May 272010
 

Have you ever received a letter meant for someone else and opened it by mistake? As soon as you start reading it, you realise it's not meant for you. The first clue is that it is addressed to someone else. Usually we stop reading at this point, but if we carried on out of curiosity, we'd find references to people, places and things that are meaningless to us. The letter has no useful purpose for us because it wasn't intended for us. The information is irrelevant.

Yet that is exactly what many businesses do with their e-newsletters.  They send information out that's not relevant or interesting to their readers.

Why would any business owner do this?

We get excited about our business especially if it has grown out of a passion or hobby.  All the minutiae and ins and outs are endlessly fascinating to us.  We want to share it with the world.  Your Mum will listen avidly.  Unfortunately your customers or potential customers may not be so enthusiastic. Finding lots of new customers like your mum is going to be an uphill struggle so you're better off finding out what excites or concerns your existing customers.

What can you put in your e-newsletter?

Coming up with topics for our e-newsletters can be a struggle.  The first thing to think about is what will interest, entertain, or surprise your readers. Using our own judgement is risky.  We are coming at it from a completely different perspective. If you don't know what your customers care about, you need to ask them. 

How can you find out what topics will interest your readers?

As an e-newsletter is often about educating, engaging or establishing long term relationships you can think a little more laterally.  For instance if you sell honey, do a quick brainstorm for topics connected with honey.  Go as wide as you want.  You might come up with a list like this:-

  • honey recipes
  • medicinal uses of honey
  • history of honey making
  • using honey in cosmetics
  • how bees make honey
  • current reports on bee populations
  • bee keeping societies
  • bee keeping
  • where to buy honey
  • qualities of different honey
  • your bees
  • swarming bees
  • poems about bees
  • songs about honey/bees
  • bees in literature
  • bees around the world
  • bee images
  • bee videos

To find out what interests your customers you could do a quick phone survey.  Pick one or two good customers and ask them. Don't assume – ask. If they want honey recipes or bee cartoons, go out and find some.

Without understanding who your readers are and what makes them tick, you can waste valuable resources producing e-newsletters that only your Mum will want to read.

Value versus price

 Food producers, Marketing  Comments Off on Value versus price
May 262010
 

Many years ago an antique dealer I met in Queensland, Australia taught me an important lesson about value.  His name was David Cameron (not the recently elected UK Prime Minister).

He would tour around the rural areas north of Brisbane looking out for hidden treasure on people's verandahs.  As soon as he spied something promising he would make an offer – a low offer. 

"You see", he told me, "I can go in with a low offer because I know they don't value it. If they valued it, they'd keep it in the house."  What these rural folk didn't realise is that in Brisbane, that neglected vase was highly desirable.

So he'd make a low offer.  The householder would be pleased to get something for what they considered to be a piece of junk.  Off he'd go with his purchase, clean it up, display it in the window of his antiques shop in Brisbane and there, where the piece was valued, he could make a tidy profit.

The value of something isn't fixed.

From this we learn that the value of something is, like beauty, in the eye of the beholder. In this case physically moving a product from one location to another changed it's value.  He put it in front of a different target audience and so was able to make a profit because of the different values placed on the same object.

If you have a premium product e.g. an organic product, you will be looking for a premium price.  Whether or not you can achieve that price is less to do with what's affordable and more to do with whether the marketplace you target, values that product.  Try selling a premium product to a store that piles them high and sells them cheap – you're doomed to fail.  Take that product to a store whose shoppers, for health or ethical reasons choose organic food, then your product immediately has a higher value and you stand a much better chance of making a sale.

The balance between value & price

How do you determine the value of your product? A better question is how do you find out who values your product? I was talking to La Creme Patisserie in Neath yesterday.  They produce gorgeous pastries and desserts made with fresh cream and fresh fruit. They offer a premium product.  Knowing this the hotels and restaurants who buy from them, often include La Creme Patisserie's desserts in a premium option for example in their wedding package.

Yet still as a food producer, La Creme has to negotiate and demonstrate the higher "value" of their product.  In this case, the products have a well established reputation and so hospitality establishments add to their own cudos by including them on their menus.

How can you find those who value it?

Targeting customers who already show a preference for premium products makes sense.  So if you are selling painting holidays you must target people who want to learn to paint yes but crucially, also have money to spend on their hobby. It's no good mailing the starving artist in the garret. Where do such people hang out?  Online certainly but probably also at theatres, galleries and other cultural centres.  Do some market research.

How can you increase the value of what you offer in the eyes of the customer?

Once you are broadly targeting the right audience, the best way to increase the value of what you offer, is to identify what key issue your customer has. Then look for ways you can offer even more in this area.

