing services or safe deposit boxes, a wise banker will empha- size unique services. Take, for example, the National Bank of the Redwoods, head- quartered in Santa Rosa, California. This lo- cally owned bank specializes in providing services to small businesspersons and tells customers that its commitment is “to bring the bank to you.” For example, bank per- sonnel often go to the borrower’s place of business by appointment. In addition, the bank underwrites a messenger/courier ser- vice to deliver paperwork and pick up de- posits and other important documents, making banking less time-consuming. To make changing from other banks easier, NBR sends out an account executive to work with the business’s accounting per- sonnel. This includes helping them with the forms, endorsement stamps and other paperwork needed to complete the switch. When the woman in charge of New Ac- counts was asked how the National Bank of the Redwoods (NBR) informs customers of these services, she commented: “I sit down with every new customer and assess their needs, suggesting services that seem appropriate for them. In addition, I give
  • 7/12 MARKETING WITHOUT ADVERTISINGthem pamphlets that explain our servicesand charges. Of course, we are continuallyworking on new services such as onlinebanking, having grown from our original,innovative electronic banking which re-quired a different approach. In the firstcase, we formed a focus group of custom-ers and did role-playing exercises to helpfigure out what customers might require.We then devised a questionnaire that wesent to 170 customers. From their feed-back, we now have ten questions we canask potential customers to help them de-cide if this is a useful service. We use thosequestions for our online banking product,phoning customers we think might be in-terested in online banking and offering togo to their place of business to give them ademonstration.” Salli banks at the Sebastopol branch ofNBR and notes that in addition to offeringpersonalized service to the smallbusinessperson, the bank employees makethe trip to the bank a pleasurable experience.Unlike many austere banking institutionswhere the tellers and bank managers treattheir customers impersonally, the staff ischeerful, friendly and genuinely helpful.They even provide dog biscuits and, on thelast Friday of the month, cookies for humans. There are many ways an establishedbusiness can inform customers about thesekinds of extra services. For example, the 7-11 convenience store chain brilliantlychose a name that told its customers that itwas open earlier and later than traditionalgrocery stores. More typical methods in-clude flyers sent out to your mailing list
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 1 3and signs in retail stores or office waiting specialized travel agents, services that buyrooms. You can also note an extra service airline seats in bulk and negotiate low ratesor two on your business card and person- at no charge to the customer. Specializedally explain the availability of extra services agents can get flights to Hong Kong, Tokyowhen customers visit your business. In oc- and Amsterdam at rates that are half ofcupations where you deal with a relatively published fares.few people, you can even call them to let Many owners of new types of businessesthem know about a particularly valuable do realize they must educate people aboutnew service. Chapter 8 discusses many their field in order to create customers.more strategies. Take the tofu business as an example. For the uninitiated, tofu is a Japanese soybean extract: the cottage cheese of soybeanD. Businesses in New or milk. It was introduced in the United States Obscure Fields in the early 1970s as part of the health food movement.It’s one thing to market an established Bill Schurtleif and his wife, Akikobusiness by convincing customers that you Aoyagi, were among the pioneers in creat-do a better job or offer extra service, and ing the first small market for the productquite another to let people know about a with their Book of Tofu (Ballentine), whichbusiness in a field they have never heard they promoted with a nationwide mediaof. For example, if you are a tour. On their tour, they gave order formsbusinessperson who sells wholesale lapi- to interested people to buy “do-it-yourself”dary supplies or structural mylar members, tofu-making kits. Schurtleif and Aoyagi un-very few people will know what you do derstood that if they were to sell manyfrom a quick perusal of a business card. books, people needed more and better in-Even if your business isn’t quite this ob- formation about tofu, the most important ofscure—say you are a freelance video tech- which was what it tastes like.nician, a computer-aided drafting firm or Now, several decades later, many peoplethe operator of a papermaking studio—ex- in the food business take it for granted thatactly what you do may not be clearly un- everyone knows what tofu is. This, ofderstood. course, is nonsense; probably a majority of Don’t assume that your business is im- Americans have yet to taste tofu. In othermune from the need to educate existing words, people in the tofu business, evenand potential customers because it has after years of educating potential custom-been in operation for some time. For in- ers, have barely scratched the surface. Tostance, even today there are many people further expand their market, they still havewho don’t take advantage of the services of a major teaching job to do.
  • 7/14 MARKETING WITHOUT ADVERTISING Redwood Hill Farm, an award-winning put his music on cassettes, a mediumgoat dairy that has the greatest variety of which had almost no retail market at thegoat milk products of any dairy in the time. After questioning a number of peopleUnited States, has been in business in who responded favorably to his music, heSonoma County, California, for over 20 found that many patronized natural foodyears. Not only is it in a rather obscure stores. One by one he called on thesefield, it also has the added challenge of stores and played his tapes for the owners.overcoming buyer resistance to its product. Sure enough, they liked it, stocked themEven though the dairy is successful, it and even played the tapes as backgroundnever lets up on efforts to educate both ex- music for their own enjoyment. Not sur-isting and potential customers. The most prisingly, the tapes slowly began to sell.effective way that owners Jennifer Bice and Each tape had an address and price for ad-the late Steven Schack found was to give ditional ordering. Several years later, whenout samples of their yogurt, milk and a FM radio stations began playing his music,wide variety of cheeses so customers can Halpern’s audience grew even more rap-taste for themselves. Jennifer brings some idly.of her 400 goats to fairs and invites the Ambica, a potter, was among the firstpublic to “Open Farm” days during the Americans to work successfully with low-summer to milk the dairy goats and play fired raku, a process of firing pottery thatwith the babies and enjoy goat milk yogurt was relatively unknown and unappreciatedand cheese. The animals are extremely among art, craft and pottery buyers. Tofriendly, and the public can see that the help people understand it, she scheduledoperation is immaculate. Along with the regular evening events where she servedsamples, they hand out recipes and litera- tea and snacks in her studio. Generally,ture at fairs informing customers that the she was able to attract ten to 15 guests afarm uses organic feed whenever available, month. At each event, she encourageddoes not use hormones such as BST to in- people to make an object of clay whichcrease milk production and is committed to she would glaze and fire. For those whoproducing the best-tasting, least-processed were shy, she had ready-made pieces thatgoat milk products possible. they could engrave or personalize. Nearly Steve Halpern is a composer and per- everyone came back to pick up theirformer of a very specialized type of sooth- pieces after the firing and looked arounding and meditative electronic music. In the the studio at Ambica’s work as well. Theearly 1970s, he was a pioneer in a field that market developed, and her work sold.later attracted many musicians (of course, Charmoon Richardson, the owner ofRavel and others had done it earlier with Wild About Mushrooms, has developed antraditional instruments). Halpern chose to excellent marketing plan based on educat-
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 1 5ing potential clients. Many people are newsletters that discuss the products. Theleery about eating mushrooms other than Good Vibrations motto is, “If you wantthe ordinary kind found in supermarkets, something done right, do it yourself,” so itand the more adventurous often have no is fitting that it is the sponsor of Masturba-idea how to prepare the exotic mushroom tion Month, which has been picked up byvarieties. Charmoon has figured out how national magazines. Within the catalogueto educate both kinds of clients. they make sure customers know just what Salli first met Charmoon at an environ- they will be getting by clearly markingmental gathering where he was cooking each category. In the book section, for ex-exotic mushrooms with a delicious mari- ample, under Family Sexuality are titlesnade, giving out samples and answering such as Talking With Your Child About Sexquestions. She loved his samples and at- and Period; in the smut series there aretended his Feast of Forest Mushrooms held titles like Modern Lust and Lusty Lesbians.at Mistrail, a popular eatery. The event in- The business also makes potential cus-cluded an introductory talk and slide show tomers, who would never patronize theand displays of fresh wild and exotic typical store that sells sex toys, comfortablemushrooms, followed by a five-course din- by assuring them of confidentiality. It neverner featuring a variety of forest mush- sells, rents or gives customers’ names torooms. Some of Charmoon’s other events anyone else, and all items and literature areinclude mushroom identification walks, the shipped in plain brown packaging withWine and Mushroom Festival, weekend their corporate name (Open Enterprises)forays for mushroom gathering, and mush- on the return label. To encourage custom-room dying and paper making. ers to tell their friends, they offer to send Some businesses, if not exactly obscure, them a brochure. The mature approachare traditionally very low-profile. Good Vi- taken by founder Joanie Blank andbrations, a San Francisco and Berkeley adopted by the current worker/owner co-store that sells sex toys, video and audio operative sets Good Vibrations apart fromtapes, guides to safer sex and books, has others in the field.broken out of the sleazy sex-shop moldand now, after two decades of operation, isrecognized world-wide. Education is cen- E. Whom to Educatetral to putting potential customers at ease.The business does public outreach at hu- Once people in a new business face up toman sexuality courses and clinics, sponsors the need to educate their customers, theworkshops, hosts book signings and acts as next question becomes whom to educate.a resource in the community. It publishes Don’t assume, as many smallinformative and humorous catalogues and businesspersons do, that this is a trivial
  • 7/16 MARKETING WITHOUT ADVERTISING question. The key to getting a good personal recommendation marketing plan in motion is to get your message before the eyes and ears (and in some instances, the noses and mouths) of the right people as efficiently as possible. To put it another way, because all small businesses have finite (often painfully finite) resources, you must concentrate your educational energies on the people most likely to respond positively. The following chart illustrates categories of potential customers. Categories of Potential Customers NAIVE AMATEUR STANDARD EXPERT Non-user Light user Medium user Heavy user Where are your current customers? potential customers? potential sources of referrals? It may be surprising to you to learn that many users do not fall along the diagonal, increasing their usage of your business as they become more expert about what you do. This is important to know, because
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 1 7most marketing strategies are based on The point is that any good marketingmoving people along this diagonal—teach- strategy must communicate with customersing them more about your business as they who have a number of different levels ofincrease their use of your product or ser- expertise. If you own a mountaineeringvice, with the idea of increasing use even shop and concentrate on communicatingmore. There is nothing wrong with this with your class 5 climber customers, youstrategy unless you overlook the facts that are likely to talk over the heads of, andlots of potential customers also exist in perhaps even alienate, the much largerother categories (the boxes on our chart), number of weekend backpackers.and that catering to the needs of these cus- Similarly, if you own a men’s clothingtomers can also produce excellent results. store and concentrate all of your market-For example, there are people who don’t ing strategy on educating people aboutuse a product but have expert knowledge, fabric, you may totally lose the interest ofsuch as an aerodynamics engineer who the many men who simply want a decentdoesn’t fly, or a professor of criminal law suit that won’t wrinkle on airplanes.who rarely, if ever, sees the inside of a If you have ever been to a typical audiocourtroom. Both of these people are surely store where the salespeople (if you canasked by friends and relatives (and maybe find one) don’t have a clue about theeven by business or government, if they equipment and the music plays at full blastare retained as consultants) for recommen- as you try to figure out what’s what, youdations about businesses or people who will appreciate The Good Guys. They hireprovide services in their fields. salespeople who understand their products Similarly, there are heavy product users and will give you an educated opinionwho are naive, such as the wealthy cham- about what to expect for the price. Thepagne drinker who just loves “those happy mood is low-key and calming, and there islittle bubbles,” or the person who orders no pressure to buy until you are ready. Forlarge bouquets for the home each week the high-end user there are sound-proofbecause it’s expected, but doesn’t know rooms available for you to test out thethe names of most of the flowers. People various speakers and other components,in these groups may have no interest in in- and the salespeople will help you put to-creasing their sophistication about the gether the system that is right for yourproduct. The naive user of a flower service level of expertise and budget. For the low-may care a lot more about whether the end user, there is a vast array of productsbusiness will deliver on short notice than available.about whether it publishes a newsletter full To make this point in a different but im-of interesting horticultural facts. portant way, consider how often people who are naive about a particular product
  • 7/18 MARKETING WITHOUT ADVERTISINGor service purchase it as a gift, as is often the body to break down toxins, and thor-the case when a man buys a woman jew- oughly cleanses and beautifies the skin.elry, or someone who knows a relative is The bath often relieves aches and pains,into photography buys her a camera lens. and is especially beneficial for people suf- Businesses that traditionally cater only to fering from tension, fatigue and highmen or only to women should be particu- stress.”larly aware of changing societal gender Since the enzyme bath is almost un-roles and broaden their marketing accord- known in the United States (even thoughingly. Thirty years ago, men bought most it’s been enjoyed by the Japanese for overcars. Today, women buy cars (and trucks) 40 years), Stusser clearly must teach peopleby the millions. If you’re selling pickup a good deal about this product before theytrucks and assume that women are only are likely to buy it. In this case, trying topicking out the color after some man de- move a lot of people up the diagonal linecides on the model, you’re going to over- on the marketing chart from naive/lightlook a lot of potential customers who are user to expert/heavy user would almostprobably eager for helpful information surely be both incredibly time-consumingabout what you’re selling. Similarly, today and expensive, probably involving writingmen buy skin lotion, cookware and diapers a book (and a number of magazine andin numbers that would have seemed amaz- journal articles), doing extensive public re-ing less than a generation ago. lations to sell the book and giving public Osmosis, a company that marketed the demonstrations and teaching classes, tofirst enzyme bath in America, got immedi- mention just a few.ate results by directing its marketing at ex- Perhaps eventually Stusser will find thepert non-users. Owner Michael Stusser time to do many, or even all, of these, butprinted a brochure explaining the enzyme because he needed customers right away,bath to potential customers: he decided instead to concentrate his mar- “A remarkable form of heat therapy from keting effort not on informing potential us-Japan, which relaxes, soothes and ener- ers, but experts in the field of body work.gizes the body, mind and spirit. Unlike These people are primarily health profes-other heat treatments, the enzyme bath sionals who practice alternative healinggenerates heat biologically, through fer- methods and have studied Asian medicine.mentation, nature’s purification process. Some of them had heard about the enzymeThe bath is composed of fragrant antiseptic baths but had never had a chance to expe-cedar fiber, rice bran and over 600 active rience them. Stusser provided them with anenzymes. The action of the enzymes pro- opportunity to take a complimentary bath.duces a special quality of heat that im- Many of those who responded loved theproves circulation and metabolism, helps enzyme bath and immediately began refer-
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 1 9ring their clients who they felt would ben- has the chance to enthusiastically educateefit from the relaxation and penetrating her customers about Italian delicacies, herheat. favorite subject. Most people who hear her Sylvana LaRocca owns Made to Order, an share her excitement and take home a bagItalian delicatessen in Berkeley, California. or two of goodies they hadn’t planned toShe concentrates on educating non-users buy when they entered the store. Eventu-about Italian delicacies. In addition to fresh ally, many even learn the correct pronun-pasta and imported cheese and wines, ciations, which they use to impress theirLaRocca stocks a wide array of Italian deli- friends, thus educating a whole new groupcacies, many flown to her fresh. Realizing of potential customers.that her customers are unlikely to purchase Byerly’s is a prospering chain of grocerythings they can’t pronounce and have stores that almost never advertises. Thenever tasted, she follows the fairly standard manager of each store in the Minnesota-practice of placing samples of many items based chain has considerable leeway toon the counter. In addition, however, she provide services in the particular neighbor-hand-prints large colorful signs, which she hood. Every store has a full-time homehangs on the wall behind the counter, economist who helps customers with nutri-which say things like, “Mascarpone: made tion and menus. A wonderful example offrom fresh cream. A heavenly cheese from its superior service and education of cus-Italy that can be eaten with fish, fruit or tomers in this health conscious age isspread on chocolate cake—perfect on Byerly’s color-coding of foods for specialbread with olive oil and salt.” diets. For example, all low-cholesterol LaRocca’s idea is to stimulate her custom- foods in the store might have a blue tag,ers to ask about these products. She then and customers can also get a list of them from the store’s home economist.
  • 7/20 MARKETING WITHOUT ADVERTISING Working With Knowledgeable Customers Nan Hohenstein, a skilled publicist whose publicist. These people really don’t know one-person San Francisco agency special- enough to appreciate the work that goes izes in handling publicity for the publishing into what I will do for them. If lots of industry (such as author appearances on ra- people show up at an event I organize, dio and TV shows) and also publicizes those clients tend to assume that it’s in the events such as fairs and trade shows, con- nature of things, not acknowledging how centrates on knowledgeable businesspeople much my getting the word out contributed. in the field—for example, small publishers That’s why I prefer to concentrate on cli- with an even smaller budget. Many people ents who know a good deal about how the in this group, because they have been only publicity business works, say someone who light users of publicity services, fear that has worked in an arm’s-length relationship comprehensive public relations (P.R.) ser- with a big P.R. firm that has charged them vices will be too expensive. Holstein’s goal high prices. While these people are gener- is to help these people become medium or ally knowledgeable, they don’t know how heavy users by explaining to them how she to use my more personal and flexible ser- can lay out an overall campaign but allow vices, which allow the client to save a great them to do many of the time-consuming deal of money by doing their own envelope P.R. tasks themselves at a very reasonable stuffing, follow-up calls, etc. My job is to cost. educate this second group on how to use Hohenstein explains, “I’m really good at my services effectively. Once I do this, it’s what I do but have a difficult time with cer- usually relatively easy to produce positive tain kinds of clients—the worst client for results at a moderate cost and I naturally me being someone who has rarely used a get repeat business.” Allen/Vanness, which began by selling real appreciation of the extraordinary qual-elegant woven fabric available in a wide ity of the handwoven fabrics used in therange of patterns at craft fairs, decided its garments; they just liked them. To increasebest marketing strategy was to educate cli- sales, Allen/Vanness decided to help cus-ents in the “naive heavy users” category. It tomers understand why they liked wovenexpanded to include scarves, shawls, products so much. They taught the sales-wraps and ties, selling to expensive de- people in the various shops about howsigner stores in San Francisco, Los Angeles their handwoven goods were made andand New York. Initially, the people who why they offered such a superior value.patronized these pricey outlets had little When this information was passed along to the customers, sales went up.
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 2 1 Consider how educating customers can doesn’t pill and doesn’t get itchy. It stayslead to better business. Pastorale, a Free- soft and comfy; it is rain repellent, can bestone, California, business that emphasizes treated with Scotchguard for waterproofingnatural fibers, sells beautiful clothing made and lasts and looks great for a long time.of silk, rayon and wool. Larry and Nancy Technically speaking, all clothing on theRowinsky, the proprietors, go to great American market must pass rigid tests forlengths to educate their customers about flammability. This one is no exception.the care of what they buy. Their main con- Now and then you hear about a recall;cern, however, is that light users are often there have been none on this product. Cus-naive about taking care of fine wool gar- tomers take pride in wearing the jacketsments and exotic silks and rayons. For in- because they feel they are participating instance, they put a wet wool cap on a hat recycling.rack or sweater in a clothes dryer—and Our favorite yarn store follows the tradi-when the hat stretches and the sweater tional approach of converting novices toshrinks, uneducated customers typically amateurs to encourage them to patronizeblame everyone but themselves. To deal the business more. The shop owner esti-with this, Larry and Nancy put a lot of ef- mates that at one time or another, 40% offort into teaching new customers how to her customers depend on her to help themcare for their fabric. In addition to the tab with a project. As they become better knit-inside each garment and the hang tag, they ters and crocheters, many of her patronsbelieve in verbally informing each cus- move from naive/light users to amateur/tomer of the safest and surest way to care medium users. Without instruction, busi-for their purchase. The time spent with ness would surely suffer.each purchaser makes for satisfied custom- For another wonderful example of howers who feel confident in buying and car- helping your customers to become better-ing for their items. informed users can improve your business, Recently they have branched out into let’s again refer to the National Bank of theclothing products that are environmentally Redwoods. This bank has a credit analystfriendly and made in the USA, so they have on hand to help unsophisticated smallthe job of educating customers about an business owners put their financial infor-entire new field. An example is Polartec® mation into a form the bank can deal with.jackets, made of a fabric made from re- This not only provides the bank with thecycled plastic bottles. They inform each correct information it needs to make loancustomer that the quality of the product is decisions, it helps turn naive light and me-unsurpassed. Not only do they come in dium users of the bank’s services intostunning colors, it’s a friendly plastic. It steady and profitable customers.
  • 7/22 MARKETING WITHOUT ADVERTISING Do People Know What You Do? At a party, ____% of the people who hear the name and a very brief description of my business will know a little about the details of what I really do. [For instance, 100% would know what a barber does, but only 3% would know that an oncologist studies tumors.] At a meeting of business people generally (for example, the Chamber of Commerce), about _____% of the people who hear the name and a very brief description of my business will know a lot about it. When a potential new customer approaches, how much does he or she really know about what I do? Doesnt know anything Knows a little Knows quite a bit and is very confident Among new customers, _____% have used someone else in my field (or a similar prod- uct) before. Are there experts in my field (or closely related fields) who have had little or no experi- ence with my goods or services? YES NO List by category: ___________________________________________________________ Are there specific categories of people who would have less than an average level of knowledge about my field who might use my business if they knew more about it, such as people who seldom travel (about the travel business), landlords, commuters, etc.? List: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________
  • DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS 7/ 2 3Do People Know What You Do? page 2Do any of these categories of people include good prospects for my business? List: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________I have available the following information about my business: Descriptive brochure Guide book for new customers Descriptive label General instructions or manuals References Articles Order form for more general information Books ManualsI provide: Personalized instruction Classes Examples of other customers Samples Introductory discussion Free first lesson s
  • Chapter 8 How to Let Customers Know Your Business Is ExcellentA. Tell Them Yourself .......................................................................................... 8/3B. Help Customers Judge for Themselves........................................................... 8/7 1. Direct Measures ........................................................................................ 8/7 2. Public Measures ...................................................................................... 8/10 3. Educational Measures .............................................................................. 8/13 4. Referrals .................................................................................................. 8/14C. Giving Customers Authority for Your Claims ............................................... 8/16
  • 8/2 MARKETING WITHOUT ADVERTISINGW e’ve just talked about the without any wrinkles, and it does, that per- need to decide which son has clear evidence that you and your groups of customers and business can be trusted. Or, if a respectedfriends to focus your marketing efforts on. financial columnist states that for a certainThis chapter discusses the best ways to type of investment, a 15% return is excel-give those people enough information lent, and your personal finance advisingabout your business so that they will know service has just done substantially betterwhy it is good and be able to communi- than that, you will want to be sure your cli-cate this to others. The point of doing this ents are aware of how you compare.is obvious. To really become effective mis- New Balance bases their marketing onsionaries on your behalf, your customers, the concept that high quality athletic shoespotential customers and friends need to can be made in America at competitiveknow specifically what sets you apart from prices. They include a hang tag with everyothers in your field. purchase explaining their commitment to How do you make sure your customers providing jobs for American workers andhave enough information about you to to support domestic manufacturers andspread the word knowledgeably? One way suppliers where possible.is to tell them yourself. The way you run A second way to ensure that your cus-your business, of course, makes a strong tomers have information is to have some-statement. However, you should also make one they trust tell them how good youran effort to give your customers informa- business is. Positive validation by a trustedtion that lets them judge the quality of person can be extremely effective. For in-your business for themselves. stance, think about how good you would For example, a plumber might say, “I’m feel if a fashion designer told you the suitglad you let me install 3/4-inch copper you were wearing was beautifully tailored,pipe instead of plastic, because I feel con- or if your uncle who is a dentist lookedfident it will last two generations without into your mouth and assured you that yourgiving you any problems. Also, it works so regular dentist did excellent work or if anwell that the pressure in your shower is award-winning architect remarked posi-now good enough that you can take a tively about the remodeling job you hadshower while washing the clothes and just done on your kitchen.running the dishwasher, without loss in You can and should, of course, use bothpressure.” of these methods to let your customers Or, if you tell a customer in your bou- know that you run an excellent business.tique that the half-Dacron, half-cotton Once they know this, they will not onlyjumpsuit she is considering buying to bring tend to patronize you more themselves,on a trip will dry on a hanger in two hours but will also surely recommend your busi-
  • HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS 8/ 3ness to others. Let’s now look at these or sexier. Make the communication mean-techniques in detail. ingful and interesting—beyond a func- tional description of what you’re selling. A catalogue can educate your customersA. Tell Them Yourself about what you do, especially if you tie it to a story. We all love a good story, andHow can you effectively communicate are more likely to patronize a business thatyour confidence and pride in what you do takes the time to tell us one. The followingwithout boring people to death or appear- brief excerpts from mail order cataloguesing hopelessly egotistical? The most imme- illustrate the technique.diate way is to have your own genuine Burgers’ Smokehouse, located in thegood feelings about what you do be so Ozark Mountains of Missouri, has this topervasive that your customers immediately say about its hams: “These are the hamspick up on them. Earlier in this book, we our fathers, grandfathers, and their forefa-discussed the importance of having a clean thers made. It is the ham that was made atbusiness, enthusiastic employees, open the time of the Pilgrims and long before.books, honest pricing, and offering lots of They are cured the old-fashioned way—extras as well as selling a quality product outdoors in a corn crib or, as in our case,or service. All these things tell your cus- in a special building which allows freshtomers that you are a first-class operation. country air to move continually around theIn addition, it is extremely important to hams—and aged for a year. Because it ispay attention to details, such as how you so time consuming, most production offinally present your product or service, in- this type of ham is for private consump-cluding the wrapping, if any, clear instruc- tion, and we are virtually the only firm thattions on use and what to do if something makes it in commercial quantities.”goes wrong with a product or a service The House of Tyrol in Cleveland, Geor-proves disappointing. gia, sells beer steins to collectors. Its cata- Once these basic good business tech- log contains not only detailed descriptionsniques are in place, you are ready for the of the steins, but background informationnext step: maintaining a high level of com- that is bound to captivate collectors. Formunication with your customers. Commu- example, with a description of a stein thatnication (oral when possible, written when depicts Frederick the Great and the Prus-not) should be built into the operation of sian eagle is the following story:your business. There is no need for this “His father thought him a weakling, beatcontact to be boastful. People are sick of him, and cast him into a dungeon for abeing told by advertisements that a certain spell. Indeed, Frederick II played the flute,product or service is bigger, better, faster corresponded with Voltaire for 42 years,
  • 8/4 MARKETING WITHOUT ADVERTISINGwas known as the philosopher king, and articles by people prominent in theeven anonymously published a refutation field discussing the best mediationof Machiavelli. Yet, Frederick, inheriting an techniques and other important in-army of 100,000 giants, wrested Silesia formation about the field. Landefrom Maria Theresa, held off the combined sends his newsletter to other lawyersforces of Austria, Russia, and France, and who might refer mediation cases tolater joined in the first partition of Poland. him, as well as to a wide range of le-When he died in 1786, he was known as gal practitioners and former clientsthe Great, and Prussia rivaled Austria for who might know of others whocontrol of the German states.” could use his services. Here are several other examples of busi- • The Redwood Funeral Society pub-nesses that tell their customers how good lishes an annual “Consumer Protec-they are in creative and helpful ways: tion Price Survey on Death • A delicatessen that makes sure all Arrangements” which lists prices bro- new customers know how to prepare ken down by services offered and the exotic foods they purchase. whether they are an independent • A caterer who has a favorite recipe provider or part of a conglomerate. printed on business cards. • Mary’s Flowers in Seattle sells special • A craftsperson who includes a card flowers, shears, decorative figurines with every piece of finished work, and vases used for traditional Japa- explaining how it was made and nese flower arrangements. She al- where the materials came from. ways has a fresh arrangement in the • A bakery that prints on its bags its window created by a person skilled policy about using only natural in- in the field. This subtly, but obvi- gredients. ously, tells her customers that her • A dentist who calls the evening that flowers and other materials are first- he performed a root canal to ask class. how you are feeling. No matter what your business, you can Here are some small businesses that do offer a descriptive brochure about youra good job of having others communicate goods or services, extensive descriptionsfavorable information about them: on your label (if that is appropriate), guide • John Lande, a lawyer who specializes books, instruction manuals or handouts in mediation, publishes a newsletter/ containing basic information about your bulletin to educate people about the goods and services. Remember, if your reasons for choosing mediation over business is truly a good one, the more an adversarial approach to dispute your customers know about your field, the resolution. This newsletter contains better you will stack up.
  • HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS 8/ 5 The options in providing general infor- though far from exhaustive, is designed tomation about your field of business are stimulate your thinking and imagination.very broad. The following questionnaire, Do You “Tell Them Yourself”? Do you give verbal assurance to customers about the quality of your goods or service? NEVER SELDOM OFTEN ALWAYS How? What kinds of things do you tell customers? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Is specific evidence given to customers to back up this assessment? [Examples: “Call me back if you dont see a result in three days.” “Measure it before and after you put it in a cold wash to make sure it doesnt shrink.”] YES NO Who usually tells the customer? I TELL THEM SOME EMPLOYEES TELL THEM MOST EMPLOYEES TELL THEM ALL EMPLOYEES TELL THEM Is follow-up done to check new customer satisfaction? NEVER SELDOM OFTEN ALWAYS Is follow-up done to check regular customer satisfaction? NEVER SELDOM OFTEN ALWAYS
  • 8/6 MARKETING WITHOUT ADVERTISING Pinchot & CompanySelling a service to the top executives of and American companies, and PinchotExxon, Xerox and DuPont can’t be consid- worked with them to learn how to deal withered an easy job, especially when your first large corporate clients.post-college business experience was Next he, with the support of the Swedesblacksmithing. That is precisely what Gifford and Norman Macrae, editor of the presti-Pinchot III has done. His firm, on Vashon Is- gious Economist magazine, gave the meth-land near Seattle, sells an Intrapreneurial odology a name: Intrapreneurship. With thetraining program. Included in Pinchot’s sales name and the direct client experience,packet is an “Innovation Audit” for major Pinchot opened the School for Intrapreneurscorporations designed to see if they are en- at Tarrytown Center and marketed thecouraging the development of new ideas. A courses to the Center’s big business commu-full-scale audit can cost upwards of $50,000 nity. In addition to instant credibility, thisand take several months. The company also provided him with students.offers a mini-audit for less. Pinchot’s next step was to begin to talk Pinchot started with his own about his ideas with the American businessentreprenurial spirit and experience, first press, which was eagerly soliciting informa-farming and then blacksmithing for eight tion about his new ideas. As part of gettingyears and running an inventor’s brokerage. the word out, he wrote his own article onHe had the respectable academic creden- the material, published in International Man-tials necessary for many mainstream jobs agement magazine, which led to further cov-but preferred running his own business. erage by Inside R & D. In the late ’70s, he participated in the Simultaneous with the beginning of hisSchool for Entrepreneurs at Bob Schwartz’s publicity campaign, Pinchot started work onTarrytown Center (see Chapter 7). While a book called Intrapreneuring, which wasthere, he asked himself the question, “Could published in 1985 by Harper and Row. Thea large corporation keep the entrepreneurial book was based on interviews withspirit within itself?” As he said in USA To- “intrapreneurs” from major companies andday (August 22, 1985): “One very large firm provides examples for his prospective clients.lost 37 people that they really thought were When the book was published, Pinchot gotimportant. They discovered after five years widespread publicity in the general press andthat those 37 people had formed businesses made special efforts to be covered by thewhich were 2.5 times as large as the com- business press. The result was large articles inpany they had left.” Inc., Boardroom Reports, Business Week and Although Pinchot clearly had a good busi- other publications.ness idea, he had to do a number of things to Finally, because he frequently used the 3Mappeal to major business clients. Many of Corporation in Minneapolis as an example ofthem had to do with giving potential clients an intrapreneuring company, Pinchot asked forinformation with which to measure his work. permission to study the company. Not expect-To accomplish this, Pinchot first developed ing payment, he was surprised when 3M felt ithis direct support community—people expe- needed a new outside viewpoint and hiredrienced in the field, with whom he could him for an audit. Word of Pinchot helping hisbrainstorm and learn. As it turned out, three best example spread widely among corporatemen in Sweden (the Foresight Group) were executives and helped further expand thetaking a similar approach in helping Swedish firm’s business.
  • HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS 8/ 7B. Help Customers Judge • A wine store that displays graphically for Themselves attractive material telling customers how to judge a good wine and thenThe best way to let your customers know gives them a list of ten “good buys”your business is good is to provide them and asks them to judge how theywith the information they need to judge for stack up.themselves. You can give your customers • A real estate company that demon-four broad kinds of measures to accom- strates with a bar graph that it out-plish this: Direct, Public, Education and Re- sells other companies in the area andferrals. places this information in the local real estate guide and in the office. • A brake shop that distributes infor-1. Direct Measures mation sheets explaining the various types of brake jobs it does and howAt the simplest level, you can tell your cus- long each should last.tomers about special features of your • Rollerblade, an in-line skate manu-goods or services. Examples of this tech- facturer, which lays out a course andnique include: brings a van full of skates to an- PART OF AN INFORMATION SHEET HANDED OUT BY REAL ESTATE AGENTS RANDY AND DIANA ROUSSEAU IN SONOMA COUNTY, CALIFORNIA
  • 8/8 MARKETING WITHOUT ADVERTISING nounced locations so customers can try before they buy. These types of direct explanations offer a concise measurement that your customers can easily evaluate. Let’s now look at the specifics of how four businesses accom- plish this. Bruce Nelson of Local Color Inc. in Mill Valley, California, specializes in exterior paint jobs for older houses. He has devel- oped a one-page checklist that details the elements of a quality house-painting job. He gives this form to all prospective cus- tomers when he bids for a job. This gives them a chance to understand all that his work entails so they can have a sensible basis on which to compare other painters’ bids. More to the point we are discussing here, it also provides them with the back- ground information necessary to evaluate the quality of Nelson’s work when the job is complete. Local Color also gives poten- tial customers a list of buildings it has painted. Divided into “Driving Tours” of different neighborhoods and house styles, this provides a convenient way for anyone interested to check out Local Color’s work in advance. In 1994, Local Color painted two houses on the famous Post Card Row—a street in San Francisco lined with historic Victorian homes—and won first and second place in the “Picture It Painted Professionally” contest sponsored annually by Painting and Decorating Contractors of America.
  • HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS 8/ 9 The House Cleaners of Memphis, Tennes- agreement. Needless to say, Barbara is sosee, specializes in cleaning apartments valued by the people she works for thatwhen tenants vacate. When its employees she commands a premium price and has afinish, they leave a detailed checklist for the waiting list for her services.landlord, marking off such items as “cleaned Written agreements are particularly im-venetian blinds,” “oiled hinges” and portant in many consulting and personal“cleaned refrigerator coils.” Many landlords service businesses where customers oftenwho would never think of cleaning some of don’t know just what it is you do. In addi-these items still feel very good to learn tion to defining the specific task to be ac-about what they see as an extra service. complished (for example, designing a In a similar vein, Barbara, a mother of computer program to track sales calls), it isschool-aged children, needed to supple- also important to use a contract to tell thement her income and decided to clean customer exactly how you charge. For ex-houses so she could control her schedule ample, many professionals charge forand be home when her children arrived af- missed appointments in some circum-ter school. Barbara has evolved a method stances. If you do, letting your clientsthat makes new customers both knowl- know in writing as part of your contractedgeable and satisfied. Initially, Barbara about the specifics of your billing practices,comes to a potential customer’s house to such as the fact that “Travel time is chargeddetermine, specifically, what is expected of at one-half the standard hourly rate,” orher. She then sits down with the customer “Phone calls of more than five minutes’ du-and draws up a short contract which spe- ration are charged for a quarter of ancifically states what will be cleaned, how hour,” is a direct and beneficial way tooften, who will provide necessary supplies both give them necessary informationand how much this will cost. Then, Bar- about your business and to indicate thatbara comes and cleans everything at the your time is valuable.agreed-upon price, even if it takes her a In the home contracting business it islittle longer than estimated. She then leaves very common for the home owner to keepthe homeowner a note asking him to call if adding on to the job without realizing thathe has any problems and suggesting any the cost is going up with each addition.adjustments in the arrangement. If she The savvy contractor anticipates this by ex-doesn’t hear from the person within a few plaining verbally and in writing that any-days, she calls to make absolutely certain thing not included in the original contracthe is happy with her service and to discuss requires an extra work order signed by thewhether he wants to add or subtract any- home owner.thing from the agreement. From then on, Typically, a letter of agreement such asshe comes as scheduled and keeps to the this works well:
  • 8/10 MARKETING WITHOUT ADVERTISINGSample Letter of Agreement 2. Public Measures Ms. Nancy Lowell Another important way your customers Compu-Consultants gain knowledge about your business is 24360 9th Street through your creative use of public com- Berkeley, CA 94710 munication. Public communication can in- clude almost any source of authority, such Ms. Jeanne Pierson as a trustworthy media outlet or consumer Butterfly Boutique rating service that your customers know 1234 Mountain Blvd. makes judgments that are reliable, objec- Montclair, CA 94725 tive and, most important, independent of your control. Dear Ms. Pierson, For example, when you offer something The object of this consulting project is for that has been evaluated favorably in Con- Compu-Consultants to help you, the sumer Reports magazine or by any other owner of Butterfly Boutique, to set up an consumer rating organization, it’s good operating financial reporting system that business to post a copy at your place of will allow you to travel for periods of up business. (Consumer Reports discourages to six months with confidence that the ac- use of its ratings in ads, for obvious rea- counting and bookkeeping aspect of your sons, but their use as part of direct market- business will be well run while you are ing efforts by your business is acceptable.) gone. This should be accomplished in Similarly, listing the FDA minimum daily three months, using no more than 90 nutrition requirements side by side with hours of consulting time. the contents of your food products allows The technical specifications of all soft- your customers to intelligently judge your ware necessary to accomplish this goal product. Where relevant, Environmental and a detailed statement of what the soft- Protection Agency (EPA) warnings are cer- ware will accomplish are appended to tainly important for your customers to be this agreement. Consulting time shall be aware of so they can evaluate how you billed monthly at $75 per hour. If you have dealt with any potential health risks. agree with these terms and find them sat- For example, if you run a garden shop and isfactory, please sign under my signature know the EPA has listed several types of below on both copies; keep one of them pesticides as being particularly dangerous, for your files and return the other to me. you would be wise to post a notice to this Sincerely, effect along with a list of the substitute Nancy Lowell products you recommend to accomplish President the same pest control purpose.
  • HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS 8/ 1 1 Here are some other examples: ing informative signs on the goods them- • “The following is a list of five nega- selves, consider creating a display where tive traits associated with religious you post the actual reviews and articles cults by Time magazine—please commenting objectively (and ideally, favor- judge for yourself if our spiritual cen- ably) on the products you sell. ter has any of them.” The Internet has a plethora of sites that • “Following are the important charac- evaluate products and services. If you have teristics of a fine woolen sweater as a website, you can add a page that has established by the National Wool Bu- evaluations of the products you sell. Even reau. Notice how our sweaters com- better, you can provide a page of links to pare.” other sites that provide evaluations and • “Tennis International magazine has measurement tools. published the following criteria for a The Industry Standard, a magazine on well-strung tennis racket. Please the Internet economy, has a Secret Shopper check to see that we meet or exceed column that rates websites for accuracy. In all of these requirements.” one instance, the Secret Shopper ordered a Similarly, if you are in the insulation dozen clothing products from online storesbusiness, you want to let your customers in order to compare the actual color of theknow about the products you sell that clothing with the Web graphic examples. Ifwork as well as asbestos, without the your company obtained a good rating, ithealth risks. One way to do this is to make would be worth noting publicly.available the recommendations of a promi- The Sonoma Land Trust in Santa Rosa,nent architect associated with the environ- California has devised a Partners in Naturemental movement. Besides the educational program with local business owners. Asvalue, your customers will appreciate your part of helping participating businessesawareness of these matters. market their services, the land trust pro- Articles in newspapers, magazines or vides a logo that the businesses can use toprofessional journals that evaluate your show their commitment to land protectionbusiness or products also give the public and conservation.readily available measures of quality they In the May 1996 issue of Money maga-can use for their own purposes and pass zine, in the “Wise Up” column, there is analong to others. It’s important to be aware article entitled “The Post Office’s Priorityof such articles and make them available Mail Flunks Our Five-City Test.” The articleon a regular basis. For example, if you sell is prominently displayed on the counter ofappliances, electronic equipment or hard- our local mail service that handles Fed Exware, all products that are top rated should and UPS packages.be marked accordingly. In addition to plac-
  • 8/12 MARKETING WITHOUT ADVERTISING Don’t assume that providing convenient products are “scrupulously cleaned andways for customers to measure the quality created without bleaches, formaldehydes,of your goods and services may work well dyes or animal cruelty by more than 50for some types of businesses but not for ranchers.” Along with other informationyours. For example, even dentists—hardly about the important attributes of wool theya group that normally engages in creative include the results of a study conducted bymarketing—are sometimes evaluated. A two leading European institutes that con-San Francisco Bay area publication, Con- firms wool’s superior comfort (under bothsumer Checkbook, sent a questionnaire to warm and cool sleeping conditions, wool-thousands of Bay Area citizens and asked fill wicks away body moisture better thanthem to rate their dentists. Two of the down, cotton or synthetic fibers) and dem-questions were: “My dentist explains what onstrating the lowering of heart rate, de-he/she is doing,” and “My dentist encour- crease in humidity and regulation of bodyages patients to look at their own dental temperature.files.” The magazine published the tabu- Offering customers something tangible islated results, which contained information a good marketing strategy and can be an-on costs, dental specialty and other mat- other creative way to allow them to mea-ters. One Palo Alto dentist, Daniel sure the quality of your goods andArmistead, who was rated at or near the services. Pharmacies can provide chartstop in all important categories, displays this that compare cost and potency of genericrating in his waiting room, so that the ma- and branded medicines. This not only al-jority of his customers who don’t subscribe lows customers to save money, but alsoto Consumer Checkbook will know how he lets them know that the pharmacy is con-stacks up. cerned with more than just its own bottom A dentist who isn’t in a community line. For businesses that sell things bywhere ratings are published can display ar- weight, a cardboard slide rule that conve-ticles and other information explaining niently allows customers to compare vol-new and improved techniques for teeth ume to cost, or distance to weight, can beand gum care. This gives the patients valu- a wonderfully helpful device. It is both aable information about state of the art den- useful tool and a reminder that the storetal care and helps them understand that wants to help customers get a good deal.they are being cared for by a person who Nolo.com, the publisher of this book,prides herself in keeping up with develop- does an impressive job of giving out infor-ments in her field. mation in a variety of ways, particularly at In The Natural Bedroom in San Fran- its website where an extensive Legal Ency-cisco, California, mail order catalogue cus- clopedia offers free legal information fortomers are informed that their woolen consumers.
  • HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS 8/ 1 3 How Customers Can Evaluate Your Business My business provides clear verbal measurements of product/service effectiveness. NEVER SELDOM OFTEN ALWAYS My business provides training classes to new customers and prospects. NEVER SELDOM OFTEN ALWAYS My business provides clear written measurements of product/service effectiveness. NEVER SELDOM OFTEN ALWAYS We offer a Brochure Specification sheet Checklist Contract Informative label Questionnaire Instructions Evaluation form Worksheet Physical measurement Website Other online information (survey, newsletter, etc.) We have: Displays/models Samples/examples Photos of successful work Other evidence of quality3. Educational Measures opportunity to communicate directly with both customers and interested prospectiveAll the measures discussed in this chapter customers. And if you teach at a well-to communicate information to your cus- known school, it gives both you and, bytomers and clients are, in a broad sense, extension, your business a valuable cre-educational. Here we focus on more tradi- dential.tional “educational” avenues: classes and Most community college and universityworkshops. extension course catalogues include a wide If you teach popular classes, you have a array of courses in which businesspeoplegreat marketing advantage over similar teach the public about their fields. Thebusinesses because you have an enormous courses can generate clients and personal
  • 8/14 MARKETING WITHOUT ADVERTISINGrecommendations based on what the stu- 4. Referralsdent learned. For example, a college exten-sion catalogue that recently came our way The opinion of people in your field—pro-lists the following evening courses, which fessional peers, leaders in the field, knowl-are really just introductions to new busi- edgeable suppliers, key employees orness fields: former students and apprentices—can • Graphic Design for the World Wide make a huge difference to a successful per- Web sonal recommendation marketing cam- • Computer Ergonomics paign. • Mediating Business Disputes In the small business context, one of the • Ocean Kayaking best references you can obtain for a service • Toxic Waste Safety you offer is to send a customer to a re- • How to Design Your Own Kitchen spected peer for a second opinion or criti- • Coping With an Alcoholic in the cal evaluation. For example, an architect Family might send a client to a solar expert for • Law for the Small Business Person confirmation that his design is, in fact, solar • Creative Divorce efficient. A builder working in an area of Classes can also directly expose potential earthquake risks can refer potential cus-customers to your product. For example, tomers to a soils expert or structural engi-auto dealers often lend cars to driver train- neer to review her plans.ing classes, and customers are often ex- The point is that it is extremely impor-posed to computers, laser printers and tant, especially in service businesses, thatother high-tech equipment through training you take the time to know others in yourclasses. Indeed, this approach is so suc- field and related fields. As they come to re-cessful that the Apple Computer company spect and trust you (and vice versa), therebases much of its corporate marketing ef- will be all sorts of ways you can help eachfort around making gifts and loans of com- other, one of which is to provide validationputers and software to schools and for each other’s goods and services.nonprofit groups. Similarly, one of the rea- The Pickle Family Circus of San Fran-sons that Lincoln and Victor became the cisco found an ingenious way to involve adominant names in the welding business former colleague. One of the clowns whowas because they supplied trade schools helped found the circus in the early 1970swith their equipment. moved to New York and became a widely recognized performer. He even received a very prestigious MacArthur Foundation Award. In a well-publicized homecoming gala fundraiser, the circus was able to re-
  • HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS 8/ 1 5mind everyone that it is an important throughout the years, passing along his ex-source of theatrical talent and an exciting pertise and love of fine craftsmanship.place to be. Now, when Hal’s apprentices have jobs Similarly, a good strategy for a dance that are technically too difficult for them,school would be to have a top student per- they refer those customers to their “mas-form at a party held by a board member of ter.” If you have been involved with ap-an important ballet company. prentices, let them know if you are Whenever we think of apprentices, Hal available to back them up or help withHoward comes to mind. Hal, a floor complicated jobs.sander, has trained numerous assistants
  • 8/16 MARKETING WITHOUT ADVERTISING Referrals My business is: by: KNOWN RESPECTED RECOMMENDED Others in the same business Some Most Locals in the same business Some Most Others in closely related businesses Some Most Leaders in my business Some Most Students and former employees Some MostC. Giving Customers Authority Chances are you already use some of these for Your Claims techniques and are familiar with others. For example, displaying diplomas, awards andWhile it can be very effective for you to certificates of course completion are tradi-communicate your pride in your work or tional ways to let clients and customersproduct to your customers directly, it is know that you have the “seal of approval”usually even more effective to have some- of the educational or licensing institutionsone else do it for you. There are many in your field. Similarly, wine bottles oftenways you can provide the authority of oth- have an “appellation”; marmalades anders to help customers realize that your mustards often tell us they won “First Prizeproduct or service is of high quality. in the Cloverdale Fair”; film posters and
  • HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS 8/ 1 7book jackets tell us about awards won and display it on the bulletin board along withdisplay favorable critics’ comments and information about the speed and precisionelectrical products have the “Underwriter’s of its service. If you adopt this technique,Labs Seal of Approval.” Web pages may however, be sure all letters and commen-note that they’ve been named “One of the dations are relatively recent and aretop 5 Yahoo sites on the Net.” If you are changed often. Your regular customersan author or small publisher, a high rating won’t be impressed the 37th time they seeby readers on Amazon.com can be useful the same faded letter. Oh, and one morein your marketing. thing. Take the trouble to display all mate- Ways to use third party testimony to tell rials as nicely as possible. If you simplyyour customers that you do a good job are tape a review or commendation to a win-almost limitless. Even the smallest business dow or wall, you tell your customers thatshould be able to create a healthy range of you have little imagination and don’t valuethis type of information. For example, in the accolade highly enough to present itsome businesses such as consulting, graph- well. A far better approach is to take allics, interior design and advertising, it is you want to display to a local framing shopcustomary to list one’s clients in a portfolio. and have them presented nicely.This idea can be carried further by not only Peter Martin, a Santa Cruz, California realpresenting a bare list, but including de- estate broker, makes extensive use of state-scriptions of each client, as well as quotes ments from satisfied customers. When afrom them about your business. It is also a customer compliments Martin after a job isgood idea to give special potential clients done, Martin asks her to put the compli-the phone number of an existing client ments in writing, on letterhead if possible.(with permission, of course) to call for “It’s important to ask clients when themore information about your work, as long good service they’ve received is fresh inas you don’t overdo it. Architects, interior their minds,” he says. Martin sends pro-designers, graphic artists and landscapers spective clients and friends well-designedare among the businesses that can offer and attractively printed brochures contain-portfolios of their work along with pictures ing excerpts from the letters. The bro-of happy clients and letters of appreciation. chures, which are inexpensive to produce, Many retail businesses display letters serve the dual purpose of telling prospec-from enthusiastic customers, and some en- tive clients about him and answeringlarge letters of special interest. For ex- friends who ask “What can we say aboutample, if a local photocopy store you?”completes a huge rush job for a popular Some businesses also display photos oflocal business or a political figure and re- local or national celebrities who patronizeceives a note of thanks, it makes sense to their business. If you do this, pay particular
  • 8/18 MARKETING WITHOUT ADVERTISINGattention to both the quality of these pho- ice cream shop near our office, displays atos and what they communicate to the newspaper article selecting it as the storeviewer. While a photo of a top bike racer with the best cafe latte in San Francisco.consulting on the repair of his bike at a lo- Written on the glass frame is “Chosencal bike repair shop would be very effec- Number 1.” Made to Order, the very suc-tive, a 15-year-old picture of a former cessful delicatessen in Berkeley, Californiafootball player eating in a restaurant may we referred to in the last chapter, let itssubtly tell the customer that the restaurant customers know that its pesto was chosenis as out of date as the quarterback. Number 1 in Northern California by a well- Another good approach to validating known newspaper by enlarging the article,your expertise is to write a series of articles framing it with bright colored cardboardabout your specialty or to contact publica- and putting it in the window with ribbons.tions and freelance writers to see if they After a month, the display was taken downare interested in telling your story for you. and replaced with a list of new products.In almost every business or field of special- Made to Order, which regularly wins prizesization, there are newsletters, journals or and receives favorable reviews and awards,trade magazines that accept such articles. turns each into an exciting event, but neverOnce a favorable article is published about tries to milk any particular accolade oryour innovative law practice, lawn repair prize too long.service or language school, distribute re- One of the most ingenious examples ofprints to your customers and have the giving customers positive informationoriginal enlarged for display. Also, if you about a business was Zoah’s Free Rafflecan, arrange to be interviewed on a local Event. This popular Japanese luncheonradio show, and have a friend photograph spot in San Francisco opened during theyour appearance and display it at your late ’70s and lasted into the early 1990s, ca-business, or use it in your brochure. News- tering to businesspeople. Zoah’s askedpaper articles about your business are, of each customer to present a business cardcourse, an easy thing to display. Again, to enter its annual raffle. Many hundredshowever, make sure that all material of this did. Zoah’s then awarded over 60 small butsort is reasonably up-to-date. People will nice prizes (a beer mug or Japanese cook-be a lot more interested in the fact that you book, for example). The name of eachappeared on the Jay Leno show last month winner and his business was written care-than the Merv Griffin Show in 1980. fully on long sheets of paper underneath Awards and displays explaining them can his prize and posted on the restaurant wall.often be an authoritative way to tell your Zoah’s crossed out the winners’ namescustomers that others think well of you. with light-colored ink when they claimedFor example, the Daily Scoop, a coffee and their prizes. The result, of course, is that all
  • HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS 8/ 1 9the restaurants’ many customers, and even but the roster of winners posted on themany people who work in the neighbor- wall allowed others to see how manyhood who had never been to the restau- prominent and interesting people patron-rant, heard about the winner’s names. ized their restaurant.Indeed, several prize winners reported be- Unfortunately, Zoah’s didn’t do an ad-ing called by a number of friends telling equate job of keeping the place clean, andthem of their good fortune. Of course, in Japanese food is known for its ultra-cleanli-running this little event, Zoah’s not only ness. Word got out, and Zoah’s early mar-provided fun and prizes for its customers, keting could not overcome the effects. Customer Referrals I offer new customers the names and phone numbers of other customers. SOMETIMES USUALLY I refer customers to others for second opinions or evaluations. SOMETIMES USUALLY I have available: Printed lists of customer referrals Letters from satisfied customers Evidence of awards or certificates for my product Newsletter with customer comments I display: Articles Photos of customers enjoying my product or service Certificates and awards Any other evidence of accomplishments s
  • Chapter 9 Helping Customers Find YouA. Finding Your Business .................................................................................... 9/3B. Convenience of Access .................................................................................. 9/5C. Signs .............................................................................................................. 9/7D. Telephone Accessibility ................................................................................. 9/8 1. Yellow Pages Listings ................................................................................. 9/8 2. Phone Technology ................................................................................... 9/10E. Listing Your Services Creatively and Widely ................................................. 9/13F. Getting Referrals From People in Related Fields ........................................... 9/15G. Trade Shows and Conferences ..................................................................... 9/17
  • 9/2 MARKETING WITHOUT ADVERTISINGH aving the best product or manuals or with the Chamber of Com- service in your area won’t merce. do you any good if poten- At this point, you may be thinking abouttial customers can’t find you. If you run a skimming or skipping this chapter; aftersmall animal hospital, how does a person all, if you have been in business for awhose cat gets violently ill in the middle while, you probably believe that you haveof the night find you? If you fix Apple already dealt with all the obvious accessi-computers, how does a writer with a balky bility issues. It is our observation thatMacintosh and an unforgiving editor get many established and otherwise efficientyour phone number in a hurry? If you op- businesses have a lot of room to improveerate a language school to teach English as in this area. And don’t dismiss concernsa second language, how do potential cus- about accessibility because yours isn’t a re-tomers who may not know enough En- tail business. Even if you only have a rela-glish to use traditional listing services such tively few loyal clients, as is true of manyas the phone book locate you? wholesalers and small consulting busi- To begin with, ask yourself two ques- nesses, it is imperative for you to attracttions. The first is obvious: Do the maxi- new ones if your business is to thrive. Tomum possible number of potential do this, you must make it easy for newcustomers know how to find your busi- people to find you.ness? Depending on what kind of business For example, suppose a visitor from an-you own, the second question can be far other country reads an article you wrote inmore subtle: Assuming a potential cus- a trade journal about how to efficiently usetomer knows where you are, can he actu- variable speed electric motors in genera-ally get to your goods and services with tors, and asks the State Department for anreasonable ease? introduction. You will never meet the per- Answering these important questions son if you can’t be found fairly easily.can involve thinking about everything Similarly, imagine the former spouse of afrom your business name, your product loyal customer who now has a thrivingpackaging, the signs on your building and business of her own and needs the ser-vehicles and the wording on your business vices of your employee benefits consultingcards and flyers, to deciding to distribute a business but doesn’t want to communicatehumorous T-shirt or poster to your good with her ex-spouse—will she be able tocustomers. It also involves determining find you on her own? What if someonewhether or not you are listed in the appro- from your college hears from a formerpriate and logical places—for example, in professor that you are a hot-shot Webthe Yellow Pages, Internet search engines, page designer; will he find you easily orall appropriate professional reference give up in frustration?
  • HELPING CUSTOMERS FIND YOUS 9/ 3A. Finding Your Business times have you looked for someone’s of- fice or shop a little longer than youParticularly for retail businesses, letting po- wished to? Have you ever quit in disgust?tential customers know where your busi- Probably, most of the time you keptness is located is extremely important. searching until you found your elusiveOften, businesses use well-known land- quarry, but weren’t in the best of moodsmarks to help clients find and remember when you finally arrived. Enough said, wetheir location. Such slogans as hope. You don’t want new customers to“Bridgeman’s, across from the main en- struggle to find you and to pass the wordtrance to the University of Minnesota,” or that you are “really out of the way” or “im-“Matthews, Top of the Hill, Daly City,” can possible to find at night.”be very helpful for the new customer. Normally, it is fairly easy to eliminateThink about how landmarks can help you. problems people have in finding you evenFor example, if your knife sharpening if your location is out of the way. For ex-shop happens to be at the crest of the hill ample, Santa Rosa Dodge capitalizes onon Main Street, your business cards, Yel- the fact it is difficult to find through itslow Page listing or delivery truck might Yellow Pages listing, “Hardest Place insay “Main Street Saw & Knife Shop—Get Town to Find…But Worth It!” and thenan edge at the Top of the Hill.” This ap- prints a map so customers can in fact eas-proach may be corny, but if it’s effective, ily locate it. It is an excellent practice forso what? businesses to print maps in the Yellow Your business name can also be an im- Pages as well as on any flyers or bro-portant tool. The “24-Hour Pet Emergency chures. If you are hard to find, or if youClinic” clearly lets people know that they draw customers from out of town, it be-can get help in the middle of the night and hooves you to do this.is a far better name than “Miller Veterinary We like The First Light Cafe, whoseClinic” when it comes to promoting your name tells customers that it is open earlybusiness. Similarly, the “Cosmetic Dentistry and which provides very clear directions,Clinic” tells potential customers what you in the Yellow Pages, to its location.specialize in. Of course, business names Accessibility includes many obviouscan serve a number of other valuable pur- things beyond telling people where youposes, but in choosing or changing a name are located, such as making sure yourdon’t overlook the potential in terms of working hours are posted at your place ofhelping customers find you. business and that you keep to those times. Never assume that customers will find Being unpredictable is a rapid way toyou easily—or at all—once they get your erode customer trust. Imagine how youaddress from the phone book. How many would feel if you got up early on a Satur-
  • 9/4 MARKETING WITHOUT ADVERTISINGday morning, packed up the car for a long A number of retail businesses in all sortsawaited ski trip, and, arriving at the tire of fields, from books to baby clothes, havechain rental store promptly at eight, no found that staying open longer hours, es-one was there, even though the sign pecially at times when most people areclearly says, “Open at 8:00.” You get a cup not working, results in more than enoughof coffee and return at 8:30, and still no sales to cover the increased overheadone is there. You pace around, trying to costs. Your customers will tell others thatrationalize traveling without chains, when there is one place in town where you canfinally at 8:45 someone comes to open up. buy a bridal gown, lawnmower or a guppyIf you have a choice, you probably won’t on Tuesday evening or Sunday afternoon.ever again patronize that business and cer- Many businesses that have profitably ex-tainly won’t recommend it to fellow ski tended their hours have done so by hiringbuffs. reasonably priced part-time Sunday and evening help. Even professionals and oth- ers who traditionally work 9 to 5 should consider keeping their businesses open longer hours, or at least making some ser- vices available during times when others in their field are closed. Using modern communications equip- ment creatively often makes it possible to offer extended access to at least some ser- vices at a reasonable cost. For example, one attorney we know of put a small ad- vertisement in the phone book emphasiz- ing that his office took messages 24 hours a day from people who had suffered per- sonal injuries. He signed up over 30 new cases within a few months. Similarly, some dentists and many therapists are now tak- ing evening appointments, and one friend very successfully offers 24-hour emergency dental care for his patients. Having a website can be very helpful in directing your customers to your business. A website can provide vivid and accurate directions, maps, electronic coordinates
  • HELPING CUSTOMERS FIND YOUS 9/ 5(for a global positioning system (GPS), a lines clearly marked. All of these are goodtool that uses satellites to find ground loca- ideas. The important thing is that you ana-tions) and details about parking. As the lyze the parking needs of your customersInternet becomes increasingly connected and try to meet them, even if doing sowith mobile phones, more and more costs you a little extra.people check a business’s website to find For example, the Counseling Center inits geographic location. downtown Westwood, California is in a neighborhood with very difficult parking, including 4 p.m. tow-away zones and half-B. Convenience of Access hour meters. It printed a map showing all the various parking zones, including freeYou probably know businesses that are spaces, metered ones and parking garages,easy to find, but located where parking is within a four-block radius. It’s been verysuch a problem that you rarely go there. popular with customers.Indeed, shopping centers, which offer free The Franz Valley Gardens in Calistoga,convenient parking, grew in large part be- California specializes in growing and intro-cause shoppers got fed up with driving ducing new and unusual plants. It turned aaround the block. Parking should be seen huge problem with accessibility into aas an integral part of access to your busi- flourishing business. The nursery is small,ness. Unless you are in a shopping center, remote and has limited parking, so it insti-are lucky enough to have plenty of park- tuted a shop-by-mail program for clients.ing or depend entirely on walk-by traffic In addition, it sends out a newsletter listing(such as a gift shop in a hotel), you should the local Farmers’ Markets where you cango to great lengths to see that parking is purchase its plants; it also has a displayreasonably available. garden of ornamental grasses and various If parking is a potential problem for plants which may be seen by appointment.your customers, you should take affirma- When the items that you order arrive, thetive steps to help them locate what is nursery calls and sets up a mutually agree-available. The fact that most businesses able delivery time or a time when you candon’t bother to do this is even more rea- pick them up at the nursery if you wish.son for you to set yourself apart by going Providing parking information isn’t theout of your way to help your customers. only way to get your product and your Some creative businesses offer validated customers together. Indeed, it may makeparking privileges at nearby lots, give out sense to reverse the normal process andmaps showing where parking spaces in take the product to the customer. Hometheir neighborhood are most likely to be delivery, of course, is a tradition in a fewfound, or print maps with public transit businesses, such as pizza and Chinese res-
  • 9/6 MARKETING WITHOUT ADVERTISINGtaurants. Other businesses, especially ser- Curious passers-by, who can see allvice ones, make house calls but often the exercise equipment through thecharge a lot to do it. Certainly, many busi- sparkling window-front, can getnesses could gain customer trust and ex- more information instantly withoutpand their business by flouting tradition going in. This is good not only afterand offering free or low-cost deliveries hours, but also allows people toand service calls. “browse” without risking a hard sell This raises an important point: Providing (which they wouldn’t get anyway).accessibility to your customers at their • Hansen’s Mill of Kromforsh, Sweden,homes or businesses should never mean runs a portable sawmill operationpunishing them by charging outrageously and serves rural customers by millingfor the service. Take stock of your busi- logs right on their property. Whenness. If offering low-cost or free home de- the tree feller finishes his job, Olaflivery would increase sales, consider and his brother Torbjorn level a spot,buying a clean second-hand pickup, hiring set up their equipment and start toa retired truck driver at a reasonable rate work, milling lumber to theand of course purchasing the necessary in- customer’s specifications. It’s notsurance. This expense shouldn’t be huge only convenient for the customer,and may be more than offset by the im- but extremely satisfying for her toprovement in sales. build a deck or outbuilding using Here are some examples of interesting lumber from her own land.solutions to the problem of getting product • A masseuse might bring her speciallyand customer together: designed chair and magic hands to • The Fit Lab, a clean, bright, well- your workplace, offering 15-minute staffed exercise facility with branches neck and shoulder massages for a in Albany and Oakland, California, minimum of four people. What better fairly bubbles over with innovative Friday afternoon bonus? marketing without advertising tech- • Many small office, auto and hard- niques. One of its best is to open at ware supply stores have found that least part of the day on major holi- they can successfully compete with days such as Christmas, Thanksgiving large discount warehouses by em- and Easter. You are just bound to phasizing fast delivery service. brag about a gym that cares enough • Many drug stores will make deliver- about your well-being to let you ex- ies when necessary, especially to ercise on the days when you eat the new mothers or the elderly and, in most. Fit Lab also has brochures an emergency, will meet you at the available in a rack outside its door. drug store at any hour.
