BA350

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Chapter Ten
Small Business Promotion:
Capturing the Eye of Your Market
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Education.

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The Need for Promotion
To get people to buy,
you need to make an
impression.
Those with interest are
sales leads and the
most interested are your
prospects.
The marketing funnel
shows how many
prospective customers it
takes to find one who
will make a purchase.
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Figure 10.2: The Customer Development Funnel for Physical
Products
There are three goals: get customers, keep customers, and grow customers.
Taken from Figure 4.11 of The Start-Up Owner’s Manual, ©2016, Steve Blank and Bob Dorf, used with permission.
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Figure 10.3: The Customer Development Funnel for
Web/Mobile Products
This slightly different version of the funnel is for internet-based businesses.
Taken from Figure 4.17 of The Start-Up Owner’s Manual, ©2016, Steve Blank and Bob Dorf, used with permission.
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Promotion Using the PESO Model
Advertising is part of conveying your message to your customers.
• Paid media – you pay for ad placement.
• Owned media – your website, newsletters, emails, signage, etc.
• Shared media – called word-of-mouth or referral advertising.
• Earned media – public relations and press relations, or “free ink.”
Your promotional mix are techniques that will get you noticed.
• Shared media embassies – your gateway to shared content.
• Media partnerships – with companies, influencers, etc.
• Media integration – where you develop contests, advertorials, etc.
• Incentive media – such as sponsorships, brand ambassadors, etc.
At the very center of the PESO model is where your brand and your
organizational identity fits, and where everything starts.

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Figure 10.4: The PESO Model: A Hybrid Model of How to
Think about the Media Landscape
Source: Adapted from G. Dietrich, “The Four Different Types of Media,” Spin Sucks, June 24, 2013.
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The PESO Model: Your Brand
A brand may seem like the name a firm puts on itself and its products,
but it is more than that.
• A brand message should project what the firm
is about.
• Your product/service will likely evolve, so your
brand would need to change to reflect this.
• Think about what underlies your brand.
• Your brand promise shows what your firm will
do for the customer.
• Branding builds from the value proposition,
your competitive advantage, and what you
want the firm to represent.
• With small businesses, the entrepreneur is
part of the brand.
As you develop
your brand, you
come to know
yourself and your
business.
You can now start
to build the
business out into
the media
landscape.
That starts with a
focus on your
owned media.

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The PESO Model: Owned Media
Organizational identity is your business/product/service name, including
logos, symbols, characters, slogans, hashtags, uniforms, and packaging.
• When picking a name, take care when using a personal name, avoid
copyright infringement, and allow for future growth.
• Owned media: domain name, logo, phone line, business card,
brochures, sales packet/marketing kit, online support material, sign,
packaging, and promotional novelties – all with a succinct message.
The overlap of owned and shared media are social media embassies.
• Your firm’s own branded page on different social media sites.
• Includes the usual, but also business directory sites, user review
sites, catalogs, and sites like Amazon, eBay, Etsy, and others.
• You can use a social media management platform or even pay a
customer, friend, or family member to keep an eye on the sites for you.

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The PESO Model: Shared Media
Shared media is the ultimate form of free advertising.
• Service providers get customers through referrals or word of mouth.
• Social media sites have the possibility of viral marketing.
• Creating and leveraging hashtags increases the viral impact.
Where shared media and earned media overlap lie media partnerships.
• Potential partners include chambers of commerce, local business
organizations, trade or professional associations, and others.
• Other forms of media partnerships include sponsorships, co-
branding, and co-marketing.
• A key type of media partnership comes from influencers, either
macro- or micro-influencers.
• Donations and community service are other forms of media
partnerships which can create publicity in a virtuous cycle.

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The PESO Model: Earned Media
Earned media occurs when others talk about your firm or products in the
media and you did not pay them directly for the mentions, called free ink.
• A key issue is how newsworthy your material is – it should have public
recognition, public importance, and public interest.
• Media outlets offer a media kit of their publication schedule, topics, etc.
• Start-ups can use a business profit kit to share with the media, or
develop a press release using the AIDA formula.
• Public relations create a favorable opinion of your firm.
• Investor relations do the same for investors, advisers, mentors, and
companies with whom you may form important relationships.
Media integration occurs where earned media and paid media overlap.
• Contests are a specific form of lead generation.
• Another technique is placing advertorials.

