B 2 B Direct Mail Marketing Followup

Once you’ve done a few mailings, go visit the prospects on your list. Before you go, though, think through what you want to say to them. A short (three-minute) description of what you do and how you can help the prospect’s company make money will get you started. Once you’ve delivered it, ask them what you need to do to get their business, then shut up and listen. Nine times out of ten, they’ll tell you what you need to know as long as you use a professional approach and demonstrate a willingness to pay attention. Don’t be offended if you get a brush-off or two and don’t give up if they say they already have a preferred source for what you’re trying to sell. If that happens, thank them for their time and move on. Keep them on your mailing list, though, and visit them again next month—things change!

You should also have a leave-behind of some sort for every sales call. This can be a version of your latest direct mail piece, a fancier brochure, or even a coffee mug with your logo. And don’t forget to give them your business card. In fact, one of the best tactics you can adopt is to always hand out two cards at a time and ask the recipient to pass one along to anyone else they know who might be interested in your services.

Once you’ve established a relationship, build on it. There are all kinds of creative things you can do to keep your company at the top of the prospect’s list of preferred subs and vendors. Offer to sponsor a sales contest for the prospect for example, awarding a prize to the dealer’s salesperson who sells the most pieces in your line during a given period of time. Watch for the prospect’s own sales event, then have a pile of pizzas or a few boxes of donuts delivered with your compliments on their busiest day.  If the prospect belongs to a civic group or supports a local charity, become involved with it yourself. The goal is to keep your name in front of the prospect all the time.

Your own vendors may help you with business-to-business marketing, too. Many manufacturers and distributors have co-operative advertising programs that pay part of the cost of your printing and mailing if you feature their products. Even if they don’t have a formal program, it doesn’t hurt to ask the next time you place an order. Others may have regional sales reps who would be available to go with you to make face-to-face calls. You should also ask if your suppliers do any lead generating of their own—trade shows, magazine advertising, etc.—that they can share with you.

Even with help from your vendors, marketing isn’t free, of course. A hundred first-class letters will cost you at least $100 for postage, envelopes, and computer printer ink. Imprinted coffee mugs aren’t cheap and even a supply of business cards will set you back a few bucks.

The biggest expense, though, is your time. Someone has to compile the prospect list, write the sales letters, and make the sales calls. In most small businesses, that someone is you. To control that particular expense (and to make sure the marketing gets done), dedicate a set number of hours every week to it, budgeting your time the same way you do your money.

Marketing is an investment from which you should expect a return. Fortunately, results from business-to-business marketing are usually easy to track. There is a finite prospect list, you know exactly how you’re marketing to each one, and you can easily identify the orders that you get from them. Make the investment in business-to-business marketing for a few months, then review the response. You might be surprised how much your company’s business has grown.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

How To Succeed At B 2 B Direct Marketing

Advertising to other companies doesn’t mean running TV spots in the Super Bowl. It’s much more targeted than that, which means it’s much more economical. Direct mail is probably the single most effective medium to use; it’s intrusive and there’s very little waste circulation. There are three keys to successful direct mail: a good prospect list, a compelling message, and repetition. You can make up a short prospect list yourself if you spend a little time with the Yellow Pages. Just look up the dealers and other prospects in your market area, call them to get the names of the general managers, service writers, sales managers and buyers, and you’ll have a solid prospect list to work with. Keep it handy, by the way, because you’ll use it later when you start making sales calls.

The direct mail piece itself doesn’t have to be a four-color glossy catalogue. In fact, a one-page personal letter introducing you and describing how you can make money for the other company (in one form or another, that should always be your pitch) will be a good place to start. Every three or four weeks, send another one saying the same thing in different ways. You can announce new equipment or product lines you’ve added, quote a recently satisfied customer, or brag about any awards you’ve received. Address it to each individual on your list, keep it to one page, include a picture or two, and make sure you send something at least once a month.

A web site is a useful business-to-business marketing tool, too. If it has plenty of pictures of your work or products, testimonials from satisfied customers, and some information about your background and your company’s capabilities, it will give the prospect even more reasons to send business your way. Also make sure there is a working email link, phone and fax numbers, and keep it all up to date. You don’t need to hire a high-priced web designer, by the way; most hosting services offer perfectly good bare-bones templates. The site itself can cost less than $10 a month.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Social Media Marketing Tips From The Pros

“You have to create a plan. I see many professionals and smaller businesses who haven’t looked at their objectives. Who is their target audience? What key messages are they trying to get out?”
--Stacy Cohen, Co-communications

“A great way to gain followers on Twitter is to Retweet what someone else has to say or to jump into their conversation and add your own perspective. Also ask people to retweet your links by adding the words ‘Pls RT’”
--Stacy Solomon, Internet Marketing Consultant

“If you are spending five hundred to a thousand dollars each month on marketing and take even one or two months of this and invest in setting up your social media, you can see a significant long-term gain for your business.”
--Gerald Stern, WOW Production Services

