Website Marketing

Management of a website and the accompanying marketing can be a confusing and complex task. Search Engine Optimization (SEO), Search Engine Marketing (SEM), and Pay Per Click (PPC) are all terms that you see referencing the management of website marketing. Keywords, links, and page optimization are all important nonpaid aspects of making your website an effective sales tool for your business.

The above are technical aspects. Even more important is the brand development of the site and the presentation of your products and/or services key benefits. If search engines are the queens of the internet, then customer service is the emperor. Getting the technical aspects correct is only important if your site convinces the visitor that you can fulfill their specific needs.

Even if you have no interest in the physical management of your website, you need to understand how this key marketing tool functions. Websites are not "build it and leave" tools, You must consistently evaluate and modify a website for it to provide the performance you need. Businesses are allocating more and more of their marketing budget to the Internet. To meet the competition you need to manage your site and the various marketing technologies and tools.

The internet is now at the “top of the food chain” for marketing tools. It can provide a 24/7 fulfillment tool, a brand building tool, and perhaps most importantly a feedback loop from current and potential customers. The most important step you can make in developing a website is to define which of its functions you will need to utilize. It doesn’t matter if you build your own site or you work with a website designer, understanding how the web fits into your marketing plan is the most significant part of developing a web presence.

The internet for firms consists of two major parts: your website and your hosting service. When you define your needs in regard to what content your site will have, then you can make an informed choice as to which “hosting” service is best for you. Selecting a host is the most technical decision (beside the actual “building a website”) decision you will have to make. Take some time to read the details on a few of the major hosting sites like network solutions and you will start to understand what is offered. If you choose to use an outside website developer let them help you make the choice.

Remember that when you build a website you are in fact opening another location or perhaps your only location. It is a strategic decision which will be around as long as you are in business. Think carefully about content and structure – knowing that you will modify and perhaps totally change the website several times during the life of your business. A website is an investment in the capital assets of your company, treat it as you would your most important tool or resource.

Ad Management

Repeat an ad

If response to an ad is good, run it - without change - two or three times and check the responses of each appearance or broadcast against previous ones.

 

Keep repeating the process. Much advertising loses effectiveness because the advertiser doesn't keep reminding people. Repetition helps increase knowledge of and interest in, the product. You can soon estimate how often you should repeat each ad - exactly or with minor changes.

 

Analyze all ads in relation to response

Divide ads into at least two classes: high-response ads and low-response ads. Then look for differences between the two classes.

 

The time the ad was broadcast or run may be responsible for a particular response level. Other factors, however, may be just as influential as time or even more so, though in radio time is often crucial.

 

Consider the message and how well it was expressed. Did the copy stick to the theme or did it wander? If you used slogans, did they help make the point? For print, consider the effects of illustrations, type, size, color, and ad location. In broadcast, consider whether or not the voice of the person doing the ad or music used may have had an effect.

 

Emphasis on brand names should also be checked. Price figures should be analyzed. If price lines are involved either in the ad or in the merchandise line of which the advertised product is a part, you should consider them also.

 

Check the effect of the length of broadcast ads. Did you get the best results with 10-second, 30-second, or 60-second announcements?

 

Check the size of print ads. Size often has a bearing on response. As a general rule, the larger the ad, the larger the response.

 

Try to see a pattern of dominance

Your analysis of high-and-low response ads may show that certain details make the difference between a high or low response. Try to find the combinations that work best for your firm and merchandise.

 

Note changes occurring over time

You should never take a winning combination for granted. There is no single formula that will insure high response ads every time. Advertising changes. Therefore, you should watch the ads of others to see what changes are occurring. Continue to analyze your own ads, make small changes occasionally, and note any variations in response.

 

Listen to what people say about your ads

In doing so, try to discover your mental framework within which any comment about your ad was made. Then try to find points that reinforce believability and a feeling that your product fulfills some wish or need.

 

However, you should not be misled by what people say. An ad can cause a great deal of comment and bring in practically no sales. An ad may be so beautiful or clever that as far as the customer is concerned the sales message is lost.

 

Testing Attitude Advertising

Testing Attitude Advertising

Testing Attitude Advertising

When advertising is spread out over a selling season or several seasons, part of the measurement job is keeping records. Your aim is comparing records of ads and sales for extended time.

 

An easy way to set up a file is by marking the date of the run on tear sheets of newspaper ads (many radio stations now provide "radio tear sheets", too), log reports of radio and television ads, and copies of direct mail ads. The file may be broken down into monthly quarterly, or semiannual blocks. By recording the sales of the advertised items on each ad or log, you can make comparisons.

 

In attitude (or image-building) advertising, the individual ads are building blocks, so to speak, which make up your advertising over a selling season. The problem is trying to measure each ad and the effects of all of the ads taken together.

 

One approach is making your comparisons on a weekly basis. If you run an ad, for example, each week, at the end of the first week after the ad appears or is broadcast, compare that week's sales with sales for the same week a year ago. At the end of the second week, compare your sales with those of the end of the first week as week as year-ago figures.

