Archive for

Five Rules To Long-Term Success

What’s in a name? Quite a bit if you are starting a business. From cute to clumsy, serious to inane, business names can range from the ridiculous to the sublime. Perhaps starved for opportunities to be creative, some entrepreneurs seem to have the market cornered on how to blunder into what may be the single most important aspect of marketing genius: the name of the business.

It never ceases to amaze me how people arrive at the names for their businesses. Many business people approach me after they have worked with their lawyers and accountants to set up the business, perhaps going the extra mile to incorporate and sometimes having also taken it upon themselves to design their own logo before realizing that it takes a little more talent to create a brand than some amateurish attempt at graphic design. I then have the dubious honor of taking the pooled efforts of these three dedicated professionals some of whom must have slept through business marketing to work with a sometimes problematic name they have agreed upon and create a logo or trademark which addresses the desperate need for a striking, definitive and effective professional image for the duration of its existence.

Many people who start small businesses fail to consider that in the highly competitive arena of local marketing the name should quickly define what the business represents. This results in two problems: The name does not describe what the business offers; or, even if it does, it usually uses too many, or a misguided combination of words, to do so. And to make matters worse, this is usually after a false start with liberal spending to try to promote this new venture, based on an array of inept marketing decisions and the use of deficient marketing tools, a situation which makes it more difficult for me than starting from ground zero.

Case in point: I recently was contacted by a relatively new organization who said they needed a marketing plan. Upon closer analysis, I learned that they had been running an ad in the regional newspaper of their geographic service area on almost a daily basis without reaping any response. In searching their industry via Google, I could not find any mention of their group within the first ten pages of results. Only after searching the name of the gentleman who had contacted me was I able to locate his name on a web page about this organization’s board of directors. Literally entering through the back door, I was able to find a link to their home page which upon observation reminded me of the incompetent ad which had been running in the paper I read every day but like everyone else, had ignored as irrelevant. Understandably, with a nebulous business name, poorly designed logo, non-existent ad message and busy, unprofessional presentation, it’s sad and ironic that this non-profit group offering a valuable service to senior citizens had so miserably wasted their limited funds by trying to do everything themselves to save money. And not one of the members of this in-house marketing group were able to detect any problems with this effort, too close to the forest to see the trees.

Now, with resignation that a do-it-yourself strategy is not always the most cost-effective, the directors were surprisingly receptive to my suggestion that, while I expected resistance, perhaps they could consider a business name change at this early juncture in their organization’s history. Simultaneously, I also proposed that along with the marketing plan and name change, a new professional logo would logically follow in addition to a series of well-conceived ads they could use for promotion on a continual basis. As soon as their signed contract and project deposit arrives, I will undertake this challenge, since they now are anxious to proceed with sudden recognition and appreciation of their failed attempt at self-promotion.

From the perspective of my long career, I assure you that this is a common phenomenon particularly in situations where marketing is done by “committee,” which tragically describes the majority of my clients: law firms, healthcare and dental practices, non-profit organizations, industrial and pharmaceutical companies, etc. And it doesn’t matter whether the business is large or small, or whether it is basically run by a single professional or a group of directors. In most cases, business leaders frequently lack the vision or self-confidence to make marketing decisions on their own, so they engage the opinions of everyone and anyone who surrounds them, regardless of competence to judge the subject. This means that my directives come from such diverse sources as teenage sons of clients, wives of clients, secretaries, summer interns, random customers of clients, anonymous emailed comments from websites, and other miscellaneous “experts,” all of whom emphatically express their views so I am well-apprised of how to do my job effectively.

Of course, I am not so pig-headed that I cannot see the value of such input. On the contrary, I am grateful to know how this diverse universe processes information so I can evaluate every strategy as it is developed to satisfy every possible requirement. Whether anyone realizes that this method of marketing is fairly impossible to achieve is immaterial, since no one can ever measure every single response to marketing efforts anyway. The old axiom, “You can’t please all of the people all of the time” may apply, but you can’t blame a person for trying.

Of the clients I have who do believe that there is one, and only one, way to effectively market their business, that way being their own personal way, based not on advanced study of business marketing, mass psychology, the elements of style or effective strategies of communication, but on nothing more than pure, unadulterated, self-centered ego. I say, hey, more power to them! It is their money they are spending and they certainly have the right to believe what they want to believe. Furthermore, marketing as part art, part science and part luck has as many guarantees as we get at the race track or in the stock market. So who am I to disagree with my clients’ convictions?

Well, just for the record, I do chime in with my own opinions which are backed by 35 years of hands-on marketing experience which includes a successful career in marketing my own as well as my many successful clients’ businesses. If my opinion differs from that of one egotistical client, for example, it is enough that I have advised him of it regardless of his stubborn impulse to dismiss it and proceed with his own strategy despite what I think. He obviously has gotten to this stage of his illustrious career through his own navigational talents and distinctive intelligence so I do respect him and am not offended in any way by his belief in himself, above all.

