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Just recently I read a question on a PR forum from a PR person asking whether it was still possible to achieve PR coverage without a big budget for wining and dining journalists. I was all set to reply until I realised that if she had worked in PR for a number of years and still thought that wining and dining was the way to achieve PR success, then maybe she shouldn’t even be in PR and especially not in the “age of austerity”.
Since I started Cerub PR in 2003, we have worked with a wide variety of clients, but in all that time, we have been working to tight budgets and have very rarely had the opportunity to take journalists out for dinner and drinks. Instead, our work is focused on what some people call the “donkey work” — coming up with story ideas, writing press releases and media alerts, telephoning journalists, responding to news stories and working on behalf of our clients. If we were to spend time taking journalists out for lunch, we’d probably get a lot less coverage for our clients.
The trouble with this attitude is that it gives the impression that PR really is all about wining and dining and maybe I’ve been doing it wrong all these years, but for me and my colleagues, it’s more about getting on with the work and achieving great coverage for our clients. To prove my point, we’ve recently had coverage for clients in The Financial Times, Sky News, CNBC, Something for The Weekend, Magic radio and Real People — all while sat in the office!
Ceri-Jane Hackling is the managing director of Cerub PR.
Ok, so that’s a bit of a leading question, but whilst we all know what our answers should be, it’s tempting to focus all of our time and money on acquiring new customers rather than looking after the ones we have. Acquiring new customers satisfies our need to get onto the next thing, it seems exciting and new. But does it make good business sense?
The short answer is no. It can cost you up to six or seven times more to gain business from a new customer than it does from an existing one according to Flowtown. The same blog highlights that you can increase your profits by up to 95 per cent just by improving your customer retention rates by five per cent. That sounds pretty optimistic to me, but even an increase of 20-30 per cent in profits wouldn’t be a bad thing for most businesses.
Your loyal customers will spend more money with you, they cost you less to gain repeat business from, and they’re probably more loyal and less sensitive to price than new customers. So, if retaining the customers you have makes good business sense, then why don’t many businesses put their existing customers at the heart of their marketing strategy?
In the small business world, it’s easy to think that it might be a lack of strategy. Many business owners don’t have a strategy or a marketing plan and will often lurch from advertising to leaflet drops to manic social networking without taking a considered or planned approach. Perhaps that’s a very unfair way of looking at things, but I do believe that without a strategy to retain customers you leave yourself open to losing customers unnecessarily.
That said, big businesses aren’t immune to failing to retain their customers effectively. Talk to anyone renewing their insurance and you’ll wonder whether the insurance companies have even heard of the concept of customer retention. I know that it’s always cheaper for my family to apply to our existing insurance company as a new customer, than it is for us to just renew. How unbelievably inefficient for us all!
Large and small businesses could do well to think more carefully about customer retention. In this age of comprehensive spending reviews and increased efficiency, frankly we could all do with whatever help we can get in leveraging more business from our valuable customer bases. What strategies do you use in your business?
2010 has been a fantastic year for Marketing Donut and we are about to take a seasonal break to recharge our batteries ready for the challenges that 2011 throws at us!
We couldn’t have done it without all of you — your insights, comments, blogs, tweets and advice make Marketing Donut a living, breathing resource for small firms in the UK.
In particular, we’d like to thank the experts that have generously passed on their marketing know-how and the small firms that have shared their experiences with us — Naked Wines, Ling’s Cars, Chase Vodka, A Quarter of and Crazy Fox Golf to name just a few.
Here are a few of our achievements this year:
What does 2011 hold? Well, you can expect fresh Donuts and an even stronger local presence in the next year. And of course, we’ll continue to champion the cause of small-business owners across the UK.
None of this would be possible without your enthusiastic support of our work. The Donut sites are all about you — the owners, managers, employees and supporters of the UK’s small businesses owners — and we appreciate all the kind comments and messages of support you’ve sent us throughout the year.
Have a great Christmas and a fun New Year. We’ll be back on 4January with more news, stories, tweets, offers, competitions and advice — everything you need to help you run your business better.
Editor, Marketing Donut
I don’t think it takes a huge amount to make us feel valued as consumers. Know my name when you can, talk to me as a human being, I have been loyal to you, please be courteous and considerate and offer me a fair deal. It’s not a big ask and it’s not rocket science either.
