FastTrac, Kauffman Foundation
Advertising is one way to get information about your product or service to potential customers. Because advertising can be expensive, you will want to focus your reach on a very specific target market-which means getting in front of specific prospects most likely to be interested in what you offer.
For example, if you own a chain of day care centers, it may be more effective to advertise in selective local publications that target parents with young children; or you could advertise in school newsletters that reach families within a ten-mile radius of each of your centers. Advertising is only effective if it reaches the eyes and ears of your intended audience.
Print and Media Advertising
Print and media advertising include newspapers, magazines, television, radio, and the Internet. If you are considering advertising in these venues, you need to ensure that the advertising will yield the results you desire-quick results and rapid sales.
When a Boston public radio station needed office relocation assistance, entrepreneur Gretchen Fox, president of Fox Relocation Management Corp., saw an opportunity. In lieu of a fee-for-service arrangement, she swapped her services for radio spots promoting Fox Relocation. The market synergy was perfect: among the station listeners were the top executives of professional and financial firms in Boston. The urbane, understated announcements positioned Fox's firm as professional and civic-minded, educated the market about the new service she was offering, and gave the impression of a more established firm.
Advertising can be costly. If you plan to promote your business this way, consider:
- Purchasing small blocks of local radio or television time at a reduced rate.
- Buying pre-emptable time. If timing is important, this won't work.
- Selecting a smaller local newspaper, radio station, or television station that reaches your market.
- Working with a media-buying service that provides expertise in buying various types of media.
Other Forms of Advertising
Other popular advertising venues include direct mail and Yellow Pages ads. Many entrepreneurs also reach their target market by using new and creative advertising options that are just emerging. One example of a new form of advertising is floor slicks-ads of food products placed in front of shelved products in grocery store aisles. Other ad options include grocery store carts, digital messages on display boards, theatre screens prior to movie previews, and magnetic billboards on vehicles. Consider these and other advertising options, including the following:
Web banners- Place advertisements for your company, product, or service on other companies' Web sites.
E-commerce catalogs- Make electronic catalogs available to customers on your company Web site. The advantages include no printing or mailing costs and product or service descriptions. Prices can be updated anytime.
Direct mail- Direct mail means sending marketing information and sales literature to potential customers by mail. From the standpoint of size alone, direct-mail marketing provides a way to reach a large number of customers quickly. It allows entrepreneurs to easily measure the response. The quality of the mailing list has a major impact on the effectiveness of the campaign. Many of the lists sold are only updated annually, and the contact information may be outdated quickly.
Thoughtfully designed direct mail pieces can produce desired results. Research has shown that more than 90 percent of Americans have bought at least one item as a result of direct mail. The disadvantage of using direct mail is that the cost is front-loaded. The mailing piece, mailing lists, and postage are paid for up front without any guarantee that sales will be generated. Response rates for direct mail are low and average about 1 to 3 percent. Carefully targeting the recipients can improve response rates.
You can compile the best mailing list from actual customers. If you keep track of their names and addresses via receipts and order forms, you automatically have a list. Asking customers to sign a list or enter e-mail information enhances your customer mailing list.
The Yellow Pages- Many entrepreneurs find that advertising in the Yellow Pages is a necessity to their business while others discover that their target market doesn't use this source to find their type of business. Some of the advantages of advertising in the Yellow Pages include the ability to select a well-defined neighborhood as well as an entire metropolitan area, the various ad sizes and color options, and a relatively low cost for production and target reach. Disadvantages include the infrequency of placement-ads can only be placed once a year, the clutter caused by competitors' listings and ads, and lack of creative flexibility compared to other media options.
Flyers- You can use handouts or flyers at networking events or trade shows. They often contain a discount coupon to attract customers. This method can be a cost-effective way to reach a small market area since you can design flyers or coupons on a personal computer and have a printing service print hundreds of them fairly inexpensively. You can also trace how many customers are attracted to your business by counting the redeemed coupons.
Catalogs- The catalog industry has grown significantly. Firms such as L.L. Bean, Orvis, and Lands' End; have all enjoyed tremendous growth and success. Catalogs, however, are expensive to produce and send, and these costs are incurred prior to making any sales. It is important to develop a targeted customer list before investing in this advertising venue.