Carol was a Realtor a partner in a new real estate agency. The other partner was a broker, so he took that part of the responsibility, while Carol kept the books and tended to advertising.
They didn’t call their advertising marketing, and in all reality, it wasn’t.
Her method was simple. Every time they had a closing, she’d look at how much money had come into the account and figure out where she could spend it on advertising.
Can you see where this is going? She forgot all about those other mundane expenses like rent, power bills, telephone service, etc. So when those bills came in she panicked. And sometimes she paid late charges if the next closing didn’t come soon enough.
Carol had no idea how much she should be spending on advertising – because she and her partner had no marketing plan.
They had both been Realtors for several years, but were working for other people and had not paid much attention to where clients and customers came from. So they had no idea which mediums they should use for advertising. They didn’t know if people responded to their newspaper ads, to their pages in a homes magazine, or merely to the signs posted on their properties for sale.
On top of that, Carol was easily led by salesmen who dropped by offering the latest and greatest idea. She bought into everything from signature ads to support school sports to ads on restaurant placemats, to ads on shopping carts. If there was enough money in the checking account, she bought.
She should have started with a budget. Although no small business person can predict just how many dollars will come into the business in a given month, they can make an estimate based on past history. After taking out all the fixed expenses such as rent, they can see what percentage is left for other things. A portion of that should be allotted to marketing.
But that entire percentage shouldn’t be automatically spent each month. Instead, they need to plan ahead for quarterly and annual promotions that take a larger share of the marketing dollars – and set aside a portion of the income each month to cover those periodic expenses. For instance, if they mail a quarterly newsletter, they need to budget in the printing and postage. And if they purchase and mail gift items to their clients at holiday time, that cost needs to be factored in.
If the business is real estate, annual expenses such as replenishing the yard signs also need to be included in the plan.
The next step, once they see how many dollars they have to work with for media marketing, is to carefully consider where those dollars should be spent for maximum effectiveness.
Most businesses will benefit from a web presence – which is a small expense once the website is up and running. But even a $10 or $20 per month hosting fee adds up over a year’s time, so it needs to go into the budget.
All businesses should know who their customers are so they can choose the correct placement to reach more of them. If it turns out that most of your customers are between the ages of 25 and 35, no amount of advertising in “Senior Times” will build your business!
Next, businesses need to pay attention and keep a record of where customers come from. In some businesses, such as real estate or insurance, it’s easy to just ask. In others you don’t have that opportunity. But a coupon or a special offer with a promotional code will reveal the truth. If you place a valuable coupon in a publication and don’t get many takers, you know that’s the wrong place to advertise!
Testing ad size is important too. Sometimes a smaller ad will draw as well as a larger one. But sometimes not. If the budget is tight, it might be more effective to place a large ad every two or three weeks rather than a small one every week. Testing your results is the key.
The second part of creating a marketing plan is the marketing copy itself. Good copywriting takes time. Seasonal promotions need to be planned ahead of time and printing arranged or merchandise ordered well before it is needed.
Often small business owners dread writing their ad copy. They aren’t good at it, so put it off until the last minute. I’ve seen Realtors trying to write copy to promote a house when the deadline was only 15 minutes away.
I believe that no ad at all is better than a bad ad – because poor copy gives the impression of a non-professional, sloppy business. It’s a true waste of money.
With your marketing plan in front of you, you can allow yourself plenty of time to either block out some quiet time to write your copy yourself, or explain your needs and get your background materials to a copywriter who will do it for you.
Yes, copywriting is another expense that has to go in the marketing budget, but if you really aren’t good at it and don’t want to take the time to develop the skill, professional copywriting services will more than pay for themselves in increased revenue.
Oh – you’re probably wondering what happened to Carol.
When her partner finally woke up to what she was doing and why they were broke, they got into a huge battle. Their parting was not very pleasant, and in fact ended up in court.
A marketing plan, agreed upon by both partners, would have saved them a lot of grief, as well as a lot of money.