Promotion is the specific mix of advertising, personal selling, sales promotion, and public relations a company uses to pursue its advertising and marketing objectives.
If you are an entrepreneur, you most likely have limited resources and you are still learning about the market. Information gather is extremely important at this stage of the game. The trick is the start the revenue stream without spending too much money.
Objectives
The objectives that are met by promoting are to move the target market through the following phases:
Unawareness -> Awareness -> Beliefs/Knowledge -> Attitude -> Purchase Intention -> Purchase
It is believed that consumers cannot skip over a phase, but they need to move through them. Promotion is used to move the target market from one phase to another to finally purchase.
The Offer
The offer needs to be identified before you begin any promoting. What are you offering the target customer? What do you want the target market to do?
One mistake that can be made is to create a promotional advertisement and not tell the customer what to do. You should prompt the customer and tell them to "call this number to place an order" or "download this software from our web site".
Measuring Response
Testing different offers, advertisements, direct mail letters, lists, and promotion techniques can tell you what method is most effective. There is a trade-off. Testing is expensive. You need different versions of promotions, which raises production expense. You need to track the results, which takes time. But the information you gather could help you reduce wasteful, ineffective spending in the future.
If you decide to test, make sure you have a method for measuring response. You can do this by first asking the customer where they heard about you when taking the order, if it is a telephone order. If it is an order form that they mail back to you, you can code the order form with a tracking number that lets you know exactly what promotion the customer is responding to. This information can then be entered into the customer database for future analysis.
World Wide Web
The Web allows for a cheap way of promoting your product. It is a great tool because it allows the target customers to educate themselves about your product by reading about it, seeing a demo, and download a copy (and therefore serve as your distribution channel).
Remember, you are trying to reduce the perceive risk of purchasing your product. By providing a Web page, you are moving the target market through the communication cycle from unawareness to purchase.
Also, you are trying to reach innovators and early adopters. These people are actively searching for better ways to meet their needs. The Web is a natural place for them to go to look for you.
The difficulty with the Web is all the mass out there. It is very crowded and difficult to be noticed. Register with all of the search engines, such as Google, Yahoo and Alta Vista. Make sure that there are keywords in your web site that will attract your target audience.
Direct Mail
An average response rate for direct mail is about 1%. This depends on the offer, the mailing list, the target audience, the creative (how the direct mail piece looks), and the timing of the mailing. There is a whole industry built around direct mailing.
This promotional activity involves many steps. Direct mail is a way of promoting your software product by sending prospects mail. It is a way of directly communicating to a list of people.
List Selection
A list is the names and addresses that you use to send your direct mail piece. This list is very important to the success of a mailing. Some experts place 40% - 60% of importance to the list and 40% - 60% to other combined factors, such as offer, sales letter, and timing.
Compiled List: Names and addresses from a common source - such as a phone book. These lists are the lease expensive, but have the lowest response rate.
Mail Order Buyer Lists: Names and addresses of people who have responded to direct mail in the past. Lists can be selected by lifestyle or special interests. These lists respond better than compiled lists.
Publication Lists: Names and addresses of people who subscribe to a particular magazine. General interest magazines tend to have a lower response rate than special interest magazines. Special interest newsletters have a small circulation, but if this group is your target market, it can have a better response rate than other lists.
Donor Lists: Names and addresses of people that are of interest to non-profit organizations.
House Lists: Names and addresses owned by a specific company of customers and inquires of their product.
You can narrow lists down by demographic information, such as gender, geographic location, income, homeowners, frequency of purchase, date of purchase, and monetary (amount) of purchase. Date of purchase tends to be a good indicator of response rate. The older the names, the less likely the response - although you must test your lists to determine how old is old.
Prices are usually given in cost per thousand. There is usually a minimum order - such as 5,000 names. There is usually a cost to select based on certain criteria. Price ranges can be from $50/M to $300/M for a base price. Each source varies. However, the cheapest list may not be the most cost effective. You need to look at cost per acquisition once the mailing is complete.
Common Measurements
Cost per acquisition = Total Cost of Mailing / Number of Responders (people who ordered).
Cost per piece = Total Cost of Mailing / Number of People Mailed.
Response rate = Number of Responders / Number of People Mailed.
Response rates to prospects (non-customers) average around 1%.
Response Mechanism
One of the most important parts of your direct mail piece is the response mechanism. This is the device that the prospect will use to place the order (or request information).
In designing your response mechanism or order form you need use all you have thought about so far - your offer, your product, the benefit it gives your customers, the price, and the risk reducer (such as a money back guarantee or a free trial period).
Make it easy for the prospect to place the order. Give them many ways to do it - telephone, e-mail, fax, mail back order form.
Tell them exactly how to pay for the order.
The response card should be easy to fill out, offer as few choices as possible, be short, and be easy to read and understand.
Although using a postcard may be cheaper, people will not put confidential information on a postcard. They will not put credit card number or even name and phone number on something everyone can read. Use a business reply envelope, even if it is a little more expensive. You will get a higher response rate. And make sure the response card fits in the envelope without folding it.
Involvement devices work. Give the prospect something to do, such as check a box to order or place a sticker or stamp on the order form.
Give the order form a look of intrinsic value. Use the bond-like borders, seals, stamps, and other money look a-likes.