However, this places an enormous task on my shoulders: To market his business using a name that includes six long words, some of which are esoteric and industry-specific. This means that the logo, in addition to including a striking trademark must also be composed of six words totalling 42 letters. Add to that the need for a tagline, the entire package of which must be large enough to read in such small applications as on checks, on business cards, and in the smaller units the yellow pages offers both online and in print.

Compare this with business names using one short word: eBay®, Google™, Yahoo!®, Microsoft®, Apple®, etc. Granted, some of these names do not describe what the business offers. But all of these are highly successful businesses nonetheless. How have they done this? By assigning ample funds to building their brands so that the name of the business needs no definition, it becomes its own word with its own meaning. Such is the power of successful marketing.

You may say those businesses had the advantage of marketing their brands over the Internet but today, we all have that same advantage. Especially with the help of such brands as Twitter, Facebook, LinkedIn, and YouTube, all four being excellent examples of short, punchy business names which aptly define their raison d’étre. Most of the businesses that approach my company for marketing help are small businesses, sometimes with geographic limitations. Such businesses usually don’t realize how much time, money and repetition of effort is needed to build a brand.

One of our competitors in the metro-New York market recently began airing a commercial to promote their business and invite response from the same market we serve. While I cannot mention the name of this business for legal reasons, suffice it to say that it is a short 3-word insult directed at the very market they are trying to attract. And, moments ago, I was scolded by a telemarketer who responded to my polite statement that his offer to sell my business did not interest me at this time with: “OK…go down with the rest of them!”

Have I missed something? Are insults the new marketing strategy du jour? In both of these instances, injecting negativity, or worse, personal abuse into normally courteous business protocol, in my opinion, does nothing more than deliver a message of disrespect, insolence and humiliation to the very subject you are trying to endear.

Starting Up a Small Business Concerns

In a previous article I dug a bit deeper into small business volatility but it is worth mentioning again especially in the context of getting a business started. Small business exists because large business has carved out a method to meeting the needs that doesn’t reach everyone in a market place. In other words small business is small business because large business has deemed the pursuit of such market places not worth the effort. Large businesses seek opportunities that exist in well-established mature markets. These would be markets that yield smaller margins but are also less volatile. Consequently this leaves the more dynamic and volatile markets for the small businesses. This is part of why small businesses don’t last long, they compete in an ever changing market place.

So, what does this mean for you? It means that the opportunities that will exist for you and the business you aspire to open will be opportunities that require quality and custom solutions quickly. This also means there will be a good deal of work involved in order to gain market share for you niche. Abandon any idea of providing a single product or service, you will need to diversify your products/service, customers, and possibly industries. To combat the ebb and flow of the small market place you will need diversify all aspects of your company.

Alignment

Ok, now that you understand a little about the realities of the small business market place the next thing to look into is how well your potential business aligns with who you are. In the beginning stages of a business the founder is the business and the business is the founder. To offer the most value the business should be the embodiment of you and you should be the embodiment of the business. The realization of a single opportunity should not be the only deciding metric for starting a business. As an example; A few years ago I had the opportunity to start a frozen yogurt shop in my town that would have been modeled after a profitable model that was doing well in other cities. I did my homework and found that for $40,000.00 I could have everything I needed to open the doors and start selling yogurt. I decided against it for two reasons, 1. I live in a four season’s area and I did not want to have a feast or famine demand and 2. I am not that crazy about yogurt. Now, the opportunity was there, and since then many of these shops have opened, but I didn’t want to invest 80 hours a week into a frozen yogurt business.

Market Positioning

So you have an idea that aligns with who you are, and you have come to understand the nature of the small business market place, how are you going to position your product or service? How are you going to meet the needs of the customer? The answer is somewhat laid out above, but because of the nature of the small business market place you will need to become a high quality, quick turnaround company. Small businesses have the advantage in small volume custom areas. Your competitive advantage will be your ability to cater to the specific needs of your customer. As a small business you have no business competing on price.

Margin

You are your business, and chances are you do not have much capital behind you. This means that achieving a positive cash flow situation as quickly as possible is key. Cash is king and without it you don’t have a business. The upside is small volume high quality work demands top dollar. That’s right, by being a small business you are competing in a large margin arena. The mark up on your products and services can and should be high. The market will let you know when you are too far out of range, but a healthy profit margin is to be expected with small businesses. Individuals that fail to understand this begin to lower their prices in hopes of gaining some sales but what they don’t realize is they are diluting the market and putting themselves out of business. So, don’t be afraid to charge for your work!

Growth Strategy

The last thing I will mention for those looking to start a small business is that a growth strategy is imperative. You need to have an idea of where you are going if you ever expect to make it as a business owner. By nature small businesses should only remain small for a while, if you company is not growing it is dying. Markets mature, customer needs mature, and guess what… your business should also be maturing. Knowing where your business is headed will allow you to take the appropriate measures today to set up for tomorrow’s market. A growth strategy can be vague. You don’t need to define every variable, but you should use your intuition to determine where you should position your company.