Contrasting Cross-selling and Up-selling

Cross-selling involves asking a customer to purchase a related or complementary item with an item they have just ordered.  The following examples should help.

  • Would you like French fries with your burger?
  • Do you need a warranty?
  • Do you need a printer along with your new PC?
  • This belt or these shoes would look great with those slacks!

Up-selling occurs when one suggests a better or more expensive product.  Examples include offering

  • a larger size of French fries or shake
  • a faster computer
  • a golf membership with greater privileges.

These two sales terms are often interchanged with one another, and many on-line articles seem to suggest these strategies are exclusive to Internet sales.  But they’re not as they’ve been around for quite some time!

Small Businesses and the NAICS

In the 1930’s, the federal government developed and introduced the first U.S. system to classify business establishments based on type of primary business activity.  At that time, our economy was primarily driven by manufacturing.  This system was known as the Standard Industrial Classification (SIC) system and utilized a hierarchical four-digit coding system with ten major categories or sectors; thus many of us are familiar with the term SIC code.

By the 1990’s, economies all around the world had dramatically changed over the past sixty years and governments began discussing the need to make changes in their classification systems. The new structure, introduced in 1997, is also a hierarchical system that utilizes six-digit codes with twenty major categories or divisions; it’s called the North American Industry Classification System, or NAICS.  NAICS groups establishments together based on production processes and is compatible up to the five digit level with the systems used by Canada and Mexico.  Additionally, it’s compatible up to the two digit level with the International Standard Industrial Classification of All Economic Activities of the United Nations.

Now that you know a little about the background, let’s address why a basic understanding of the U.S. business classification system is important for a small business.

First of all, by researching business data using a standardized code, such as the NAICS code, one can find out how many businesses like yours are operating and where they are located.  As an example of a geographically congregated industry, you’re likely to find a high percentage of furniture manufacturers located in North Carolina.  Furthermore, these codes will be helpful in preparing your marketing plan as you need to be able to clearly describe your business, suppliers (if applicable), and competition.  If you operate in the B2B market, you can also use use an industry coding system when describing your target market(s).

Second, one can use this industry data to study trends of past activity to make estimates of what may happen industry-wise in the future.  As an example, if the government had been tracking blacksmiths or manufacturers of buggy whips, one would have noticed a continual decline in these industries.  Two modern examples are the decline we’re seeing in the number of video-rental stores and independent travel agencies.

Third, one can use industry data to compare and contrast basic characteristics within your industry, such as employment (size of business) and full and part-time employment levels.  By visiting www.census.gov you’ll obtain a quick overview of the types of business and industry surveys and reports made available by the U.S. government. 

Fourth, a NAICS code is necessary for a wide range of documents.  Federal and state entities ranging from the U.S. Environmental Protection Agency, the IRS and the Census Bureau will require a business to provide their NAICS code on many of their applications and reports.  Other practical uses include attorneys filing required government documents, banks evaluating loan applications, insurance companies accessing risks and mailing list publishers compiling business data. 

If you’re familiar with the old SIC system given below, you’ll recognize carryover to the new system. The ten categories of the older SIC system are:

  1.  Agriculture, Forestry and Fishing
  2. Mining
  3. Construction
  4. Manufacturing
  5. Transportation, Communications and Public Utilities
  6. Wholesale Trade
  7. Retail Trade
  8. Finance, Insurance and Real Estate
  9. Services
  10. Public Administration 

The twenty categories and the corresponding first level two-digit codes of the newer NAICS system are: 

  • 11         Agriculture, Forestry, Fishing and Hunting
  • 21         Mining, Quarrying, and Oil and Gas Extraction
  • 22         Utilities
  • 23         Construction
  • 31-33    Manufacturing
  • 42         Wholesale Trade
  • 44-45    Retail Trade
  • 48-49    Transportation and Warehousing
  • 51         Information
  • 52         Finance and Insurance
  • 53         Real Estate and Rental and Leasing
  • 54         Professional, Scientific, and Technical Services
  • 55         Management of Companies and Enterprises
  • 56         Administrative and Support and Waste Management and Remediation Services
  • 61         Educational Services
  • 62         Health Care and Social Assistance
  • 71         Arts, Entertainment, and Recreation
  • 72         Accommodation and Food Services
  • 81         Other Services (except Public Administration)
  • 92         Public Administration