  • HELPING CUSTOMERS FIND YOUS 9/ 7• A young friend of ours has many • The small business owner who refin- auto repair customers who live in ishes clients’ bathroom fixtures in rather remote areas. He customized their homes is certain to benefit from his truck so he could do many re- personal recommendations. In the pairs at their homes, often saving same vein is the mobile dog groom- them costly towing charges and in- ing and bathing service, which is an convenience. especially great boon for owners of• Bookstores that allow customers to large dogs. order current titles over the phone or • A lawyer or tax preparer who makes online and ship the same day are house calls at no extra charge to deal providing a service to the elderly and with the problems of the ill and eld- handicapped as well as researchers erly opens up a whole new market and other busy customers. for herself.• Tilley Endurables makes the super- • The Mad Matter in Port Townsend, sturdy, squashable, rain and mildew Washington is a framing business resistant, wide-brimmed cotton duck whose owner brings her mat and hat that floats and comes with a for- frame samples to the clients’ homes ever guarantee—”Put it in your will.” for truly individualized service. It also sports a “Brag Tag” in the A business that operates online offers crown of the hat for the owner to additional accessibility. See Chapter 11. give people who inquire about the hat. C. Signs Drive down any commercial street in America and look at the signs. How many do you like? How many do you hate? If you are like most people, the ones you are at- tracted to are probably a distinct minority. What makes a good sign? There is no one answer. While many people hate neon, it can be very effective in some cir- cumstances. Other materials and styles of typefaces can be effective or not depend- ing on how they are used. Our bias is to- ward signs that are simple, easy to read, and communicate the essence of the par- ticular business.
  • 9/8 MARKETING WITHOUT ADVERTISING For example, the Pacific Basin School of 1. Yellow Pages ListingsTextile Design flies an exquisite wovenflag from the front of its building, telling An independent study done for Pacificthousands of people who pass on the busy Telephone determined that 95% of theroad more about the business than a hun- people interviewed found the Yellowdred conventional signs ever could. Simi- Pages helpful and 78% of them had con-larly, we know of several locksmiths who tacted a firm located there. One-half ofuse large cut-out wooden keys to quickly those in the study made a purchase oralert passers-by to the nature of their busi- used a service as a result of their inquiry.ness. Some businesses, however, waste their The Internet has its own kind of signs. money having a listing or display ad in theBusinesses that rely on the World Wide Yellow Pages and similar books. For in-Web for a good part of their business stance, while escort services, 24-hourshould invest in domain names (their plumbers and bail bondsmen depend al-online addresses) that describe their busi- most entirely on customers who see theirness (such as Salli’s Creativecenter.com) Yellow Pages listing, industrial broom sup-and are very easy to remember. Other pliers, nonprofit trade organizations, artistsbusinesses may, in effect, put up signs and economic research firms typically getpointing to your online site; if they think few if any new customers from this source.people would be interested in it, they may Van Entriken is an example of alink their site to yours, allowing browsers businessperson who found advertising into jump to your site almost instantly. More the Yellow Pages to be ineffective. Theabout this in Marketing on the Internet, owner of an interior design business inChapter 11. Reno, Nevada, he laments that “all that ever came to me from my Yellow Pages listing was a knowledge of the street lay-D. Telephone Accessibility out of the city.” This knowledge came about the hard way, when homeownersFor any small business, the telephone is a who found his Yellow Pages listing undervery important tool; your number should Interior Designers invited him over for anbe listed in all places a customer is likely estimate as an excuse to get a free consul-to look. This is especially crucial for ser- tation.vice businesses and others who do a large If you question whether the Yellowpart of their business by phone. Pages are appropriate for your business, it’s helpful to see what others in your field have decided. If lots of similar businesses use listings, it’s probably wise to give it a
  • HELPING CUSTOMERS FIND YOUS 9/ 9try. If you find only a few listings, check increase your display size next year, orold directories, which can usually be even sooner in directories for adjacentfound in public libraries, to see if others in geographic areas.the field have tried listing. If you notice If you do decide that a display ad makespeople trying it at various times and then sense for your business, keep in mind cer-dropping it, that’s an important clue that it tain considerations:probably won’t work for you. • Emphasize your specialties. Describe Many businesses fall under more than goods and services that distinguishone Yellow Pages category. For example, you from others in your field. Onea word processing service can be found charter boat company we knowunder that title as well as under “Secre- originally omitted the fact that it hadtarial Services” and even “Typing.” When sailboats for hire, even though it wasyou check the Yellow Pages, it is a reason- the only company in the Yellowable assumption that if all large displays or Pages that offered this service (othersboldface listings are in only one category, were power boat charterers). Athis is where customers look most often. change in the display ad copy in-Spending money to appear in a related creased business by 20%.category will probably be a waste unless • Put in as much access information asyou are in a rapidly changing field featur- you can. Include credit cards you ac-ing new terminology. For example, a num- cept, hours of operation, whetherber of years ago computer sales and you respond to calls at night or onservice were listed under “data process- weekends (businesses that do soing.” The first businesses to escape from usually do particularly well in thethis category and be listed under “comput- Yellow Pages), whether you deliverers” did very well. (another big plus in this kind of list- If you decide that your business will ing) and, of course, detailed instruc-benefit from more than a listing and want tions about how to find you.to pay for a display ad, the question of ad • Don’t be cutesy or try to win asize (and price) is important. The best graphic design award. Informationguideline is to start at a price level you can that answers customers’ questions asafford even if the ad doesn’t generate any clearly as possible is what counts.business at all. No response would natu- Also, if your business has been in ex-rally be painful, but if you’ve been cau- istence a long time or has just wontious it won’t put a financial strain on your an award, mention it briefly. Custom-business, forcing you to work longer hours ers who don’t know you will appre-or significantly increase your debt. If you ciate the reassurance provided bydo get a positive response, you can always this information.
  • 9/10 MARKETING WITHOUT ADVERTISING2. Phone Technology Answering Machine and Voice Mail RulesBecause of rapid technological change, it • Keep your message short. By nowis worthwhile to review your telephone- everyone knows how to use therelated marketing needs at regular inter- machines and doesn’t want a longvals. While staying current isn’t always explanation before getting a chancecheap, failing to do so often undermines to speak. Something like, “Hello,customer confidence in your business. As this is Tandy Belew Graphic De-a general rule, anything that significantly signs. Please leave a message of anyimproves the way your customers can length, and I’ll get back to youreach your business is worth the money. within 24 hours. Thanks,” is all you A back-up telephone answering machine need.or voice mail service is essential so you • If you have an old-fashioned an-can be accessible even when you aren’t swering machine that cuts off after athere. Calling a business and having no certain number of seconds, throw itone answer turns customers off. We re- out and buy one that will let callerscently called a large drug store in our area talk as long as they wish.and the phone just rang and rang. Need- • If you tell callers when you will beless to say, the drug store that gave its ad- back, keep the message current. “I’lldress and hours of operation got our be out Tuesday afternoon” soundsbusiness. We are continually surprised at dumb on Thursday.businesses that let the phone ring and • Get the best quality machine and fixring, passing up a great opportunity to it or replace it immediately if itprovide important information to potential breaks. Answering machines gener-customers. Letting the phone ring also ally rank as cost-effective invest-raises the question in potential customers’ ments.minds that if you are that remiss about the • If you have voice mail with multiplephone, what about the rest of your busi- mail boxes, say so immediately soness? callers know what to listen for. When you use an answering machine orvoice mail service, let people know ap- Here are a few more useful phone tech-proximately when you will be returning niques:their call. If you are out of town, say so, • Three-way calling, which allows youand have some system for dealing with to connect an incoming customer’scalls during that time. call with someone at another loca- tion so that all three of you can talk, is available in many parts of the
  • HELPING CUSTOMERS FIND YOUS 9/ 1 1 country. This service is essential for someone or a department and then hear lawyers, consultants, accountants and nothing but a click, you may not be sure others who regularly must communi- whether you’ve been transferred, put on cate with more than one person at a hold or cut off. Not a great beginning for time. your contact with a company. • “800” and “888” numbers, which let The one thing worse is to get trapped in your customers call you at no ex- a telephone branching system, the kind pense to them, may be absolutely that says: “If you want our hours press 1, if necessary if you take phone orders. you want sales press 2” and so on, but If you are too small to contract for never gets you to the place you want or your own service, there are “800” gets you to the wrong place. Nearly every residential services. American can tell a story about a terrible • Credit card billing for telephone sales telephone branching experience. is a growing practice. It offers many types of retailers and others the op- portunity to send catalogues to their A good telephone branching requires good customers, take orders over the three vital elements: phone and send out the product via 1. Explain the branching system imme- UPS or other delivery service the diately. For example, “You will be same day. given four choices, including an in- • Worldwide telex services are now house directory.” available for anyone with a computer 2. Make sure that every branching and modem to attach to a telephone. route will get to a logical place. If • Fax machines have become standard you have five products, and inquir- in a wide variety of businesses. A ies about two of them go to line separate line is often a necessity, as one and two go to line two but may be 24-hour high-speed auto- there is no line three, you have mated transmission. made a common mistake. For many businesses, the telephone is 3. Always let people talk to a real livethe primary access point people have with human being if they are confusedyou. It’s very irritating to call a business or can’t find their choice among theand be transferred by the person who an- ones you offer.swers the phone to someone else without Many imaginative business services areeven a “one moment please.” Even worse becoming available over the phone. Foris just being put on hold without permis- example, Michael, one of the authors ofsion. This is especially annoying when you this book, offers personalized marketingare calling long distance. If you ask for consulting over the phone. For details, see the back of the book.
  • 9/12 MARKETING WITHOUT ADVERTISING Phone Accessibility Checklist WE OFFER UPDATED YEARLY White pages listing in appropriate areas Yellow Pages listing under applicable topics and in appropriate geographical areas Answering service/system with clear instructions “800” numbers Numbers listed on cards, receipts, order forms, mailers, vehicles, repair labels and publications Mail Accessibility Checklist WE OFFER Clear, stable address Return address on everything we distribute Mail forwarding up-to-date Personal relationship with mail delivery person to avoid mistakes Clearly identifiable mailbox, with alternative places to deliver packages and postage-due mail If in out-of-way location, maps are included in mailings
  • HELPING CUSTOMERS FIND YOUS 9/ 1 3 Walk-In Accessibility Checklist WE OFFER Clear, distinct signs not blocked by trees Neighbors given an invitation to visit so they know where we are and what our business involves Parking available or clearly designated Safe places for bicycles Door that opens easily, bell in working order Convenient hours Convenient parkingE. Listing Your Services city directories, locally produced maps, tourist publications, international directo- Creatively and Widely ries and publications of county, state andAs you might guess, there is no one way to federal government agencies that operatelist information about your business in a in specialized fields. Online listings onway everyone will find it; each business is electronic bulletin boards may also be use-unique and requires an analysis specific to ful. Remember also that local trainingits needs. Just the same, there are always a schools (such as a culinary academy), tradenumber of sensible steps you can take to schools and wholesalers commonly publishmake it easier and more pleasant for po- directories, some of which may be appro-tential customers to find your business. priate for your business.These include the obvious such as listing in Once the obvious listings are covered,general phone books, specialized phone it’s time to be a bit more creative: to thinkbooks (for seniors, disabled, ethnic Yellow of the kinds of listings that are seen by sig-Pages, and “green” pages, to name a few), nificant numbers of people who mightand trade and professional association di- overlook traditional listing places. As anrectories. Don’t forget Chamber of Com- exercise to get your mind focused in themerce publications, public library listings, right direction, assume that all of the fol-
  • 9/14 MARKETING WITHOUT ADVERTISINGlowing people are trying to locate your “Floor Surgeon,” you may never find himbusiness. Where are you listed, posted or unless he notifies you of the change aknown that they are likely to look? couple of times. In addition, anyone asso- • An old school chum whom you last ciated with your product or service (in- saw five years ago before you voice, label or container suppliers, for opened your own business. instance) should have your up-to-date ad- To help this person locate you, inform dress and phone numbers. People who runyour alumni associations as well as former neighboring businesses should also be in-employers and employees of your location. formed of your new location when youIt’s a good idea to do this more than once. move and, if possible, you should arrangeThis can be done by a friendly letter—be with your old landlord to display a smallsure to include your business card. Also, sign giving your new address. You mightwhen communicating with an alumni orga- offer to pay a few dollars or provide thenization, always provide information about landlord a free service in exchange for dis-what you are doing in a way that is suit- playing the sign for an extended period.able for use in its publication. For example, • A person who heard about yourif you open a wharf-side retail store featur- unique skill from a former client anding fresh fish, you might include a picture knows only your last name and city.of yourself in a wetsuit with a spear gun, You should be listed in all local profes-captioned, “Our fish is so fresh, I haven’t sional and trade association directories, in-caught it yet,” or some such. Alumni maga- cluding those of trade groups and schoolszines thrive on this sort of good-natured related to your work. Others in your citysilliness and will surely run your picture who do related work should know whoand accompanying information, telling a you are and where you are located. It’s anumber of old friends (great potential cus- good practice to periodically bring otherstomers all) where you are. up-to-date on your location as well as the • One of your first customers, a person current nature of your business. This is you haven’t seen since you moved true even for a civil engineer, painter or your business five years ago. author working out of his home. If you have a customer mailing list, write Spend a few hours online with thisto old customers informing them of your chapter open in front of you. Sending e-move. Do this more than once; people of- mails to business contacts, associates,ten don’t focus on this sort of information friends and acquaintances will help ensureunless they need your service right then. that people you know will in fact be ableFor example, if you have your wood floors to find you when they want to.refinished, you may not need the “Floor Salli lives in a little-known rural areaDoctor” again for a number of years. If he 60 miles north of San Francisco. Becausehas moved and changed his name to the
  • HELPING CUSTOMERS FIND YOUS 9/ 1 5she knows being accessible to the media • Legal services (legal aid) officeshelps her market her books, she is listed in • Battered women’s sheltersthe San Francisco phone book so that radio • Immigrants’ help organizationsand TV talk show producers and newspa- • Law school “pro per” assistance cen-per reporters who remember she is from tersthe Bay Area can easily locate her. • Law libraries • Community service agencies and di- rectories • Drug treatment centersF. Getting Referrals From • Marriage counselors and family thera- People in Related Fields pists • Social services officesMany people in service businesses, from • College student assistance officesyoga teachers to optometrists to piano • Gray Panthers and other senior advo-teachers, rely on referrals for many of their cacy organizationsnew customers. Listing the availability of • Major corporation personnel depart-your services far and wide is crucial to get- mentsting those referrals. For example, if you’re • Parents Without Partners and otheran independent paralegal, someone who singles groupshelps people prepare legal forms for di- • Law enforcement (including thevorces, bankruptcies and adoptions, you sheriff’s office and county jail)might want to list your services with the • Consumer organizationsfollowing types of groups: • The state Employment Office • Women’s organizations • Collection agencies • Child care centers • Military bases, including Judge Advo- cate General offices
  • 9/16 MARKETING WITHOUT ADVERTISING Listing Questionnaire We are listed in: All appropriate professional journals and directories __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ Our alumni organizations’ directories __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ Local business organizations’ publications __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ Trade associations’ directories __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ Appropriate online databases __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________
  • HELPING CUSTOMERS FIND YOUS 9/ 1 7 Unique Marketing G. Trade Shows and Accessibility Problems ConferencesThere are, of course, some businesses In some industries and for some businesses,where marketing accessibility is a built-in the trade show is the primary marketingproblem. With custom-designed dresses event. A customer who can’t buy from youthat are sold through boutiques, for in- there probably won’t buy from you at all.stance, the retailer is likely to allow labels Such is the case for many products soldwith only the designer’s name and the through gift shops, bookstores, boutiques,store’s name and not the designer’s or small groceries, and for businesses selling tomanufacturer’s address. The same holds interior designers, school districts, collegetrue with some craft items such as cus- lecture organizers and many more.tom-made chairs. The retail stores don’t Especially for a new small business, a tradewant the customers to bypass them and show offers a unique opportunity. Typically,go directly to the source. retailers, wholesalers, sales reps, industry From the specialized manufacturer’s or press, importers, exporters and agents are allcraftsperson’s point of view, a good solu- under one roof, and business is conducted intion to this problem is to include the a myriad of ways. If you have a good prod-name of a city as part of your designer uct and display it well, one trade show canname and logo. Suppose you run Sasha put your business on the map.Designs and are located in San Diego, Conferences of people in a particularCalifornia. Your designs are sold all over field often offer a similar opportunity. Forthe country, but it’s very hard for people, example, people who purchase equipmenteven other retailers, to locate you di- for electronics companies and hospital x-rectly. An easy solution is to change your ray departments might be in one place forname to Sasha/San Diego or otherwise several days, and if you have a product orwork your location into your name. Now service of interest to them it behooves youpotential customers can simply call infor- to be there too. But before you rent amation in San Diego to find Sasha. Even if booth and set up a display, take the timeSasha is located in a neighboring suburb, to educate yourself about how the showyou could list the name in the San Diego operates and what activities are appropri-directory. ate and customary. All the marketing advice in this book is applicable to trade shows; re-read it with your exhibition booth in mind. Especially keep in mind the general advice we dis- cussed in Chapter 1: Don’t recruit customers until you can properly serve them. Often,
  • 9/18 MARKETING WITHOUT ADVERTISINGsales orders taken at a trade show cannot be you and what visual, technical orfilled on time, and word spreads to the rest other complications can arise. At oneof the industry with laser-like speed. booksellers’ trade fair, for example, Here are some trade show tips to keep in the booth of a publisher of books onmind: human sexuality was located be- • Get to know the old pros in your tween those of a Bible company and business and study what they do. If a publisher of children’s books. possible, get their advice on display, Clearly, adjustment was in order. location and promotional offers. • Get a list of the trade shows sched- • Have enough supplies and back-up uled for all convention centers near personnel, and don’t attempt demon- you. Consider displaying not only at strations unless you are sure it will go those in your field, but also at those smoothly. A sample (whether it’s a which are in any way connected with toy or a bulldozer) that doesn’t work what you do. For example, an archi- will be the topic of far more com- tect who likes to design kitchens ment than will a hundred products might take a booth at a gourmet food that do work. trade show, or a lawyer who special- • Try to set up your display early, and izes in employment problems might design it to be flexible enough to ad- set up a small display at a personnel just to the surroundings. It’s hard to executives’ conference. know who or what will be next to
  • HELPING CUSTOMERS FIND YOUS 9/ 1 9 Using Trade Shows to Launch Your BusinessVivien Feyer is a trained psychologist. Sev- plimentary. I sold enough to pay for theeral years ago on a trip to Bali she was show, met a lot of people at all levels of thestruck by the fact that the Balinese are a business and saw what others were doing.happy people who view work as a service Best of all I found out in just a few days thatto the gods. Attracted also to Balinese jew- my basic business concept was sound.elry, and knowing that she had a talent for “In later shows, I improved my displaydesign, Feyer decided to experiment with and had many more products. Many of mythe idea of having fine jewelry of silver, first customers reordered and I met manygold, shell and other natural materials more retailers. I also met a lot of charlatansmanufactured in Bali to her design. who wanted to order but not pay, and One of the many questions Feyer had to learned quickly that if you don’t checkface as part of launching her business credit references very strictly, you don’t(which she named Paradiso: Jewels of Bali), stay in business. Through people I met atwas the basic one that all new the shows, I was able to sign up a goodbusinesspeople must confront. Was there a crew of regional sales representatives.genuine demand for the product she wished “To tell you the truth, despite the factto bring to market? To find out, she decided that as I did more shows I recruited a won-to attend some trade shows. Here are a few derful crew of people to help with theof her comments. booth (dropped-out lawyers, many of them) “My first show was the International Fash- and had good business access, I don’t re-ion and Boutique Show in New York City. I ally enjoying doing trade shows. It’s all sowas completely naïve, but I knew I needed overblown, full of hype, and, in the jewelryto see if I was kidding myself or if my de- business, a little paranoid, in that you havesigns would work. Even though I had a sad a lot of valuable goods in a place where se-little booth, retailers, reps and others were curity isn’t always so great. These days I dointerested in my jewelry and were very com- very few.”
  • 9/20 MARKETING WITHOUT ADVERTISING One interesting recent development is sponse to the growing success of craftsthat trade fairs have become so successful fairs throughout the country. The invitedfor some businesses that they have led to exhibitors for the showroom are selectedthe development of permanent national from the best craftspeople who have dis-wholesale showrooms, normally located in played in regional crafts fairs. These can bea sales mart devoted to the products of a very cost-effective way for a small busi-similar types of businesses. While this sort ness to display its wares. Obviously, theof sales center has been popular with fur- main advantage of this sort of display isniture, jewelry and gifts for some time, it that the type of customer who would at-has now spread to many other areas, in- tend a trade fair (wholesalers, store buyers,cluding crafts. National Craft Showroom sales reps) now has access to your productopened in New York, primarily as a re- throughout the year. s
  • Chapter 10 Customer RecourseA. Elements of a Good Recourse Policy ........................................................... 10/4B. Designing a Good Recourse Policy .............................................................. 10/5 1. Consult Advisors ...................................................................................... 10/6 2. Join an Established Ethical Business Group ............................................. 10/7 3. Involve Employees ................................................................................... 10/7 4. Ask for Public Participation ...................................................................... 10/7C. Telling Customers About Your Recourse Policy ............................................ 10/8D. Putting Your Recourse Policy in Writing ...................................................... 10/9
  • 10/2 MARKETING WITHOUT ADVERTISINGH ow often are you disap- to customers simply means giving them a pointed with a business way to get a fair resolution of their com- transaction? Have you plaints. It’s essential that you make a veryever bought a shirt that had to be taken strong recourse statement to your custom-back because of a flaw? Have you ever re- ers and back it up with an immediate re-turned a car to the repair shop because it sponse to their needs.wasn’t fixed right? Have you ever ordered It’s almost essential that a small businesssomething from a catalogue or the Web go out of its way to emphasize recourseonly to be told a month later that it won’t policy, especially in the light of the mis-be available for many more months? Have taken public presumption that becauseyou waited hours or days for someone to larger businesses have more assets, theyshow up to work on your house? Have are more responsible to their customers.you spent months trying to have a billing While most customers appreciate the per-error corrected, meanwhile getting new sonalized service they receive from a smallbills that contain the same mistake plus company, they sometimes worry that,penalty charges? Have you ever authorized should something go wrong, their recoursea business to automatically debit your ac- is more limited than if they dealt with acount and months after you have termi- major corporation. They might assume, fornated your relationship they are still example, that a business that does lots ofdebiting your account? advertising is a substantial company with When these sorts of problems occur, plenty of money behind it, and that ifyour reaction probably varies from mild something serious involving legal liabilityannoyance over the minor ones, some of occurs, it has the resources to make itwhich are not even worth the hassle to good. In fact, small businesses, becausecorrect, to anxiety and sometimes anger they are closer to their customers, often of-over major problems. Chances are you will fer better recourse than do larger ones.be reluctant to patronize a business that Your job is not only to establish an excel-won’t correct a problem or one that you lent recourse policy but to make sure yourthink will be reluctant to do so and will customers understand and trust what youcreate more hassles for you than the trans- offer.action is worth. Certainly, you are unlikely Although recourse is a potentially diffi-to recommend such a business to your cult and unpleasant topic, it is at the heartfriends. of long-term business health because it Slip-ups are inevitable in any business. protects the supportive customers whoTo avoid losing customers (and referrals) make personal recommendations. Rela-over mistakes, you need to establish an ef- tively small efforts, well-thought-out fromfective recourse policy. Providing recourse the customer’s point of view, cost very
  • CUSTOMER RECOURSES 10/ 3little and do much in protecting our total erous if you feel a good customer deservesinvestment in public trust. In fact, when more attention. But a customer whoyou promptly and attentively make sure doesn’t know that you will try to solve thethe customer is treated right, you can gain problem if confronted is likely to give uptheir loyalty. It feels so good to have the in disgust and never discuss it with you. Iftransaction turn out right that the customer that happens, you risk losing a valued cus-naturally tells their friends. tomer who is very likely to pass negative On the Internet, recourse is equally im- feelings on to others.portant—perhaps even more so. A survey In a retail business, a reputation forof Internet shoppers found that 85% con- quick exchanges or refunds is a key ingre-sidered “product returns” a key to their dient in customer loyalty. For example,online shopping decisions. (The Industry you probably know which retail stores youStandard, August 14, 2000.) deal with allow returns without question, The Industry Standard magazine has a which businesses have complicated proce-secret shopper who reports on Internet dures to return an item and which storestransactions. In May of 2000, the shopper make it so difficult to return an item thatordered clothing from ten well-known re- it’s not worth the hassle. Many goodtailers’ online outlets. Only the products neighborhood businesses have built a lotfrom two of the ten sites—Nordstrom and of their following based on customers’Victoria’s Secret—matched the descriptions confidence that the business will stand be-and images as presented at the websites. hind its product or service. Much of the difficulty in developing a In this context, it’s worth rememberingrecourse policy is not designing good that your customer has recourse to publicmechanisms to catch and correct errors, measures if you don’t handle the disputebut applying them in a context where your satisfactorily. In extreme cases, a deter-customers are mad, disappointed, anxious mined customer can picket your businessor all three. Unless you set up a recourse or hold a press conference. More typically,policy in advance, there is little hope that customers appeal to local consumer actionyou can do this effectively. Unfortunately, groups, TV reporters or newspaper colum-many small businesses attempt to handle nists, put postings on the Web or just tellindividual problems as they arise. their friends. You may not think of cus- We strongly suggest that this is a mis- tomers spreading negative feelings abouttake. It confuses both your customers and your business to their friends as “goingyour employees. For example, you may public,” but it surely is. Now that manygive the impression you will repair your people browse the Internet and are part ofproduct only in limited situations, yet re- online newsgroups, negative word oftain the discretion to actually be more gen- mouth can be sent to literally thousands of
  • 10/4 MARKETING WITHOUT ADVERTISINGpeople instantaneously. Consider how sible. When people feel they are in controlmany times you have remarked to a friend from the start, they are much less likely tothat you plan to try a particular restaurant, get upset. As you design your recourseoptician or computer store only to be told policy, ask yourself: What role do my cus-about a negative experience that your tomers play in deciding whether my prod-friend (or maybe even your friend’s friend uct or service is substandard?or someone your Aunt Hilda’s neighbor An example of a situation where a cus-knows) had with that particular establish- tomer enjoys a high degree of control is ament. Did you still plan to patronize the fine restaurant where the discovery of abusiness? Probably not. hair in the salad immediately results in de- An extreme but slightly humorous ex- livery of a new salad, a sincere apologyample of this aspect of negative word of and often a free bottle of wine or somemouth involved an acquaintance who was other extra. In this situation, the customercheated by a 12-hour photo processing is at least implicitly in control, the assump-merchant and couldn’t get suitable re- tion being that when dining in that restau-course from the manager. His frustration rant, every effort will be made to providewas so great that he pounded on the first-class service and take care of evencounter, inadvertently scattering merchan- small problems.dise around the store. The manager called An example of little customer control isthe police and the customer, while stand- when you attempt to deal with a mistakeing around waiting for the police to come, in your checking account balance at agathered support from other customers bank, where the typical attitude is that youwho thoroughly enjoyed seeing someone are wrong. Incidentally, in this era of bankmake a business “pay.” When the police deregulation, treating customers with morearrived, they listened to both sides and respect would seem to be a much betterthen talked to each party separately. They strategy than giving free teddy bears to ev-informed the store owner to mend his eryone opening a new account (especiallyways or face possible prosecution and since the majority of accounts acquiredthen, smiling the whole time, told our with a premium offer don’t stay open afriend not to damage property again. year). Sadly, most banks are so focused on their own bottom line that they resist spending even modest sums to treat theirA. Elements of a Good customers decently. This situation appears Recourse Policy to be getting worse instead of better with the advent of ATM machines and elec-The best recourse policies give your cus- tronic banking; it’s not easy to work thingstomers as much control as possible, as out with a machine. One of these daysearly in the relationship with you as pos- someone in the banking business will do
  • CUSTOMER RECOURSES 10/ 5the things necessary to give customers is insolvent. Because most people under-more control and will revolutionize the stand these drawbacks, it means that ifbusiness. your business has been sued, or even Not many years ago, an even more frus- threatened with suit, it is a sure sign thattrating recourse problem involved trying to your recourse policy is seriously deficient.enforce the provisions of the warranty onany new American car. Indeed, some cus-tomers became so frustrated about the lack B. Designing a Goodof automobile company response when Recourse Policytheir cars broke that they painted themyellow to look like lemons and call atten- When designing or improving your re-tion to their plight. It proved to be a very course system, remember that customerseffective way to get the message across, care most about:and eventually a number of states stepped • Promptness. The amount of time itin and passed “lemon laws” to force manu- takes—or your customers think itfacturers to arbitrate the most serious war- will take—to correct a problem isranty disputes. In other words, the need crucial. Fast resolution of disputes isfor recourse became so great that laws had not good enough if you can think ofto be passed to take care of it. In the a way to do it faster.meantime, of course, close to one-third of • Responsibility. Is your customer pre-Americans began purchasing imported sumed (even implicitly) to be thecars, particularly Japanese ones, which had cause of the problem when a com-fewer problems in the first place and plaint is made? If so, your policy is awhose makers offered mediation and arbi- poor one. Clearly, the responsibilitytration to solve customer disputes. for dealing with a real or perceived Today a similar situation has developed mistake should be on your business.in the insurance business, where company No two businesses are exactly alike. Forafter company is canceling the insurance this reason, we can’t lay out a policy thatof long-time policy holders or raising rates you can clip out and apply to your situa-outrageously, with no meaningful opportu- tion. But whether you are a stonecutter, anity for customers to appeal what they be- storekeeper or a stress-reduction clinic,lieve is arbitrary treatment. there are a number of proven techniques The worst instances where customers to help communicate that your recourselack control over recourse result in law- policy is very responsive to your custom-suits. Lawsuits are expensive, slow and un- ers’ needs. Here are several of the best.predictable. Even if a favorable judgmentis entered in your lifetime, it may be im-possible to collect if the person you sued
  • 10/6 MARKETING WITHOUT ADVERTISING1. Consult Advisors nent board members of the TV station took the time to get together with two ofInvite well-known and respected people to the film company’s advisors. The film wasserve as a board of advisors to your busi- re-edited, and the station was chargedness and get them to help you make your somewhat less for it. The happy result wasbusiness better—which, of course, in- that Rolm got paid, no lawsuit was neces-volves developing a recourse policy. These sary, the parties are still on good termsadvisors should not be merely names used and the public got to see a good film.to impress, but trusted associates. By do- Small businesses can tell customersing this you are borrowing a technique about a board of advisors in various ways:that has been used by nonprofit organiza- • A motorcycle shop could hang pho-tions for years. As long as you truly run an tos of the owner together with a fewhonest business dedicated to serving your racing celebrities on the wall. Along-customers, it will work for you. Be sure to side the photos would appear the listlist your advisors on your letterhead. (We of advisors, including the people pic-discuss the value of this sort of association tured.in other contexts in Chapter 11.) When it • A computer consultant could print acomes to recourse, associating prominent, list of business advisors along with awell-thought-of people with your business short list of current and former cli-is a subtle but direct way of assuring your ents (after getting their approval, ofcustomers that in the event of a problem, course) on all brochures and on theyou will make it good. Your customers cover sheet for bids.know that your respected advisors • A graphics supply wholesaler mightwouldn’t associate themselves with your use some examples of design workbusiness if it weren’t trustworthy. If you done by prominent local artists in itscan actually involve one or two of your catalog in addition to listing them asprominent friends in a formal mediation advisors.procedure to deal with occasional serious • A textile teacher could display hiscomplaints, so much the better. latest fabric design along with photos A board of advisors was used effectively of his finished upholstery in theby Dick Rolm, an independent film pro- homes of his well-known advisors.ducer working in New England who con-tracted to make a film for a local public TVstation. The station was dissatisfied withthe results, which led to a very uncomfort-able situation for both parties. The matterwas resolved when two of the most promi-
  • CUSTOMER RECOURSES 10/ 72. Join an Established Ethical human effort from its customer service Business Group representatives, it has turned out to be well worth it, if for no other reason thanIt is also wise to join an organization that the fact that the reps now waste very littlealready handles customer problems. time dealing with calls asking, “Where is If a truly active Better Business Bureau my book?” Before customers can wonderexists in your locale, consider joining. Bet- where their books are, they have them.ter yet are local Consumer Action organi-zations and mediation services. Merelyadding your name to their membership 4. Ask for Public Participationroster is not enough. If you participate inthe group’s activities, you will learn a great Include as wide a range of communitydeal about how to handle recourse prob- members as possible in the design and de-lems and solutions at the same time you cision-making of your recourse policy. Aare doing your bit to promote public trust good example of this is the Pike Placein small business and helping to assure Market in Seattle, which houses manyhonest business principles in your commu- small businesses. This group has wiselynity. A fringe benefit is that word of your created a committee of both business op-involvement in good business groups of- erators and members of the general public,ten spreads, which, of course, is good for which meets periodically to review specificyour business. complaints about consumer problems. This is a marvelous process, as it both allows many different points of view to be aired3. Involve Employees and creative solutions to be developed. You may doubt that your customers re-Consider forming a customer service com- ally care enough about your small businessmittee of employees. No one knows what to participate. This is rarely true. Theyour customers need more than the people who deal with a particular businesspeople who deal with them daily. And no on a regular basis, such as professional gar-one has more incentive to make changes deners who buy from a particular nurseryin the way the business operates and to or graphic artists who patronize a particularavoid complaints before they are made. typesetter, care a great deal about how the Nolo.com decided to try to get every in- business operates and probably have alldividual book and software mail order out sorts of ideas for improvement, includingthe door the same day, or the next day if how to develop a better or more flexiblethe order comes after noon Pacific Time. recourse policy. If you ask them to shareWhile this sometimes takes almost super- their ideas with you, they probably will.
