Having worked in marketing for over 20 years as a marketing manager/ director of marketing for several large companies and as head of press, publicity and marketing for a large government agency, Stefan now runs a small marketing and management consultancy with clients that include other small businesses, national organisations and charities. These are mainly based in the UK but he has recently also advised small businesses in Holland, Belgium, Cyprus, France and the US.
Notes to accompany Dave Trevena's interview with Stefan Drew
Firstly, to put the interview in context, some background information on Stefan Drew and his career in marketing.
Stefan became an independent consultant because he wanted to stop trading his time for a salary and stress!
When he set up this business his first year target was a six-figure income in four days a week. He achieved this in his first year and is adamant that other businesses can achieve the same.
Stefan is the UK's leading authority on Sun Tzu Marketing tactics.
Stefan's Interview Notes
How much do you need to spend on marketing?
When I started my businesses my challenge was similar to yours …. like most SMEs and independents I couldn't afford Big Budget Marketing.
The cosmetics industries spend about 30% of their revenue on marketing ….
But there are 100+ marketing methods that are absolutely free so why waste money that could be profit?
I spend 1% or less.
I.e. No more than £1000 for every £100,000 income I generate
In my first three months in my present business I signed contracts worth £45,000 ........ but only spent £450 on marketing
You could spend 1% or less on marketing!
Most Marketing doesn’t Work
I upset a lot of marketing professionals
I’ve upset a lot of people by stating what we all know …..
Most Marketing doesn’t work
- Most advertising doesn't work – “Me” adverts not action adverts are used by most people and they don’t work very well. You need to focus on customer benefits and the call to action.
- Most exhibitions fail dismally because there is no objective or plan of how to achieve it. Being there because your competitors are there isn’t enough
- Most direct mail doesn't work well – DM companies frequently claim a 2% success rate. Would you buy anything else with a 98% failure rate? You should be looking a for a much higher success rate or you are wasting money!
- Most websites are no more than expensive electronic notice boards… and this includes those belonging to the multinationals. You need to exploit the full marketing potential of your website.
Remember Believe it ... but be prepared to be wrong
Most people believe marketing is about advertising - it is about far more than that.
Most new businesses believe they need to advertise – you don’t.
Most businesses believe marketing is expensive – it isn’t.
Think about the 100+ marketing tools that are available to businesses large and small.
Believe in yourself ..... and be prepared to be right
Self-belief is crucial – you need to believe you can succeed. You need belief in your product and your ability to satisfy your customers with it. If you don’t believe in yourself or your product who else will? No one.
Sense Check Mentors
Although you need belief you also need a sense check. Find yourself a mentor who will be honest about your ideas….. but remember the Chairman of Sony was told there was no call for the Walkman!
Most successful entrepreneurs ….. or is that millionaires ….. mix with other millionaires and have mentors who they work with. Find a way to mix with successful people ….. mixing with failures just saps your belief and energy.
Three Ways to grow a Business
Growing your business
There are only three ways to grow you business. You can grow your business with -
- More customers
- More transactions per customer
- More revenue per transaction
There is no other way.
But it has to be profitable. Having the best sales figures ever is no good if you have lost money. Remember also that profitable businesses can go bust if they have poor cash flow.
Top end product
Do you have a top end product? A product that can make you a lot of profit very quickly?
My advice can cost over £1000 per hour. In 1990 I was asked to advise Saatchi and Saatchi with a client project they were working on. I realised I had the solution to the question they were trying to answer and had demonstrated success by the results of my work …… but they didn’t know how I had achieved it. I realised that my help was worth a lot of money and charged accordingly. There was a blinding flash as I then realised that every market has a price that is perceived as appropriate and that the value of a product often far outweighs its cost or normal price.
Give a product away and it can be perceived as low value. If you have a product, which has a high perceived value, there is no limit to what you might charge for it.
Planning your marketing
So how can you market your business?
A marketing plan is vital. Don't rely on making it up as you go along... write it down. Ensure your plan is SMART - Specific, measurable, acheivable, realistic and timely and monitor it regularly.
Your Marketing Plan
Plans sound dull and boring but are essential. But they needn’t be as long as War and Peace. A few pages are usually enough. My best plans often consist of a table on one side of A4.
Think about the following
- What action do you want your prospect to take?
- What competitive advantage do you have?