“One hundred high-quality followers easily equals one thousand so-so followers, because in the social media world you want people to constantly pass on the things you write, as well as send you material to post. Business people must avoid an overt ‘sales’ method—you’ll just turn people off and you’ll lose your following.”
--Chris Cornell, Westchester Social Media

“You should never expect social media to be completely cost-free. Someone must spend time staying on top of all those tweets, messages, Facebook updates and blog posts. Likewise, quick (if not instant) replies are necessary to maintain a reputation for responsiveness.”
--Kristen Ruby, Ruby Media Group

Whether they pay-it-forward or pay-as-they-go, more and more business owners and managers are turning to social media networks for very good reasons. “In the current economic downturn business owners must go above and beyond to promote themselves,” says Rye NY Chamber of Commerce Secretary Sally Wright. The organization received dozens of requests for a repeat of its recent social media seminar. She adds, “Social media is one great way to accomplish that.”

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Pricing For Profit - Step Two

Once you know how much the merchandise or job costs, you mark it up to provide a profit. One way is to use what’s known as “keystone” pricing, which simply means doubling the cost to arrive at the selling price. This provides a 50% gross profit margin. That’s why retailers can put goods on sale for 40% off and still make a profit. It works fine, but it isn’t always the best choice.

You can also use manufacturers’ suggested retail pricing, which even further simplifies the calculations. Nationally uniform prices, of course don’t reflect local market conditions, much less the individual business owner’s costs of doing business. Remember, too, that they’re designed to help the manufacturer move more merchandise, not necessarily help you make more money.

Using a standard markup sounds simple, but that’s really only the beginning of sound pricing strategy. You also have to be sure that the gross profit is large enough to cover your overhead, or the indirect costs of operating your business, and still leave a net profit. Whether you’re marking up merchandise or deciding on a labor rate, you’ve got to build in something to cover the rent—and all those other bills you pay every month.
Every business has indirect expenses (not related to the cost of a piece of merchandise or a particular employee’s labor on a job) that have to be paid. The obvious ones include your building and what it costs to operate it (utilities, maintenance, taxes, insurance), your fixtures, tools, office equipment, vehicles and other fixed assets (their cost on an annual basis is your depreciation expense), your salary and benefits (especially health insurance), not to mention the office manager and other general employees. Don’t forget to add in your property and casualty and liability insurance premiums, accountant’s fees, advertising and marketing expenses, office supplies, telephone, and so on and so on. While you’re at it, make sure you include an annual contribution to your own retirement plan, be it a 401-K, SEP-IRA, or whatever.

Finally, add something for net profit. That’s the whole point of running the business, right? The net profit, by the way, is not the same as your salary as the manager or owner. Your salary is payment for your labor managing the business. If you’re the owner, the net profit is the return on your investment and the compensation your receive for the risks you take. There’s a big difference.

The total dollar amount of your shop’s gross profit, the figure that has to be larger than your overhead expense, is also dependant on how much merchandise you sell or how many jobs you complete. These are determined, at least in part, by the prices you charge. If your prices are too high, customers will run away, so it can be a vicious circle. Cost-based pricing is all well and good, but ultimately, the prices you charge are determined by what your customers are willing to pay. That’s where a whole raft of other factors comes into play.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Pricing For Profit - Step One

When it comes to prices in your business, how much is enough and how much is too much? How do you set your prices? Buy low and sell high is the obvious answer, but for many companies, especially those with a mixture of retail merchandise and services, bricks-and-mortar and online competition, and customers driven one day by a penny-pinching budget and the next by the lust called gotta-have-whatever-at-any-price, there aren’t any easy answers.

Setting prices requires that even the most experienced manager or owner take a few moments every once in a while to dust off the calculator, get the accountant on the phone, and do some serious figuring. It’s tempting to just mark all merchandise up by a fixed percentage and figure labor at a flat rate comparable to what your competitors charge, but that’s not managing for profit, it’s hoping for one. There are several factors that you should consider.

Start with the cost of goods sold. That’s the amount you pay the manufacturer, wholesaler, or whomever for the merchandise you sell, whether at retail or as part of a service job. But it also includes the cost of acquiring those goods (shipping and handling), carrying them in inventory (interest expense), and allowances for returns and defective merchandise. If you pay any salespeople a commission or spiff, that needs to be taken into account, too.

For service work, you have to cover your direct labor costs on each job. These include not only an appropriate portion of your technicians’ annual salaries, but also their benefits, payroll taxes, unemployment insurance, worker’s compensation insurance, etc

What about the cost of your time? Whether you are a one-person business or simply provide indirect supervision of your staff, your time is a cost that has to be covered. One way to approach this is to divide what you expect to personally earn on an annual basis (including those items above but not your profit from the business—I’ll talk about that later) by 2,000, which is roughly the number of working hours during the year. Let’s say your “salary” plus benefits is $100,000. Your hourly labor cost is $50. Multiply that number by the hours you estimate you’ll personally spend on the job, add in the other worker’s costs, and you have your direct labor costs.

These aren't the only factors, so check next week for more guidelines on pricing for profit.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.