  • 10/8 MARKETING WITHOUT ADVERTISING Good Recourse Policies C. Telling Customers About Your Recourse PolicyHere are some examples of businesseswith good recourse policies: To ensure that your customers are always • The Cross Corporation allows cus- aware that should any problems arise they tomers to return a pen for any rea- will be treated fairly, you must closely ex- son, and stores that carry Cross amine how you present your recourse products are provided with a supply policy. of addressed envelopes to give to • Is your recourse policy clear? any customer who wishes a refund • Is it communicated to your custom- or a new pen. In other words, the ers early and often? decision of the Cross Corporation to • Do your friends, employees and cus- guarantee its product is made evi- tomers perceive your policy in the dent to consumers by providing way you intended? easy and convenience recourse. • Are customers with small complaints • Sears Roebuck & Co., a huge com- really encouraged to bring them to pany selling moderately priced your attention? goods, has a generally good reputa- A good recourse policy should be writ- tion for customer satisfaction. For ten and available to all customers and example, it has traditionally guaran- should be posted on your website. As teed its Craftsman Tools and re- noted, if your customers are educated in places them years after purchase if advance as to their rights in any potential they are defective. When Sears situation, there will be far fewer problems started selling computers, people and angry customers. Even customers who correctly assumed that the same are a pain in the neck and enjoy making sort of replacement policy applied. trouble will have a more difficult time if This assumption was a key to Sears’ you adopt a fair recourse policy and go early success in the computer mar- out of your way to let them know about it. ket. Customers, knowing that there And, of course, it is even more important was little chance of getting good to reach those customers who are reticent service from many computer retail- about voicing legitimate complaints. It is ers, preferred dealing with a store obviously much better to encourage these with a solid reputation for customer people to tell you about any problem with service. your goods or services than it is to have them avoid you in the future because of a problem you never even knew about.
  • CUSTOMER RECOURSES 10/ 9 A written policy is especially important DO NOT WANT YOU TO HAVE ANY-in the mail order business, and the best THING FROM L.L. BEAN THAT IS NOTmail order companies all have a guaran- COMPLETELY SATISFACTORY.” Not onlyteed return policy. They do it for a simple do L.L. Bean customers get assurance thatreason: People are reluctant to buy some- they will be satisfied, but Bean’s recoursething they can’t see and touch, especially policy also works as an effective marketingif they think it might be difficult to return. message, because customers realize thatThus, phrases such as “Return for any rea- only companies truly offering qualityson, any time within 30 days” have be- goods can make this type of promise.come common and have enabled peopleto shop through the mail and online withmore confidence. Recreational Equipment Inc., a coopera- D. Putting Your Recoursetively owned retail and mail order com- Policy in Writingpany headquartered in Seattle thatspecializes in outdoor apparel and equip- Lands’ End sent out its first catalogue inment, does even better. Its order form 1964 from a basement along the river instates: “REI guarantees satisfaction on ev- Chicago’s old tannery district. In one of theery item purchased. If you are unhappy recent catalogues it printed the business’swith your purchase for any reason, please “Principles of Doing Business.” Principle 3return it for a replacement or full refund.” states: “We accept any return, for any rea-(Incidentally, this company is listed in The son, at any time. Our products are guaran-100 Best Companies to Work for in teed. No fine print. No arguments. WeAmerica, discussed in Chapter 5.) mean exactly what we say. GUARANTEED. And the legendary L.L. Bean Co., a small PERIOD.”business grown large, which built its repu- Reassured by this guarantee, Salli over-tation on quality clothing and outdoor came her reluctance to buy a swimsuitequipment as well as excellent customer through the mail. The swimsuit wasservice, backs up its product with this shipped the same day, and she was verystatement in its catalogue and at its pleased with the quality and fit. One weekwebsite: “All of our products are guaran- after it arrived, Salli received a phone callteed to give 100% satisfaction in every from Lands’ End asking if she was happyway. Return anything purchased from us at with the purchase. Not only was their re-any time if it proves otherwise. We will re- course policy clearly stated, they followedplace it, refund your purchase price or up to make sure they had a happy cus-credit your credit card, as you wish. WE
  • 10/10 MARKETING WITHOUT ADVERTISING Customer Recourse Policies and Practices We have a written customer recourse policy. YES NO Our written policy is: Given to all customers Given only upon request Displayed prominently on the premises Our policy identifies and deals with those areas and situations where customers are most likely to have problems with our goods or service. We have regular communication with our customers to be sure they understand our recourse policy and know that we implement it efficiently. A customer who complains is: Always right Almost always right Seldom right Rarely or never right The most common complaints involve: _________________________________________ __________________________________________________________________________ __________________________________________________________________________ When the customer is right, he or she gets: Full refund or replacement when: ___________________________________________ __________________________________________________________________________ __________________________________________________________________________ Partial refund when: ______________________________________________________ __________________________________________________________________________ __________________________________________________________________________ We send or give questionnaires to customers to evaluate their satisfaction with our service. Our liability insurance covers the following customer problems: ___________________ __________________________________________________________________________ When a customer deals with our insurance company, it is: Very responsive Responsive Slow to respond Dont know When the customer disagrees with our recourse offer, we have available: Appeal process Arbitration Industry established board of review Mediation Nothing Other __________________________________________________________________
  • CUSTOMER RECOURSES 10/ 1 1tomer. Recourse policies can’t get any bet- makes agreed-upon modifications in theter than that. second coat. If the customer assents to the Now, let’s look at several other examples color choice, the final coat is applied andof how to put a recourse policy in writing. after that no free repainting is done for rea-You will notice that these policies antici- sons of color. If, however, the customer ispate typical problem areas and establish a legitimately dissatisfied with the quality ofprocedure to head them off before a dis- work, the contractor will do any repaintingpute arises. For instance, a painting con- necessary at any time.tractor we know prides himself on being Ruth, who owns a garden and plantextremely neat and doing quality work. store, has a replacement policy should anyHowever, because there is a lot of poten- plant she sell prove unsatisfactory. How-tial for paranoia among his customers ever, to help her customers avoid mostabout what their rights are if paint drips on common problems, she instructs them boththeir floors or furniture, he is especially orally and in writing as to what kind ofclear about the precautions he takes to care the plant they purchase requires. Foravoid this kind of problem and about what example, Ruth goes out of her way to ex-he will do to correct any that should arise. plain the symptoms of over-watering, let-He not only promises in writing to correct ting a plant grow too large for its pot andthe problem, but explains the type of in- become rootbound, and excess exposuresurance he carries and just what it covers. to sunlight. Armed with this information,He also explains provisions made for out- the customer is in a good position to evalu-side evaluation and mediation should any ate and save a drooping or rootbounddispute ever arise. plant. One additional advantage of this Another frequent problem for painting kind of instruction is that Ruth gives hercontractors is that a color a client chooses customers a reasonable standard againstfrom a color key looks different than ex- which to judge whether a problem with thepected on the wall. All sorts of factors, plant was caused by their neglect or oc-from the nature of the surface being curred because the plant was defective inpainted to lighting, can affect this. In antici- the first place.pation of this common problem, this con- A carpet retailer we know in the Sacra-tractor puts on a first coat and then mento Valley of California not only guaran-encourages his customers to live with it for tees in writing all carpets sold, buta few days. He specifies in writing the encourages customers with complaints tonumber of days his client has to decide if contact him so that problems can be rem-the color is the correct shade. If the cus- edied. As part of doing this, he sends everytomer doesn’t like the color, the contractor customer a postcard a few weeks after a
  • 10/12 MARKETING WITHOUT ADVERTISINGcarpet purchase, with a reminder of the ruled for the rug company butstore’s “total satisfaction” policy. In addi- complimented its honest business practicestion, he includes a statement of customers’ before a courtroom full of people.rights every time he communicates with Kaiser Permanente, a huge health main-them in writing. An amusing side result of tenance organization, invites some patientsthis policy occurred as part of a Small to fill out a card about the care they re-Claims Court procedure initiated by the rug ceived. “If you’re pleased,” they advise,store against a customer who hadn’t paid “Fill out the side of the card that saysher bill. The customer showed up in court ‘Great!’ If you’re not so happy fill out theand said she failed to pay because the car- ‘Not so Great’ side of the card to let uspet was defective. The store owner was know how we didn’t meet your expecta-able to produce the written recourse tions.” Patients then have an opportunity topolicy, a copy of the postcard and several talk with the department manager or otherother communications explaining to the administrator to get the problem resolved.customer the “total satisfaction” policy. He If they want they can also receive a refundthen testified that, although a year had of their copayment, up to $25. Not onlypassed, the customer had never com- does this allow Kaiser to monitor service, itplained about the quality of the product gives the patient control over service. suntil that day in court. The judge not only
  • Chapter 11 Marketing on the InternetA. The Importance of Passive Internet Marketing ............................................ 11/3B. Yellow Pages Plus ......................................................................................... 11/5C. What to Put on Your Site ............................................................................. 11/7 1. Your Schedule of Events ........................................................................... 11/8 2. Links to Related Sites ............................................................................... 11/8 3. Accessibility Information ....................................................................... 11/10 4. Valuable Free Information ...................................................................... 11/10D. Designing an Internet Site ......................................................................... 11/11 1. Your Homepage ..................................................................................... 11/11 2. Your Website’s Structure ......................................................................... 11/13E. Interactivity and Customer Screening ........................................................ 11/14F. How to Help People Find You Online ........................................................ 11/16 1. Get Covered by Search Engines ............................................................. 11/16 2. Get Recommended on Other Sites ........................................................ 11/17 3. Distribute Your Web Address ................................................................. 11/17 4. Pay for Referrals ..................................................................................... 11/17G. Active Internet Marketing ......................................................................... 11/19
  • 11/2 MARKETING WITHOUT ADVERTISINGT he Internet has been the Our job is to be clear-headed about the subject of intense hope Internet, maintain our equilibrium as we and speculation, border- examine it from a business perspectiveing on national hysteria. It is well to re- and report on successful marketing uses ofmember the work of the great American this new medium. We believe the best wayThomas Hughes, founder of the field of to consider the business marketing aspectsthe history of technology, whose most fa- of the Internet is to break it down into twomous book is Technological Enthusiasm: approaches: passive Internet marketingThe History of Technology in America. The and active Internet marketing.title summarizes Hughes’s vivid observa- The passive strategy focuses simply ontions on the subject; as a culture we have creating a compelling online presence foralways been wildly enthusiastic about new your business for potential customers totechnology and view our national future as visit—a site that offers them essential infor-commingled with its development. mation about the business and perhaps Not only do Americans have a long and entertains them as well. (When we sayintense history of becoming enamored of “online presence” it’s simply another waythe latest technology, we also have a pro- of conceptualizing your website and anypensity to believe that technology will features it offers. In other words, yoursolve most, if not all, social problems. The online presence comprises any and allInternet is touted as the latest technologi- ways your business exists online.) With acal panacea that will welcome in a new passive marketing approach, the emphasisera of democracy and social justice while is to create a website that essentially offersalso improving our sex lives and making the same types of information as a com-the children behave. The Internet is per- prehensive brochure or a very extensiveceived as having unlimited possibility in Yellow Pages listing. Of course, unlikelarge part because we can’t understand the brochures or Yellow Pages listings, apossibilities. website has the following essential quali- Just as we are prone to accept that ad- ties:vertising works in other media, we are be- • it can provide many levels of depthing seduced (or seducing ourselves) into for inquiring users;believing that advertising on the Internet is • it is interactive, which allows morethe solution to our marketing needs. The meaningful contact with potentialbest advice we can give is to evaluate the customers.Internet as you do other media. All of the Active online marketing, on the othersame issues, including where to be listed, hand, focuses on engaging in specific mar-accessibility, being transparent and educat- keting activities online to generate busi-ing customers, apply to marketing on the ness, such as sending out e-mailInternet.
  • MARKETING ON THE INTERNETS 11/ 3newsletters, promoting a contest at your We believe that all businesses need awebsite or publishing articles about your website—no exceptions. Think of it as afield at other related sites. Active Internet color brochure that, when people searchmarketing is essentially the next step after for you, they can find out enough aboutnailing down your passive marketing strat- your business to see if it suits their needs.egy, and is an extra step that not all busi- In addition, when you meet potential cli-nesses need to take. While active online ents at a trade show, chamber meeting ormarketing is useful for some businesses, a party and let them know about yourit’s not essential for many of them. business, you can give them your card and As we discuss in more detail in the rest suggest they check out your website. Thisof this chapter, we strongly feel that all reinforces your initial meeting and allowsbusinesses should engage in passive them to find out more about you at theirInternet marketing by creating a solid convenience, if they choose. Having awebsite for their business. The majority of Web presence is also an easy way for oth-this chapter discusses how to go about do- ers to refer people to your business. Anding this. At the end of the chapter, we it’s a convenient place to list yourbriefly describe some active Internet business’s recourse policy and to cite posi-markeing strategies for businesses that tive recommendations.want (or need) to take the next step. Keep in mind that the passive strategy of maintaining a website should not in itself be expected to generate significant onlineA. The Importance of Passive revenue. For three-quarters of businesses, Internet Marketing it doesn’t and probably won’t in the foreseable future. Regardless, people ex-As of this publishing date, two-thirds of all pect an excellent business to have aAmerican small businesses have a website. website. If you don’t, customers may won-(The Industry Standard, July 31, 2000.) der if you are not up-to-date in other as-While the Internet does not produce pects of your business.miracles for most businesses, it is definitelya potentially powerful part of the market-ing mix.
  • 11/4 MARKETING WITHOUT ADVERTISING What Exactly Is a Website? ”But Do I Really Need a Website?”Having a website (often known as a Web Two business friends of ours are not onpage) simply means having a computer file the Internet and don’t want to be. One isthat is publicly accessible through the glo- Al Pietsch, a master of the art of using a special old-fashioned multilith (an offsetbal computer network known as the printing press) machine. To appreciateInternet. The files that comprise your and use his work, designers and graphicwebsite are stored on servers, high-pow- artists need to see and touch it. In addi-ered computers that are connected to the tion, Pietsch works alone and already hasInternet 24 hours a day. Companies that more work than he can handle. For hisrun and maintain servers are often called business, marketing on the Internet wouldWeb hosts, or hosting services. Once you appear to be irrelevant.provide a hosting service with your files, Bob G. is a brilliant class-action lawyer with more major victories than anyone inthey will put them on their servers and his field. He occasionally has room for amake sure that the servers are constantly new client but doesn’t dare to be listed onrunning and connected to the Internet. the Internet for fear he won’t have time toOther companies, known as Internet ser- answer his mail or screen the prospects.vice providers (ISPs), allow their customers He feels that getting referrals from the fewto connect to the Internet by dialing in or other lawyers who know his work and thethrough other technologies such as DSL. kind of clients he is looking for is sufficientOften, ISPs offer hosting services as well. and efficient. His listing in the Yellow Website files can include text, graphics, Pages, under Attorneys, is plain vanilla— just his name, so old friends can find him.video and sound. It can be in color, ani- In our opinion, both of our friends needmated and can automatically connect the a website. Why? Al, the printer, needs oneviewer to other websites. The Web uses because customers want to recommendtechnology called hypertext markup lan- him and describe his work to their friendsguage (HTML) that makes it easy to send and associates. And most important, in theimages, photos and sound on the Internet. long run Al will need replacement clients. By that time, the Internet will be taken for granted and he will be seen as difficult to work with if he doesn’t have a website. Bob G., the lawyer, needs a site because he needs to get a few highly specific cli- ents. A website is a perfect place to ex- plain the focus of his practice and his outstanding record, as well as screen po- tential clients. His site can also explain how busy he is (which in itself will reflect favorably upon his business), and make clear that he can’t respond to every e-mail.
  • MARKETING ON THE INTERNETS 11/ 5 Don’t Neglect Customers Who Aren’t firm, gender, etc.—become vitally impor- Online. Because Internet access isn’t tant when you join the cyberspace busi-free, and because the Internet isn‘t easy to ness community. Potential clients need touse for some people, many of your know what makes you unique and desir-present customers don’t use the Internet, able. When you’re ready to compose andand they probably won’t for a long time. design your site, imagine yourself trying toThis means that you should provide the make it into the Guinness Book of Worldsame services and information to non- Records: What feats would be appealing toInternet users that you provide online, prospective clients?where possible. As an example of what Second, geographical proximity may benot to do, a local bookstore we know has a drawback or a bonus. If your business isan online directory of its inventory, but no geographically limited, describe those lim-computer in the store for customers. its clearly. Even better, offer a map of your location. For example, Jim Davis’s sewer repairB. Yellow Pages Plus business is located in Seattle. On his website, a map shows that his office is inAt the risk of oversimplifying things a bit, the University district about four milesthe Internet is much like the Yellow Pages from downtown. To increase the range ofof the phone book. It is a directory that possible customers, he also shows the en-can be accessed by users at their conve- tire city of Seattle and four suburbs andnience and is used for seeking business in- color codes them as “immediate serviceformation. But unlike traditional Yellow area for emergency service.” The largerPages, the Internet is not geographically area of King and Snohomish counties islimited; it has millions of listings covering marked “by appointment.” The site alsomany parts of the planet. details that in the “immediate service area,” Because of the huge number of listings, Davis offers to give customers an exact ap-you’ll need to keep in mind two key mar- pointment time, and if the service is lateketing facts: First, your business listing will by more than one half-hour, the customerbe part of a much larger universe than is gets 20% off the bill, “except during earth-found in the Yellow Pages. If you are one quakes, snow, Super Bowl parades orof 30 patent lawyers listed in your local other acts of God.” Davis lists the namesprinted Yellow Pages, you may find your- of 51 neighborhoods, suburbs and smallself among 9,000 patent lawyers listed towns in his list of service areas, just inonline. The elements that distinguish you case someone is searching the Internet forfrom all these other patent lawyers and sites that contain the name of his or hermight attract particular clients—years of own tiny local area.experience, law school attended, size of
  • 11/6 MARKETING WITHOUT ADVERTISING Geography is not a serious limit for Lief For Denise Armomot’s classic sheet mu-Gunderssen, who sells accounting systems sic reproduction business, the Internet’sto credit unions, except that credit unions worldwide coverage is a bonus. She has ahave different legal structures in different list of more than 2,000 titles that she pro-parts of the world, and his package is de- vides. The list is available in seven lan-signed in English. Gunderssen sells his ac- guages, and Armomot is adding more ascounting system, which is part software, quickly as she can find people to help herpart paper and part files, all over the U.S. with the translations.and occasionally outside the country. Withthe Internet, the whole world is a potentialmarket, but Gunderssen needs to thinkcarefully about his approach. The Internet Frontier For prospects in the U.S. and Canada,the laws are appropriate for his accounting Uses of technology keep evolving longpackage so he emphasizes this fact online after the technology itself stabilizes. Forand lists his toll-free phone number. For example, the telephone was first used byeight other countries where a modified ver- businesses for short messages, inter-busi-sion of his package can be used, he has ness orders and confirmation of meetingseparate pages on his site explaining the times. Doctors and pharmacies were alsomodifications necessary for each. He also among the first to have phones, largely foraddresses the most commonly asked ques- emergency service. Idle chatter and per-tions relative to that country. On his main sonal conversations did not become com-Web page, Gunderssen has a large banner mon on the phone for nearly 30 yearsexplaining that his program is based in En- after its introduction. Widespread residen-glish. The banner is there to make sure that tial use of the phone (in two-thirds of U.S.he doesn’t have to waste anyone’s time an- homes) did not occur for 70 years.swering questions about other languages. Internet technology is far from stable,Last, he has a separate page for overseas and we should not expect long-term pat-credit unions that are part of American and terns of usage to emerge for business orCanadian corporations where he answers individuals for at least 15 more years. Incommonly asked questions. The use of the meantime, accept the volatility of thismultiple pages gives quick answers to new medium and be innovative in yourpeople just glancing and detailed answers marketing. Our advice is to get online andto people who need details (see Designing get a feel for what others are doing—it’s aan Internet Site, below). challenge at first, but can be lots of fun.
  • MARKETING ON THE INTERNETS 11/ 7C. What to Put on Your Site or do you want to have customers call you by telephone? Do you need to explainLots of businesses, big and small, have what your cutting-edge business does? Dobeen bitten by the Internet bug. They’re you want to tell potential customers wheresure they need a site, mostly because ev- to find your product in their city? It’seryone else seems to have one, but when amazing how many websites suffer from ait comes to what information to actually lack of clear purpose.post on the site, they’re stumped. It is im- For instance, a magazine might want toportant to keep in mind that a simple site create a simple website with just a couplefull of fresh and interactive content will at- pages as a passive marketing tool. They’vetract loyal customers. For the vast majority decided against putting the whole maga-of online businesses, using lots of gim- zine online, which would be too muchmicks is just a waste of time. As Evan I. work each week. In a hurry, the magazineSchwartz put it in the February, 1996 issue decides to put the cover of the current is-of Wired magazine, “a website that attracts sue on the site each week along with itsjust a few thousand loyal consumers will table of contents so that visitors to the siteultimately be more valuable than one in can see what’s in the issue, which willwhich a million new people visit each hopefully prompt them to go buy it. Whatmonth and never return.” His words are the magazine owners fail to consider isjust as true now as they were five years that interested readers will want to knowago: Today, an estimated 80% of people how to subscribe and where to buy thewho visit a site never return. magazine. Without that crucial info, visi- When deciding what content to include tors to the site might think the magazineat your site, the important questions to ask looks interesting but won’t have any spe-yourself are: cific, simple information on how to pur- • what your goals are for your site, chase it. By posting only the cover and and table of conents, the magazine also is fail- • what kind of investment are you ing to give crucial information to advertis- willing and able to make. ers about ad rates and deadlines. In short, Deciding what you want out of your site just a little planning can go a long way inis a crucial first step in building it. Many making your website as effective as it canbusinesses seem to skip this first step, be.thinking that the obvious answer is “to Freshness is another major issue in de-generate more business.” But in order to ciding what to put at your site. Don’t putcreate a truly effective website, you need anything on your website that will rapidlyto be more specific in your goals: Do you go out-of-date unless you have the re-want to sell product directly from the site, sources to update it faithfully. While the
  • 11/8 MARKETING WITHOUT ADVERTISINGcost of buying the computer hardware and your site. Keep in mind that with the hugesoftware necessary to set up a website is range of different kinds of businesses,usually fairly low, the cost of maintenance there’s no magic formula for good content.can be high for a small business. No ifs, As discussed above, be sure to examineands or buts—someone has to keep the your goals for your site and choose con-site fresh and check it often. Almost noth- tent accordingly.ing makes a worse impression than out-of-date information or images. It is a clearsign of poor management, the online 1. Your Schedule of Eventsequivalent of a dirty place of business, andwill destroy positive word of mouth rec- The Internet can be a great place to postommendations. your calendar of marketing events. There If you decide you don’t have the time to are two reasons for this. First, online list-continually monitor and update your site, ings can be continually updated and con-one option is to hire someone to keep stantly available in a way that no otheryour site fresh. This may be more com- medium allows. Newspaper calendars, forplex—and more expensive—if your site example, are prepared many days in ad-provides highly specialized information vance and customarily appear onlyand needs to be updated by an expert in weekly. Second, the potential for personal-the field. Oftentimes, however, the job can ized sorting exists only on the Internet.be done by people with good generalized That means that people interested inknowledge such as freelance writers or events, displays and meetings about over-editors. Of course, if you’ve hired some- weight dogs in Duluth can have a ticklerone to create your site in the first place it notice that tells them when anything onwould make sense to have them monitor the subject pops up online.and update it as well. Holding creative marketing events is vi- If you decide to take on updating duties tal to create positive recommendations foryourself, there are several software pro- your business. (Chapter 13 is devoted tograms available that make the job easier this subject.) Listing these events at yourthan you might think. Michael uses Adobe website is just as important.Go Live, software that creates fairly com-plex websites and is easty to update with-out knowing Web language. Other 2. Links to Related Sitespopular and user-friendly programs in-clude Macromedia Dreamweaver, Netscape We assume that you understand the natureComposer and Microsoft Frontpage. and benefits of cooperation in business, Let’s take a look at some ideas for what discussed in several chapters of this book.kinds of information might be effective at An additional advantage for a business that
  • MARKETING ON THE INTERNETS 11/ 9views itself as a constructive, cooperative from other businesses and nonprofits thatmember of society is that the Internet can recognized a cooperative peer.provide automatic referrals to you from We recommend putting your links to-other cooperative businesses. And you can gether on a page that is easily found atdo the same for them with links to their your site. But don’t put links on yourwebsites. Linking sites on the Web is a homepage—your homepage is yourgreat service to customers and potential business’s “front door,” and you don’tcustomers. (Links are also commonly re- want to usher customers out just as they’referred to as hot links or hyperlinks.) walking in. (Designing your website is dis- Payment for links is common on the cussed further in Section D.)Internet, and you should consider everysuch potential source (see Pay for Refer-rals, below), but the fact that you are a co- Putting a Community Onlineoperative business needs to becommunicated to all potential sources of Steve Killey (www.Bodeganet.com) islinks. Businesses with active websites un- growing a successful business by offeringderstand that offering links to other sites a unique and cooperative service in hisenhances their reputation. And just as in rural community.any marketing, you must have a well-run, Bodeganet acts like a referral for othertrustworthy business to continue to be rec- small businesses in the Bodega, Califor-ommended as an interesting and informa- nia, area. On this site you will find linkstive site. to Rasberry’s website, Eschenbach Con- It’s a good idea, when you want to link struction (discussed later in this chapter)to someone else’s website, to ask permis- and several other small businesses. Onesion first—it’s also an easy way to make of these is Northern Light Surf Shoppeople you would like to be associated which, in addition to T-shirts and surf-with aware of your site. boards, offers real-time satellite ocean Next Century, a third-world develop- data that are continually updated andment consulting firm in Washington, D.C., show the exact heights of waves andreports that it is listed as a cross-referral at wind speeds at nearby beaches.more than 100 Internet sites, all on the ba- Killey designed and maintains thesesis of mutual reciprocal benefit (coopera- websites at a very reasonable price. Astion). Forty of them were generated from part of his service to his community, hethe original list of potential referrals that also maintains the sites of two candidatesNext Century developed when it launched running for supervisor and a nonprofitits website. The next 60 came in at the rate land trust, all of which are listed on theof one or two a week, spontaneously, primary referral page.