For those of you who live in the greater Southlake, Texas area, here are highlights by industry (utilizing NAICS divisions) of businesses in this market as published in the 2005 County Business Patterns.  In 2005, 4,563 establishments were reported in the greater Southlake market based on a compilation of data for the seven zip codes in this market.  Roughly 14.7 percent of all businesses were involved in Retail Trade, 13.5 percent were involved in Professional, Scientific and Technical Services and 9.4 percent were classified in the Health Care and Social Assistance division.

If you would like to learn more about using NAICS codes to make your marketing efforts more profitable, please contact Kate Barlow at KGB Strategic Marketing Solutions. 

Marketing in a Highly Competitive Marketplace

One of the most common and effective marketing strategies when operating within a highly competitive market is to differentiate yourself from your competitors by focusing on one or two niche markets. 

Goals and priorities for niche marketing may include:

  1. Completing more transactions
  2. Generating more referrals
  3. Increasing cooperation with allies
  4. Combining marketing tools
  5. Placing greater focus on details such as devising highly personalized messages and polishing your marketing script/message
  6. Making greater use of your database.

Three general steps in creating a niche are:                                         

  1.  Studying your business’ strengths
  2.  Identifying market segments benefiting from your product, service or expertise
  3. Developing strategies to reach them based on identified characteristics. 

One example is the highly competitive local real estate market.  As examples, a realtor might have a niche based on geographic area,  housing type, stage of life, or housing value.

Take the time to look at businesses within your industry but located outside your geographic area for ideas!

If you need more information about niche marketing, please contact me at your earliest convenience.  The initial consulation is always free unless we address a specific project.  I can be reached at 817-488-2761 or via email: kgbmarketing11@verizon.net.

Answering the Age-old Customer Question, “What’s In It for Me?”

Marketing experts continually remind us that our customers are always asking this question.  In The Little Blue Book of Advertising by Steve Lance and Jeff Woll, the authors reiterate the essential need for businesses of any size to identify and understand the differences in the features, advantages and benefits of their product or service. 

Thus from this comparative analysis, you’ll want to develop marketing messages that incorporate those items that personally mean the most to your customers and prospects.  Remember that your customers are bombarded with hundreds, if not thousands of marketing messages each day.  By applying this strategy, your message is more likely to reach them and/or tug at them in an emotional manner. 

So to get started, let’s examine features, advantages and benefits.  A feature is a statement of fact about some aspect, element, or prominent part or characteristic of a product or service.  Features can often be the technical jargon your industry uses on a daily basis, but the end user may not understand or relate to such terms as GHz or network interface card. 

An advantage helps the customer or user in a specific manner, i.e., something the feature provides or delivers to the user.  An advantage can also describe how the product or service is better than an alternative feature, and/or a feature offered by the competition.   

A benefit is what the consumer or user gains from the feature and/or your product.  For many products, start by thinking of the problem or problems your product or service solves.  The benefit is what you want to offer and sell to your customers and prospects.  As stated above, customers are primarily concerned about themselves and want to know how a product benefits them.  In an on-line article by Laura Clampitt Douglas, the author recommends thinking of benefits as the end “result” for the customer.  So if you prefer, interchange the terms benefits and results. 

Research indicates the following are some of the primary benefits sought by a purchaser.

  1. Improve quality of life / save time / life made easier / high reliability
  2. Save money
  3. Save lives / safety concerns
  4. Improve health and well being
  5. Improve one’s status – wealth / appearance

After you develop your message, always remember to test it.  Ask non-vested people or some of your customers for their feedback.  And don’t be surprised if women have a longer list of benefits since they tend to seek a solution to a greater number of needs and wants.   

I thought it would be helpful to provide some examples to start your creative process.  Codes are “F” for feature, “A” for advantage and “B” for benefit/result. 

