NZ Business, June 2013

Here’s some free marketing advice – trash your twitter, burn your brochures and axe your advertising. Ignore the hype about ‘marketing’, and social media in particular, and focus on the basics of selling your product.

Okay, so these online channels are increasingly important to marketing your business, but to be effective they must be used in the context of some other key activities. At least that was my conclusion after reviewing the recently launched MYOB’s Business Monitor study. A poll of 1000 small to medium sized enterprises (SMEs) in New Zealand, the Monitor had some fascinating insights into how to grow a business in the midst of recession.

MYOB is a company that provides accounting software for small businesses, and for the last three years they have been regularly surveying small businesses about various aspects of how they operate, and decided to hand this data to economists NZIER to crunch the numbers and find the patterns.

Conclusion number one? New Zealand is recovering from the worst recession since the 1920s. Downturns since World War Two have typically involved economic contractions of 2%, this one has been twice that bad. Not only that, the current dip has lasted longer and “has been marked by a slow and grinding recovery” according to NZIER. No one in business would be surprised by these results.

More interesting was what firms that managed to actually grow during this nuclear winter of business activity were doing. NZIER identified that these businesses invested in what I would call “telling, selling and gelling.” These “business builders” were 22% more likely to invest in ‘marketing online’. That is, they are using online channels like their website, online advertising e.g. Google Adwords or social media channels including Facebook, LinkedIn and Twitter, to “tell” people about their business and what it offers.

These channels are cheaper, faster and more directed than traditional advertising mediums, making them particularity ideal in a recessionary environment where competition is fierce and pressure on prices intense. The catch is that you still need to have some basics in place to be an effective “teller”. A clear message about the value you offer, and as specific an idea as possible of what market segment you are targeting is critical.

“Selling” was the second strength of the recession-defying SMEs, doing 28% more ‘customer acquisition’ than the average. That means turning the interest that their “telling” generates into new customers.

Effective selling is a discipline in its own right, requiring particular sets of skills, process and discipline. Great selling organisations don’t typically fit the stereotype of the pushy, silver tongued sales representative. Rather they are very good at working out a customer’s problems and then explaining how their product or service meets that need. They back this up with a disciplined approach to taking prospective customers through a series of steps that lead to a sale, and tracking their progress along the way.

The last characteristic of the recession-busting SMEs in the MYOB study was investing 22% more than other companies in ‘customer retention’ i.e. gelling with those people who have already parted with cash for their product or service. And this is where great brands and profitable companies are really built. You can be good at telling a market about your value, and have an efficient selling machine, but all that does is create expectation on the part of the customer.

It is in the delivery that great brands are created – either you exceed that expectation you have created and strengthen your reputation, or fall short of it and diminish it. The truly great companies are very good at creating expectations through telling and selling, and then even better at meeting and exceeding those with their customers.

That is the ‘magic’ that drives effective use of social media. Online channels may make it easier to communicate directly with your market, but they also make it easier for people to share information about their ‘real’ experience of your products or services.

If you aren’t confident that you can exceed the expectations you create for potential customers through your promotions, trash that twitter. Focus instead on building an intimate understanding of who your customers are, what needs they have and what unique ways you can meet those needs. The social media will take care of itself.

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