Actually it’s just the little things. Perhaps it’s worth making the point that these little things are worth far more than the constant discounts and money-off offers that we are being bombarded with.
I heard a story a while back about a guy who had worked in Las Vegas as a porter for years. He was a master at remembering faces. Importantly he knew if someone had stayed before. So if a guest arrived and indeed they had stayed before he would put the luggage trolley in the hall on the left, meaning they were a previous guest. The receptionist would then greet the guest with a simple “hello Mr Clark, welcome back”. If they had not stayed before then the trolley was left on the right and the welcome here was equally effective — “Good morning Mr Clark, welcome to our resort and thank you for choosing us, can I show you around?” or words to that effect. Nice, very nice.
Here’s a thought. Think of the challenge as a festive lunch. The doorbell goes, you open the door, the house is warm — you greet your guest with a huge smile and a kiss (kissing customers is optional). You chat, feed them, give them gifts — they might not like the gift but they appreciate the gesture – and at the end of the evening you part as friends having had a great time.
So yes, you’ve put a lot of effort into the relationship, but my you are rewarded. Your guest leaves feeling loved, cared for and appreciated, and the Brucey bonus is that they will probably tell their friends that they’ve had a good time as well.
Let’s call this the Festive Lunch strategy. Consider these things:
In analyzing your data have you segmented it accurately? Do you want to invite everyone? Do you invite the ones who you know will never ask you over for lunch? You really should invite the ones who had you over for lunch a year back — they would really appreciate it.
Are you rewarding your loyal valuable customers with appropriate offers or rewards? Are you using the knowledge you have of them in the most appropriate way, showing them you understand them? Defining their traits might lead to some great insights. If you’re a busy working mum you might want to save time rather than money, so offering money off wouldn’t be as effective as offering a means of saving time (priority parking or bag packing).
The key is not to discount current behaviour, but to reward new or valuable behaviours (to us) for a change of habit.
Well good luck. If they have been loyal this will be unwelcome. Offer them a surprise, an amuse bouche, and they’ll be feeling the love. Use your knowledge of them appropriately, and make sure you offer them an appropriate product and pricing strategy. They will stay a little longer.
Are the channels you communicate to them in appropriate? Do you offer choice, and rewards or value back if you have a low cost to serve channel?
We are all hit with a lot of communications these days. Is your message clear and concise? Is it easy to understand and digest (sorry!)? Present the facts and costs clearly, separate the important from the not so.
Finally it is vital to avoid the trap of “well my competitor’s got a reward card/scheme, we better get one”. That simply gets you to a me-too place. Drill down the USP – what would drive the competitive advantage you are seeking? And the point here is that if you are simply paying for loyalty with no increase in acquisition or retention rates then what’s the point, especially if you have not set any measurement or tracking metrics. It will cost you dear.
Yes building loyalty can be hard but most of the time a smile and a handshake go a long way. Remember my name and feed me well. I’ll remember you, I’ll remember the care you took to make me feel welcome and valued, and you know what, I will stay a little longer.
How hard can that be?
You don’t have to look far to see concrete signs of the recession hitting small businesses hard. Walk down any UK high street and the empty shops say it all.
But boarded up shops is one thing — the danger is that they could soon become piles of rubble as unused properties are demolished to avoid paying rates.
Parliamentary under-secretary of state Bob Neill has announced this month that the government is to take an extra £400m per annum from businesses next year, by scrapping business rate relief given to the owners of empty properties.
But don’t blame us, says Neill.
"This is a Labour tax,” he says. “There are many Labour taxes that we would like to scrap, but we are simply unable at this point because of the disastrous fiscal legacy left by Labour. But we are taking action to tackle problems with business rates — such as scrapping Labour's retrospective ports tax and by increasing small business rate relief."
In fact, Labour introduced this tax in order to encourage regeneration schemes before the recession took hold. Obviously, this “incentive” to keep business premises occupied could not compete with the global recession.
So will we really see businesses bulldozing their own premises to avoid rates?
It’s happening already according to the British Property Federation. What it calls the “bombsite Britain” tax has led to millions of square feet of property being demolished since its introduction two years ago.