F: four wheel anti-lock brakes

  • A: help the car stop faster
  • A: safer than the competition’s car
  • B: save the consumer’s life 

F: non-stop airline service

  • A: gets the passenger to his/her destination faster (compared to a one or two stop itinerary)
  • B: save the consumer’s time 

F: wireless mouse

  • A: less wiring and fewer cords on top of desk so it’s clearer
  • B: customer can be more organized and effective 

F: clothes soap with more cleaning power

  • A: clothes get cleaner
  • A: improve your appearance
  • B: customer may feel and look better 

F: over-the-counter cold medication

  • A: purchase without a prescription
  • A: stop a runny nose
  • A: relieve congestion
  • B: improve customer’s health and/or she/he feels better faster 

F: accepting credit cards

  • A: no need to have cash at time of purchase
  • B: customer convenience 

F: feature, advantage, benefit analysis

  • A: makes one sit down and truly think of the benefits from the customer’s perspective
  • A: develop more effective marketing messages
  • B: improve the return on your advertising    

If you would like more information about this strategy, contact Kate at 817-488-2761 or kate1.kgbmarketing@verizon.net 

Major Local Women’s Groups

Since women are involved with the purchasing decisions of over eighty percent of all consumer goods in the United States, more businesses are focusing on marketing to women.   Thus I thought it would be helpful to present brief information about the following active women’s groups found in the greater Southlake, Texas area.  Remember, involvement with these groups can be a great way to make our communities a better place in which to live, grow and work along with growing your business.

 Greater Keller Women’s Club

  • founded 1989
  • primary goals are community service and fund raising
  • hosts annual Fashion Show and a variety of on-going social/networking activities for members
  • www.gkwc.org 

Colleyville Woman’s Club

  • founded 1981
  • holds annual Fashion Show and Holiday Homes tour for their fundraisers
  • has monthly meetings September through May
  •  www.c-w-c.org 

Grapevine Chamber Women’s Division

 Greater Grapevine Newcomers Club

  • primarily a social group
  • Contact 817-488-8949

 Greater Southlake Women’s Society

  • founded 1997
  • supports numerous local philanthropic causes and events throughout the area
  • holds annual art auction and annual blood drive
  • www.southlake-gsws.org 

Southlake Newcomers Club

 Southlake Women’s Club

  • founded 1985
  • sponsors two major fundraising events, Art In The Square and the annual School Supply sale
  • hosts annual Valentine Luncheon for local senior citizens
  • www.southlakewomensclub.org

 Trophy Club Women’s Club

  • founded 1981
  • sponsors annual garage sale, golf tournament and progressive dinner
  • www.tcwc.info

 If you would like more specific information about marketing to women, please contact Kate at 817-488-2761 or kate1.kgbmarketing@verizon.net  I would love to meet with you!

Important Facts on the Women’s Market

Women in the U.S. influence or are responsible for making the purchasing decisions on eighty percent of all consumer goods in the average household. 

Martha Barletta, author of Marketing to Women, does an excellent job in describing the differences between male and female consumers. The following summary highlights three main points made in her book, and will likely make many women smile! 

 If women frequently shop in your store, use your services, or buy your products on-line, why should you consider taking a different approach when marketing to women? 

 1. Women have a different purchasing process than men

· They consider more factors and generally do more research

2. Women have different attitudes,  priorities and (often) responsibilities than men

· They are more likely to bounce ideas off others, generally favor “we” over an “I” attitude, and want everyone to get ahead

3. Women have different responses to marketing messages than men

· They prefer realistic people in ads, respond to emotion and human situations, rely on word of mouth so if a product works for someone else, it’s likely to work for her situation 

Focus Group Considerations for Small Businesses

Focus groups, or focus group interviews, are generally considered a quick and fairly inexpensive method for gathering in-depth, descriptive information from customers, prospects and employees. 

On the flip side, this popular type of qualitative research can be very subjective as findings are not representative of the full market segment and conclusions vary based on the perspective of what department (sales, operations, customer service, accounting, etc.) is viewing the discussion.  

Focus groups are best at providing help with identifying major issues, problems, and a range of desirable services and features.    One can gain in-depth personal information on customer attitudes, perceptions, behavior, lifestyles, needs and desires in a creative format.  In particular, focus groups can help with examining a new product concept or how to possibly advertise it, explore the criteria consumers may use to make purchasing decisions, or generate terminology for developing a questionnaire. 

