Advertising Your Small Business on a Shoestring

If you are a small business owner, you know how hard it is and how expensive it can be to market and advertise.  One thing you should know is that you don’t have to keep up with the big boys.  If you are a small, community-based business, corporate, industrial advertising is not for you.  Maybe you have tried direct mail advertising before, and you don’t see the value.  But, I’d like you to reconsider.

Get Their Attention - A direct mail piece that gets your prospect’s attention is worth a lot of money and it will be in your customer’s home long before the monthly magazine or trade journal arrives.  If you are considering a print ad in your local newspaper, remember that your ad can get lost in the sheer volume of newspaper advertising and that the direct mail piece stands alone, arriving as a single piece of mail in your customer’s mailbox.

If you are sending direct mail to a corporate office or business, your piece will arrive on your customer’s desk or in his email box -- cutting through clutter and defeating information overload with a catchy headline and lead-in.

Advertising Costs Money - Don’t try to spread your dollars around in hopes of attracting prospects and defeating your competition.  Use Direct Mail targeting and send your ads to only the prospects you most want to grab.  You try to reach the whole world, just aim your message at the prospects who will most likely buy your merchandise or service.

Don’t forget to measure your return on investment by coding your reply cards or email response inboxes to automatically sort the type of ad you sent out and the area or business type to which you sent the ad. Then just track the number of prospects that respond and how many result in a sale. Direct mail statistics are hard to argue, because you know the response you got came from a certain ad sent to a certain customer.

Planning for the Future – With direct mail campaigns, you know what has worked by the exact responses you got to a certain ad sent to a certain area of the community or a certain business type, and you can more easily predict the success of your future mailings.  You can send test mailings, by hard copy letters or email, develop prospect mailing lists with a particular buying profile and test one kind of direct mail package against another until you find what works.  Change the wording and learn from your mistakes without a lot of expensive reprinting of brochures or big ads in magazines.

Spend your advertising dollars wisely.  Don’t guess or try the broadcast approach, placing ads everywhere and hoping that you’ll get customers.

Give Away the Store – If you offer your customers something for free you can actually lower the cost of your sales lead, because your direct mail response rate will probably increase by virtue of the fact that your prospect will respond to get the freebie item.

Think about this example.  Your company sells a health supplement, and it costs you twenty-five cents to send direct mail advertising to each of the contacts on your marketing list.  You plan to send your ad to 10,000 prospects at 25 cents each, it would cost you $2,500.  If this ad campaign only resulted in a 1% response rate (100 people) your cost for a qualified lead would be $2,500 total cost, divided by 100 qualified leads = $25.00 per lead. That’s a lot of money!

But you could include a free booklet with your direct mail ad ’10 Simple Ways to Get Healthy”.  It will cost you $.50 to print each booklet, but the free booklet will result in a 4% increase in your response rate.

So, now your qualified lead costs looks like this:  $2,500 total cost, plus $5,000 for booklet printing.  With the giveaway, your response rate goes up to 5% (or 500 people) so your costs are now $7,500, divided by 500 qualified leads = $15.00 per lead.  In other words, your cost per qualified lead is decreased by $10.00 per lead.

When you use a freebie you don’t want to spend the money to make or buy the free item you are sending to your prospects, when these people aren’t interested in your product.  So, you can make your free gift contingent upon buying your product.  In other words, your free booklet is only available when the person buys your health supplement.  Or you can link the free gift to your product.  For example, you might offer a free ‘body mass index’ of a Instead of offering a free gift certificate to a store at your local mall, give your prospect a free fitness assessment with the purchase of your health supplement.

By using direct mail advertising, either in hard copy mail or in email, you will spend less money to contact your prospects and, if you use the freebie method to elicit a higher rate of response, you will have more qualified leads to prospect and, hence, more customers to call your own!

Back to more career and business skills information

To teach and learn money skills, personal finance, money management, business, careers, and life skills please go to the Money Instructor home page.