  • 11/10 MARKETING WITHOUT ADVERTISING3. Accessibility Information 4. Valuable Free InformationYour website is a perfect place to clearly The Internet began as a computer networkexplain how to get to your business. When linking educational and government enti-you describe your location, be sure to use ties; its commercial aspects are relativelymaps and other graphics, particularly if new. People still go to the Internet prima-your business is hard to find. Be sure to rily for free information, and expect to findmention major streets nearby, well-known it; if you’re smart, you’ll include a lot ofpoints of interest and landmarks. For ex- helpful, free information on your site. Inample, a quick print shop in Berkeley, addition to satisfying users’ expectations, itCalifornia, marks its location on its map lets potential customers see for themselvesand also lists nearby points of interest: the that you are an expert.Berkeley Marina, the 4th Street shopping You don’t necessarily have to supply thearea and the Ecology Center. For land- information yourself; take advantage of themarks it lists some other well-known busi- Web’s capacity to link sites to each othernesses nearby: the Fantasy Records instantly. For example, a real estatecompany office, Orchard Supply Hardware broker’s website might include links to theand Takagawa Nursery. Also, remember to local Chamber of Commerce site, whichinclude information about parking. offers more information about the commu- Information about your location and di- nity; sites that offer good material on mort-rections to your business at your website gage rates and financing; and to sites thatwill become even more important as mo- discuss the local school system. Peoplebile Internet service becomes more widely who are looking for a house in the com-used. Internet access is already possible on munity will be grateful for the leads.regular cell phones, allowing users to ob- Nolo.com, publisher of this book, oper-tain information such as addresses and ates a Self-Help Law Center on the Webphone numbers, directions, business hours (www.nolo.com). The site features plentyand even movie times on their cell of information about Nolo books and soft-phones. As this becomes more standard, it ware, but it also offers loads of free legalwill become essential that your site offers information on common topics such asbasic information about your business so debts, wills and trusts, small businessesthat everyone who wants to find you can and real estate.easily do so.
  • MARKETING ON THE INTERNETS 11/ 1 1D. Designing an Internet Site likely evolve in website structure. Already there are some standards in website designThe Internet is so new that the format of such as homepages and “return home”websites has not yet fully stabilized. But as buttons on other Web pages at the site.it does, it is fair to guess that many of the The following sections describe simplestructures of a book, which have evolved ways to make your website clear and easyover 500 years, will be involved. These el- to navigate.ements include a cover, with an image,title and subtitle; a back page with shortreviews and recommendations; often, a 1. Your Homepagejacket that contains a 300-word summaryand a description of the author; and in- A well-designed site starts with an unclut-side, standard locations for a table of con- tered main Web page (a “homepage”) thattents, an introduction, a bibliography, a list has its key message easily readable on theof other books by the author, and an in- screen. It’s also best to present any otherdex. crucial information at the homepage so In books, all of these elements help po- that it’s completely readable without usingtential readers know what the contents of a bottom or side scroll bar.the book are and enable them to find whatthey need quickly. Similar elements will
  • 11/12 MARKETING WITHOUT ADVERTISING Should You Do It Yourself? case, a massage pagoda, an antiqueFew small businesses have the expertise and dishrack and a custom house. His site in-time to design and maintain their websites. cludes an e-mail link and his phone numberFortunately, many individuals and compa- so potential clients can just click on the linknies offer this service, at a cost that ranges and e-mail him or pick up the phone andfrom minimal to expensive. As in any tech- give him a call if they like what they see.nology, the first questions to ask yourself During the rainy season when businessare what you need and want from your slacks off, he plans on adding free informa-website, and how much you want to spend. tion about various aspects of construction.You absolutely do not need a lot of bells These articles will be useful over a longand whistles—in some businesses, such time period, so he won’t have to updatethings can be inappropriate and distracting. them often and can add to them when heAs in all business marketing, you have to has time. At this point, for his kind of busi-look at what others in your industry offer ness, a simple low-maintenance site is ap-and what customers expect. One last warn- propriate.ing: Don’t put up your site until it’s ready. As industry norms change and moreIt’s very off-putting to visit a site that says people look to the Web for contractors, he“under construction.” will have to change his approach. He might Michael Eschenbach, for example, runs a add a FAQ (Frequently Asked Questions)construction and cabinetmaking business. section to help educate customers whileHis geographical business area is limited keeping his e-mail traffic down, more infor-(50 miles), and for the most part, people mation about changes in his field, the latestlooking for local contractors don’t use the trends in home building and tips on remod-Web for this purpose. However, a few eling. He might include links to subcontrac-people have inquired about whether he had tors and vendors he recommends and spenda website, so he had a friend help him de- a lot more time maintaining and keeping hissign a simple site with a few photographs site fresh and informative to customers.showing samples of his work: a spiral stair-
  • MARKETING ON THE INTERNETS 11/ 1 3 In the Yellow Pages, your listing must Since your homepage should clearly re-present, all at once, all the key elements flect what the rest of your site has to offer,your customers need: hours, credit cards, you’ll need to decide what else your sitelocation. The Yellow Pages are also in al- will offer before you can finalize yourphabetical order by category. Neither of homepage. Let’s take a look at some prin-these things is true of the Web. Most pro- ciples for designing your site as a whole.spective customers will find your listing byusing online search engines, which searchfor sites that contain words a user enters. 2. Your Website’s StructureA user may search for several words at atime, assigning equal weight to each or The homepage offers a central place fromgiving some a higher priority. which users can branch out to all the other In designing your homepage for your material at your site. In designing yoursite, you need to keep in mind that a pros- site, you’ll need to decide which pages arepect delivered to your homepage may be accessible from which—in other words,looking for something that is on another you need to establish the branching struc-one of your pages. The homepage should ture by linking certain pages to others.therefore clearly indicate what other mate- When designing your branching system,rial is available at the site. In essence, your keep these guidelines in mind:homepage needs to provide a sort of 1. Always show what is ahead. LetTable of Contents for the site as a whole. prospects know what tables, charts, Also keep in mind that it’s important for inventories and gold nuggets are stillyour site to be clear and useful to all types ahead of them.of visitors. Recall from Chapter 7 that cus- 2. Always allow them to go back totomers and potential customers range from your homepage with one click. Eachthe naïve to the expert. Your introductory page should have an easy-to-findpage should tell both the naïve user and “home” or “main menu” button thatthe expert what the site offers and where takes the user back to yourto go to find specific information—without homepage. It’s crucial that visitorsscaring a naïve prospect with the expert constantly feel oriented and knowmaterial, or insulting or boring an expert how to find their way around thewith the simpler material. It’s often a good site. Reassure them that they can al-idea to show a sample of your primary ways go back to the main menupage to a cross-section of friends and cus- whenever they want to and providetomers to make sure it appeals to a range an easy-to-understand mechanism toof different people. do so.
  • 11/14 MARKETING WITHOUT ADVERTISING The overarching idea is to have the can search for their information at theirviewer feel comfortable and in control own pace and with their own logic.when they’re at your site so they stay The interactive potential allows anthere, rather than getting frustrated and online business to sort customers who visitclicking off to a new site. To this end, be the website, directing amateurs to pagessure to design a branching structure that’s that will educate them, and experts toclear and easy to navigate. pages appropriate for their knowledge Encourage the visitor to bookmark your level. For example, on an acupuncturepage for future reference. Web browsers clinic’s online site, naïve non-users can seesuch as Netscape Communicator and a short video segment of a patient beingMicrosoft’s Internet Explorer allow users to treated, as well as a graphic dictionary ofcreate a list of their favorite pages so they terms, a brief history of this ancient medi-can revisit them without having to enter cal art and testimony from successfullythe Web address (also called a URL, for treated patients. Experienced patients andUniform Resource Locator). practitioners could be directed to pages It’s very helpful in designing your with information about the latest studieswebsite to search for businesses similar to and developments in the field, and toyours online and study what works and pages where patients could schedule ap-what doesn’t, using the criteria above. pointments. The most important and beneficial use of interactive branching is to bring new prospects exactly to the right door of yourE. Interactivity and business. With the right branching system, an architect will, someday soon, answer a Customer Screening phone line and already know that the per-One of the most interesting marketing at- son on the other end wants to schedule atributes of the Internet is that it allows meeting on Thursday afternoon at 3 p.m.businesses to screen their interaction with for a half-hour discussion of a 1,000-footcustomers and prospects. Before the addition to her house at $120 a squareInternet, the voice-mail branching systems foot, and that the prospect knows thethat many of us hate were the best tool for architect’s qualifications. When the twothis purpose. We all recognize the voice meet, the sale would be 90% complete.that says, “If you want to talk to a sales- One mechanism for weeding out brows-person, press 1; if you want to discuss a ers that is rarely used in American busi-billing problem, press 2; ...if you want to ness is to be purposefully obtuse andspeak to an operator, press 9.” The same obscure. In Japan, it is common to findthing can be done on your website—with- that a master craftperson or a respectedout antagonizing the customer. Customers antique dealer has a storefront that is old,
  • MARKETING ON THE INTERNETS 11/ 1 5dilapidated and unobtrusive. Only the spond to. He himself takes the clients whomost sophisticated customers know where pick conservative fabrics for traditionalto go, so the masters don’t waste time or “English gentlemen’s” suits.get involved in the unpleasantness of turn- Experience. Sorting by experience ising the wrong people away. used by a marketing research firm seeking The same approach can be used online. sophisticated clients for a technical meth-Irv Thomas, who sells books and newslet- odology that it has perfected. Its Internetters about simple living to people who are offering includes a wide range of politicalalready leading simple lives, uses it on his survey data, election results and statisticalprimary page by alerting prospects that analysis programs. Users of two of its mostthey are facing a screening. If they get sophisticated statistical analysis programs,through they will probably like the prod- a chi-square and queue-sort, are clearlyuct. He then lists the names of five famous the highly experienced type of peopleand five obscure people and asks which they want to offer their most sophisticatedones have values that the prospect ad- “key issues” methodology to. Users ofmires. Picking any of the right three names those two programs are offered wide-openleads directly to Thomas’s core material, access to databases not known to othersand you get an explanation of why those and a direct toll-free phone number forthree people are important to Thomas. free assistance on their projects. Many ofPicking another three names that are close these experienced users of the secret data-in values leads to a page that gives clues bases have become regular customers ofas to what is appealing about these three the key issues methodology.names and about the values that would Understanding. A good example of sort-lead the prospect to the core pages. Pick ing by understanding is found at theany of the four remaining names, and you online site of the University of Chicago’sare politely told that you would probably Committee on Social Thought. This reclu-find Thomas’s material inexplicable and sive institute holds occasional seminars fordull. a very small number of invited cognoscenti You can separate window-shoppers and for the rare person who visits itsfrom serious prospective clients based on Internet site and follows the branchingseveral attributes, including taste, experi- lines all the way to the end of a Ph.D. the-ence and understanding. sis by one of the Committee’s alumnae. At Taste. A tailor in Hong Kong shows a the end of each thesis is a flashing invita-large sample of fabrics; you pick the ones tion to the next seminar, with an phoneyou like, and he recommends the tailor number at which people can obtain thewhose work you are most likely to re- time and location.
  • 11/16 MARKETING WITHOUT ADVERTISINGF. How to Help People did not get prospects to zero in on her Find You Online company. There were literally hundreds of thousands of other businesses using thesePeople will find you on the Internet in words. She needed more specific wordsmany ways. Here are some ways to get the such as “workbook,” “alternative medicalword out. advice” and “estrogen replacement.” Here are some ideas to stimulate your thinking:1. Get Covered by Search Engines • Location: where you are located, towns you serve, nearby landmarks.A primary method that potential customers • Skills, talents, experience, awardsuse to locate businesses online is through and degrees.search engines such as Google (http:// • Past and present associations and or-www.google.com), Lycos (http:// ganizations you belong to that arewww.lycos.com) and Alta Vista (http:// relevant to your business.www.altavista.com), and with indexes or • Trade goods, services and products.directories such as Yahoo! (http:// • Employees’ names, for example, if awww.yahoo.com). Search engine informa- customer might want a specific per-tion is accessed by words or phrases; in- son to cut her hair or drive him todexes use subjects and categories. To list the airport. Betty Sue’s Airport Vanyour site with search engines, you need to Service, for example, lists the yearsubmit your website address to them along and model of the vans in her fleetwith other information about your busi- among her key words, along withness. Dozens of businesses now exist the names of her drivers, in caseonline that submit your website address to someone wants a specific driver“thousands” of search engines for a mod- whose name they remember.est fee (though, since most people use one • Relevant numbers: the number ofof about ten popular search engines, sub- years you’ve been in business, yourmitting your site to thousands of them is of birthdate, your address and zip code,questionable value). your phone number with area code Because search engines use key words and your business hours if relevant.to find you, you need to make a list of key Use a thesaurus to find synonyms to allwords and keep adding to it as you think the words you conventionally use to de-of new ones. One friend who sells a scribe your business. Synonyms for “en-menopause product used very general ergy,” for example, are power, force,words, such as “women,” “health” and “fit- vigor, propulsion and thrust.ness.” These words were too vague and
  • MARKETING ON THE INTERNETS 11/ 1 72. Get Recommended on your Web address is printed or posted, Other Sites and if it changes, make updates quickly. We highly recommend registering a do-Other websites may link to your business. main name in order to avoid any problemsFor example, publishers of vegetarian with having to change your Web address.cookbooks sometimes list vegetarian retail If, instead, your address is provided to youmarkets by location. So Green Pastures by your Internet access provider—for ex-market in Boulder, Colorado, is listed and ample, your business called Cactus Cre-gets automatic referrals from people who ations has a website hosted by Mindspring,select the listing for Boulder. Green Pas- so its URL is www.mindspring.com/tures, which carries a unique line of cactuscreations—you run the risk of hav-French homeopathic remedies, also has an ing to change your Web address if youautomatic referral from the page of the leave that access provider or if it goes outFrench Wholesale Company, listed under of business. Address forwarding programsBoulder. are still too unreliable to be wholly effec- tive; it’s better to take care of it yourself. This is also something to keep in mind The Old Ways Are Still the Good when choosing an access provider: Pick Ways. People find out about one that seems as if it will be around for awebsites the same way they hear about while.other things—through personal recom-mendations. According to Business Weekmagazine (July, 19, 1996), word of mouth 4. Pay for Referralsis what gets most people to check out asite. “With 90,000 [websites] to choose The Internet has many people and busi-from, a lot [of people] use good old-fash- nesses offering to link to your site for aioned word of mouth,” concluded the fee. When should you pay for referrals?magazine. Analyze it the same way you analyze your listing in the Yellow Pages: See what simi- lar people in your business are doing, how3. Distribute Your Web Address long they use it, and what messages they present to the public. If you decide to tryInclude your Web address on all printed, it, start with a limited-time arrangement sopublished and public material, even your you can see what type of customers yououtdoor sign if you have one—it’s at least get and whether you have the facilities toas important as your phone number and handle their inquiries.mailing address. Keep a list of the places
  • 11/18 MARKETING WITHOUT ADVERTISING Most important, see what company you ers of new technology, before governmentwould be keeping. To be in a referral cat- regulation is established, often include aegory offered by less than desirable large volume of snake oil peddlers. Extrapeople can be very harmful. The early us- caution is needed. Marketing Manners on the Internet It is a big negative to send unwanted elec- People are very wary of having their Web tronic mail. Doing a mass mailing is called use patterns followed on the Internet or spamming and is the Internet version of their e-mail addresses given out. Anything sending junk mail. You will quickly be- you can say on your site to reassure them come hugely unpopular among online folks that your business does not engage in such if you do it. practices is a plus. Many businesses have a Don’t assume that someone who checked policy statement on their website. out your website wants to hear from you— Here is an example of a good privacy ask before you send. When you get a policy from Book Passage in Corte Madera, person‘s name and e-mail address, clearly California: explain that you might e-mail something, or “We never sell, rent, or give away any in- ask permission to send something such as formation about our customers. an e-mail newsletter. When you do send “We use the least intrusive methods pos- something, get permission to send more. sible to gather from our customers the infor- Don’t treat your list like a traditional mar- mation we need to operate our business. keting mailing list, to which you might do a (And we probably should add a third mailing four times a year. Never do the point:) negative option of sending and then requir- “If you show up with a subpoena looking ing the recipient to request that you remove for a customer’s buying history, be pre- his or her name. pared for a battle.”
  • MARKETING ON THE INTERNETS 11/ 1 9 Internet Pricing G. Active Internet MarketingFixed pricing, the kind we are most famil- Actively marketing your business onlineiar with, where the seller has a posted can include a wide range of activities fromprice and that is the only price the seller doing an online newsletter with feedbackwill accept, was developed in department from subscribers to participating in onlinestores in the 1850s. It replaced haggling discussions to running online games withabout price and allowed store owners to thousands of simultaneous participators.hire employees who were not family The main point is that active online mar-members. The owners kept their eyes on keting strategy looks for opportunities andthe cash register to make sure the em-ployees weren’t cheating. We now accept reaches out to potential customers in anfixed pricing; it has been important in cre- endless variety of ways. Basically, this typeating an industrial society. of marketing is above and beyond simply Among the major industries that first de- maintaining a site (as wonderful as thatviated from fixed pricing were the airlines. site may be). Still, there are many simpleNow, no one on a single airplane has nec- ways of doing so.essarily paid the same price as anyone Participating in discussion groups andelse. Early bookers and groups get low bulletin boards online is a great way to getprices and late bookers get high prices. the word out about your business. OfThere are also frequent flyer upgrades and course, it’s essential that you participate inother perks. This deviation is called mar- the spirit of the discussion group and notginal pricing or dynamic pricing. treat the group as purely a marketing op- The Internet has already seen a propen- portunity. People participating in onlinesity for dynamic pricing. You may betempted to use dynamic pricing, especially discussion groups on subjects related tofor sale goods, time-sensitive goods and your business constantly ask questions andservices for loyal customers; in these cases, ask for recommendations about productsdynamic pricing can make a lot of sense. and services. For example, a novice skierBut be very careful that your dynamic pric- looking for equipment might ask othersing also makes sense to your customers. taking part in an online discussion for theThe Internet is a miracle machine for name of a helpful ski shop in the Bostonspreading negative evaluations. If your area. To get such referrals, you, a friend, alow-priced product is inferior, word satisfied customer or an employee must bespreads fast. If you charge some customers an active participant in the discussionhigher prices based on their prior habits at group.your site, consumers can’t be expected to If you have an active website of yourunderstand your pricing policies. The own, it’s a good idea to join an onlinenegative word of mouth that will likely en-sue can spread rapidly—as it already has newsgroup or two and participate in ongo-for several major Internet sellers.
  • 11/20 MARKETING WITHOUT ADVERTISINGing discussions about topics that relate to of DNA typing, got an invitation to be anyour business. A newsgroup is an online expert witness in a trial in Hawaii whencommunity of people who are interested the trial attorney found out about himin a specific topic. They tend to have a from a colleague’s referral in an online dis-narrow focus and can be very useful in cussion group among lawyers about thecertain fields. Your knowledgeable contri- Hawaii case. The attorney knew of Billingsbutions will help you become known as because he is a lawyer who participates inan expert in your field. These newsgroups online discussions about genetic issues, in-(there are thousands) are linked together; cluding problems with DNA typing, whereyou can find ones you may be interested Billings is a highly respected contributor.in through an online network known asUsenet. When you’re ready to post a message or Content-Sharing as an Activequestion on a newsgroup, check out its Marketing StrategyFAQs (Frequently Asked Questions) before One of the active marketing strategiesjumping in. It’s bad form to advertise your Nolo.com uses is to license its content togoods or services, but if you just wrote a other carefully selected companies. Thisnew program for cabinetmakers, a one- arrangement sometimes includes off-linetime post is fine because the other people content licensing as well. Obtaining con-in your cabinetmaker newsgroup would tent (through a license, generally) from abe interested. trusted name such as Nolo is a huge ben- Subscribing to a listserver, a kind of efit to any business, whose customers willelectronic newsletter dedicated to a certain appreciate the inclusion of high-qualitytopic and delivered via e-mail, is another content, which builds trust for the entireway to let people know you are around. website. Nolo has been in business for 30Subscriptions are usually free. years and its reputation is based on being Tom Hargadon, who runs a multimedia trustworthy and offering consistently reli-newsletter and consulting business, regu- able content.larly gets new subscribers and clients from Nolo also has an arangement with Ya-people who know about him from the hun- hoo!. Nolo allows Yahoo! to use certaindreds of cogent and valuable comments he Nolo content, and Yahoo! attributes themakes in online discussion groups. content to Nolo and links back to the The better you are known, the more rec- Nolo site, which enjoys increased traffic.ommendations you will get. And online, Nolo.com has 12,000 users a day, andrecommendations travel with lightning generates one-third of its revenue online.speed across the country. For example,Paul Billings, a Palo Alto, California physi-cian and an expert on the social problems s
  • Chapter 12 Designing and Implementing Your Marketing PlanA. Your Marketing List: The “Who” of Your Marketing Plan ............................. 12/2B. How to Evaluate Your List ............................................................................ 12/3C. Marketing Actions and Events: The “What” of Your Marketing Plan ............ 12/5D. Direct Marketing Actions ............................................................................ 12/7 1. Sampling as a Direct Marketing Technique .............................................. 12/8 2. Giving Customers a Little Extra ................................................................ 12/9 3. Product Demonstrations as a Direct Marketing Technique .................... 12/12 4. Classes as a Direct Marketing Technique ............................................... 12/13 5. Follow-Up as a Direct Marketing Technique .......................................... 12/14E. Parallel Marketing Actions ......................................................................... 12/15 1. Samples and Offers as Parallel Marketing .............................................. 12/17 2. Demonstrations as Parallel Marketing .................................................... 12/18 3. Follow-Up as Parallel Marketing ............................................................ 12/19F. Peer-Based Marketing Actions .................................................................... 12/21
  • 12/2 MARKETING WITHOUT ADVERTISINGA marketing action plan for wants to expand is an up-to-date master your business should include list of customers, prospects, suppliers, three basic elements. The first friends and people in the community whois the statement describing your business, can help spread the word. To create suchwhich you completed in Chapter 7. Now it’s a list, start by gathering all the names ontime for you to design the next two, which your invoices, ledger cards, mailing lists, e-we call the who and what of your market- mail messages, personal checks you haveing effort. Let’s start by briefly defining the accepted, customer sign-up sheets, Palmrather shorthand terms “who” and “what”: Pilot, etc. Some businesses add to their • The who of your action plan is sim- lists by offering a prize and holding a ply a list of the people you already drawing; the entry forms include the know who are in a good position to customer’s phone, e-mail and postal ad- recommend your business to their dresses. This technique is particularly ef- friends and acquaintances. fective at trade shows, malls and other • The what of your action plan is the locations where a large number of inter- list of marketing actions and events ested people are gathered. We feel it is im- that will stimulate the people on portant to make it clear when you add your list to actually make recommen- new people to your list, that they will from dations. time to time receive e-mails and mailings. Before we get into specifics, be aware There is no benefit in spending postagethat your general objective in designing a and adding to junk e-mail by sending in-good marketing plan is to give your cus- formation to people who aren’t interested.tomers, associates and prospects a sense Your marketing list should includeof participation in your business. When names, e-mail and postal addresses, phonedone well, this allows you to share your numbers, and what, if any, goods and ser-sense of excitement at the same time that vices the customers received, along withyou enhance trust in your business. If you appropriate dates. Where possible, and de-can accomplish this you can significantly pending on your business, include person-increase the desire and willingness of a alized comments and notes as to wholarge number of people to recommend referred the people or how they heardyour business to their friends. about you. The general rule is that if you deal with a few important customers you should go out of your way to be personal,A. Your Marketing List: The but if you sell a lot of goods and services “Who” of Your Marketing Plan in small units, collecting extensive per- sonal information isn’t feasible.One of the most important marketing toolsavailable to the small businessperson who
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 3 Whatever method you currently use for Throw a Rolodex Party. One of thestoring your list, we recommend transfer- most ingenious ways we’ve encoun-ring relatively small lists—fewer than 300 tered to add names to a list was a “rolodexnames—to index cards and alphabetizing party.” Developed by Joan McIntosh forthem with one name per card, even if do- Dean Sautner, who designs and builds cus-ing this duplicates a computer list. The tomized shelves and desks for computers,physical presence of this box of cards is a she invited her trusted friends to a partypowerful reminder to use it. However, if and asked each to bring their rolodex. Atyour list is over 300 names, then a com- the party, she provided envelopes contain-puter database will be necessary. ing brochures describing Sautner’s prod- Here is a sample index card that has ucts. Joan asked her friends to address atworked for businesses we advise: least six envelopes to people who might be interested in the furniture and to write a short personal note on the121098765432109876543210987654321SAMPLE INDEX CARD front flyer. A good percentage of121098765432109876543210987654321121098765432109876543210987654321 the people contacted this way121098765432109876543210987654321 LAST NAME (OR FIRM)121098765432109876543210987654321 responded favorably. FIRM (OR CONTACT)121098765432109876543210987654321121098765432109876543210987654321 CUSTOMER [ ] SUPPLIER [ ]121098765432109876543210987654321 PROSPECT [ ] OTHER [ ]121098765432109876543210987654321121098765432109876543210987654321 B. How to Evaluate121098765432109876543210987654321121098765432109876543210987654321 PHONE121098765432109876543210987654321 Your List ADDRESS121098765432109876543210987654321121098765432109876543210987654321 FAX121098765432109876543210987654321 The purpose of this checklist E-MAIL121098765432109876543210987654321 is to determine how much, if121098765432109876543210987654321 DATE CARD WAS CREATED OR UPDATED121098765432109876543210987654321 any, work is needed for your121098765432109876543210987654321 list to be usable.121098765432109876543210987654321 back121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321 REFERRED BY121098765432109876543210987654321 DATE AND INFORMATION ON TRANSACTIONS121098765432109876543210987654321121098765432109876543210987654321 PERSONAL COMMENTS121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321121098765432109876543210987654321
  • 12/4 MARKETING WITHOUT ADVERTISING Your Marketing List Your marketing list was last updated: NEEDS MORE WORK 6 months ago 1 year ago 2 years ago 3 or more years ago ADEQUATE EXCELLENT A complete list of your customers, suppliers, prospects, and business associates, relevant aquaintances and peers is available for an immediate mailing, phone invitation or e-mail contact. YES NO If Yes, how current are your addresses? customers suppliers prospects business associates acquaintances peers How current are your phone numbers? customers suppliers prospects business associates acquaintances peers How current are your e-mail addresses? customers suppliers prospects business associates acquaintances peers If No, how long would it take you customers _______ hours to make a list? suppliers _______ hours prospects _______ hours business associates _______ hours acquaintances _______ hours peers _______ hours Starting now you are compiling checks these records from… customer records form letters supplier records organization membership lists your personal address book e-mail messages personal organizers (Palm Pilots, etc.) other _______________________________
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 5C. Marketing Actions and • Parallel Marketing: The dance school Events: The “What” of Your selects people from its marketing list and invites them to be guests at a lo- Marketing Plan cal performance by a touring dance company known to do innovativeOnce you generate a list of your marketing work.community, the next step is to plan mar- • Peer-Based Marketing: The danceketing actions. These actions should gener- school gives a reception for a visitingally fall into three categories: out-of-town artist/performer and in- • Direct, vites the people on its list, including • Parallel, and a wide cross-section of the local • Peer-based. dance and arts community. Together, these make up the “what” of All businesses should carefully consideryour marketing plan. Let’s first define these each of these broad community-basedterms by looking at how a small school of marketing approaches. Of course, depend-modern dance might use each to mount a ing on your business, there are many—of-good marketing effort designed to stimu- ten hundreds—of possibilities in each oflate personal recommendations. (The next the three categories. Often, particularlychapter gives several examples from each good ones become annual events that cus-of these categories to show how year-long tomers and friends look forward to. Christ-marketing plans are actually planned.) mas parties and business open houses are • Direct Marketing: For a dance a popular version of this type of market- school, a good illustration of direct ing. So are free ice cream cones for marketing is holding a performance children’s birthdays from the local ice by advanced students at the school. cream shop. But because they are so com- All students would be encouraged to mon, and because they are not designed invite their friends and family, and with intentional information content, they the school would send a notice to are not nearly as effective. school alumni and friends and ar- range for appropriate publicity in the dance community.