The format can be flexible enough to allow delving into a particular response on the spot.  Participants can use their own words to answer questions versus a pre-determined list on a written survey.  A real world example occurs when attorneys use focus groups to gain insight into how people speak, think and feel about specific topics. 

Experts recommend a group size of six to twelve participants.  If you have a very opinionated group such as executives or a shy group of teenagers, consider reducing the group size to four to six.  One highly vocal participant can dominate the discussion and influence responses from others no matter the size; thus certain group and meeting management skills are essential! 

This type of research compliments quantitative research, such as written surveys that are number/statistic driven.

 Some standard “nuts and bolts” about consumer based focus groups include:

  • Plan on recruiting (external sources can help) and compensating participants who are targeted for certain characteristics (gender, age, occupations, hobbies/interests, etc.)
  • allow a minimum of one hour for each session with two hours usually the maximum
  • prepare to hold a minimum of three focus groups per target market segment, such as three involving men, three involving women, and three for each age segment
  • tape each session to allow multiple viewing of the exchanges and  responses (advise participants upfront that people are observing the session and it is being recorded)
  • develop an outline of open-ended questions, usually moving from general to specific
  • hold off site, such as in a hotel suite or office building conference room
  • hire a trained moderator / facilitator to obtain the best results
  • use name tags.

If you’re wondering about the role of the moderator/facilitator, his/her job is to explain the process and general guidelines, encourage discussion, restrain dominating personalities, remain emotionally detached from the subject or topic, ensure key questions are addressed, and maximize the use of probing questions.  

Other practical hints include making sure participants are provided assurances to give their honest opinions and are comfortable and relaxed.  Thus try to make sure the room isn’t cramped, too hot or too cold, and neither too dark nor too bright.   

If you’re a small business on a limited budget and want to conduct casual focus groups involving your key customers, you may be able to offer little or no cash compensation, but provide an appropriate thank you gift along with a meal and refreshments.  Experts advise to plan on paying a greater amount for the participation of highly trained professionals, such as attorneys and doctors.   

Here are a few ideas to spark your creativity.

  • A toy developer could observe and tape kids at a local day care center interacting with a new toy concept.  In this case, permission from the parents would be an absolute necessity.
  • A fitness center could seek information on new programs or customer satisfaction noting priorities between women and men.
  • A grocery store could seek information on a new marketing campaign targeting families of different income levels.
  • A bank could seek customer service information from new customers versus long term customers.
  • A youth organization could try to find out what new programs would appeal to youth at a certain age and distinguishing between inner city and suburban youth.
  • A technology store could research how their products are being used by age and gender.
  • A title company could research an idea for a new service based on residential versus commercial realtors.
  • A school district could question how technology impacts teachers and students in the classroom.
  • A business or organization could use the format informally to meet with employees about various topics, such as benefits, organizational issues.

Experts on the women’s market state that various forms of focus groups can be very useful when collecting information from women since they like to share stories in great detail and often relate products and services to people and lifestyle. 

Focus groups differ from town meetings, brainstorming sessions and study circles as the former have a clear plan and utilize a controlled process with greater structure, along with the fact that participants are selected based on characteristics they share.  Impractical uses of focus groups are trying to build consensus or educating a market segment. 

If you would like to visit about the various methods for obtaining customer information, please contact us at 817-488-2761 or email kate1@kgbmarketing@verizon.net.  We’ll be delighted to meet with you! 

Nine Common Small Business Marketing Mistakes

You’ll find a variety of common marketing mistakes’ lists on the Internet.  But I thought it might be helpful to present these issues in reference to the stages of the sales cycle that I’m defining as: 

  1. Prospecting, trying to build a list of contacts or “filling the pipeline.”  This phase includes networking and non-personal promotional activities such as advertising.
  2. Following up with prospects / contacts.
  3. Turning prospects / contacts into presentations.
  4. Converting presentations into sales.

Additionally, I’ve also provided a few questions and suggestions to help address these common mistakes.   

