Sales & Marketing
Retail operations may generate billions of annual dollars in sales, but data indicates that sales and marketing expenses take a huge bite of the profits. American retailers routinely spend billions of dollars on advertising, with placements in both print and electronic media.
All the same, Internet technology is rapidly transforming the industry's advertising and marketing strategies. Even shoppers that like to touch, smell and try on potential purchases are checking out the Web before they head for the nearest mall.
The National Retail Federation has found that a majority of American adults currently consult the Internet before hitting neighborhood venues for products and services. With the Internet clearly a catalyst for change, retailers with smaller, independent operations are scrambling to stay competitive without breaking their advertising budgets. The following are recommendations and strategies on how to maximize your ad and marketing dollars.
A Marketing Primer
- Let High-Tech Gadgets Do The Work. Customer Relationship Management (CRM) technology, for instance, allows the retailer to not only collect data but also generate and mail individualized postcards, letters or coupons pitching the right product to the right consumer. Hundreds of CRM options exist, both pay-as-you-go systems and ready-to-use software.
- Know Your Target Market. A purveyor of guns and ammunition likely would not choose to advertise in a women's interest magazine, nor would he (or she) donate t-shirts to a softball game sponsored by an anti-gun group. He would do better to advertise in sportsmen's magazines or on similar websites, rather than waste ad dollars appealing to the wrong audience. Yes, this example is simplistic, but it does underscore what marketing experts advise stick with the outlet best suited to the product.
- Consider Non-Traditional Outlets. According to marketing pros, the costs of network television, radio and print promotions continue to escalate. Each of these modalities can range in price from a few hundred dollars to tens of thousands of dollars, depending on things like ad size, air time and circulation.
On the other hand, an Internet banner ad on selected websites can range in cost from a few hundred to a few thousand dollars. Other potential bargains are email newsletters and promotions, direct mail, cable TV channels and custom publishing.
- Make Friends With the Neighbors. Retail establishments of every size are attracting new customers and getting free publicity in the process by sponsoring events such as in-house demonstrations, concerts, children's functions, art shows and classes. One major hardware chain, for instance, offers weekend how-to workshops on carpentry projects, painting techniques and dozens of other subjects for do-it-yourselfers; a pet store provides free obedience classes to canine customers; and a cosmetics store gives free make-up applications to teens every Saturday morning.
- Team Up With Other Professionals. Cross-promotional marketing allows retailers and other businesses to strategically target the same market without directly competing with one another. The beauty of this technique is that it provides low-cost growth opportunities for any enterprise, regardless of the type goods or services.
An example: With purchases of $50 or more, a ladies' boutique distributes "free manicure" coupons to redeem at a local spa. In turn, with 60-minute massage, the salon presents a $20-off certificate for the boutique. As partners in a cross-promotion, these vendors are reaching far more potential customers at much lower costs. In addition, prospects are introduced to each business through vendors they already use and respect.
- Develop Media Partnerships. It's no secret that small retail operations frequently have super-tight marketing budgets. Even so, successful independents can lower advertising costs by negotiating special agreements with electronic and print media providers, such as committing to a 12-month contract in exchange for a reduced price per spot. Others have found that co-sponsoring charitable fundraisers (5K races, galas, cook-offs and fashion shows, to name a few) with local radio, television and newspapers draws attention to their businesses and helps others, too.