 

At the end of the third week, 1 month, 3 months, 6 month, and 12 months from the running of the ad, repeat the process even though additional ads may have appeared or been aired in the meantime. For each of these ads, you will also make the same type of comparisons. You will, of course, be measuring the "momentum" of all your ads as well as the results of a single ad.

 

After a time, you probably will be able to estimate how much of the results are due to the individual ad and how much to the momentum of all your advertising. You may then make changes in specific details of the ad to increase response.

 

When comparing sales increases over some preceding period, allowances must be made for situations that are not normal. For example, your experience may be than rain on the day an ad appears cuts its pulling power by 50 percent. Similarly, advertising response will be affected by the fact that your customers work in a factory that is out on strike.

The key idea in an ad

Plan the ad around one idea

Each ad should have a single message – the key idea in an ad. If the message needs reinforcing with other ideas, keep them in the background. If you have several important things to say, use a different ad for each one and run the ads on succeeding days or weeks.

The pointers which follow are designed to help you plan ads so they will make your store stand out consistently when people read or hear about it:

Identify your business fully and clearly

Make sure your radio and television ads identify your sponsorship as fully and frequently as possible without interfering with the message. Logotypes and signatures in visual ads should be clean-lined, uncluttered, and prominently displayed. Give your address and telephone number. It's possible to use a musical or sound effect signature identified with your store to create a "logo" on radio, too.

Pick illustrations that are similar in character

Graphics - that is, drawings, photos, borders, and layouts - that are similar in character help people to recognize your advertising immediately.

Pick the audio format or typeface and stick to it

Using the same typeface or the audio format for radio or television helps people to recognize your ads quickly. Using the same format or kind of type and illustrations also allows you to concentrate on the message when checking ad response changes.

Make copy easy to understand

Printed messages should be broken up with white space to allow the reader to see the lines quickly.

Broadcast messages should be written conversationally. Remember, these messages are human beings talking to human beings.

Tell your listeners how what you're advertising will help them. Consumers buy benefits, not products.

Get the main message in the first sentence, if you can. Sentences should be short. Be direct. Go straight to the point. Get the audiences' attention in the first five seconds of the radio or TV commercial.

Try out your script on somebody else or read it into a tape recorder. When you play the tape back, you'll easily spot phrases that are hard to understand (or believe!). Your ears are better than your eyes for judging broadcasts ads.

Planning for Advertising Results

Planning for  Advertising Results

Whether you are trying to measure immediate response or attitude advertising, your success will depend on how well the ads have been planned. The trick is to work out points against which you can check after customers have seen or heard the advertisement.

Certain things are basic to planning advertisements whose results can be measured. First of all, advertise products or services that have merit in themselves.

Unless a product or service is good, few customers will make repeat purchases no matter how much advertising you do.

Many people will not make an initial purchase of a shoddy item because of doubt or unfavorable word-of-mouth publicity. The ad that successfully sells inferior merchandise usually loses customers in the long run.

Marketers, as a rule, should treat their messages seriously. Humor is risky as well as difficult to write. Be on the safe side and tell people the facts about your merchandise and services.

Another basic element in planning advertisements is to know exactly what you wish a particular ad to accomplish. In an immediate response ad, you want customers to come in and buy a certain item, or items in the next several days. In attitude advertising, you decide what attitude you are trying to create and plan each individual ad to that end.

Evaluating Advertising Results

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Marketing Misconceptions

To begin moving in the right direction, we must first dispose of some  marketing misconceptions. Four of the most common are:

Misconception 1: Companies control market demand. This is a notion that is at once seductive and destructive.

The idea that companies control markets has been disproved most vividly in the industry where the misconception first took hold–the automobile industry. General Motors saw its market share plummet during the 1980s, despite pouring millions of dollars into television, magazine, and other mass-market advertising. The decline of huge department stores (Macy’s), airlines (Pan Am), and computer companies (Wang) is further evidence that companies don’t control markets, no matter how large their advertising budgets.

Misconception 2: Once you develop a marketing approach that works for your company, you've mastered marketing.  This may be the most dangerous misconception, because it can mislead entrepreneurs who are enjoying business success. Just think about all the business executives who have ridden the crest of marketing success, only to crash.

Remember whenWestern Unionwas synonymous with time-sensitive business communications, and IBM synonymous with computers

These examples aren’t meant as slights to the companies noted. The purpose in citing them is to make the point that everything looks easy when it works. But it should be clear to anyone who follows the ups and downs of business that few executives can feel truly secure that they have mastered marketing.

Misconception 3: There's a magical "marketing bullet" that works for everyone.    The converse of this is that a single overall explanation exists as to why successful marketers stumble. Successful marketers invariably attribute their accomplishments to some special practice–a focus on product quality or top-notch service or speedy delivery or the best prices. The stumbles come about, they typically say in retrospect, either because of some force beyond their control (Japanese imports or a recession, for example) or because they “took their eye off the ball.”