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The PESO Model: Paid Media
Forms of paid media include: promotional video for building awareness,
audio, print for complex information, locational promotion including OOH,
and network advertising.
• Advertising costs (CPM) ranging from least to most expensive: online,
out of house, radio, television, and print.
• With online campaigns, measure goals using key performance
indicators (KPIs) and track your organic traffic.
• Use search engine optimization (SEO), adding the best keywords
and description tags to your web pages.
The overlap between paid and owned media is incentive media.
• The best known form is affiliate marketing.
• Related to affiliates are brand ambassadors.
• Other forms include native advertising, and a variation called
sponsored content.

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Developing Your Promotion Strategy
With so many promotional options, a plan is crucial.
• In the marketing plan is a one-page overall strategy with a detailed list
of the goals, types of activities, and anticipated outcomes of your plan.
• These are the main components of your media content strategy plan.
• Include future promotional efforts, their schedule, platforms you will
use, your budget and costs, and how you will measure success.
• Start-ups should focus on brand and owned media, branching out to
shared media using social media embassies.
• Look for opportunities for partnerships and earned media through
affiliates or influencers.
• Experience will help you decide on types and amounts of media
integrations, paid media, and incentive media to use.
• Getting the word out is the purpose of promotion.

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The Process of Personal Selling
Personal selling follows a general formula.
1. Prospect and evaluate.
2. Prepare by finding out what you can about the clients.
3. Present a logical and compelling argument for purchase.
4. Close the sale using one of a number of techniques
5. Follow up to avoid customer’s cognitive dissonance.

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Customer Retention: Keeping and Growing Customers after
the Sale
It costs five times as much to get a purchase from a new customer
compared to an existing one.
The general approach to keeping customers is customer retention (CR)
and there are three major elements to CR.
• One is handling problems that crop up after a sale.
• The second is customer relationship management (CRM), which
focuses on monitoring and promoting customer interest and loyalty.
• The third is growing customer sales, which builds from the customer
development model and lean business practices.

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Customer Retention: Handling Post-Sale Problems
The ultimate test of any business is how they handle adversity, and
complaints are the most frequent example of that ultimate test.
• Most dissatisfied customers do not report their dissatisfaction to the
company and a third report their dissatisfaction to others.
In reality, most complaints are justified, so use this four step approach.
• Prepare yourself and listen.
• Accurately reflect.
• Apologize and start generating solutions.
• Implement and follow up.
The goal is an arrangement the customer thinks is fair.
• Avoid using “company policy” as a reason for inaction.
• Marketing is about sales and nothing generates cash like sales.

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Customer Retention: CRM in Two Steps
Step 1: Gathering the Data.
• Gather performance and
contact data from existing
customers.
Examples of contact data:
• Person, firm, source – unique
ID, demographics and contact
information, firm information,
and source.
Example of performance data:
• Purchases, non-purchase
events, follow-ups, follow-
throughs.
Step 2: Analyzing the Data.
• Customer vector reports.
• Sales process reports.
• Sales outcome reports.
The simplest, and most important
analysis is sales by customer.
• It is believed that 80 percent of
sales come from 20 percent of
customers.
• Identify those 20 percent and
keep them happy.

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Customer Retention: Growing Customer Sales
Selling the same
product to the
same customers is
market
penetration, while
selling the same
customers a new
product is product
expansion.
When looking for
new customers,
you seek market
expansion or
diversification if
trying to sell them
new products.
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Source: William O. Bearden, Thomas N. Ingram, and Raymond W. Laforge, Marketing: Principles and Perspectives, 4th ed. (Burr Ridge, IL: McGraw-Hill/ Irwin, 2004), p. 57.

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Customer Retention: Mechanics of Growing Customer Sales
Additional sales take four forms in the physical world.
• To unbundle is to break a product/service into components.
• Up-selling is selling accessories to higher-quality versions.
• Cross-selling means to sell related products.
• Referrals is a major way to grow sales.
In the online world, a next-sell is an attempt to prime customers to make
their next purchase.

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Sales Forecasting
One piece of the marketing efforts that feeds directly into your financial
projections, is knowing what your sales will be.
• First, determine how many prospective customers you need.
• A key issue in determining your number of customers is assessing your
hit rate or how many prospects it takes to make one sale.
• The next step is to estimate the average amount of sales per customer.
Now create your sales forecast:
• Prospective customers X Hit rate X Sale amount = Sales forecast.

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