Marketing a new business

Dear Bob …

I’m considering starting my own company.

Besides word of mouth, what is a good way for me to market my services (advertise)?

– Entrepreneur

Dear Entrepreneur …

This is a short question that requires a long answer, because it depends on what type of company you’re thinking of starting.

My first recommendation is to make sure you’re as clear as possible about how your business is supposed to work. The basic formula is to define product (in your case, your services), customers, pricing, messages and marketplace. The first four are reasonably self-explanatory. “Marketplace” includes your supply chain, distribution channel, and competitors – it’s the ecology within which your company is going to operate.

See how well you can answer these question:

1. Why should anyone buy from me instead of my competitors? The answer is called your unique selling proposition, and too few entrepreneurs have one.

2. For whom is the answer to #1 most valid? If your answer is a company, not a person in a company, you aren’t finished. In the end you’re always selling to individual people.

3. Given the price and margin of what you’re selling, are there enough of the answer to #2 to generate the profit you need for your business to be successful?

4. What is the best way to get the answer to question #1 in front of the answer to question #2?

Think about the image you’re trying to project. The answer to this will tell you how much you need to invest in things like logos, your website and so on. Whatever the answer, you should get your own domain name (of course!), so your e-mail address isn’t someone.or.other1234@hotmail.com.

If you’re selling a low-price, low-margin service and need a lot of customers, you’ll arrive at a different answer than if you’re selling a service that generates high revenue and margin at low volumes. In the former case you’ll need customers to come to you, so you’re looking at some form of mass or direct-response marketing. In the latter case you’ll need direct selling, which means personal networking and referrals.

I’m guessing that if you’re like most people who read Advice Line, you’re probably thinking of some sort of consulting business, which means low volume and high revenue and margin per sale. The sales process for this is tougher every year (trust me!). In particular, an increasing number of your sales targets just aren’t interested in talking with a total stranger they have no reason to trust. So if you don’t think a lot of your prospects will be interested in talking with you based on your personal network and referrals, think hard about whether this is a good idea.

You can improve the situation somewhat by getting articles published and getting in front of relevant audiences. For some services, you might gain an edge by teaching in a continuing education venue if they’ll have you, and if the students are potential buyers or can introduce you to potential buyers.

Keep in mind that all of your competitors are already doing all of this. It isn’t new and unplowed prairie. There is no new, unplowed prairie.

If you’re wondering: The big guys try to bypass this and generally fail. For example, do you really think any CIO or CEO is going to contact Accenture because a really great golfer appears in its television ads? It’s wishful thinking. The only possible value of these ads is that perhaps they persuade someone that Accenture is big enough to afford Tiger Woods as a spokesperson.

If I were in the market, the ads would persuade me that Accenture should not use Tiger Woods, and pass the savings along to me in the form of lower billing rates.

All of which is to say, when it comes to selling your services, don’t persuade yourself of what you want to be true. Fooling yourself is a very expensive proposition.

In the end, with the possible exception of “celebrity consultants,” your personal network, coupled with your ability to exploit the six degrees of separation between you and your sales targets, is the answer to your question.

– Bob