In my work with many small and medium enterprises years ago, I have noticed hat many of these businesses consistently make the same marketing mistakes.
Let me illustrate this with an example, a health and fitness club named the Art of Life Club (name changed to protect client identity), and show how such firms can be guided.
The Art of Life (AoL) Club caters to what they call the “beyond workout” market – the older generation that are typically starting an exercise regimen for the first time – and senior citizens, while the other local health clubs appeal more to younger people who want to socialise and build muscle mass, and to families who use the pool and other related amenities.
The club’s management understands its clients; fears and concerns, and knows they must reassure potential members that the club offers a supportive, non-intimidating environment as well as fitness programmes suitable for beginners.
However, in practice, it runs ads and promotions that use photos of people who are extraordinarily muscular, fit and dressed in high-fashion workout attire – not at all representative of their typical client – and the accompanying copy describes features such as high-tech equipment, advanced cycling training and professional-trainer franchise endorsements. These promotions conjure up some pretty intimidating images for an out-of- shape person who is already apprehensive about joining a health club.
In order to build its client base, the AoL Club needs to align its marketing messages with the realities of its target customer segments. At our first meeting with the club’s executives, the CEO detailed their marketing strategy. He did not have any well-defined and consistently implementable strategy underlying a variety of marketing tactics. Rather, he was using the proverbial “throw-a-bunch-of-stuff-at-the-wall-and-see-what-sticks” approach. This lack of focus and consistency had the expected result: Nothing was particularly effective in generating the desired volume of new clients, or it brought in people who were not necessarily qualified prospects. Since so much of what they do is reactive rather than planned and deliberate, they also could not reliably measure their marketing budget effectiveness. This haphazard prospecting approach brings me to my next point: Marketing is about creating relationships with people.
AoL’s professional staff works with each client to develop a fitness programme based on his or her goals and level of conditioning. Unlike many other health clubs, they continue to provide individual attention even after the initial personal training sessions.
This ongoing personal attention adds significant value to clients; membership and is a powerful way to differentiate the club from its competitors. Yet the club’s marketing is highly impersonal. Case in point: It purchased an electronic telemarketing machine, which programmes in a series of phone numbers of the residents in the neighbourhood, and when a victim (I mean, resident) answers the phone, the machine launches itself into a pitch for the club. Yes, the club’s message reaches many people in a cost-effective and timely manner, but is this the image they really want to project?
Another danger of the “warm bodies” approach is that it does not take into consideration return on investment. Considering the statistics that show how much more it costs to recruit new customers than to retain existing ones, it is financially advantageous to attract the right customers and then keep them.
The AoL Club does not consider the lifetime value of their customers. Instead, its sales goals focus strictly on generating a certain volume of appointments. A promotion they launched offered a free month’s membership, which primarily attracted college students home on break for a few weeks. The recruitment cost was high, and the students were not qualified prospects. They didn’t do their analysis and forecasting, and did not specify qualifying norms for free month membership.
Certainly not every small and medium business makes each of these mistakes.
But unlike larger organisations that may have marketing staff, the SME owners often wear many other hats on top of handling the business marketing.
Therefore, marketing professionals can bring value to these entrepreneurs by doing the following:
n Help the business owner focus on choosing a few right things and then doing them consistently.
n Encourage them to look past their products or services technical features and craft messages explaining its benefits to customers; after all, this really is what customers are purchasing.
By knowing the right segments to serve, and converting the real insights into consistent marketing messages, SMEs can stay focussed. The medium and long-term impact of a strategy is more critical than sacrificing it all for short-term gains.
It is certainly legitimate to be concerned about short-term profits. However, marketing is about developing long-term, profitable relationships with the right customers.
(The writer is CEO & MD, CustomerLab Solutions)