  • 12/6 MARKETING WITHOUT ADVERTISING Marketing for Wholesalers Who Use MiddlepersonsMany businesses have no direct contact part by softer, higher quality imports. In-with their final buyers. If you use represen- stead of closing down, as many othertatives (reps) or sell through distributors and woolen mills have done, it reversed its de-retailers, you will probably want to direct cline by eliminating all of its reps and rely-most of your marketing activity at the ing solely on one salesperson plus anpeople who actually buy from you. How- innovative marketing strategy. Part of thisever, if an opportunity ever comes up to strategy consisted of inviting customers todeal directly with the final buyer, we advise visit the factory and to stay in a local 300-you to take it. This doesn’t mean that you year-old inn. People loved the idea andshould ignore your reps, just that you came from as far away as Japan andshould try to develop alternative marketing Canada.strategies. The owners of the mill introduced each If your business must use reps because customer to the women on the productionthat system is built into the industry, try to line, allowing time for informal interactionhelp your distributors sell more of your as well as in-depth discussion of the pro-product. One example is a jeweler we cess of turning wool into fabric. The cus-know who sells primarily through sales reps tomers found that the factory could create abut still regularly sends the buyers at all her far wider range of custom fabrics than theymajor store accounts a newsletter. The had realized. Several customers who usednewsletter is primarily graphic; one issue the fabric in the upholstery business wereshowed some unusual contemporary fash- able to redesign some of the material toions and how her jewelry is worn with better fit their needs. And by changingthem, and another highlighted interesting some procedures, new markets were cre-window and counter displays featuring her ated in the sporting goods field. This in-jewelry. In one issue, she included a small crease in business could not havecard with a chart that converted millimeter happened had the mill worked exclusivelymeasurements to the 1/16-inch measure- through middlepersons.ments used in the jewelry business. Because We believe this lesson is valuable to al-the newsletter complemented the activities most every business. Your customers, espe-of the reps and didn’t threaten them, the cially since they are in business themselves,reps were happy to have the supplier ac- know what they need better than any reptively helping in the sales process. (who is, after all, in the “rep” business), and You may decide, however, that you can often better than you do.do better without reps. For example, a Sometimes the problem of middlepersonswoolen mill in western England faced a di- is difficult to avoid. Frances Peavey pub-sastrous decline in its business, caused in lished a book, Heart Politics (New Society
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 7 Marketing for Wholesalers . . . cont’d D. Direct Marketing Actions Press, 1985), about community organiz- Once you have a list of clients, suppliers, ing for social change. This is the kind of friends and prospects in front of you, you book that rarely gets widely reviewed. In may feel the urge to pick up the phone, other words, book reviewers—the send a note or visit each one to tell them middlepersons of the book world— more about your business. For most busi- weren’t likely to be of much help if she nesses, following that impulse would be a simply mailed out review copies. Frances primitive and impractical form of direct circumvented this bottleneck by doing marketing. The task of this section is to get her own publicity and direct selling to you to refine this idea so that you can con- churches and peace groups. In addition, tact the people on your list to tell them however, Frances also put some thought about an event, action, product or service into how she could get the middlepersons that they will welcome hearing about. to pay attention to her product. Where appropriate, the most direct and During the annual American Booksell- effective marketing stimulus is to contact ers’ Association convention, which most the persons on your list by telephone or in major book reviewers from all over the person to inform them of some new offer- country and close to 20,000 book indus- ing. If your information is genuinely useful, try people attend, Frances got a part-time this approach is usually appreciated. An job as a taxi driver. She kept her cab in example is a fancy clothing boutique that front of the convention hall during the en- calls the people on its list to tell them tire week of the convention, making it a about a luncheon fashion show. point to get into conversations with pas- Many businesspeople are understandably sengers about her books. A few of these uncomfortable phoning or otherwise di- were reviewers, and many others knew rectly contacting customers. They feel that reviewers and were so struck by the cre- if they offer a good service or product, ativity of her approach that they provided people should appreciate them so much introductions. Frances met more than a that they will seek them out. Often too, dozen book reviewers, representing major there is the fear of being rejected. The real- newspapers as well as a few key maga- ity, of course, is that any business is only a zines. They all promised to review her small item in the busy life of its customers book. Most of them did. and can easily be overlooked. You can test this on a small scale for yourself; call ten of your customers and tell Let’s now look at each of the categories them about something that is of benefit toin more detail to help inspire you when them. Chances are they will be happy toyou create your own list of actions. hear from you and will tell you so.
  • 12/8 MARKETING WITHOUT ADVERTISING1. Sampling as a Direct Marketing customers to nibble. To reach large Technique numbers of new customers, regularly contribute your special concoctions atIf you offer a quality product or service, community events. Bill’s Farm Basketone of the best marketing strategies con- in Sebastopol, California, offers asists of offering a potential customer a wide assortment of fruit, veggies andsample. We have all found samples of other goodies. This popular roadsidetoothpaste, shampoo and soap in our mail- market recently added a deli, and asboxes. If the sample works to our satisfac- customers wait at the check-outtion, we may well buy the product, even if counter they tempt them withthis means switching brands. hummus and crackers, salsa and This sort of large-scale sample distribu- bread or whatever new item theytion can often be a very effective marketing have decided to add to their selec-tool, but it is obviously way over the bud- tion. And you don’t have to feel shyget of the ordinary small businessperson. about seconds and thirds; they en-With a little imagination, however, you can courage their customers to really en-come up with smaller-scale, targeted sam- joy their products. No wonder Bill’s ispling ideas to let people on your action list a favorite roadside stand of Tom Pe-know what you have to offer, and do it at ters, author of The Management Ex-a very reasonable cost. For example, we pert.have a friend, Clark Herz, who offers free • A catering business can invite its cus-foot massages at the county fair. Tired tomers to drop by for a food tasting.tootsies are soon rejuvenated, and a whole It might offer five variations on a des-new group of people are introduced to sert it is contemplating serving as partClark’s massage business. of its dinner menu and take a vote as Here are a few illustrations of how to to customer preference. Presumably,creatively use sampling techniques at a if the desserts are good, a number ofmodest cost: the people who attend will call the • If you are in the landscaping busi- caterer for future events and feel con- ness, offer to demonstrate how your fident recommending it to friends. new weed-whip can spiff up a yard • In Japan, department stores generally, in short order as part of clean-up and cosmetic sections always, include duty at a local church or community a small sample as a gift for customers center. with each purchase. All sorts of small • The retail food business is a natural businesses can use this technique to for samples; it’s wise to have small introduce customers to new products bits of food regularly available for at relatively low cost. Indeed, if you
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 9 can get the cooperation of your sup- selling them a jar of her face cream (which, pliers (who, after all, are interested in incidentally, was made in a converted increasing sales of their products), stable by her Uncle John). you may even be able to provide Picking the best sample from your busi- your customers with small quantities ness is often an act of creative inspiration. of a new product at no cost to you. It requires matching the customers’ inter- • A tapestry weaver might send out a ests with something you have to offer. sample of a new “rough-knotty” yarn Think about what aspect of your business that he is incorporating in new de- you can share with others at a reasonable signs. cost that is likely to entice people to want • An educational game and curriculum more. Converse Shoes, an athletic shoe designer could send a quiz based on manufacturer, for example, often provides one of her new products with the of- “test” shoes in popular running areas. It of- fer of a prize to anyone who answers fers a one-hour “sample,” which is a great it correctly. attention-getter and a real service. What • Welcome Wagon-type groups can be better way to see if a pair of shoes is right a good, relatively low-cost marketing for you than to actually run in them? If you tool to reach people new to your like the Converse shoe, you get a discount area. Offering a free sample or intro- coupon redeemable at local stores. ductory discount this way is appro- priate if new residents are particularly likely to need your product or ser- 2. Giving Customers a Little Extra vice. • America Online does mass mailings Not so many years ago, when you pur- of free, easy-to-use software and of- chased a dozen rolls or pastries at a bak- fers free access time to encourage ery, you got one free. In some places, potential customers to use its service. smart bakeries still give their customers a Unfortunately, some businesspeople tend baker’s dozen. Similarly, See’s Candy, anto dismiss sampling as a marketing tool be- old-line West Coast firm that sells wonder-cause they don’t think it’s sufficiently so- ful candy at a fair price, always gives aphisticated. Consider the story of Estee purchaser a free piece of candy on theLauder, founder of the largest family- spot.owned cosmetics company in the world. In both instances, the point is the same:When Lauder was starting her business in a good customer gets a tangible thank you.the 1930s, she stopped people on New Being generous is a wonderful way to say,York City streets and offered to make them “We appreciate your business. Please comeup then and there. She usually ended up back.”
  • 12/10 MARKETING WITHOUT ADVERTISING Another form of giving a little extra is • A lawyer who specializes in helpinglooking upon your business as part of a small businesses sends a letter to hercommunity. Every business has a commu- network of clients and friends sayingnity, but in some businesses customers are that, in September, she plans to con-encouraged to be part of that community centrate on incorporations becauseand feel almost part of an extended family. her new computer program allowsFor example, nowadays coffee houses her to achieve substantial efficienciesabound. The reason why some of these es- by pre-programming the standardtablishments have an incredibly loyal clien- (“boilerplate”) language. As part oftele is that customers trust the business for “incorporation month,” she not onlyall of the reasons we have discussed in this offers a free (or low-cost), one-daybook and they have decided to “adopt” it. seminar on the pros and cons of in-Customers proudly invite their friends as if corporating, but also reduces her nor-they were inviting them into their own mal incorporation fee by $100 to passkitchen and feel almost proprietary about along the savings a volume approachthe business. allows. A good example of business as extended • A plumber gives every customer afamily is Caffe Trieste, a flourishing busi- bottle of liquid drain cleaner as partness tucked away on a corner in North of house calls.Beach, the old Italian neighborhood of San • A shoemaker includes a sample sizeFrancisco. One thing that sets it apart from tin of shoe polish with every majorother (often fancier) cafes in the neighbor- repair job.hood is its friendly, “family” atmosphere. • A one-hour film developer sells filmOn Saturday afternoons Caffe Trieste is to customers at a wholesale rate.jammed with customers who come to hear • A tire service sends customers asome of the regulars—friends and family of simple tool designed to measurethe owners—sing everything from Italian tread wear, along with an announce-folk songs to Broadway hits. Audience par- ment of a sale on new tires.ticipation is encouraged, and it’s more like • An accountant sends out an inexpen-going to a party than to a restaurant. sive financial record-keeping book to Giving a little extra to good customers all his clients.can build customer trust very quickly. Ev- This list could be nearly endless. With aeryone likes a good deal, and many will little creative thinking, every smallpass on the good news to their friends. If businessperson can use discounts, smallyou don’t run a retail business, you may be gifts or extra services to make good cus-saying “Sure, but this sort of technique tomers feel appreciated. One good waywon’t work for me.” Nonsense. Let’s look many businesses do this is through the useat a few examples:
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 1 1of punch cards or tickets allowing custom- Of course, punch cards and couponsers to get one item free whenever they work better in some businesses than oth-buy ten. We are very loyal to a video ers, and are clearly inappropriate in a fancyrental shop and a take-out pizza place that restaurant where people expect to pay welldo this, and one of our editors brags about for exquisite food and service. However,a children’s shoe store that has the same even in the most expensive gourmet res-policy, but with the nice little twist that taurant where diners don’t worry about thethey also keep the records of purchases number of zeros on the bill, a little extra isfor you. And we know a nice little Japa- appreciated. For example, a friend reportsnese restaurant in San Francisco that gives having a dinner at Masa’s, one of Sancustomers a Japanese coin good for a free Francisco’s loveliest and most expensiveorder of sake at the next visit. restaurants. This party was hosted by an- Osmosis, the enzyme bath and massage other friend who was treating the entirebusiness mentioned in Chapter 7, gives a group to celebrate his big promotion. Thebirthday card that you present within 30 left side of the menu contained a numberdays of your birthday for you and your of wonderful entrees as part of a completeguests to receive 20% off all treatments. dinner. As mouth-watering as this list was,And Pastorale, the retail store with a focus however, the “grass is always greener”on natural fibers (also mentioned in Chap- phenomenon of human nature inevitablyter 7) sends a card at Christmas to the ap- caused some of the party to begin fantasiz-proximately 13,000 people on its list ing about how scrumptious some of the àinviting them to come in for a free orna- la carte items on the other side of thement. About 600 people bring in the card menu were sure to be.each year; the ornaments are of the high- Finally, the host beckoned the waiter andest quality and have become a tradition in asked if substitutions were allowed, fullythe community. expecting that the answer would be no, as it usually is. Much to everyone’s surprise, the waiter said it was Masa’s policy to offer its customers the best eating experience possible, and that almost anything on the menu could be substituted for anything else. From then on, our friend reports the meal was a terrific success, with one of ev- erything ordered, bites shared, and every- one getting a taste of his or her favorites. When the last bite was eaten, sip of wine
  • 12/12 MARKETING WITHOUT ADVERTISINGdrunk and the bill paid, everyone felt that as would be the case if a tax accountant re-they had been treated wonderfully. ferred his clients to a reliable computerized One of the most ingenious of all fair bookkeeping service that offered them aprice techniques we have encountered slightly discounted hourly rate.comes from Tokyo Hands, a store in Tokyothat sells hobbies, crafts, art supplies, gar-dening tools, auto supplies and office and 3. Product Demonstrations asbathroom goods, each on a separate floor. a Direct Marketing TechniqueA customer who buys office supplies onthe fifth floor is given a 20% discount cou- Product demonstrations can make the dif-pon good for that day for any art supplies ference between success and failure foron the third floor. If he takes advantage of many small businesses. For some, this mar-the offer, he is given another discount cou- keting technique offers the only cost-effec-pon good that day in a related department. tive way to make people aware of whatIn short, each department gives a discount they have to offer. Here are a few ex-coupon for another department that a per- amples of successful demonstrations:son who patronized the first would likely • An interior decorator, Tony Torrice,be interested in. invited his list of builders, architects Of course, one reason why this is such a and developers to a house where hebrilliant marketing idea is that the customer had just installed a speciallyis already in the store. Money spent to en- equipped bathroom for a handi-courage customers to buy more when they capped client. No amount of wordsare already on the premises is, of course, (whether in the form of an article orfar more cost-effective than is money spent even a direct conversation) couldto get them there in the first place. have demonstrated the unique fea- Incidentally, use of this sort of discount tures of this room as well as seeing itcoupon technique need not be limited to first-hand.stores with many departments. Any group • A contractor had a wine-tasting eventof retail businesses located in a relatively at an office where he had designed asmall area which appeal to similar types of skylight in conjunction with mirrorscustomers can use it effectively. For ex- to bring light to a particularly darkample, a plant nursery might give its cus- area of the room. Actually experienc-tomers a 20% discount coupon good that ing the space allowed many of theday at a neighboring lawn furniture store, people present to see how this kindand vice versa. And the same principle, of skylight could improve their livingwith perhaps a little extension of the time and working spaces.factor, can be used by service businesses,
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 1 3 • A rug manufacturer invited his cus- their cameras. Stores that don’t provide tomers to observe one of his master these instruction classes are missing an ob- weavers at work on a huge loom so vious marketing technique. people could gain an insight into the Because business benefits from selling all rug-making process. He also dis- sorts of new product developments, our played his finished rugs. society leaves much of the job of educating • The late Kaisek Wong, a woman’s consumers up to these businesses. Busi- clothing designer, had two models nesses that do a good job at education sell wearing his stunning clothes accom- more. Here are some examples of how pany him to nearly every party, din- businesses can use classes to enhance their ner and opening to which he was marketing efforts. invited. Most people loved to invite • A weight-lifting gym offers introduc- him, especially the circle of women tory instruction to its customers. who bought his clothing. • A women’s clothing store offers color • A foreign language school sent its analysis and wardrobe design classes alumni, donor and prospect list a for its clientele. one-page flyer of common phrases • An outdoor equipment store offers to for a dozen different languages and teach people how to use the equip- offered a free 15-minute telephone ment it sells. lesson to accompany it. • A word processing firm teaches its techniques for high-speed mailing list input and for doing statistical tables.4. Classes as a Direct • A school for children with learning Marketing Technique disabilities teaches parents and grandparents of students about recentIt’s often hard to remember that many developments in this rapidly chang-products and services that are common- ing field.place for us are complete novelties to oth- • A locksmith teaches businesspersonsers. The media lets us know a little about the elements that go into creating amany new developments but rarely teaches tight security system.us enough to make us willing to break old • Fireplace manufacturers have a spe-patterns and make new products part of cial opportunity to teach classes toour lives. For example, TV may tell you architects and decorators on theabout the latest digital camcorder, but it mathematical calculations necessarywon’t teach you how to operate all the set- to design a fireplace that works.tings on one. Most people learn through In addition, classes are a particularly ef-classes offered free when they purchase fective marketing technique for service pro-
  • 12/14 MARKETING WITHOUT ADVERTISINGviders such as lawyers, accountants, doc- This technique is followed by Bernardtors, designers and all sorts of consultants Kamoroff, author of the best-selling smallto keep their clients up-to-date on new de- business guidebook Small Time Operatorvelopments in their fields. (Bell Springs, 1996). Bernard (Bear to his Should you charge for these classes? It’s a friends) schedules classes and workshopstough question. Banks often offer free for small businesspersons, sometimes un-classes for their target clients, such as me- der his own auspices and sometimesdium-size businesses. One of our favorite through existing educational programslocal banks hosts a free breakfast meeting such as local college extension programs.twice a year for their business customers As part of the course, he distributes hisand invites a knowledgeable speaker to talk book to the students so that they can referto the group for an hour. Free also seems to to various charts and other information asbe the rule when it comes to classes and he goes along. He asks only that the bookslectures taught by large accounting firms be handled carefully and returned at theand pharmaceutical companies, where end of the lecture.prices are comparable from company to Because our friend Bear’s class is socompany, and mark-ups are high. In many good, one or more students always inquiresmall business situations, however, modest if they can purchase the book. When thefees—often below the cost of providing the class learns that not only can they buy theclass—are prevalent and accepted. book, but that they get a 10% discount if We have found that the key to classes is they do, as many as 75% purchase it, andnot how much you charge, but how much most ask to have their copies autographed.real value they provide your customers. Forexample, if you run a woodworking or in-terior decorating business and offer classes 5. Follow-Up as a Direct Marketing(free or not) that are little more than a Techniquesales pitch, the classes will not be well re-ceived and may even generate negative One of the gut responses of a business-comments about your business. A far better person with good marketing skills is to fol-approach is to charge a modest fee for low up with important customers to findclasses that provide excellent information out how things worked out. The simplestand training and hardly mention the ser- way to do this is to call and ask customersvices or products your business provides. If if they are happy with the product or ser-your classes are good, people will demand vice they received. Some people new toto know more about your business. When business are reluctant to ask either becausethey do, offer them a small discount and they are afraid of the answer or feel shy.you will have created a very satisfied cus- But if you don’t ask you will never know—tomer.
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 1 5and, as we discussed earlier, an unhappy • A computer-based information re-customer probably won’t tell you but will trieval service calls a day after a re-tell his or her friends. Usually a customer quested research report is sent to thewith a small complaint will be delighted for client to see if additional materialthe opportunity to tell you and will remain needs to be generated.a loyal customer. This is your chance to be your own busi- You should follow up if at all possible, ness consultant and design your own directespecially following a marketing event. The marketing plan. These worksheets are veryquestions you want answered are: important. Use every creative technique • Did your customer like your goods or you know of to write down your ideas. Eat services? chocolate if that will help, stand on your • Did it meet her expectations? head if that works for you, have a brain- • Is there anything you can do now to storming session with your associates, go increase your customer’s satisfaction? running, take a vacation—whatever it There are many ways to follow up in ad- takes—do it!dition or instead of calling. We suggest afew here, but you will, of course, want touse your own creativity to find an ap- E. Parallel Marketing Actionsproach that is appropriate for your busi-ness: In addition to direct marketing, your mar- • A friend who manufactures hand- keting action plan should include parallel made chairs sends a letter to custom- marketing techniques. Parallel marketing is ers inquiring about their satisfaction aimed at promoting your business area in with his product. He also recom- general, not just your business. Think of mends a special, hard-to-get finishing products and services closely related to oil he uses and offers to sell it to the yours or which are in some way comple- customers at a substantial discount. mentary, that you wholeheartedly recom- • A knife manufacturer offers a free mend. By telling your customers about sharpening training session to clients. these products or services, you provide a • An illumination consultant comes by valuable service at the same time you give a few weeks after a lighting job is them a better perspective about your busi- completed to see if any slight adjust- ness. It is a strong form of teaching: subtle, ments might be helpful. clear and participatory. By helping your • A humane society worker calls a customers, you make it far more likely that week after a pet is adopted to see if they will make positive personal recom- there are any unexpected problems. mendations about your business. Moon Travel Handbooks in Chico, Califor- nia, sells state-by-state travel guides for
  • 12/16 MARKETING WITHOUT ADVERTISING Designing Direct Marketing Events SAMPLES: (items or reference guides your customers would find useful) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ DEMONSTRATIONS: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ CLASSES: (re-examine your business definition in Chapter 7 to broaden the range of topics your customers and prospects are interested in) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ FOLLOW-UPS: (what related product or service delivered by mail, phone, e-mail, questionnaire or visit could make your past and present customers more satisfied with your work?) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 1 7popular tourist and camping destinations. Its cial offers:marketing is largely parallel in the form of a • A Texas dentist sends out tooth-quarterly newsletter with articles written by brushes for patients to use withouttravel experts and a website water or toothpaste while driving.(www.moon.com/catalog). One issue con- • A lawyer with a new practice sendstained articles on wineries in Texas, fashions his small business clients a copy of ain Montana and how to avoid or treat ques- booklet explaining partnership laws.tionable drinking water by a Ph.D. in inter- • The partners in an events organizingnational health. On the website are great company alert all their clients andlinks to travel resources and some of the prospects to a wine-tasting at a localbest online information that we have seen vineyard.about staying healthy in other countries. • A Spanish restaurant has regular A different approach to parallel market- drawings among customer entries foring is provided by the Stanford University tickets to local flamenco dance per-Business School, which occasionally makes formances.available guest lecturers for alumni in ma- • A stable that boards and rents horsesjor cities around the country. This is, of sends out flyers to the people on itscourse, a very traditional marketing ap- mailing list describing a non-toxic flyproach. Stanford is marketing itself to its control system offered by a localalumni, to whom it will surely appeal for company.contributions at one time or another. But • A small publisher producing booksit’s important to understand that there is no for craftspeople includes materials indirect pitch at the lectures, which provide its mailings describing useful booksalumni with a service at the same time that and resources published by otherStanford’s value as an educational institu- companies.tion is underlined. • A florist gives a customer who buys It is helpful, in developing your list of cut flowers a sample package of aparallel marketing actions, to make distinc- substance that extends the life of thetions between sampling, demonstrations flowers.and classes if only to stimulate your imagi- Each of these parallel marketing effortsnation to generate more ideas. provides useful information for customers that adds to their general expertise in the field. The dentist who sends out tooth-1. Samples and Offers as Parallel brushes is clearly broadening the knowl- Marketing edge of his patients. They learn that using a dry toothbrush is good for the gums andHere are some examples of parallel mar- can be done while driving to work, a sig-keting techniques using samples and spe- nificant departure from the “brush after ev-
  • 12/18 MARKETING WITHOUT ADVERTISINGery meal” advice which they probably dis- member the two key rules to a successfulregard as too inconvenient. demonstration: The partnership booklet gives the • Make your demonstrations fun, andlawyer’s customers, in a convenient form, a • Give real value.better perspective on the legal issues in- Here are some examples of demonstra-volved in their business organization. This tions that work as parallel marketing tech-booklet is also a way to alert them to many niques:issues (for example, what happens to the • A white-water river rafting companypartnership if one partner becomes dis- holds a demonstration of oceanabled) that they might never have recog- kayaking at a local beach.nized as concerns for which they might • A wind generator manufacturer spon-want to consult a lawyer. sors a one-day show displaying the Similarly, by inviting people to a wine most recent battery storage systems.tasting, the event’s organizers are able to • A sports club invites someone whocontact potential customers in a way that is restrings racquets to demonstrate hisfar more effective than the standard ap- technique in the lobby.proach of sending them a fancy brochure • A hair salon in Copenhagen offers itsin the mail. customers smocks to wear during The publisher is being particularly cre- their visit that are hand designed by aative by recommending books published neighboring clothing designer.by someone else in a related field. By do- • A community foundation in Portland,ing this, the publisher is saying, “I am will- Oregon, puts on a fair to which it in-ing to take your interests seriously.” vites all the local accountants, law- yers and management consultants who offer special services to non-2. Demonstrations as profit organizations. Parallel Marketing In some businesses, a demonstration is much the same as a sample or a class. TheDemonstrations are among the more inter- ocean kayaking business is an example. Itesting parallel marketing events a business normally takes a beginner about threecan offer. The color and flair they add to a hours of instruction to feel confident pad-business is often beneficial in itself. People, dling alone. When Sea Trek of Sausalito,including your employees, like businesses California, was a relatively new business inwith vitality. And of course, customers re- a new field, to entice potential customersspond positively to demonstrations that into giving kayaking a try it offered one-provide them real value. and-a-half-hour “samplers” at a nominal Depending on your particular business, fee. This demo time was credited towardit’s usually worth exploring a wide range of the minimum three hours of instruction re-demonstration techniques. But always re- quired before customers could rent a
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 1 9kayak. After the first hour, most people • A grocery store invites a producewere eager to sign up for the remaining grower to give brief talks explainingtwo hours of low-cost introductory class. how best to determine when certainMany people who completed the course types of fruit are ripe.became enthusiasts who rented or bought • A prepaid health plan offers regularkayaks from Sea Trek. In addition, Sea classes by outsiders to patients on doz-Trek also invited people in the media to try ens on health issues from “Pediatricout kayaking. If they liked their experience Emergencies” to “Oh, My Aching Back.”(which they all did) they would of coursewrite an enthusiastic article or give themtelevision coverage. Sea Trek did an excel- 3. Follow-Up as Parallel Marketinglent job of offering demonstrations as wellas educating customers. It no longer offers Follow-up as a parallel marketing methoddemonstrations, as the business has be- takes a little extra thought. In direct mar-come extremely popular. Sea Trek helped keting follow-up, you check on how theeducate customers to the point where customer has reacted to your product orkayaking is now on the cover of major service; in parallel marketing, you keepmagazines and is often recommended as a him up-to-date on an issue that is relatedway to relieve stress. to your business. This allows you to dem- The concept underlying parallel market- onstrate your genuine concern about youring is especially clear in the case of classes. customers’ needs. Parallel follow-up mar-The benefits to the business owner are keting can be as personal as a dry cleanertwofold. First, classes increase the level of asking a customer, who had an elegant op-expertise of valued customers, who in turn era costume cleaned, how his opera per-are better able and more confident in mak- formance went.ing personal referrals to their friends. Sec- By this point, you are probably con-ond, they help customers better appreciate vinced that a well-planned and thought-outthe subtleties and nuances that make your parallel marketing action or event can helpbusiness unique. you establish extra credibility in your field. Here are some examples of classes as a When you play the role of an expert bro-parallel marketing technique: ker of related activities, your customers and • A consulting firm in the field of potential customers see you as creative, policy analysis sponsors a class in a competent and caring. specialized area of agriculture where When you fill out the worksheet below, policy analysis had been effectively try to think of at least five parallel market- used. ing events and actions for each category. • A sailboat sales company sends its customers free coupons for a course in boat racing.
  • 12/20 MARKETING WITHOUT ADVERTISING Designing Parallel Marketing Events SAMPLES: (items or reference guides your customers would find useful) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ DEMONSTRATIONS: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ CLASSES: (re-examine your business definition in Chapter 7 to broaden the range of topics your customers and prospects are interested in) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ FOLLOW-UPS: (what related product or service delivered by mail, phone, e-mail, questionnaire or visit could make your past and present customers more satisfied with your work?) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 2 1F. Peer-Based Marketing when the case calls for surgery, so you can Actions help and get help from others in your field. It is often surprising to find that friendsOne of the most important things propri- and peers we know well through businessetors of small businesses can do is get to- and consider just ordinary folks are ad-gether, informally and regularly, with mired or even held in awe by others.peers. It not only provides a great source Think about peers whom you know wellof both moral support and tangible assis- who qualify as special in your community.tance, but is also a superior way to explain Don’t be afraid to define the concept ofyour business to people who can refer cus- community creatively. For example, if youtomers to you. Paul Terry, a small-business run a motorcycle shop and are friendlyconsultant, has a number of peers whom with several dirt bike racing champs, thesehe takes to breakfast or lunch on a regular people should top your list. They may notbasis to stay in touch and to make sure that be well known at the local Presbyterianthey know what direction his business is church, but they are important in the com-taking. Paul understands that these busi- munity that you care about.ness friends are an important part of his re- The key to peer-based marketing is hav-ferral base. ing these well-known people participate If you are a graphic designer, for ex- constructively in your business. If you canample, with a new business, you need to do this, you will reinforce all of the ele-meet others working in your field, espe- ments of trust we have discussed in thiscially those with established businesses, to book and, as a result, stimulate personaltell them who you are and where you recommendations. Often your friends willwork. If they get overloaded, you want be happy to help you, whether or notthem to know exactly how to refer people there is some possibility that they will ben-to you. In the real estate business it is com- efit as a result of their participation. How-mon practice to visit multiple listing homes ever, on occasion, it is appropriate to paywith other real estate agents. This an honorarium or otherwise compensatecaravanning is usually done once a week friends if their participation will involveand enables agents in an area to keep in considerable time or trouble, or if that iscontact. how they make their living. Always re- The essence of peer-based marketing is member that while you may wish to usefor you to understand your role as part of a your friendship network to help your cus-group of peers in your field and to make tomers, you don’t want to make unfair de-effective use of it. All of us have unique mands on others.contributions to make. Just as one doctor, Inviting your respected friends to recep-say an internist, can make use of a surgeon tions, coffee events, demonstrations, brief
  • 12/22 MARKETING WITHOUT ADVERTISINGclasses, book signings and other events can • A massage table manufacturer hostedbe the grounds for a whole array of mar- a late afternoon reception for the fac-keting events which need only be tangen- tory employees, suppliers and retail-tial to the business. For example, we know ers in the area, with a well-knownof events where: sports doctor as the guest. • The author of a well-known personal • A scuba diving store and school in- finance book attended a “Getting vited a marine biologist friend to Thin” class reception. brief its class at dive sites. • Several football stars attended a • A commercial insurance broker with church bazaar to raise funds for the a good consumer advocacy reputa- church’s athletic programs. tion had a reception for his friends • A business consultant for graphic de- and clients to meet Ralph Nader be- signers invited a famous architect to fore a talk Nader gave. an after-dinner reception for her cli- • A Japanese advertising firm invited ents. many of its client representatives to • A lawyer who specializes in immigra- meet and hear a brief private talk by tion law invited clients and friends to an American marketing expert on the an office reception for the Governor- subject of Silicon Valley electronics General of Hong Kong. firms.