The Business Card
The Business Card is probably the most misused and most valuable advertising piece in your arcinal. Flashy business cards, too much information will cause your reader to be confused and discount your validity. Remember your business card reflects who you and your company are. DON'T SKIMP ON THE QUALITY OF YOUR BUSINESS CARD! Yes, today you can print your own business cards. But guess what, I and your potential customers will know it!. One of the first things I do when presented with a business card is to feel the weight of the cards paper and see if the edge is clean cut. Keep your card informational but not too much, just an overview of basics. Name, email, phone, web address is critical. Your address is not that important unless you have a local store front.
Product Brochure
This piece of the direct mail can be made a little more "slick" than the sales letter will be. The brochure will describe your product, the technical specifications, the benefits to the customer, testimonials from other customers, any free trial period, and money back guarantee.
Include the company's name, address, phone number, fax number, and web address.
Sales Letter
The first line of a sales letter is a headline. It should give the reader immediately the benefits of the offer being made. This is the first thing a reader will read.
The P.S. at the bottom of the letter is the second thing a read will read. Be sure to add a P.S. to your letter, giving the offer, the benefits, the free trial period, and the deadline.
The average length of the sales letter is 4 pages long. Two pages long is considered a short length letter and six or more is considered a long length letter. Printing on both sides of a page test as well as one sided print.
The use of push dates test better than no push dates. A push date is a deadline for the prospect to order - "PLEASE RESPOND BY MONDAY". If you are going to use a specific date, allow for at lease three weeks for delivery for third class mail.
Envelope
The first thing the prospect sees is the envelope. Some people use this to print a "teaser" copy on the front of the envelope. This could be used to hint at what great offer lies inside if they just would open the letter.
The risk is that the teaser copy immediately tells the prospect that this is another advertisement junk mail piece, and it may not get opened as a result.
If you do use teaser copy, make sure that whatever is promised on the outside is fulfilled on the insider. Otherwise the person will be angry, and therefore, no sale.
Testing and Tracking Response
On your response card, you can assign a code so you can keep track of what the customer is responding do. What list did you use, what offer, what sales letter, what brochure, what price, etc. There is no limit to the things you can test via direct mail. For example 01-123-CA could translate to the first mailing of list source 01, sales letter 1, brochure letter 2, price 3, in California.
If you are testing price, make sure that everything else is constant. Use the same list and the same direct mail piece, with just the price changed.
Some Tricks That Work
Remember that direct mail is a personal medium. The more personal you can make your mail look, the better response you will get.
Stamps work better than metered mail. Stamps look more like a personal letter.
First-class stamps provide a fast delivery, but don't necessarily improve response rate version third-class stamps.
Flashy color just for the sake of color does not pay off. If you decide to use some color for conservative enhancement, browns and greens do not work as well as aquamarine blues, cold and warm grays, warm reds. Some other successful colors have been bright orange, yellow ochre light and/or a metallic gold.
Soft white book and antique-finish papers work better than slick super white paper. Cheap thin paper makes the product look cheap.
Address labels perform worse than computer printed addresses directly on the envelope.
Make a dummy sample to determine folding of paper, size, and most importantly weight. Postage is very expensive, and if you go over the designated weight set by the post office, you will be paying for it. See the post office for the weight and size limits for first-class and third-class mail.
People like to do things. Checking a box, using stickers and stamps, work to improve response.
Classified Advertisements
Although it may nice to be able to take out a full color, full page advertisement in an industry magazine, it is very expensive and will not reach your target market of the innovators and early adopters. This target market will read the classified ads in the magazines looking for and willing to try new things.
The key for classified advertisements is frequency. Running an ad once will create awareness, but not necessarily action.
Request a media kit from the magazine you are considering. This should contain circulation information, subscriber profiles, and prices. This will help you determine if your target market reads this magazine.
Press Releases
A press release is an announcement of a new product release. Editors may take this information and publish it as news in their magazine or newspaper. This is a great way to get free publicity.
To send a press release, you should prepare a press kit that includes:
Cover letter to the editor
Press release product announcement
Product features sheet
Corporate background sheet
Evaluation product
Technical specifications sheet (if any)
Reprint of any past articles
Names of end user contacts and comments
Picture of your product
The editor may take your product announcement, make some modifications to it by hand, and send the original to be printed. In general, editors like to have the press releases double spaced with plenty of margin room.
There can be a 3-4 month lead time before your press release is published.
If possible, tie your press release into current events or human interest. It has a better chance of being published.
Don't write your press release like an advertisement. Any claims you make, be sure to back them up with user testimonials.
Tailor your press release to each publication, or at least each type of publication. Mass mailing press releases don't usually get published. Also, send your press release to one person at each magazine. If you are unsure of the person, contact the magazine for a contact name.
Include in your press release the product name, the price, a company contact name, the company name, address, phone number, fax number, and e-mail address. Be prepared to take questions.
Your opening sentence should be clear and concise. "The first (product) capable of (doing this benefit) is now available from (your company) for people who need to (this need)".
Product Reviews
Magazines have product review editors that review it in an article or column. This can provide great exposure. However, it can also be risky. What damage will it do if you get a bad review? Before pursuing this promotional activity, it may be safest to fully complete testing, and have contacted many new customers to get their feedback on the product. Make sure there are no surprises.
Choose a magazine your target market is reading. You can always use quotes from the review in your promotional material for other promotions. With more people accepting the product, the faster you will move past the early adopters and innovators.
Call the magazine for the name of the correct person to send the product to. Ensure that this person gets a full product.
Be available for questions. If a reviewer has problems, there will usually be a phone call to the company first.
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