First, not taking or making the time to clearly define and promote your benefits.  As an example, you may be talking about the features and advantages of your product, instead of focusing on what the purchaser needs and how your product or service will benefit them.   

Potential benefits may be saving time, saving money, increasing revenue, simplifying a process, or saving a life. This of course can also apply to staff at a retail store.  Are they trained to state benefits prior to features and advantages?  Do your advertisements promote benefits? 

Second, not focusing on the correct target market.  Have you taken the necessary steps to identify your target market to know who really needs your product at this point in time or in the near future?  Do you know where they live?  Do you know what they read, listen to or watch?   

What information do you have about existing customers that can be researched for answers?  If you’re starting a business, what industry information can you obtain about your competitors and their customers’ needs? 

Third, not being able to succinctly state what he or she does.  When you’re meeting new people, this core message is called an “elevator speech” or USP, unique selling proposition.   No matter what you call it, you want to tell people how you solve problems, such as helping small businesses fix their computer problems, or helping people maintain a healthy lifestyle.  This statement encourages them to ask for more information, instead of just stating “Oh that’s interesting” when you tell them you’re a computer repair specialist or a fitness instructor.   

Fourth, if you have a website, not providing enough information to generate leads.  Does it clearly state benefits and provide testimonials and examples?  Have a few non-vested people look at your website to obtain objective input about the design, content, colors, ease of using, etc.  Websites can be interactive to sell, handle customer service and/or accounting issues, or they can be just an informational site. 

Fifth, not using an effective contact database system.  Have you established a system to routinely update your database with new contact information?  Are you keeping track of enough information to ask additional qualifying questions?  

One expert recommends the use of index cards for maintaining contact information only if you have less than three hundred contacts.   Perhaps you might benefit from asking patrons to fill out a card when visiting your store or leave their business card. 

Sixth, not adequately listening. Remember, based on customer service research conducted by the U.S. Chamber of Commerce Small Business Institute, the number one thing people want from someone they do business with is to be listened to!   

Do you focus on what the prospects are telling you in terms of their needs?  Your business may not be able to help them solve a big problem, but you might know someone who can.  Personally, I think of this follow-up stage as the time to develop meaningful relationships.  

This also applies to retail staff.  Do they have adequate information about the various products sold in the store, where they are located, or how to obtain service and installation? 

Seventh, not following up with enough contacts.  What type of item or contact would be useful to your business and fit your style.  Should you write a monthly or quarterly newsletter?  Should you send out postcards with helpful information?  Are phone calls the best option for your industry? 

Eighth, not identifying meaningful solutions.  Have you clearly understood the need or the urgency of the prospect’s situation?  Are you adequately answering their questions, or are you providing a cookie cutter response?  Are you talking too much during the presentation?  Are you showing enough examples of your work, providing enough references or sharing enough testimonials?   

Ninth, not adequately preparing for presentations.  What type of feedback have you received about your written and verbal skills?  Are you comfortable with public speaking if that is an essential part of your presentation?  Should you consider taking some type of class or joining a group that provides public speaking opportunities?  Can you honestly say you know your material well enough that you’re flexible to address all of or the majority of issues that might surface during a presentation? 

This list does not address the importance of focusing on repeat customers and the six marketing fundamentals for all businesses posted under the Strategy category on April 16, 2007. 

If you would like to discuss solutions to these and other marketing problems that you may be encountering, please contact us at 817-488-2761 or kate1@kgbmarketing@verizon.net 

Generating Name Recognition

 Sponsoring community events is one way to generate awareness of your small business. 

 According to Raleigh Pinskey, author of 101 Ways to Promote Yourself, just about any small business can find a way to contribute to “almost every event imaginable.”  In many instances, your participation may primarily be limited to time and/or services.   

Your business can benefit from this participation when

  1.  event promoters publicize sponsors and volunteers
  2. you and your employees network at the event and pre and post events
  3. your business name appears in the event program.

 Other promotional objectives might include developing community goodwill, improving image or stimulating trial of your service or product.  Your employees may also enjoy an opportunity to volunteer, meet new people and provide service to the community.