- Which marketing channels you will use?
- What will it cost?
- How will you measure success?
Multiple Marketing Channels
Don’t put all your eggs in one basket. E.g. spend £8k on Yellow Pages or $6,000 on advertising in isolation.
Spread the risk with at least 6-8 marketing channels being used at any one time. I’m currently using over 40 – see below
What is a customer worth
Know the value of a customer …… in £ or $
Think in terms not only of the current order or contract but consider the customer's lifetime value.
Sometimes you need to be prepared to “buy” customers in the first instance .... but only if they will become long term / high value customers.. E.g. If your first transaction with a customer nets you £100 profit then if you spend £75 to "buy" a customer you are in profit! The next transaction will give you more profit and the next even more. Even if you break even the first time you will be in profit with the next transaction. Some of my clients use D2D (door to door)
recruitment for new members. The payback period is about 14 months but is profitable because the retention rate is high and once they become memebrs they stay for years.
This goes against my 1% marketing cost idea in some respects but the two can work together if you market SMART. Especially if you can "buy" a £25k customer for a few pence!
My customers are worth approx £25k each to me. So four customers a year will bring in six figures.
Do you know your production, sales and marketing figures? Do you understand what your overheads costs are? If you don’t then you don’t know how much you can spend on marketing!
If you are a corner shop your customer might spend an average of just £5 each time they come into your shop. Unless you know the average spend per visit and per year you will have problems understanding how much you can spend on obtaining a new customer. In this case if you spend £450 on a newspaper advert and get just three new customers it will be a long time before you profit from the advert.
What marketing channels can I use?
At the time of writing these are just some of the marketing channels I am currently using in my business.
- Free help – I offer people free help. One way is via my website – see the “Your Questions” section. I also offer a free marketing newsletter.
- Niche – Choose a niche in which to operate. E.g. Coaching for managers working in the utilities industry, sales training in the electronics sector, supplying paint to the engineering sector, so that you can focus your efforts and not go in for “blunderbuss marketing”. In my case I have three distinct niche markets .
- Follow up – Follow up all your leads effectively. E.g. It took me 14 months to “land” one of my current clients .... but the contract is worth £25,000 so it was well worthwhile
- Media Releases – These provide free marketing and can lead to press, radio and TV coverage. See the link in the next section to see what they can lead to.
- Magazine Features – There are examples on my website of where my work has been featured on BBC World Services, in the national press e.g. Times Educational Supplement, The Garden, BBC
- Gardeners World, etc. Think about how you can harness the power and circulation of magazines and newspapers to raise your profile and sell more More
- Business Cards- cards have two sides and should say what you do. More
- Website. It must be more than an electronic notice board– it has to engage people. Preferably it must “harvest” email addresses for you. I have an emarketing strategy and I recommend you do as well.
- Affiliates – You could be working with affiliates like Amazon or Google or maybe small local companies who can help you grow your business.
- Autoresponder – gather email addresses and send newsletters – To find out more about the system I use click on the banner at the top of this page.
- Word of Mouth – It is the most powerful marketing channel in the world …ever. Think of a strategy to ensure people talk about you and your business.
- Blogs – Blogs are excellent as they are crawled by search engines and can be use to send people to your website and newsletter opt in page. They help you raise your profile, sell products and gather email addresses.
- Email - Its FREE … use it.
- Website – People like Microsoft offer free websites … no business need think that a website is too expensive or too difficult to produce.
- Telephone - Use the phone to speak to existing customers and prospects on a regular basis. Remember systems like Skype are free
- Networking – Think Quality v Quantity. Getting 100 cards at a speed networking event is unlikely to inundate you with work. Where can you go where none of your competitors go? I use networking to mix with millionaires and the CEOs from top companies. Could you?
- Letters to Editor – Writing them can get your name in the press at nil cost. For example I was published in The Professional Manager a few months ago and people then phoned me.
- Offers – price offers, two for one or BOGOF (buy one get one free) – supermarkets use them every day …do you?
- Time sensitive offers e.g. I’m offering one person out of all those that came to this page via my “Freedom Squeeze page” a free Internet Marketing Plan for their business. The offer is time sensitive though – the only eligible people are those that “signed up” to read this page within five days.
- Squeeze page. Giving free advice in return for an email address is a great way to build a list of people interested in what you do. Squeeze page can be text, audio or video based but whatever you do don’t abuse the trust of your list by selling their names.
