Marketing and the "R" Word
Copyright © 2006 Judy Murdoch
Highly Contagious Marketing
It's got four letters, it starts with the letter "R", and
it's the reason so many great products and services
languish--never reaching their full revenue potential.
It's a little word that packs a wallop: risk.
There is risk in all areas of running a business: financing,
technology, the people you hire, the vendors you choose to work
with...you invest money, time and effort with the intention that
the returns you get will more than justify the risk you took.
But from the conversations I have with business owners, the
business activity associated most often with risk and negative
outcomes is marketing.
Marketing is an inherently risky activity because whether or not
your marketing program succeeds is based on what people (your
customers) do. And after spending many years in consumer and
market research, there's one thing I know for sure: Human
behavior is tricky to predict. The other factor that makes
marketing risky is that marketing activities are often expensive
and time consuming. Ask anyone who has spent hours putting
together a trade show demo, or has hired an advertising agency to
develop a new campaign.
It's no wonder a lot of small business owners get knots in their
stomach when they hear the word marketing.
But hang on there--put away the antacids and the aspirin. Because
you can reduce marketing risk. Even better, you can risk less and
get the same, possibly better results. You can spend less money,
time and energy on your marketing and still get plenty of new
customers, repeat business, sales revenues, etc.
WHAT IS RISK, REALLY?
Before getting into the "how" of reducing risk, it helps to
better understand what risk really is.
Simple definition: Risk is the likelihood of a negative outcome.
This is helpful because it highlights the two main components of
risk that you, as a small business owner, can manage:
1. You can take actions to reduce the likelihood of a negative
outcome. In other words, you can make the odds more favorable.
2. You can reduce the magnitude of the negative outcome. In other
words, don't bet what you can't afford to lose.
RISK REDUCTION STRATEGIES
So how do you move forward with marketing your products and
services and manage the associated risk? Here are five practical
strategies that will help you reduce and manage marketing risk:
Risk Reduction Strategy #1: Eliminate Unnecessary Risk
In every situation there are elements you can control and
elements you can't control. Managing the elements you CAN
control makes the odds more favorable.
For example, you're giving a sales presentation to an important
group. The stakes are high: you've spent a lot of time preparing
your presentation and cultivating relationships with key people.
If you succeed, the prospective sales could enable you to triple
your revenues. If you fail, you won't have another opportunity
to work with this group for at least a year.
What are some things you can do to improve your chances of
If you ask most successful sales people they'll tell you they
come prepared and they make sure they arrive early. This is as
simple as you can get when it comes to improving your odds but
it's amazing how many people walk into presentations late or try
to finesse the conversation without taking the time to learn
about their prospective customer.
Risk Reduction Strategy #2: Talk to Your Customers
You don't need to do an elaborate survey to get useful input
from your customers. Oftentimes, calling your five best customers
and asking 3-4 well-worded questions is enough. I do, however,
recommend that you think through what you want to learn, what you
will do with the information, the questions you will ask, and how
you will collect the information. That way you aren't wasting
your time or your client's time. I also recommend that you get
opinions from enough people so that you've fairly represented
the groups to whom your marketing is directed.
Risk Reduction Strategy #3: Beta test
Beta testing involves putting your marketing in front of a group
that is representative of your ideal customers to get feedback
before your marketing goes in front of the general public. You
use the feedback and suggestions to refine and tweak your
marketing so that you optimize your chances of success.
You beta test at the prototype stage: when you have something
that is close enough to the proposed finished product so that the
feedback gives you an idea of what to expect when you actually go
What should you test? Product ideas, product prototypes,
promotion ideas, sales strategies, your website design and
content, business cards, brochures, and so on. If you can't
afford a public launch to fail, take a little more time and money
and beta test first.
Risk Reduction Strategy #4: Take baby steps
This strategy addresses managing what you put into your marketing
in order to keep potential losses manageable.
Most of you are probably familiar with the strategy of breaking
large projects into small, manageable tasks. However, when
you're doing something new that feels particularly risky, I
suggest you take this a step further and break those tasks into
the smallest possible discrete activities. I think of these
small, discrete activities as "micro-steps" or "baby-steps."
Baby steps are tasks that are so small and non-threatening that
your fear doesn't kick in and prevent you from doing them. The
beauty of taking these tiny steps is that they enable you to make
progress and to build momentum. As you make progress, your
confidence grows and you'll begin taking on the larger tasks on
your project plan.
Risk reduction strategy #5: Remember to fail forward
Sometimes it's more important to manage your perception of risk
than to manage the real risk.
You can't grow and evolve without experimenting and learning
from the outcomes. Your business won't grow and evolve either if
your focus is on avoiding negative outcomes.
When you're trying out a new marketing activity, do what you
reasonably can do to reduce downside risk and take action. If you
succeed, fantastic. If you fail---the result isn't what you
wanted--- it's an opportunity to better understand your
customers, what you're marketing, and how you're delivering
your marketing message. Sometimes a few changes in one or two
marketing elements is all it takes to make the marketing vehicle
more effective. But if it's too time consuming and expensive to
make the changes that will make the marketing work, stop what
your doing and try something new.
THE BIGGEST RISK OF ALL
The biggest risk of all when it comes to marketing is NOT DOING
Sometimes I see business owners who become so discouraged with
their marketing that they give up. They stop doing any marketing
at all and pin their hopes on growing their business based solely
on customer referrals.
While referral-based marketing is without a doubt the single best
marketing vehicle for small businesses, it typically takes a
long, long time to build enough word of mouth momentum to
generate the customers needed to support a business. There are
too many sad stories about businesses with solid products and
services that had to close their doors because they just
couldn't build their customer base quickly enough to generate
the necessary referral volume.
Marketing is an inherently risky activity because human beings--
customers--are not perfectly predictable. This makes it
challenging to change and improve the way you market your
products and services because you know you need to get more
customers and clients to grow your business but at the same time,
there's possibility that the marketing won't work.
Rather than sticking to old tried and true marketing methods
which are no longer producing the results you need, move forward
with new approaches while doing what you can to reduce related
risk. Remember that the most successful marketing comes, not from
avoiding failure, but from taking intelligent, calculated risk.
Judy Murdoch helps small business owners create low-cost,
effective marketing campaigns using word-of-mouth referrals,
guerrilla marketing activities, and selected strategic alliances.
To download a free copy of the workbook, "Where Does it Hurt?
Marketing Solutions to the problems that Drive Your Customers
Crazy!" go to www.judymurdoch.com/workbook.htm
You can contact Judy at 303-475-2015 or firstname.lastname@example.org