Striking GOLD
It seemed like a good idea at the time, but $2,500 poorer and still baffled about how to get her message across, Sandy Libby regrets the hired gun and his big marketing idea: a five-page letter sent to several hundred executives telling the story of how she got into the gift business. The monthlong effort brought her a total of five orders.
“It was a learning experience,” said Libby, owner of GOLD--Gifts of Lasting Distinction. “And a big chunk of my savings and my husband’s savings.”
The retired flight attendant prides herself on finding quality gifts for her Redondo Beach business and creating luxury gift baskets. “It just comes to me. I don’t know--it’s like having a vision,” she said.
When it comes to marketing her products, though, she draws a blank. Her marketing skills are “not very good,” she said, laughing. “Not very good at all.”
The stakes are too high and her bank account too small to risk another expensive learning experience, Libby said. The tiny company just moved into its first retail shop and has begun to shift its focus to corporate gifts and awards, potentially a lucrative, high-volume business. That puts it up against some well-heeled competition, including units of Tiffany & Co., Cartier and Beverly Hills-based David Orgell.
A savvy marketing plan is critical, but with sales at $43,300 last year and expected to reach just $69,300 this year, the company’s fourth, and still in the red, Libby has little cash to spare for advertising and promotion. She has relied largely on referrals to bring in new business.
What she lacks in funds, said business consultant Paul O’Reilly, Libby can make up for in creativity and planning, consistency and a broad-based approach to marketing.
“Absolutely any small business can be very successful through a well-orchestrated marketing plan,” said O’Reilly, director of entrepreneur training at the Valley Economic Development Center in Van Nuys.
Effective marketing begins with four questions, he said:
* What is the target market and does the product need to be changed to be more appealing to that market?
* How can the company make it easier for customers to get its product?
* What should the price be?
* What’s the best way to get the message to the target market?
Libby’s products pass with flying colors, said O’Reilly. And her new shop on Torrance Boulevard should make her more accessible to customers. She’s also done a good job with pricing, he said, by including the cost of labor and overhead in her calculations, in addition to the cost of the material.
It’s no surprise to Libby that O’Reilly recommended she focus her time and money on narrowing her target market and creating a marketing campaign that better reflects what she considers a unique and unusual product line.
“If you look at the materials she sends out, nothing, nothing, nothing about them gives you a sense of uniqueness,” said O’Reilly, who owned Advantage Marketing in Los Angeles for four years before starting the entrepreneur training program.
*
He’s also concerned that Libby, like many small-business owners, may be misdirecting her marketing efforts. Besides the money sunk into the one-time mailing of the lengthy tale, O’Reilly said she is putting resources into a contact list that doesn’t include the heavy hitters--the people who buy corporate gifts, awards and premiums on a large scale for their companies.
“Much of her marketing would be wasted because the things she sends out, everything she has done, has not really been directed at the right target,” said O’Reilly. “It’s not a big enough hit.”
He recommended that Libby telephone her existing contacts, often executive assistants who order an occasional gift, and in a friendly way, ask for the name of the person in the company who handles large gift purchases for holidays, conventions, performance awards, etc.
“This is the type of business she needs to make her business successful,” said O’Reilly. “She needs much more volume.”
Once Libby builds a list of buyer names, she should avoid her usual practice of immediately calling them with a sales pitch, the consultant said. Otherwise, she--and anyone else trying to sell a product over the phone--might bore or irritate a potential buyer before uncovering what he or she is in the market for.
A better approach for Libby is to pre-sell a corporate buyer by sending a small gift and try to determine their decision “tie-breaker”--the product, service or information it would take for them to do business with GOLD.
O’Reilly suggested sending a mini-survey, with no more than five questions, along with the gift and a brief cover letter. Then follow up with a telephone call (most prospective clients aren’t likely to fill out the written survey) to make a personal contact and gather the tie-breaker information.
That information will help Libby focus her marketing message, which has been difficult for her in the past. “It’s hard to explain so many different things,” she said.
Honing the marketing message for the target audience and repeating the message in an ongoing, consistent campaign is the heart of effective marketing, said O’Reilly. Too many businesses, small and large, buy a mass-mailing list, send off a promotional letter or package and give up when they get a weak or mediocre response, or, with little analysis, try something completely different, he said.