- Joint Ventures E.g. a hotel selling wedding receptions can work with a wedding photographer. The hotel recommends the photographer who ensures wedding photos appear in the social pages of the local glossy magazine with a mention of the hotel. I have joint ventures with photographers, designers, etc.
- Photographs can replace a thousand words. I use them every day … do you?
- Columns – Could you write regular column for a magazine? You probably have the expertise!
- Google – Always check out new prospects. I was recently able to tell a prospect which school she has attended and who her first teacher was … all because she has an unusual name and a NZ accent. Google found a school picture taken in the 1960s. Google can provide massive amounts of information that can help you grow your business, test new ideas etc
- Ambassadors – I am the SME Ambassador for Birmingham Chamber of Commerce. It puts me in contact with 3500 business every month and my photo appears in their magazine virtually every month. This is quality networking!
- Referral Strategy – Do you have a strategy to ensure people are referred to you? It could take less than an hour to produce one.
- Social and business networking sites – For example Ecademy, can be excellent tools to help you research projects or products, raise your profile etc if used correctly.
- Free Directories – Ensure you are in them ….. but avoid the sales pitch because usually the cost is excessive and you don’t need it.
- PPC (Pay Per Click) – E.g. Google Adwords– This is very low cost targeted advertising that really works. It can be free – Google recently offered a £30 voucher so that you could test Adwords for yourself.
- Number one on Google – It is easy to get your name to number one but where are your products and blogs on the major search engines? When I wrote this page I was number three on Google for the term Marketing Magician. I’m often number one on the search engines for the term Marketing Magician .... sometimes there are as many as seven mentions on page one of a search engine. Some of my services also rate Google page 1 placement..... yours could to.
- Research – it can be done without any cost whatsoever. Do you know your market place well enough
- Surveys – Use the Ecademy survey tool – it’s not a perfect research tool but will give you some interesting insights. You can also put free survey tools on your website at no cost whatsoever
- Public speaking – organisations are crying out for guest speakers …. As are conferences etc. Arrange to speak at a local business breakfast
- Advertise - I know I say it often doesn't work but it can be can be free E.g. Horse and Hound magazine regualrly gave me free advertising.
Interviews –The audio semina rlinked to this page is a prime example of how an interview can be used to help people and raise your profile. Think about why someone might interview you on radio or TV and go for it.
- Audio – Linked to the above interviews can be used on websites, in adverts, embedded in emails and downloaded to CD, MP3 players etc. This is focused and mobile. Talk to people when they are free of distractions – driving, at the gym, traveling etc
- Elevator Pitch – The Americans favour a 30 second infomercial. I favour a two-word attention grabber. E.g. The Marketing Magician is how I introduce myself and people remember it enough to Google me months later.
- Breakfast host – A business exhibition recently offered me a breakfast venue, speaker and the ability to invite as many guests as I wanted to a breakfast seminar. They gained 8 guests interested in their event and I hosted my customers to a breakfast and a chance to hear Jamie Murray Wells the 23 year old founder of GlassesDirect More
- Coffee. When clients visit I make real coffee. My local gastro pub now sells “Proper Coffee” and they sell more coffee than any other restaurant I know. Staff at my clients’ offices now ask for meetings in my office because they have heard about the coffee! Providing good coffee has saved me travel time and enhanced my reputation.
- Web stats – Do you know how many people visit your site, which pages they visit, which country they are in, Google Analytics is free. With web stats you can target your web marketing.
CRM – A Content Management System enables you to produce new pages on your site or amend existing pages. You should be doing this at least once a week to encourage the search engines and people to visit more often
- Guru status – become a world expert. But first decide if it is going to take you a life time or less than an hour! You could be a world expert in the eyes of the media in the next 24 hours.
- Testimonials- you should treasure customer testimonials….. what is your testimonial acquisition strategy More
- Referrals – how do people get referred to you? Word of mouth is powerful but do you use a referral strategy? Do you want one?
- RSS Feeds – RSS feeds can be used to ensure people learn about new content on your website, on a blog or elsewhere. Feeds can go in and out of your site. You can even add them to emails.
U-tube allows you to use video to market your business and I use it with clients. Send people a link via email or your website.
Please feel free to contact me if I can help you in any way.
+44 (0) 1926 632 794