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 2 3 Profile: Fritz MaytagIt was a perfect, beautiful day in July, and that if they came and bought it on its ownwe had taken a walk around the neighbor- right that I would feel better.hood to settle our lunch. We returned to “I just sort of had a natural instinct for athe office full of energy. There working at way to market the beer, which was first tothe computer with our friend Wayne was make a wonderful beer that we were surean honest-to-God hero—Fritz Maytag. was just superb and well made, with a true Fritz is a successful entrepreneur who story. I used to say I wanted a beer thatheads the York Creek Vineyards, which would please people here (pointing) on theproduces some of the world’s finest grapes, taste buds, but also up here in the head, youas well as the family cheese company and know. I felt instinctively that the way tothe renowned Anchor Steam Brewery. market it was slowly and gently, and let it In 1969, when Fritz bought the brewery, trickle around to get some word of mouthit was near bankruptcy. He improved the going, tell our story to as many people asproduct rapidly, using only the best ingre- we possibly could, show them the brewery.dients. He created nostalgic old-fashioned Not to advertise.... I felt that we wouldbottle labels and beautiful hand-painted stand out by not doing that....delivery trucks. The company, considered “What we did was we opened the brew-one of the finest beer-makers in America by ery night and day to anyone who wouldgourmets and drinkers alike, does not ad- come and look. We had art exhibits. Wevertise. Instead of costly ads, Maytag uses had sculpture exhibits, where we turned theten master distributors. whole brewery over to a remarkable man, In the June 30, 1985, issue of the San Ron Boise, who was notorious, well infa-Francisco Examiner is Jim Wood’s fascinat- mous, for having done a little thing called aing interview with Fritz Maytag. We have ‘Kama Sutra’ series in copper. (Lawrence)excerpted, with the newspaper’s kind per- Ferlinghetti exhibited it, and the policemission, his philosophy and strategies re- came down.garding marketing. “Anyway, we weren’t dumb. We turned “Like so many liberal art students, young the whole brewery over to him and we putpeople interested in philosophy and ideas this huge sculpture of a naked man andand religion and all that stuff, I had thought woman up on the roof where you could seethat business was dumb and ugly and dis- it from the freeway. We made the front pagehonest and just a lot of money-grubbing of the Chronicle and the Examiner. The dis-people running around fooling each other trict attorney, or whoever it was, called upand talking people into buying their dumb and said ‘Hello, is this the Anchor Brew-products. That may be one reason I’ve ery?’ ‘Yes,’ I said. They said, ‘We want tonever advertised very much. I always felt
  • 12/24 MARKETING WITHOUT ADVERTISING Before you turn to Chapter 13 and begin Profile: Fritz Maytag, continued to design your marketing plan, we wouldknow about that sculpture on the roof.’ I like to tell you about Book Passage insaid, ‘What do you want to know about Corte Madera, California, which is one ofit?’ ‘We want to know whether it is ob- our favorite independent booksellers. At ascene or not.’ I said ‘No, it’s not obscene.’ time when many independents are goingHe said, ‘Oh. Thank you.’ And he hung out of business, it appears to be thriving.up. Here is a sampling of some of its superb “We had a balloon ascension on marketing, which demonstrates how oneFisherman’s Wharf in 1966, before hot air business incorporates direct, peer-basedballoons had even been heard of, and we and parallel into its marketing mix. Bookmade the paper again. The point being— Passages offers excellent news and reviewsAnchor Steam Beer was here. We were in both hard copy and on its Web pagelocal, we were continuing and we did our (http://www.bookpassage.com). It haspackaging, labels and things, trucks, all over 50 knowledgeable booksellers to helpthose things, we did with as much care you, along with a “passion and exuberanceand sort of flair for expressing our attitude for books and writers.”toward the beer as we possibly could. We This commitment to writers and readerspurposely (made) them sort of naive and shows in the 200 or so author events thesincere. We put a long story on the neck bookstore hosts every year in addition tolabel. I always said, even if people don’t its classes, book groups and conferences.read it, they’ll get the message there is a Each Christmas, Book Passages sponsorslong story here and someday they will the Giving Tree, which provides childrenread it.” from infancy to 18 years old with beauti- fully gift-wrapped books delivered by the store.
  • DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS 12/ 2 5 Creating Community for Your BusinessMost people consider a business that they which focuses on adventure travel, featuresappreciate and respect as part of their com- online contributions of photographs andmunity. You are part of their community; commentary by recent travelers to exoticthey are part of yours. Together you can travel destinations.help make the community vital. Mistrail restaurant in Santa Rosa Califor- Nolo.com’s business is built on providing nia builds community in a variety of waystrustworthy legal information, and a major including online methods. Owner Michaelaspect of the business involves building a Hirschberg teaches a class at the local jun-community. Nolo carefully develops rela- ior college on food and wine pairing, hoststionships with other online businesses. For a special scholarship dinner called “Classexample, they license their content to in a Glass,” offers a wine seminar seriesCareThere.com, a company Nolo respects and manages many other special events alland whose website exudes integrity and featuring Sonoma County products. Ascommunity spirit. Michael describes it, “We are in the hospi- Several Internet sites have been pioneers tality business and we want people to feelin creating communities of travelers. Lonely comfortable, accepted and part of the fam-Planet Books, a series of guidebooks for ily. We have a mailing list of over 6,000low-budget travelers, was quick to establish people and we send them a newsletter ofa website to keep all of its lodging, dining upcoming events, which helps them feeland transportation reviews up-to-date with connected to the restaurant.”feedback from recent visitors. Away.com,
  • 12/26 MARKETING WITHOUT ADVERTISING s
  • Chapter 13The Last Step: Creating a Calendar of EventsA. Marketing Calendar for an Interior Design Firm ......................................... 13/2B. Marketing Calendar for Jerry and Jess’s New Chiropractic Clinic ............... 13/4
  • 13/2 MARKETING WITHOUT ADVERTISINGW e have seen many good of all the important deadlines on a large marketing plans written— twelve-month calendar, with big blocks to but very few executed. write in important details. An oversize cal-Hardworking, sincere businesspeople need endar that you can hang on the wall is ato be assured that the extra boost of en- great way to remind yourself to keep atergy needed to implement a marketing ac- your marketing efforts.tion plan based on the techniquesdiscussed in this book is well worth the ef-fort, even though: Help People Feel Comfortable • Each action and event takes time to plan and get going, and At all of the events you schedule where • Good people with wonderful busi- members of your business community nesses often forget them when busi- have the opportuanity to meet each other, ness gets busy. it is important that you help them get to- Because we tend to really focus on gether. Introduce people to each other,marketing only when business slows have designated hosts to help peopledown, it often takes a long time to get a mingle, use name tags if appropriate andgood marketing plan activated, which do everthing else you know to create adoesn’t do a lagging business much good. convivial atmosphere.We can’t emphasize this point oftenenough: The best time to market is whenyou don’t need the business. If you don’t The following detailed examples mayheed this advice and wait until business is help you envision a marketing plan thatslow, it might be too late. will work for your business. The way around this all-too-human di-lemma is obviously to plan ahead andspend time and effort doing creative mar-keting on a regularly scheduled basis. One A. Marketing Calendar forway to do this is to schedule events on a an Interior Design Firmyear’s calendar, allowing ample time be-tween events so they remain fun instead of 1. March: Open House at Greenfielda burden. Keep in mind your busiest sea- home. (Direct Marketing)sons and schedule major events well in ad- 2. June: Evening class on patio lighting.vance of these times. (Parallel Marketing) First, fill out a worksheet, like the 3. October: Demonstration at office fur-samples on the following pages, for each niture store of efficient desk lamp.event you are planning. Then make a note (Parallel Marketing)
  • THE LAST STEP: CREATING A CALENDAR OF EVENTSS 13/ 34. December: Reception for Martha 5. May of next year: Mailing about Un- Stewart’s Living’s chief graphic de- derwriters Lab approval of outdoor signer. (Peer-Based Marketing) lamp design. (Parallel Marketing) Marketing Event Worksheet #4: Afternoon reception for Bernard Mallen, chief graphic designer Event ______________________________________________________________________ for Martha Stewart’s Living magazine __________________________________________________________________________ Dec. 16 Date ______________________________________________________________________ Objective To introduce the clients and friends on my mailing list to a college friend who __________________________________________________________________ has interesting ideas about design. __________________________________________________________________________ STEPS DEADLINE 1. Set up exact date, time and location for reception. ______________________________________________________ Aug. 31 ______________ 2. Prepare draft of invitation and description of ______________________________________________________ ______________ Bernard’s recent work for review by Bernard. ______________________________________________________ ______________ Send to him and get response. ______________________________________________________ Sept. 30. ______________ 3. Arrange final details on event location, order catering ______________________________________________________ ______________ from Nancy with approximate number and price per person. ______________________________________________________ Oct. 30 ______________ 4. Print invitation, envelopes and RSVP card. ______________________________________________________ Nov. 14 ______________ 5. Confirm all details with Bernard. Send out mailing. ______________________________________________________ Dec. 1 ______________ 6. Estimate final number of guests for catering. Invite by ______________________________________________________ ______________ phone four special guests to dinner afterward. ______________________________________________________ ______________ Make dinner reservations. ______________________________________________________ Dec. 10 ______________ 7. Event. Bring name cards. ______________________________________________________ ______________ 8. Follow up by calling or e-mailing people on list to see if they enjoyed. ______________________________________________________ Dec. 15 ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________
  • 13/4 MARKETING WITHOUT ADVERTISINGB. Marketing Calendar for 7. May: Evening demonstration at clinic Jerry and Jess’s New for automobile back supports. (Parallel Marketing) Chiropractic Clinic 8. July: Evening demonstration at clinic on posture and watching TV. (Parallel Mar- 1. January: Open House for neighbor- keting)hood. (Direct Marketing) 9. August: Participate in SR sports fair. 2. January: Open House for businesses (Parallel Marketing)within 1/4-mile radius. (Direct Marketing) 10. September: Evening demonstration 3. February: Reception at boathouse for and panel discussion on posture and com-friends of the clinic. (Direct Marketing) puters. Two guest lecturers. (Peer-Based 4. March: Jerry give talk at Rotary Club. Marketing)(Parallel Marketing) 11. October: Jerry and Jess speak about 5. April: Jerry give talk at SR Community small business marketing to Chamber ofCollege. (Parallel Marketing) Commerce. (Parallel Marketing) 6. April: Jess on panel with sports ex- 12. November: Evening demonstrationperts at Women’s Service Club. (Parallel and panel discussion on posture and cook-Marketing) ing. Guest lecturer. (Peer-Based Marketing) Marketing Event Worksheet #1: Open House for neighborhood Event ______________________________________________________________________ Saturday January 20 Date ______________________________________________________________________ To let all the neighbors within 1/4 mile know where the new Objective __________________________________________________________________ __________________________________________________________________________ chiropractic clinic is located and that we are good neighbors. STEPS DEADLINE 1. Design fliers and find promotional item to attach. ______________________________________________________ Nov. 30 ______________ 2. Print fliers, have banners painted. ______________________________________________________ Dec. 20 ______________ ______________________________________________________ 3. Hire three students to deliver fliers to every home ______________ ______________________________________________________ and attach promotional item. ______________ Jan. 6 ______________________________________________________ 4. Order 2 extra video players for display in side ______________ ______________________________________________________ rooms. Order flowers and catering. ______________ Jan. 7 ______________________________________________________ 5. Get help cleaning office and putting up signs for ______________ ______________________________________________________ event. Arrange for kid care. ______________ Jan. 20
  • THE LAST STEP: CREATING A CALENDAR OF EVENTSS 13/ 5Marketing Event WorksheetEvent ______________________________________________________________________ #2: Open House for businesses.Date ______________________________________________________________________ Saturday January 27Objective __________________________________________________________________ To meet the business people in the neighborhood (within 1/4 mile radius) who can make __________________________________________________________________________ referrals. Actual event is secondary—an excuse to meet neighboring business people.STEPS DEADLINE 1. Design fliers and walk neighborhood to identify ______________________________________________________ ______________ key businesses to visit. ______________________________________________________ Nov. 30 ______________ 2. Print fliers. ______________________________________________________ Dec. 20 ______________ 3. Schedule ten two-hour segments of time for Jerry ______________________________________________________ ______________ ______________________________________________________ and Jess to distribute flier/invitation and talk to ______________ ______________________________________________________ neighboring businesses. ______________ Jan. 6 ______________________________________________________ 4. Order flowers and catering. ______________ Jan. 7 ______________________________________________________ 5. Get help cleaning office and putting up signs for event. ______________ Jan. 27
  • 13/6 MARKETING WITHOUT ADVERTISING Marketing Event Worksheet Event ______________________________________________________________________ #3: Reception at boat house for friends, past clients, fellow students from chiro- __________________________________________________________________________ practic school and suppliers. Date ______________________________________________________________________ February 19 Objective __________________________________________________________________ To let a wide range of current supporters know that we are opening a new joint __________________________________________________________________________ practice, and let each partner’s friends meet the other’s friends and associates. __________________________________________________________________________ STEPS DEADLINE 1. Set up exact date, time and location for reception. ______________________________________________________ Oct. 31 ______________ 2. Complete first draft of invitation. Prepare mailing ______________________________________________________ ______________ list from all combined sources. ______________________________________________________ Nov. 30 ______________ ______________________________________________________ 3. Arrange final details on event location; order ______________ ______________________________________________________ catering with approximate number and price per person. ______________ Dec. 10 ______________________________________________________ 4. Print invitation, envelopes and RSVP card. ______________ Jan. 15 ______________________________________________________ 5. Phone key dozen people for verbal invitation. ______________ ______________________________________________________ Send out mailing. ______________ Jan. 31 ______________________________________________________ 6. Estimate final number of guests for catering. Invite ______________ ______________________________________________________ by phone four special guests to dinner afterward. ______________ Feb. 10 ______________________________________________________ 7. Decorate room. ______________ Feb. 18 ______________________________________________________ 8. Event. Bring name cards. ______________
  • THE LAST STEP: CREATING A CALENDAR OF EVENTSS 13/ 7Marketing Event Worksheet #4: Jerry give talk to Rotary ClubEvent ______________________________________________________________________ Sometime in MarchDate ______________________________________________________________________Objective To establish Jerry as a knowledgeable health practitioner. __________________________________________________________________STEPS DEADLINE 1. Phone chair of speaker’s committee of Rotary to ______________________________________________________ ______________ arrange luncheon talk. ______________________________________________________ Jan. 30 ______________ 2. Prepare and send out press release to local press ______________________________________________________ ______________ about Rotary talk. ______________________________________________________ Feb. 28 ______________ 3. Prepare display materials for talk and hand-out ______________________________________________________ ______________ flyer for audience. ______________________________________________________ Mar. 4 ______________ 4. Phone friends who are members of Rotary to ______________________________________________________ March, 2 weeks ______________ invite them to luncheon talk. ______________________________________________________ before talk ______________ 5. Event. Have materials to demonstrate and fliers to ______________________________________________________ ______________ hand out. ______________________________________________________ ______________Marketing Event Worksheet 5: Jerry to give talk to SR Community CollegeEvent ______________________________________________________________________ April OpenDate ______________________________________________________________________ To establish Jerry as a knowledgeable health practitioner.Objective __________________________________________________________________STEPS DEADLINE ______________________________________________________ 1. Phone provost for name of the organizer of guest ______________ ______________________________________________________ lectures to arrange talk. ______________ Jan. 30 ______________________________________________________ 2. Prepare and send out press release to local press ______________ ______________________________________________________ about Community College talk. ______________ Mar. 20 ______________________________________________________ 3. Prepare display materials for talk and hand-out ______________ ______________________________________________________ flier for audience. ______________ Mar. 21 ______________________________________________________ 4. Event. Have materials to demonstrate and fliers to ______________ ______________________________________________________ hand out. ______________
  • 13/8 MARKETING WITHOUT ADVERTISING Marketing Event Worksheet Event ______________________________________________________________________ #6: Jess on panel with sports experts at Women’s Service Club. Date ______________________________________________________________________ April Objective __________________________________________________________________ To establish Jess as a knowledgeable health practitioner with __________________________________________________________________________ community ties. STEPS DEADLINE 1. Phone chair of speaker’s committee of Women’s service ______________________________________________________ ______________ Club to arrange luncheon talk. Offer to get other panel ______________________________________________________ ______________ members. ______________________________________________________ Jan. 30 ______________ 2. Find other panel members and notify Club speaker’s chair. ______________________________________________________ Feb. 15 ______________ 3. Prepare display materials for talk and hand-out flier ______________________________________________________ ______________ for audience. ______________________________________________________ Mar. 24 ______________ ______________________________________________________ 4. Phone friends who are members of the Club to invite them ______________ April, one week ______________________________________________________ to talk. ______________ before talk ______________________________________________________ 5. Event. Have materials to demonstrate and fliers to hand out. ______________ Marketing Event Worksheet #7: Demonstration at the clinic of automobile back supports. Event ______________________________________________________________________ May 25 Date ______________________________________________________________________ To make potential clients conscious of spine-related issues and to associate Objective __________________________________________________________________ spine problems with the clinic. __________________________________________________________________________ STEPS DEADLINE 1. Schedule time for demonstration. ______________________________________________________ Feb. 28 ______________ 2. Complete final draft of flier with graphics. ______________________________________________________ Mar. 30 ______________ 3. Print and mail flier. ______________________________________________________ May. 10 ______________ 4. Design and print flier and reading list on subject matter. ______________________________________________________ ______________ Order samples for display. ______________________________________________________ May 14 ______________ 5. Clean and organize clinic. ______________________________________________________ May 24 ______________ 6. Event. Have name cards. Have fliers to hand out. ______________________________________________________ ______________
  • THE LAST STEP: CREATING A CALENDAR OF EVENTSS 13/ 9Marketing Event WorksheetEvent ______________________________________________________________________ #8: Evening demonstration at clinic on posture and watching TV; suggest relevance __________________________________________________________________________ of issue to parents of growing children.Date ______________________________________________________________________ July 14Objective __________________________________________________________________ To make potential clients conscious of spine-related issues and to associate __________________________________________________________________________ spine problems in their minds with the clinic.STEPS DEADLINE 1. Schedule time for demonstration. ______________________________________________________ Mar. 30 ______________ 2. Complete final draft of flier with graphics. ______________________________________________________ Apr. 15 ______________ 3. Print and mail flier. ______________________________________________________ June 30 ______________ 4. Design and print flier and reading list on subject matter. ______________________________________________________ ______________ Order samples for display. ______________________________________________________ July 1 ______________ ______________________________________________________ 5. Clean and organize clinic. ______________ July 1 ______________________________________________________ 6. Event. Have name cards. Have fliers to hand out. ______________ ______________________________________________________ ______________Marketing Event WorksheetEvent ______________________________________________________________________ #9: Participate in SR annual sports fair.Date ______________________________________________________________________ August 8 and 9Objective __________________________________________________________________ To associate Jerry, Jess and the clinic with sports and health in __________________________________________________________________________ the community.STEPS DEADLINE ______________________________________________________ 1. Call fair organizer to make arrangements for talk and ______________ ______________________________________________________ booth. ______________ Jan. 30 ______________________________________________________ 2. Complete design of booth and sports fliers. ______________ May 30 ______________________________________________________ 3. Print fliers, paint banners and booth display. ______________ July 15 ______________________________________________________ 4. Prepare gallons of lemonade to give out at sports fair. ______________ Aug. 8 ______________________________________________________ 5. Event. Make sure booth has either Jerry or Jess at ______________ all times both days. Aug. 8-9
  • 13/10 MARKETING WITHOUT ADVERTISING Marketing Event Worksheet #10: Evening demonstration and panel discussion on posture and computers. With Event ______________________________________________________________________ two guest lecturers in computer field. __________________________________________________________________________ Sept. 4 Date ______________________________________________________________________ To let clients and prospective clients know that Jerry and Jess are current Objective __________________________________________________________________ and up-to-date about health issues. __________________________________________________________________________ STEPS DEADLINE 1. Schedule time for demonstration. Invite two friends to ______________________________________________________ ______________ be on panel. ______________________________________________________ Jul. 20 ______________ 2. Complete final draft of flier with graphics. ______________________________________________________ Aug. 15 ______________ 3. Print and mail flier. ______________________________________________________ Aug. 22 ______________ 4. Design and print flier and reading list on subject matter. ______________________________________________________ ______________ Organize details of display. Confirm with other panelists. ______________________________________________________ Aug. 28 ______________ 5. Clean clinic. ______________________________________________________ Sept. 3 ______________ 6. Event. Have name cards. Have fliers to hand out. ______________________________________________________ ______________ Marketing Event Worksheet #11: Jerry and Jess speak about small business marketing to the Chamber of Com- Event ______________________________________________________________________ merce. __________________________________________________________________________ October Date ______________________________________________________________________ Objective To establish Jerry and Jess as knowledgeable health practitioners. __________________________________________________________________ STEPS DEADLINE 1. Phone chair of speaker’s committee of Chamber of ______________________________________________________ ______________ Commerce to arrange luncheon talk. ______________________________________________________ Mar. 30 ______________ 2. Prepare display materials for talk and hand-out fliers ______________________________________________________ ______________ for audience. ______________________________________________________ Sept. 25 ______________ 3. Phone friends who are members of the Chamber of ______________________________________________________ Oct. one week ______________ Commerce to invite them to the luncheon talk. ______________________________________________________ before talk ______________ 4. Event. Have sample materials to demonstrate and fliers ______________________________________________________ ______________ to hand out.
  • THE LAST STEP: CREATING A CALENDAR OF EVENTSS 13/ 1 1Marketing Event WorksheetEvent ______________________________________________________________________ #12: Evening demonstration and panel discussion on posture and cooking. Guest __________________________________________________________________________ lecturer, Ramon Giardia, well-known local chef.Date ______________________________________________________________________ Nov. 12Objective __________________________________________________________________ To establish Jerry and Jess as knowledgeable health practitioners with __________________________________________________________________________ special knowledge about spine problems.STEPS DEADLINE ______________________________________________________1. Schedule time for demonstration. Confirm with Ramon. ______________ Sept. 30 ______________________________________________________2. Complete final draft of flier with graphics. ______________ Oct. 30______________________________________________________3. Print and mail flier ______________ Nov. 2______________________________________________________4. Design and print handout and reading list on subject matter. ____________________________________________________________________ Confirm with Ramon and find out what samples he needs ____________________________________________________________________ for display. ______________ Nov. 10______________________________________________________5. Clean and organize clinic. ______________ Nov. 11______________________________________________________6. Event. Have name cards. Have fliers to hand out. ______________ s
  • Appendix RECOMMENDED READINGBOOKS1001 Ways to Market Your Services, by Rick Getting Business to Come to You, by Paul andCrandall (Editor), (NTC/Contemporary Publish- Sarah Edwards and Laura Clampitt Douglasing, 2000). (Tarcher/Putnam Trade Paperback, 1998).Getting Publicity, by T. Fletcher and Julia Making Money in Cyberspace, by Paul andRockler (Self-Counsel Press, 2000). Sarah Edwards and Linda Rohrbough (Tarcher Trade Paperback, 1998).Small Time Operator, by Bernard Kamoroff(Bell Springs Publishing, 2000). Guerrilla Marketing Online Weapons: 100 Low-Cost, High-Impact Weapons for OnlineFinancial Troubleshooting: An Action Plan for Profits and Prosperity, by Jay Conrad LevinsonMoney Management in Small and Growing and Charles Rubin (Houghton Mifflin, 1996).Business, by Michael Pellecchia (Editor), DavidH. Bangs, Jr. (Editor) (Inc. Business Resources, How to Really Create a Successful Marketing1999). Plan, by David Gumpert (Inc. Publishing, 1996).Mastering Guerrilla Marketing, by Jay ConradLevinson (Houghton Mifflin, 1999). Running a One-Person Business, by Claude Whitmyer and Salli Rasberry (Ten SpeedPermission Marketing: Turning Strangers into Press, 1994).Friends, and Friends into Customers, by SethGodin (Simon & Schuster, 1999). Relationship Marketing, by Regis McKenna (Perseus Publishing, 1993).Principles of Internet Marketing, by WardHanson (South-Western College Publishing, Finding Your Niche: Marketing Your Profes-1999). sional Service, by B. Brodsky and J. Geis (Community Resource Inst., 1992).The World’s Best Known Marketing Secret:Building Your Business With Word-of-MouthMarketing, by Ivan Misner et al. (Bard Press,1999).
  • RECOMMENDED READING, CONTINUEDPERIODICALS & WEBSITES Marketing InkNote that several of the resources listed are $8/issuepublished both in print and on the Web, 3024 South Glencoe St.while some are available only online. Sub- Denver, CO 80222scription rates are for print editions; online (800) 749-5409publications are usually free. http://www.marketing-ink.com/American Demographics Quirk’s Marketing Research Review$69/year (12 issues) for subscriptions entered $70/year (11 issues)on Website: P.O. Box 23536P.O. Box 10580 Minneapolis, MN 55423Riverton, NJ 08076-0580 (612) 854-8191(800) 529-7502 http://www.quirks.com/http://www.demographics.com/ Web Marketing TodayGuerilla Marketing http://www.wilsonweb.com/wmt/www.gmarketing.com/ Working WomanHome Office Computing $9.97/year (10 issues)$14.97/year (12 issues) P.O. Box 3276P.O. Box 53561 Harlan, IA 51593-2456Boulder, CO 80322-3561 (800) 234-9675(800) 288-7812 http://www.workingwoman.com/http://www.hocmag.net/ Working Mother MagazineThe Industry Standard $9.97/year (10 issues)$49.97/year (48 issues) P.O. Box 5240http://www.thestandard.com/ Harlan, IA 51593-2740 (800) 627-0690 http://www.workingwoman.com/wwn/maga- zine/wm_magazine.jsp
  • HELP BEYOND THIS BOOKAfter reading this book, filling in the • a description of your business, includingworksheets, applying what you’ve learned to number of employees, range of inven-your business and thinking about the whole tory, years in business, location or facili-matter for a while, you may still have ques- ties and a photo of your product, wheretions. Author Michael Phillips will consult appropriatewith you for $180 per half hour, $360 perhour. Phone (415) 695-1591 and leave a • a brief summary of the questions you aremessage on the tape with the following asking, andinformation: • a check for the amount of the consulta-• the name and the type of business you tion. own and operate, and That’s it. Michael Phillips has consulted with• the exact time you can be called back over 800 clients in a 30-year career. If he can over the next several days. help, he will. If he can’t, he’ll say so. If you are not satisfied that the consultation wasMichael will call you collect, listen to your worth the expense, send Michael a letterquestions and discuss whether it makes sense within a week of the consultation, explainingto do a consulting session by phone. If the why. Half of your consulting fee will beanswer is yes, you’ll be asked to pick a time refunded, no questions asked. If you stillfor the phone consultation (about two weeks believe that you haven’t received yourafter the first phone call); and you’ll be told money’s worth, you can ask to have thethe cost of the consultation. In the meantime, matter reviewed by independent businessyou’ll need to send Michael: consultants Claude Whitmyer or Paul Terry of San Francisco (or anyone else you and• a copy of your answers to the Michael agree on) for a $50 fee, half to be worksheets in this book paid by you and half by Michael. If, after• your business’s most recent financial reviewing two-page letters submitted by you statement, including a Balance Sheet and and by Michael, the consultant agrees with Income/Expense, regardless of the condi- you, the rest of your money will be cheer- tion they’re in fully refunded. (Incidentally, here’s an ex- ample of marketing without advertising!)
  • WORKSHEETSPhysical Appearance That Develops TrustEvaluating Your Pricing PolicyEmployee QuestionnaireQuestionnaire for SuppliersHow Open Is Your Business?What My Business DoesThe Domains in Which Your Business OperatesDo People Know What You Do?Do You “Tell Them Yourself”?How Customers Can Evaluate Your BusinessReferralsCustomer ReferralsPhone Accessibility ChecklistMail Accessibility ChecklistWalk-In Accessibility ChecklistListing QuestionnaireCustomer Recourse Policies and PracticesYour Marketing ListDesigning Direct Marketing EventsDesigning Parallel Marketing EventsMarketing Event Worksheet
  • Physical Appearance That Develops Trust Outside Inside Sales Staff Sales Materials Product Mail Order/Online signage cleanliness clothes neatness protected answers key questions display clutter breath clutter well marked clear meaning architecture lighting teeth understandable return address exciting cleanliness smell car clean standard sizing design consistent style neighborhood spacing, general identifiable completeness dated convincing spacing, merchandise prompt labels amount of stock ADEQUATE EXCELLENT decor POORYour Business Comments __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________ __________________________ ___________________________________________
  • Evaluating Your Pricing PolicyYES NO Some customers complain about prices. Some of the trivial but necessary things I offer with my basic product or service (for example, keys, base stands, containers, refills, etc.) are priced at an amount that is more than people expect. My product or service is offered in enough different measures that by and large my customers can buy what they need. My product(s) can be bought in more than one unit of measure (bunches, pounds, bags, lugs, liters, cartons, gross, boxes). My services can be bought in time increments convenient to my customers (days, half-days, hours, minutes, etc.). My pricing practices are written down on: (flyer, price sheet, website, the wall). Any exceptions from my standard pricing practices are well explained (e.g., senior citizen discounts are stated on a sign with large type). I estimate that approximately ____% of my customers pay for more of my product or service than they really need or want, because: _______________________________________________________________ _______________________________________________________________ I estimate that approximately _____% dont buy all of my product or service that they really need because: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ My volume discounts are: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ My volume discounts are available to: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
  • Employee Questionnaire ADEQUATE EXCELLENT POORThe working conditions here are generally…The working conditions, compared to other jobs Ive had, are…Handling of serious employee problems that are brought to managers is…When most employees describe the business management they say…I know the established policy for handling employee problems and grievances. YES NO THERE ISNT ONE It is…I know the established policy for handling employee wage disputes. YES NO THERE ISNT ONE It is…I know the established policy for handling conflicts between employees. YES NO THERE ISNT ONE It is…When someone is fired most fellow workers know the circumstancesin which the employee can appeal the decision within the company. YES NO THERE ISNT ONE The appeal process is… YES NOI am paid fairly.I know what others are paid.Most employees know their jobs.Most employees understand the direction, policies and goals of the business.Comments and suggestions for improving working conditions: ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________
  • Questionnaire for SuppliersI have found in my dealing with ______________________________________________ NAME OF YOUR BUSINESSthat you and your key employees are generally: ADEQUATE EXCELLENT POORAccessible when I need you…Reliable in your payments and financial projections…Polite in your general business dealings…Reliable in doing what you promise on time…Able to handle any problems with your product and services satisfactorily…Careful and neat when it comes to recordkeeping…Generally trustworthy in all dealings…Comments:____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • How Open Is Your Business? SOME CUSTOMERS ALL CUSTOMERS ACCOUNTANT EMPLOYEES ATTORNEYWe are willing to answer the following specific FRIENDS FAMILYquestions about our business to: wages... rent... cost of goods... source of supplies... financial problems... profits and losses... specific techniques...I personally will show or explain in detail: How I do what I do... How my equipment works... How I price a product or service... How I keep track of time... How I keep track of costs...My financial statements are available to anyone YES NOwho wishes to see them...