If you would like to share some of your personal experiences, I would enjoy hearing about them.  Either phone me at 817-488-2761 or email me at kgbmarketing@hotmail.com.  Also, if you operate in the greater Southlake area, visit our DFW Marketing section to learn more about major local events in our market.

Personalizing your marketing efforts – Part III

The following is the final section of a three-part article focusing on ways a small business can personalize their marketing efforts.  As previously mentioned, I’m not referring to personalizing mass produced printed materials, but am focusing on those little “human” touches that mean a lot to your best customers, prospects, industry allies and employees.  I refer to this group as your “focused contacts”.   The first part, posted on June 25, focused on handwritten notes, and the second part, posted on June 30, focused on customer appreciation. 

The third way to personalize your marketing efforts is to ensure your company is known for customer service.  I’ve segmented this approach into four categories.

  • Customer expectations
  • Employees
  • Response time
  • Value-added ideas.

In order to exceed customer expectations (and yes I know this term is over-used), think about your recent transactions at other establishments, whether positive or negative. 

When visiting a store, we appreciate the efforts made when employees walk you to the location of a product, answer your questions about product options, and then ask if you need additional assistance with another item.·         It’s hard to feel highly valued when you’re just told the aisle location and you’re unfamiliar with the store layout or are in a hurry.  And then again, do you get frustrated when checking out and am asked “did you find everything?” and when you tell them no, they show no concern for your input? It’s important to identify your customers’ priorities if you want them to be life-long customers.

  • When I worked at American Airlines in the eighties, we studied how other businesses within the travel industry were responding to the influx of women business travelers and learned safety was the top concern.  As an example, women didn’t want their room number stated out loud at check-in.
  • It’s a great feeling when a restaurant remembers your preferred seat or a hotel remembers your non-smoking room preference.

Furthermore, it is beneficial to ask your focused customers or allies how your product or service is performing.  Then, implement changes and advise them of these changes.

  • You may find that people are willing to pay more if you spend more time listening to them (a selfish, but important factor).
  • My July 2006 newsletter identified numerous ways of gathering information and listening to your customers.
  • Remember to obtain information about different “time points”: purchase, delivery, service calls and after the customer actually uses your product for a period of time.
  • Hiring a mystery shopper can provide first-hand qualitative input on how your customers are treated.

A second way to focus on customer service is to think about your employees.  If you respect, value and train your employees and recognize them as an important asset, these employees are more likely to pass along the same treatment to your customers.  Plus, you may have lower employee turnover. 

  • Ask your employees for suggestions on ways they can offer outstanding customer service, such as learning more about products or your competitors.
  • Modify or eliminate rules preventing employees from providing great service. 
  • As your company provides training, offer employees opportunities to practice the new skills prior to interacting with customers and prospects.  New skills need time to become habits.

The third area is response time.  If you have a website, what is your response time to answer questions or comments? 

  • What are your response rates when it comes to returning phone calls, shipping products, scheduling and completing service calls, or providing replacement parts?
  • With so many people short on time, have a procedure for notifying your inability to keep an appointment.

The final area of customer service that can be personalized is value-added services.  What procedure do you have in place when an item is out of stock? 

  • I was quite surprised when a high-end local grocer had no record of my request for a special product I was seeking.  At the time I left my contact information, I mentioned the two special trips made to their store for this item.  Since that experience, I’ve reduced the number of visits to that establishment. 

Do you mail out postcards or make a phone call when the product is re-stocked?  How do you keep customers informed of special purchases?

  • Just they other day I received a call from the service department of my car dealership reminding me that I haven’t been in for service in some time.  Personally, I value that reminder since our lives get busy and it’s not convenient or fun when the car needs servicing!

Do your technicians solve an immediate problem that’s likely to repeat itself OR do they find a long term solution so it doesn’t repeat itself?  This easily applies to appliance, computer and cable service repairs.

  • Perhaps you’ve come across a problem with a piece of equipment and you make the effort to contact customers who purchased that item.

Do you notify focused contacts of your busiest time of the day or week so they can avoid long lines and delays?

  • Wouldn’t it be great if the local post office could tell you when they have the most agents working?

Please don’t hesitate to share your comments and thoughts about these three methods for personalizing your marketing efforts.  It’s a topic that never loses relevancy.