“That’s not marketing,” O’Reilly said. “Marketing is structure. It’s thinking through what your plan of attack in getting this group of customers is--what do you have to do--and planning out the best way. And do it repetitively.”
Repetition can create a sense of familiarity and comfort with the company and its products for potential customers, he said. Most won’t have an immediate need for a product or service when first contacted, but low-key, repeat mailings position the company for the day a customer is ready to buy.
O’Reilly recommended that Libby use a series of 10 or 12 promotional pieces--picture postcards, for example--whose design reflects the quality of the company products. Each postcard, a different one for each month, would showcase one or two seasonal items on the front and include a brief message on the back.
“It only takes you two seconds to get the point,” he said. Over time, potential clients will get a sense of the range and quality of the products and services Libby offers, he said.
*
“Never underestimate the value of that image and the value of the brand you are creating every time you put a message out there,” O’Reilly said.
Even small-business owners should demand top quality in their marketing materials, he said. When cash is in short supply, bartering is one way to pay for top-notch design and other services.
Libby will need a good photographer, a designer and a copywriter, he said. Some graphic or commercial designers are also good copywriters. Libby could also try a small marketing or advertising agency, O’Reilly said. Even a local college student, if highly recommended by a teacher, might be able to handle the design or copywriting, he said.
The important thing, O’Reilly said, is that a business owner hire the best she can afford, and insist that the design be consistent on every piece the company sends out--postcards, letters, invoices, price tags, business cards, etc.
“If I’m sending you 10 pieces in the mail, even if you don’t read them, I want you to remember the name of the company,” O’Reilly said. “I want you to remember it all came from the same company because when I call you after the 10th one, you’ll know who I am.”
Making those sales calls is an important but often neglected part of a marketing campaign, he said.
“That’s not fun for most people,” O’Reilly said. “So instead of doing it, we all avoid it, or we wait till the last minute or we don’t do it at all. So that’s killing [Libby].”
The answer: Pay someone else to do it.
The key, O’Reilly said, is to find the right person--someone who enjoys the challenge.
A retired salesperson or an at-home parent, for example, interested in working an afternoon or two a week might be found through personal connections or by putting up a note at the local chamber of commerce. An at-home parent who’d like to get out of the house two days a week or a college student also might be a good choice, O’Reilly said.
He suggested that Libby--who has two part-time workers in the shop--hire two more to make the calls under her supervision, and pay them $7 to $9 an hour.
Libby will need to write a sales script, and, through training the telemarketers, aim to build a relationship with potential customers, he said. A hard sale is not the point.
“The aim is long term, not short term, so every interaction must be a positive interaction. Every phone call affects her image,” he said.
With her small budget, telephone calls and direct mail are the most efficient marketing mechanisms, O’Reilly said. The company can’t yet afford advertising. His final recommendation, which would work for many small-business owners, is also cost-conscious. Libby should consider assembling an advisory council of other small-business owners and experts to provide feedback and ideas, he said.
The council could help her grow her business and evaluate possible alliances with related businesses, such as a flower shop, he said.
For now, effective marketing is her biggest challenge.
“Sandy is in the business of creating a good impression,” he said. “That’s what these gifts are about. So she has to create, constantly, a good impression with every message she sends.”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Meet the Consultant
Paul O’Reilly has been director of the free entrepreneurial training program at the Valley Economic Development Center in Van Nuys since mid-1996. Before that, he was president and owner of Advantage Marketing in Los Angeles for four years. Since 1933, O’Reilly has been and adjunct professor at Pepperdine University’s Graziadio School of Business Management. He was a vice president and marketing director at South Shore Bank in Massachusetts.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Does Your Business Need a Make-Over?
Does your marketing plan need revamping? Your business plan need updating? We are looking for business owners willing to let a consultant review their operations from top to bottom and make recommendations. Those recommendations will be published in a Business Make-Over feature. Send us a letter describing your business in detail and problem areas that a consultant could help tackle. Send to: Business Make-Overs, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053
