Sole traders need different marketing and sales messages to big corporations. Different techniques are required at different stages of growth. By COLIN BENJAMIN.
By Colin Benjamin
There are four major steps to selling and marketing successfully as a company grows from a sole trader, through the family business stage to a fully mature prospect for merger, takeover or IPO.
At the company’s inception the marketing and selling strategy revolves around the personal story of the founder, networks and personality selling.
Next comes micro and mass marketing communication strategies. Then as the mature private and publicly listed company adopts a formal structure, more sophisticated methods of communication are required, including board reports, investor engagement and regulatory responsibilities.
Ultimately, the smart company reaches a scale and scope that requires sending a message to investors and venture capital providers that communicates its future global potential.
So what are the differences between the communication strategies at each of these developmental stages? And what tools should you use when?
Networking. The most important and often most difficult path to market for the person with an idea for a new product involves building a network of people. These supporters have to help shape the growing business and give honest feedback to the founder.
To get these supporters on board the business owner needs to clearly identify the purpose and direction of the company, communicate its goals and objectives succinctly and enjoy telling everyone why they should join the circle of admirers, advocates and ambassadors.
The tools at this stage include trade shows, exchanging business cards at industry events, setting up alliance partners and associates in word-of-mouth networks.
A crucial communications faux pas often made at this stage is to try and sell to your network. Instead, identify network partners and include people in the same industry and distribution structure. Target specialist experts that help your customers and include them in the network, offering to support them if they support you. The support includes shared functions, links on websites and cross-referring potential customers.
As the enterprise develops an organisational structure, a concise business and marketing plan and financial stability to justify advertising and communication budgets, it moves beyond personal selling, internet presence and customer orientation to market focus and internal marketing communications.
Get SmartCompany FREE to your inbox every weekday.
Personal selling. This is crucial when the new business wants to build sales. It includes being able to “sell” the benefit proposition to customers, colleagues or commercial suppliers – all the people who must be convinced that there are real and abiding benefits to be obtained by “buying” into the business.
The key to success at this stage lies in the ability to tell a story and the measure of that success is the extent that customers are persuaded to try, buy and become loyal customers.
A lot depends on directly communicating with potential customers through emails, functions, door-to-door selling by reps, blogs … anything through which you can build your story and sell the benefits.
Internal and external brand development. Now it is time to communicate the brand. As soon as you have a range of satisfied customers it is time to seek testimonials that are sent to potential customers and displayed through print or online.
Every time there is a successful sale communicate this with three-core messages:
- Some form of appreciation to the customer for coming onboard.
- A clear and concise communication of why customers are satisfied to all those who have been involved in the production and distribution of the offer.
- A message to the market that shows others how they can be involved in the growth of the business.
This combination of communication strategies is the essence of brand development that takes the business from selling to marketing and to brand leadership. By this stage the company should have a very strong web presence, be advertising strongly online, have brochures and have excellent external communications such as newsletters for staff and the network.
Publicity and promotions. The company is now ready to go public with its story through press releases, CD Roms, videos and emails. And the good news is the public has a vested interest in the business opportunity and is keen to listen.
Entrepreneurs also need to be actively promoting their new product, service or experience. Building brand presence and sales volume relies on free and paid trial promotions that give people to try and buy.
Public relations. Whereas sole traders and home based business units tend to rely on well-written press releases and local media, larger firms take on public relations advisers produce newsletters, develop websites and establish customer relations databases.
PR is also used by IPOs for the launch of a dash for cash and by mature companies for damage control when there has been a breach of ethical or appropriate marketing behaviour. Relationship marketing and corporate culture must be tightly linked to processes of brand development and ongoing change management.
Direct marketing. In the days before the internet, list marketing and letter box drops were often used by growing companies to establish new products and services into local-area markets.
Now business owners can reach a global market via Google, eBay and Yahoo Search that creates equivalent niche market objectives for business-to-customer (B-C) direct sales.
At this stage lean on others’ reputations. Recruit celebrities and form strategic alliances with large firms.
Trade marketing. When the company has reached sufficient production capacity to sell to a mass market or seek trade partners, professional managers move towards channel marketing and to build extended value chains that create volume sales.
Industrial marketing and business-to-business marketing relies on creating incentives for third parties to take up the retail effort and build scale and often take up the critical task of export and global trade relationships.
Advertising search engine optimisation. Buying space for mass media advertising is an inevitable stage of development for firms that have outgrown their local market and need to generate large-scale consumer awareness, but it is always expensive, risky and less focused than any of the other marketing communications discussed above. The main goal is to support the sales objectives that have been set out in a well prepared marketing plan and is measured in reduced costs per sale and increased volume of sales from the targeted market segments.
Venture capital attraction. By this time the sales and marketing strategies must be so appealing that people want to put money into the business. The most common reasons start-ups and small business units fail to grow beyond sole trader status or lack the resources to expand their business into new markets, comes from an inability to communicate a credible sense of vision, mission and the capacity to manage the growth of the business. Early attention to venture capital attraction requires outstanding financial and accounting communication within the growing company, and professional budget and forecasting communications to bankers, business angels, venture capital sources and ultimately stockbrokers and business analysts.
Market focused communications. Create market spaces for product. At every stage in the development of the firm there is one substantive imperative: to have sufficient cash flow and capital to maintain both the growth of the business and to pay rewards for time and effort of shareholders and wider stakeholders. The bigger the business, and the wider the range of products, services and experiences that are offered to the market, the greater the need for an effective marketing and selling communications program.
Read about lessons from top entrepreneurs: How to build a brand.