  • What My Business DoesThe following is a definition of what my business does, in about 35 words:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • The Domains in Which Your Business OperatesThe major domains in which I operate (taken from my payables) are:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________The major domains in which I operate (from looking at checks paid to my consultants) are:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________The general functions I fulfill (the major domains in which I operate)from a customer’s perspective are:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • Do People Know What You Do?At a party, ____% of the people who hear the name and a very brief description of mybusiness will know a little about the details of what I really do. [For instance, 100%would know what a barber does, but only 3% would know that an oncologist studiestumors.]At a meeting of business people generally (for example, the Chamber of Commerce),about _____% of the people who hear the name and a very brief description of mybusiness will know a lot about it.When a potential new customer approaches, how much does he or she really knowabout what I do? Doesnt know anything Knows a little Knows quite a bit and is very confidentAmong new customers, _____% have used someone else in my field (or a similar prod-uct) before.Are there experts in my field (or closely related fields) who have had little or no experi-ence with my goods or services? YES NOList by category: ___________________________________________________________Are there specific categories of people who would have less than an average level ofknowledge about my field who might use my business if they knew more about it, suchas people who seldom travel (about the travel business), landlords, commuters, etc.?List: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________
  • Do You “Tell Them Yourself”?Do you give verbal assurance to customers about the quality of your goods or service? NEVER SELDOM OFTEN ALWAYSHow? What kinds of things do you tell customers? ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________Is specific evidence given to customers to back up this assessment?[Examples: “Call me back if you dont see a result in three days.”“Measure it before and after you put it in a cold wash to make sure it doesnt shrink.”] YES NOWho usually tells the customer? I TELL THEM SOME EMPLOYEES TELL THEM MOST EMPLOYEES TELL THEM ALL EMPLOYEES TELL THEMIs follow-up done to check new customer satisfaction? NEVER SELDOM OFTEN ALWAYSIs follow-up done to check regular customer satisfaction? NEVER SELDOM OFTEN ALWAYS
  • How Customers Can Evaluate Your BusinessMy business provides clear verbal measurements of product/service effectiveness. NEVER SELDOM OFTEN ALWAYSMy business provides training classes to new customers and prospects. NEVER SELDOM OFTEN ALWAYSMy business provides clear written measurements of product/service effectiveness. NEVER SELDOM OFTEN ALWAYSWe offer a Brochure Specification sheet Checklist Contract Informative label Questionnaire Instructions Evaluation form Worksheet Physical measurement Website Other online information (survey, newsletter, etc.)We have: Displays/models Samples/examples Photos of successful work Other evidence of quality
  • ReferralsMy business is: by:KNOWN RESPECTED RECOMMENDED Others in the same business Some Most Locals in the same business Some Most Others in closely related businesses Some Most Leaders in my business Some Most Students and former employees Some Most
  • Customer ReferralsI offer new customers the names and phone numbers of other customers. SOMETIMES USUALLYI refer customers to others for second opinions or evaluations. SOMETIMES USUALLYI have available: Printed lists of customer referrals Letters from satisfied customers Evidence of awards or certificates for my product Newsletter with customer commentsI display: Articles Photos of customers enjoying my product or service Certificates and awards Any other evidence of accomplishments
  • Phone Accessibility ChecklistWE OFFER UPDATED YEARLY White pages listing in appropriate areas Yellow Pages listing under applicable topics and in appropriate geographical areas Answering service/system with clear instructions “800” numbers Numbers listed on cards, receipts, order forms, mailers, vehicles, repair labels and publicationsMail Accessibility ChecklistWE OFFER Clear, stable address Return address on everything we distribute Mail forwarding up-o-date Personal relationship with mail delivery person to avoid mistakes Clearly identifiable mailbox, with alternative places to deliver packages and postage-due mail If in out-of-way location, maps are included in mailings
  • Walk-In Accessibility ChecklistWE OFFER Clear, distinct signs not blocked by trees Neighbors given an invitation to visit so they know where we are and what our business involves Parking available or clearly designated Safe places for bicycles Door that opens easily, bell in working order Convenient hours Convenient parking
  • Listing QuestionnaireWe are listed in: All appropriate professional journals and directories________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Our alumni organizations’ directories________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Local business organizations’ publications________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Trade associations’ directories____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Appropriate online databases________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  • Customer Recourse Policies and PracticesWe have a written customer recourse policy. YES NOOur written policy is: Given to all customers Given only upon request Displayed prominently on the premises Our policy identifies and deals with those areas and situations where customers are most likely to have problems with our goods or service. We have regular communication with our customers to be sure they understand our recourse policy and know that we implement it efficiently.A customer who complains is: Always right Almost always right Seldom right Rarely or never rightThe most common complaints involve: _____________________________________ ______________________________________________________________________ ______________________________________________________________________When the customer is right, he or she gets: Full refund or replacement when: _______________________________________ ______________________________________________________________________ ______________________________________________________________________ Partial refund when: __________________________________________________ ______________________________________________________________________ ______________________________________________________________________ We send or give questionnaires to customers to evaluate their satisfactionwith our service. _____________________________________________________ ______________________________________________________________________Our liability insurance covers the following customer problems: _______________ ______________________________________________________________________When a customer deals with our insurance company, it is: Very responsive Responsive Slow to respond Dont knowWhen the customer disagrees with our recourse offer, we have available: Appeal process Arbitration Industry established board of review Mediation Nothing Other _______________________________________________________________
  • Your Marketing ListYour marketing list was last updated: NEEDS MORE WORK 6 months ago 1 year ago 2 years ago 3 or more years agoA complete list of your customers, suppliers, prospects, and business ADEQUATE EXCELLENTassociates, relevant aquaintances and peers is available for an immediatemailing, phone invitation or e-mail contact. YES NOIf Yes, how current are your addresses? customers suppliers prospects business associates acquaintances peersHow current are your phone numbers? customers suppliers prospects business associates acquaintances peersHow current are your e-mail addresses? customers suppliers prospects business associates acquaintances peersIf No, how long would it take you customers _______ hoursto make a list? suppliers _______ hours prospects _______ hours business associates _______ hours acquaintances _______ hours peers _______ hoursStarting now you are compiling checksthese records from… customer records form letters supplier records organization membership lists your personal address book e-mail messages personal organizers (Palm Pilots, etc.) other _______________________________
  • Designing Direct Marketing EventsSAMPLES: (items or reference guides your customers would find useful) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________DEMONSTRATIONS: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________CLASSES: (re-examine your business definition in Chapter 7 to broaden the range of topics your customers and prospects are interested in) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________FOLLOW-UPS: (what related product or service delivered by mail, phone, e-mail, questionnaire or visit could make your past and present customers more satisfied with your work?) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
  • Designing Parallel Marketing EventsSAMPLES: (items or reference guides your customers would find useful) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________DEMONSTRATIONS: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________CLASSES: (re-examine your business definition in Chapter 7 to broaden the range of topics your customers and prospects are interested in) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________FOLLOW-UPS: (what related product or service delivered by mail, phone, e-mail, questionnaire or visit could make your past and present customers more satisfied with your work?) ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
  • Marketing Event WorksheetEvent __________________________________________________________________ ______________________________________________________________________Date __________________________________________________________________Objective ______________________________________________________________ ______________________________________________________________________STEPS DEADLINE ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________ ______________________________________________________ ______________
  • Index Apple Computer, 8/14A Apprentices and referrals, 8/15Accessibility and your business, 9/3–4 Arbitrariness of management, 5/8 checklists for, 9/12–13 Archer Daniels Midland, 1/7 convenience of access, 9/5–7 Armistead, Daniel, 8/12 location described on website, 11/10 Armomot, Denise, 11/6 telephone accessibility, 9/8–12 Articles about your business, 8/18Action Industries, openness program, 6/4 A Step Ahead, 6/5Adcult (Twitchell), 1/3 Authority for claims of excellence, 8/16–19ADM. See Archer Daniels Midland Auto industryAdvanced Micro Devices, 5/5 lemon laws and, 10/5Advertising pricing policies, 4/4 backfires, 1/7 Awards for your business, displaying, 8/18 branding, 1/14–15 Away.com, 12/25 dependence on, 1/8–9 dishonest ads, 1/9–12 disloyal customers attracted by, 1/8 B honest ads, 1/12–14 Banking inappropriateness of, 1/23 customer control often missing, 10/4–5 increasing budgets, 1/3–4 unique services, 7/11–12 listing distinguished from, 1/2 Bell Labs, 5/5 myths about effectiveness of, 1/3–8 Berkeley Design Shop, 7/10–11 statistics on usefulness of, 1/2 Berkeley Fish, 6/5Advice by email, 6/9 Best Companies to Work For in AmericaAdvisors, board of, 10/6 (Moskowitz, Levering, and Katz), 5/4–5Agreements, written agreements, 8/9–10 Better Business Bureau, joining, 10/7Allen/Vanness, 7/20 Bice, Jennifer, 7/14Alta Vista, 11/16 Bidding on jobs, 4/5Alumni association listings, 9/14 Billings, Paul, 11/20Amazon.com, 5/15 Bill’s Farm Basket, 12/8Ambica, 7/14 Blank, Joanie, 7/15America Online, 12/9 Board of advisors, 10/6Anchor Steam Brewing Co. Bodeganet, 11/9 advertising not used by, 1/4 Book Passage, 11/18 marketing strategies of, 12/23–24 marketing strategies of, 12/24, 12/26Anderson, Charmian, 7/2–3 Book publishing industryAnderson, Chris, 6/3–4 cash flow problems of small publishers, 5/14–15Andreeson, Marc, 6/11, 6/12 personal recommendations and, 2/4Answering machines, 9/10 Boutique hotels, 3/6Antonowsky, Marvin, 2/4 Branding, 1/14–15Aoyagi, Akiko, 7/13 British Airways, 3/4Appearance of your business. See Physical ap- Burgers’ Smokehouse, 8/3 pearance of your business Business friends and acquaintances, 5/17–19
  • 1/2 MARKETING WITHOUT ADVERTISINGBusiness names, 9/3 CustomersByerly’s, 7/19 communicating with, 8/3–5 control over pricing, 4/6–8C educating potential customers, 7/2–23 evaluation of business by, 8/13C&W Ford, 3/10 providing information to, 8/2–20Caffe Trieste, 12/10 questionnaire about communicating with, 8/5Calendar. See Marketing calendar testimonials from, 8/17–18California Raisin Advisory Board, dancing raisins Customer service campaign, 1/4 employees and, 10/7Campus Shoe Repair, 3/4 See also Recourse policyCaravan Traveling Theatre Company, 2/3CareThere.com, 12/25 DCash flow problems, of small publishers, 5/14–15Catalogs. See Direct-mail catalogs Daily Scoop, 8/18Celestial Seasonings, 5/4 Davis, Jim, 11/5Center for Traditional Medicine, 6/9 Delivery options, 9/5–6Checklists. See Worksheets and checklists DemonstrationsChiropractic clinic, marketing calendar for, 13/4–11 as direct marketing, 12/12–13City Lights Bookstore, 3/10 as parallel marketing, 12/18–19Classes and workshops Dentists, rating of, 8/12 as marketing, 12/13–14 Describing your business, 7/2–6 offering, 8/13–14 worksheets, 7/22–23Cleanliness of business space, 3/7–8 Direct communication, 8/7–10A Clean Well-Lighted Place for Books, 3/10 Direct-mail catalogs, fantasies and sales, 3/5Clients, openness with, 6/6 Direct marketing, 12/5, 12/7–15, 12/16Clutter and your business space, 3/9–10 classes as marketing, 12/13–14Cody’s Bookstore, 5/5 follow-up as marketing, 12/14–15Common Ground directory, 1/16, 1/17 giving customers something extra, 12/9–12Communication product demonstrations, 12/12–13 with customers, 8/3–5 samples, offering, 12/8–9 direct measures, 8/7–10 worksheet for, 12/16 educational measures, 8/13–14 Discounts, offering, 12/10–11 public measures, 8/10–12 Discussion groups (online), for marketing, 11/19–20 referrals and, 8/14–16 Dishonest advertising, 1/9–12Complaint handling. See Recourse policy Display of merchandise, 3/3Conferences and trade shows, 9/17–20 Dispute resolution. See Recourse policyConstruction company, domains of business op- Domain names, 9/8, 11/17 eration, 7/8 Domains of business operation, 7/7–9Consumer Action organizations, joining, 10/7 DoubleClick, 1/8Consumer Checkbook, 8/12 DrKoop.com, 2/7–8Consumer Reports, 8/10 Dutch Philips, 6/11Content sharing, 11/20 DuVall, Sam, 2/2–3Control Data, 5/5Convenience of access, 9/5–7 EConverse Shoes, 12/9Coors, union boycott against, 1/7, 5/4 EBay, 4/8Costco, advertising not used by, 1/4 personal recommendations (feedback), 2/3Counseling Center, 9/5 Educating potential customers, 7/2–23Credit card billing, 9/11 businesses in established fields, 7/10–13Cross Corporation, 10/8 businesses in new or obscure fields, 7/13–15Cummings Engine, 5/5 categories of potential customers, 7/16–17Customer recourse. See Recourse policy domains of business operation, 7/7–9
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 3 what does your business do, 7/2–6 Friends and acquaintances, 5/17–19 whom to educate, 7/15–21Educational means of communication, 8/13–14 GE.F. Hutton, 1/7 Goat dairy, 7/14800/888 numbers, 9/11 “Going postal,” 5/9–10Employees Good Guys, 7/17 complaint handling, 5/9–11 Good Vibrations, 7/15 complaints of, 5/7–9 Google, 3/10, 11/16 customer service committee of, 10/7 Grievance procedure, for employees, 5/10–11 find out what they think, 5/11–12 Grocery stores, 7/4–5 grievance procedure for, 5/10–11 Gunderssen, Lief, 11/6 hiring process, 5/7 management openness, 6/6–8 questionnaire for, 5/12 H retaining, 5/5 Hallmark Cards, 5/5 spread the word about your business, 5/3–7 Halpren, Steve, 7/14Entriken, Van, 9/8 Hansen’s Mill, 9/6Enzyme bath marketing, 7/18–19 Hargadon, Tom, 11/20Eschenbach, Michael, 11/12 Hiring, good practices for, 5/7Eschenbach Construction, 11/9 Hirschberg, Michael, 12/25Established buying habits, overcoming, 2/4–5 Hohenstein, Nan, 7/20Ethical business groups, joining, 10/7 Home delivery, 9/5–6EToys, 1/4 Homepage design, 11/11, 11/13European Sleep Works, 7/11 See also WebsitesEvent scheduling. See Marketing calendar Honest advertising, 1/12–14Exchanges. See Recourse policy Honest Business (Phillips and Rasberry), 6/3Expansion of business, handling, 2/8–9 Hospice Thrift Store, 5/3Exploitation, by management, 4/8–9 Hotels, pricing policies, 4/4Extras. See Special services and extras Hours of operation, 9/3–4, 9/6 House Cleaners, 8/9F House of Tyrol, 8/3–4 Hughes, Thomas, 11/2Fantasies and sales, 3/5–7 100 Best Companies to Work For in AmericaFax machines, 9/11 (Moskowitz, Levering, and Katz), 5/4–5Federal Express, 5/5Ferlinghetti, Lawrence, 3/10Feuerstein, Aaron, 5/6 IFeyer, Vivien, 9/19Filene’s, 4/6 Ideas, openness with, 6/11–13Financial openness, 6/3–4, 6/7 Incomplete prices, 4/3–4Finding your business, 9/3–5 Index cards, for your list, 12/3 signs, 9/7–8 Industry norms for physical appearance of busi- Yellow Pages listings, 9/8–9 ness, 3/2–4Fine Design, 3/9 Industry Standard, 8/11First Light Cafe, 9/3, 9/4 InformationFit Lab, 9/6 openness with, 6/8–9Fluegelman, Andrew, 6/12 and personal recommendations, 2/6Follow-up See also Communication as direct marketing, 12/14–15 Intellectual property as parallel marketing, 12/19 licensing and marketing, 11/20Franz Valley Gardens, 9/5 openness with, 6/11–13Freeware, 6/12 Interconnectedness of people, 5/2–3French Laundry, 2/3 Interior design firm, marketing calendar for, 13/2–3Friday’s (TGIFriday’s), 2/3 Internet marketing, 11/2–20
  • 1/4 MARKETING WITHOUT ADVERTISING active marketing, 11/19–20 forms of, 1/17–18 active strategy described, 11/2–3 Internet as Yellow Pages Plus, 11/5–6 content sharing, 11/20 questionnaire for, 9/16 licensing of intellectual property, 6/11–12, 11/20 successful use of, 1/15–18 manners, 11/18 Yellow Pages, 9/8–9 passive strategy described, 11/2 Lists. See Mailing list for customers pricing strategies, 4/9, 11/19 L.L. Bean Co., 10/9 product returns policies, 10/3 Local Color Inc., 8/8 See also Websites Lonely Planet Books, 12/25Internet service providers (ISPs), pricing policies, Lycos, 11/16 4/4–5Intrapreneuring (Pinchot), 8/6 MISPs, pricing policies, 4/4–5 Made to Order, 7/19, 8/18 Mad Matter, 9/7J Mail accessibility, 9/12 Mailing list for customers, 9/14Japan developing, 12/2–3 auto industry pricing policies, 4/4 evaluating, 12/3–4 fantasy and a retail store, 3/6 Malden Mills, 5/6 honest advertising in, 1/14 Ma Maison, 2/3 No Brand store, 6/4 Management openness, 6/6–8Johnson Wax, 5/5 Maps to your business, 9/3, 9/4Joseph’s Sewer Rooter, 7/10 Marketing, defined, 1/2 Marketing calendarK for chiropractic clinic, 13/4–11Kaiser Permanente, 10/12 for interior design firm, 13/2–3Kamoroff, Bernard (Bear), 12, 14 Marketing plans, 12/2–25Katz, Michael, 5/4–5 categories of marketing, 12/5Killey, Steve, 11/9 direct marketing, 12/5, 12/7–15, 12/16Kimpton, Bill, 3/6 list development, 12/2–3Koop, C. Everett, 2/7–8 list evaluation, 12/3–4 parallel marketing, 12/5, 12/15, 12/17–20 peer-based marketing, 12/5, 12/21–26L for wholesalers, 12/6–7La Blue’s Cleaners, 5/18–19 Martin, Peter, 8/17Lande, John, 8/4 Mary’s Flowers, 8/4Landmarks for finding your business, 9/3 Masa’s, 12/11–12Lands’ End, 10/9 Matsushita, Beta system, 6/11LaRocca, Sylvana, 7/19 Maytag, Fritz, 12/23–24 See also Made to Order McDonald’s, and cleanliness, 3/8Lauder, Estee, 12/9 McIntosh, Joan, 12/3Lavin, Michael, 7/10 McKenna, Regis, 1/10Letter of agreement, sample, 8/10 Mediation, for negative word of mouth, 5/19Levering, Robert, 5/4–5 Merchandise display, 3/3Levi Strauss, 5/5 Midas Mufflers, and cleanliness, 3/8Levy, Sidney, 2/5–6 Miller, Terry, 3/6–7Licensing strategies, 6/11–13, 11/20 Misleading pricing, 4/2–3Lincoln and Victor, 8/14 Mistrail, 12/25Linux, 6/11–12 Moon Travel Handbooks, 12/15, 12/17Listings Moskowitz, Milton, 5/4–5 advertising distinguished from, 1/2 Movie industry, personal recommendations and, creative sources for, 9/13–15 2/3–4
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 5Multiple Choice Consultation, 6/9 Payment systems for online transactions, 4/9 PayPal, 4/9N “PC Talk” (software), 6/12 Peavey, Frances, 12/6–7National Bank of the Redwoods, 7/11–12, 7/21 Peck, Laura, 1/8Natural Bedroom, 8/12 Peck, M. Scott, 2/4Negative word of mouth, 5/19–20 Peer-based marketing, 12/5, 12/21–26Nelson, Bruce, 8/8 Peet’s Coffee, 3/8–9Netscape, 6/11, 6/12 Personal recommendations, 2/2–10New Balance, 8/2 bad news and, 2/7–9New ideas, encouraging the development of, 8/6 cost-effectiveness, 2/2–4New or obscure fields, educating potential cus- customer referral worksheet, 8/20 tomers about, 7/13–15 established buying habits, overcoming, 2/4–5Newsgroups for marketing, 11/19–20 marketing plans based on, 2/5–7Next Century, 11/9 negative word of mouth, 5/19–20No Brand store, 6/4 referrals, 8/14–16Nolo.com, 4/9, 8/12, 10/7, 11/10, 11/20, 12/25 referrals from people in related fields, 9/15Nordstrom, 5/5, 10/3 referral worksheet, 8/16Northern Light Surf Shop, 11/9 sample referral letter, 8/15 testimonials from customers, 8/17–18O Photos of celebrity patrons, 8/17–18Obscure or new fields, educating potential cus- Physical appearance of your business, 3/2–12 tomers about, 7/13–15 cleanliness, 3/7–8Odetics, 5/4 clutter, 3/9–10Office waiting areas, 3/3–5 evaluating, 3/11–12100 Best Companies to Work For in America fantasies and sales, 3/5–7 (Moskowitz, Levering, and Katz), 5/4–5 goals for, 3/2Online auctions, 4/8 industry norms for, 3/2–4Online presence. See Website openness of, 6/5Openness in business sloppiness, 3/2 benefits of, 6/2–3 smell, 3/8–9 employee relations and, 5/7 worksheet for evaluating, 3/12 financial openness, 6/3–4, 6/7 Pickle Family Circus, 8/14–15 with ideas, 6/11–13 Pietsch, Al, 11/4 with information, 6/8–9 Pike Place Market, 10/7 management openness, 6/6–8 Pinchot, Giffor, 8/6 physical openness, 6/5 Polaroid, 5/5 questionnaire about, 6/10 Postcard Question Service, 6/9Osmosis, 7/18, 7/19, 12/11 Pricing, 4/2–10 completeness of, 4/3–6P customer control over, 4/6–8 evaluation worksheet, 4/10Pacific Basin School of Textile Design, 9/8 Internet, 4/9, 11/19Palmer, Mary, 1/9 straightforward policy for, 4/2–3Paradiso: Jewels of Bali, 9/19 Product demonstrations. See DemonstrationsParallel marketing, 12/5, 12/15, 12/17–20 Product samples, offering, 12/8–9 demonstrations, 12/18–19 Professional association listings, 9/14 follow-up, 12/19 Professional office waiting areas, 3/3–5 samples and special offers, 12/17–18 Promptness and problem correction, 10/5 worksheet for, 12/20 Public behavior, guidelines for, 5/20–21Parking, dealing with, 9/5 Public communication, 8/10–12Partners in Nature program, 8/11 Public participation, and recourse policy design,Pastorale, 7/21, 12/11 10/7
  • 1/6 MARKETING WITHOUT ADVERTISING Search engines, getting listed with, 11/16Q Sears Roebuck & Co., 10/8Questionnaires. See Worksheets and checklists Sea Trek, 12/18–19Quick-Stop stores, 3/9 See’s Candy, 12/9 Service businessesR bidding on jobs, 4/5 describing the business, 7/5Raisins, dancing raisins campaign, 1/4 pricing policy, 4/3RCA, video disc, 6/11 written agreements, 8/9–10Recourse policy, 10/2–12 7-11 stores, 3/9 designing, 10/5–8 Signs, 9/7–8 elements of, 10/4–5 Simon, Julian L, 1/5 examples of, 10/8 Simons, Virginia, 5/20 informing customers about, 10/8–9 Slogans for finding your business, 9/3 reasons for having, 10/2–4 Smell of business space, 3/8–9 worksheet for, 10/10 Software for website development, 11/8 written policy, 10/9, 10/11–12 Sonoma Compost, 4/7Recreational Equipment Inc., 10/9 Sonoma Land Trust, 8/11Redwood Funeral Society, 8/4 Sony, VHS system, 6/11Redwood Hill Farm, 7/14 Special services and extrasReferrals. See Personal recommendations for businesses in established fields, 7/10–13Refunds. See Recourse policy as direct marketing, 12/9–12REI, 10/9 as parallel marketing, 12/17–18Replacement policy Stanford University Business School, 12/17 Sears, 10/8 Starbucks, Peet’s Coffee as model for, 3/9 See also Recourse policy Stusser, Michael, 7/18Reputation tracking, 5/2–3 Sullivan, Jim, 6/6Responsibility, personal recommendations and, 2/7 Supercuts, and cleanliness, 3/8Responsibility for problems, 10/5 SuppliersRichardson, Charmoon, 7/14–15 questionnaire for, 5/16Richardson, Linda, 2/6 relations with, 5/13–15Road Less Travelled (Peck), 2/4 Sweden, honest advertising in, 1/14Rollerblade, 8/7–8Rolm, Dick, 10/6 T“Rolodex party,” 12/3Ross, Andy, 5/5 Tarrytown Conference Center, 7/9Rousseau, Randy and Diana, 8/7 School for Intrapreneurs, 8/6Rowinsky, Larry and Nancy, 7/21 Teaching, 8/13–14 Technological Enthusiasm (Hughes), 11/2S Telephone accessibility, 9/8–13 Telephone branching (menu) tips, 8/11Samples, offering Telex services, 9/11 as direct marketing, 12/8–9 Terry, Paul, 12/21 as parallel marketing, 12/17–18 Terry McHugh store, 3/7Santa Rosa Dodge, 9/3 Testimonials from customers, 8/17–18Sautner, Dean, 12/3 TGIFriday’s, 2/3Scandinavian Airlines (SAS), 6/7–8 Thomas, Irv, 11/15Schack, Steven, 7/14 Three-way calling, 9/10–11School for Intrapreneurs, 8/6 Tilley Endurables, 9/7Schurtleif, Bill, 7/13 Tinseltown Studios, 3/5Schwartz, Bob, 7/9 Tofu business, 7/13Schwartz, Evan I., 11/7 Tokyo. See JapanScreening customers, websites and, 11/14–15 Tokyo Hands, 12/12
  • ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 7Toll-free numbers, 9/11 software for development, 11/8Torrice, Tony, 12/12 See also Internet marketingToys ‘R’ Us, 1/4–5 Welcome Wagon, offering samples to, 12/9Trade association listings, 9/14 What does your business do, 7/2–6Trade shows and conferences, 9/17–20 Whole Foods, 5/4Triton (hotel), 3/6 Wholesalers, marketing tips for, 12/6–7Trust, and personal recommendations, 2/5–6 Wild About Mushrooms, 7/14–15TWA, 5/4 Wong, Kaisek, 12/13Twitchell, James B., 1/3 Woodbridge, Gail, 1/9 Word of mouth. See Personal recommendationsU Working hours. See Hours of operation Worksheets and checklistsUnequal treatment, of employees, 5/7–8 customer evaluation of business, 8/13United States Postal Service, employee relations, customer referrals, 8/20 5/9–10 describing your business, 7/22–23University of Chicago Committee on Social direct marketing, 12/16 Thought, 11/15 domains of business operation, 7/8Urasenke Tea School, 3/9 employee questionnaire, 5/12 listing questionnaire, 9/16V mail accessibility, 9/12 marketing event (chiropractic clinic), 13/4–11Victoria’s Secret, 3/5, 5/5, 10/3 marketing event (interior design firm), 13/3Voice mail, 9/10 marketing list evaluation, 12/4 marketing without advertising, 2/9–10W openness in business questionnaire, 6/10 parallel marketing, 12/20Walk-in accessibility, 9/13 physical appearance of your business, 3/12Water sports equipment business, domains of pricing policy, 4/10 business operation, 7/8 recourse policy, 10/10Websites referrals, 8/16 accessibility information on, 11/10 suppliers questionnaire, 5/16 content to include on, 11/7–10 telephone accessibility, 9/12 described, 11/4 verbal communication with customers, 8/5 designing, 11/11–14 walk-in accessibility, 9/13 domain names, 9/8, 11/17 What My Business Does, 7/6 free information on, 11/10 Workshops and classes, offering, 8/13–14 freshness of content, 11/7–8 Written agreements, 8/9–10 geographic location of business on, 9/4–5 hiring a designer, 11/12 Y importance of, 11/2–5 interactivity and customer screening, 11/14–15 Yahoo!, 11/16 links from other sites, 11/17 Yellow Pages listings, 1/16, 9/8–9 links to other sites, 11/8–9 paying for referrals, 11/17–18 Z schedule of events on, 11/8 search engines, 11/16 Zoah’s Free Raffle Event, 8/18–19 s
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  • About the Authors By the Publisher, Ralph WarnerMICHAEL PHILLIPS I met Michael Phillips in workbook, that not only provided the intellectual1979, when he was coordinating the Briarpatch, a foundation for why marketing without advertisingnetwork of small businesses that share common works, but also a lot of detailed “how-to” specifics.values of openness and honesty, and providinghelp for each other. Nolo had just gone through a SALLI RASBERRY Enter Salli Rasberry, who hasgrowth spurt which had strained our personal re- successfully run a dozen small businesses in fieldslationships. Michael helped us set up a series of as varied as book fairs (the first San Francisco In-meetings that got things back in synch. Over the ternational), to publishing companies (New Glidenext few years, Michael became a good friend and Publications and Clear Glass Press), documentarytrusted advisor, and I frequently drew on his ex- films, business consulting, writing (co-author withtensive business experience (including a major Michael Phillips of The Seven Laws of Money androle in developing the Mastercharge (now Honest Business, among others). Currently she isMasterCard) interbank credit card and doing con- vice-president of the Sonoma Land Trust, a privatesulting for over 600 businesses. nonprofit that preserves and protects the land for- After a few years our relationship led to my ever through conservation easements or outrightteaching at the Noren Institute, a pioneering small ownership. A pioneer in the fields of educationbusiness school run by Michael and several others and values-based living, Rasberry is involved inin San Francisco. I also became more familiar with the design and development of an innovativeMichael’s innovative thinking about small business model for a rural home care center for the elderlysuccess by reading both of his books, Honest in northern California. An artist and avid gardener,Business and The Seven Laws of Money, which I she initiated the Coffin Garden Project, where art-routinely recommend to everyone who runs, or is ists, gardeners and others are invited to expressthinking of starting, a business. their feelings about death in a setting of natural One of the courses I helped teach at Noren In- beauty and serenity.stitute was Marketing Without Advertising, a con- Sally’s job was to add a few pounds of ordercept that I learned the hard way here at Nolo. The and a bushel of passion to Michaels manuscript.result of helping Michael teach this course was a She did this brilliantly, at the same time that herseries of freewheeling conversations, ranging from honesty, compassion and general niceness madeMichael’s small business teaching and consulting the always difficult task of turning a good manu-experiences in Tokyo, Stockholm and Paris, to my script into an excellent book a real pleasure.own more mundane experiments with variousways of communicating the Nolo message to large Other Books by Phillips and Rasberrynumbers of people without the expense of adver- The Seven Laws of Moneytising. The results were a real sense of excitement (Pocket Classics, Shambhala Publications)that the concept of marketing without advertising Honest Businesswas one of genuine interest to the small business (Pocket Classics, Shambhala Publications)community, and the decision to produce this The Briarpatch Book (ed.) (New Glide)book. I know now it was an excellent decisionbecause we have experimented with a number of By PhillipsMichael’s marketing without advertising concepts Simple Living Investments (Clear Glass)here at Nolo. Without exception, they have been Citizen Legislature, with Ernest Callenbachextremely successful. (Banyan Tree/Clear Glass) When Michael Phillips showed us the first draftof this book, it was long on brilliant concepts, but By Rasberrya little short on specifics and organization. What to Living Your Life Out Loud: How to Unlock Yourdo? Although it might have made sense to publish Creativity and Unleash Your Joy, with Padi SelwynMichael’s manuscript under a title such as The Zen (Pocket Books)of Small Business Marketing, we had already an- Running a One-Person Business, with Claudenounced that we were publishing a Nolo-style Whitmyer (Ten Speed Press, Second Edition)