If one analytically picks apart the successes and failures, though, they are invariably much more complicated. Lee Iacocca can certainly blame Japanese imports and a recessionary environment for Chrysler’s problems in the early 1980s and again in the early 1990s. But there are no doubt a variety of pricing, feature, positioning, segmenting, promotional, and other issues that adversely affected the company. And perhaps Iacocca became more infatuated with his own success than he should have been if he were to stay objective about his company’s marketing prospects.

Misconception 4: Marketing and selling are the same. This misconception comes about because many of the most successful entrepreneurs are also very good salespeople. Talented salespeople can often go a long way selling a particular product or service without having a clear understanding of the true dynamics of the marketplace. Thus their success in selling can delude them into believing they have mastered marketing.

In reality, though, selling is only one aspect of marketing implementation. That is, once you have identified your customer prospects and determined how best to reach them, you move into the sales process–convincing customers to buy your product or service. If you haven’t done your marketing homework, you can easily fail when it comes to selling. And if you are fortunate enough to convince a random group of individuals or companies to buy your product or service, without some notion as to why you picked them, your success may be a testimonial to your sales rather than your marketing skills.

This confusion between marketing and sales often becomes apparent when companies seek to move past a particular sales plateau–typically in the $500,000 to $3-million range.

Marketing Truths: see link

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Income Statement Ratio Analysis

Income Statement Ratio Analysis

The Balance Sheet and the Statement of Income are essential, but they are only the starting points for successful financial management. Apply Income Statement Ratio Analysis to Financial Statements to analyze the success, failure, and progress of your business.

Ratio Analysis enables the business owner/manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry. To do this compare your ratios with the average of businesses similar to yours and compare your own ratios for several successive years, watching especially for any unfavorable trends that may be starting. Ratio analysis may provide the all-important early warning indications that allow you to solve your business problems before they destroy your business.

The following important State of Income Ratios measure profitability:

Gross Margin Ratio

This ratio is the percentage of sales dollars left after subtracting the cost of goods sold from net sales. It measures the percentage of sales dollars remaining (after obtaining or manufacturing the goods sold) available to pay the overhead expenses of the company.

Comparison of your business ratios to those of similar businesses will reveal the relative strengths or weaknesses in your business. The Gross Margin Ratio is calculated as follows:

Gross Profit

Gross Margin Ratio = _______________

Net Sales

(Gross Profit = Net Sales - Cost of Goods Sold)

Net Profit Margin Ratio

This ratio is the percentage of sales dollars left after subtracting the Cost of Goods sold and all expenses, except income taxes. It provides a good opportunity to compare your company's "return on sales" with the performance of other companies in your industry. It is calculated before income tax because tax rates and tax liabilities vary from company to company for a wide variety of reasons, making comparisons after taxes much more difficult. The Net Profit Margin Ratio is calculated as follows:

Net Profit Before Tax

Net Profit Margin Ratio = _____________________

Net Sales

Management Ratios

Other important ratios, often referred to as Management Ratios, are also derived from Balance Sheet and Statement of Income information.

Inventory Turnover Ratio

This ratio reveals how well inventory is being managed. It is important because the more times inventory can be turned in a given operating cycle, the greater the profit. The Inventory Turnover Ratio is calculated as follows:

Net Sales

Inventory Turnover Ratio = ___________________________

Average Inventory at Cost

Accounts Receivable Turnover Ratio

This ratio indicates how well accounts receivable are being collected. If receivables are not collected reasonably in accordance with their terms, management should rethink its collection policy. If receivables are excessively slow in being converted to cash, liquidity could be severely impaired. The Accounts Receivable Turnover Ratio is calculated as follows:

Net Credit Sales/Year

__________________ = Daily Credit Sales

365 Days/Year

Accounts Receivable

Accounts Receivable Turnover (in days) = _________________________

Daily Credit Sales

Return on Assets Ratio

This measures how efficiently profits are being generated from the assets employed in the business when compared with the ratios of firms in a similar business. A low ratio in comparison with industry averages indicates an inefficient use of business assets. The Return on Assets Ratio is calculated as follows:

Net Profit Before Tax

Return on Assets = ________________________

Total Assets

Return on Investment (ROI) Ratio.

The ROI is perhaps the most important ratio of all. It is the percentage of return on funds invested in the business by its owners. In short, this ratio tells the owner whether or not all the effort put into the business has been worthwhile. If the ROI is less than the rate of return on an alternative, risk-free investment such as a bank savings account, the owner may be wiser to sell the company, put the money in such a savings instrument, and avoid the daily struggles of small business management. The ROI is calculated as follows:

Net Profit before Tax

Return on Investment = ____________________

Net Worth

These Liquidity, Leverage, Profitability, and Management Ratios allow the business owner to identify trends in a business and to compare its progress with the performance of others through data published by various sources. The owner may thus determine the business's relative strengths and weaknesses.

Balance Sheet Ratios:  http://wp.me/p2qN89-5S