There are plenty of empty premises, that’s for sure. According to the Local Data Company, 13 per cent of all town centre shops are now lying vacant. The majority of the boarded-up blackspots are in the Midlands and the North with a shocking 29 per cent of all businesses in Blackpool closed up.
Napolean Bonaparte called us a nation of shopkeepers. The fact is that our high streets reflect the state of our nation and it doesn’t look good — some are turning onto ghost towns, others are high street clones with few independent stores.
So what can be done to encourage more enterprise on our high streets?
People power is one way. Pop-up shops, cafes and galleries are moving into empty premises and using them to improve community life. By starting small, many projects have been able to get off the ground. Some have turned into permanently successful going concerns — like the Dock Kitchen in West London which was set up in the old Virgin recording studios complex.
But pop-up shops aren’t going to save the high street single-handedly. Even economic recovery may not immediately change the fortunes of our shop-keepers, according to the British Retail Consortium. Director general, Stephen Robertson, has said: "Many of the problems of town centres have more fundamental causes than simply the economic slowdown. High street shops are often battling to pay big bills for business rates and rents”.
The BRC has called for a moratorium on business and property rates. Certainly, national and local government have to find ways to reduce the barriers that stop entrepreneurs setting up businesses on our high streets — from business rates to planning and even parking.
Something’s got to be done — before boarded-up Britain becomes bombsite Britain.
We all have good years and suffer tough ones, but Christmas comes in all economic conditions. It's like a lifelong census of your approach and attitude, and says much about you as a leader.
In austere times when staff may have been let go, wages frozen or cut, and profits and cash placed under pressure, it can on the surface appear a good idea to avoid the costs of the Christmas bash. Let's face it, many of us do find it a bit cringeworthy to watch Brenda from Accounts Receivable suddenly hyperactive and over friendly on Egg nog (what actually IS egg nog? Does anyone know?).
But the truth is you need your team firing on all cylinders in difficult times. They are your biggest cost and you need more from less if you are to improve your profitability. If you cut Christmas and the water coolers you'll look not only look petty and run the risk of annoying even your best and most loyal people, but you'll panic your entire team into insecurity, which is bad for morale, bad for productivity, and bad for profits. Leaders lift horizons and spirits. Losers wallow in the recent past.
What does it say about you if you won't invest the equivalent of a couple of hours worth of pay in saying "thanks guys"? And not to celebrate the survival of your remaining crew to this point in the most treacherous economic storms known to man because you've lost a few overboard is weak leadership. In tough times you need to lift horizons and stay to task, not wallow in the inevitable imperfections of the journey. Business is a challenge worth doing because you can lose. Celebrate those who have left as if martyrs to the business cause.
There's no sin in a laugh. Think back to the war years when times were really austere and remember that humour helped us come through.
So, don't cut back on Christmas. Don't let tough times of the politics of different religions convince you to reign back. Celebrate - we could all perish in an asteroid collision tomorrow. Count your blessings at this time of year, not your excuses.
Above all never miss an opportunity to say "thanks" and to raise horizons. These two simple traits separate the Gandhis from Gordon Gekkos, Greed is not good. Generosity is great!
Alex Pratt is an entrepreneur and the author of Austerity Business.
Alex has given us a copy of Austerity Business to give away to a lucky Marketing Donut reader. All you have to do is leave a comment below telling us what you're doing to thank your staff this Christmas. We'll put all the commentators' names in a hat and pick one out on Thursday, 23 December to receive the book. Get commenting!
Entries will only be accepted via the Marketing Donut website. You can enter by leaving a comment on this blog post telling us how you're thanking your staff this Christmas. To leave a comment, you will need to sign in or register to set up an account. Registration is completely free. Multiple comments from the same user will only be entered once. Comments will only be published at our discretion and no links will be allowed. Inappropriate or offensive comments will not be published. Comments submitted between Thursday 16th December and Thursday 23rd December 2010 (17:00 GMT) will be entered into a draw and a winner will be picked at random. The winner will be contacted on Thursday 23rd December using the email address they provided when they registered on the Marketing Donut. If the prize is not claimed by Monday 10th January 2011, another winner will be selected. We will post the prize to a UK address in January 2011. The prize is one copy of Alex Pratt's book 'Austerity Business', there is no cash alternative.