For example: if you sell organic eggs you need to find out why someone would spend more to buy organic rather than free range.  Both free range and organic hens technically enjoy high animal welfare, as both should have access to the range. Where are they different?  The feed. Feed given to organic layer birds should not contain pesticides, herbicides or have any GMO (genetic modified organism) content. Lack of pesticides, arguably gives organic eggs a lower carbon footprint.

Which of these really matters to your customers?  How do you find out?  Ask them.  If it's lack of pesticides, find out why specifically.  Are they buying because of health issues, ideological issues, environmental issues or just to keep up with the Jones.  If it's a health issue consider focusing on that in your sales material or packaging. You could offer an information leaflet highlighting how your eggs are different.  What's in them and what's not? What health issues are associated with various pesticides.  This way you are reinforcing their decision to buy this product. 

Are you production led or marketing led?

Many people involved with producing hand made or bespoke products often find pricing extremely difficult.  Starting with your costs and putting a price on your time is how production led businesses arrive at pricing decisions. This ignores the value of the item to the customer.  It will also lead you to a high input low output business which is ultimately unsustainable.

Businesses that are marketing led, tend to focus on researching their market place and developing their business to constantly improve customer satisfaction. This allows them to price their items based on their value to their customers.  In the case of bespoke handbags, market research might lead you to a market place that is willing to spend considerable sums on a unique item.  This audience may be more difficult to find but once you've found them you can command a decent price for something you love doing.

Value versus price.

Look at it this way. 

Take that handbag.

Lets look at the production led way of pricing:

Cost of materials      £25.00

Cost of your labour     £50.00

Subtotal                       £75.00

Say you add 30% (because someone told you that was a good mark up)

PRICE                        £97.50

PROFIT                     £22.50

Lets look at the marketing led way of pricing:

You've discovered through market research that owners of Arab horses are willing to pay up to £350.00 for a hand stitched hand bag with certain designs.

PRICE                      £350.00

PROFIT                    £275.00

You would have to sell 72 bags @ £350.00 a year to bring in £25,000.

However you would have to sell 257 bags @ £97.50 to bring in £25,000.

Here comes the really scary part.  Look at these figures if you now look at the profit rather than the takings.

To make a profit of £25,000 in your business, you will have to make and sell 90 bags a year @ £350.00.  That's about 2 per week.

On the first model @ £97.50 with just £22.50 profit you would have to sell …. wait for it

1112, in words that is one thousand, one hundred and twelve bags.

So value is also about how much you value your time, your business and yourself.

Why testing links in e-newsletters pays

 Email marketing  Comments Off on Why testing links in e-newsletters pays
May 182010
 

You know how it is, you're rushing to get your newsletter out and you tested all the external links when you sent the test email.  A few days later you're checking your stats and strangely your newsletter didn't generate the peak you would expect.

Now on the detective trail you decide to investigate.  While the link you carefully checked did get clicked on, the link to your website in the footer of your email wasn't clicked on by a single subscriber.

Alarm bells should now start to ring.  So you go into your inbox, dig out the offending newsletter and hit the link to your website.  Sure enough it returns an error.

How can that be?  Maybe you hand typed your web address and made a mistake.  Maybe you hit cancel instead of save.  Maybe a passing blacksmith broke your link with a heavy hammer. 

However it happened the result is clear.  Your carefully crafted newsletter just went out and didn't do it's job because of a tiny oversight. 

Frustrating though it is and time consuming though it seems, you need to make sure you check ALL the links.

As you might guess, I write from experience.  The only way you can KNOW that your links are working is to send the test email and then click through on every single link.

In the above case, pasting the link from the website soon fixed the broken link.  Too late for that newsletter but luckily there's always next time.

May 062010
 

Have you ever noticed how some people at a Farmers’ markets just have a knack of engaging your interest?  Maybe they go through the best cooking method to get melt in the mouth duck breast, or maybe they tell you about a special heritage, variety of cherry tomato that is sweeter than all the supermarket varieties.

Why is it engaging?  

They're giving you information you want.  You want to know how to cook a wonderful duck for your friends; you want to make your salad taste of summer. These masters and mistresses in the art of selling realize an important fact.  Educating your customers on matters that interest them is a great way to set up a sale.  He isn't telling you about the regulations required to sell duck, he's telling you how to make it taste fantastic.  He's giving you information you want.  At the same time he is reassuring you about his produce, making the purchase easier.

Sending e-newsletters (i.e. a newsletter delivered electronically) is a great way to regularly educate your customers, build up relationships with them and so make selling easier. It is a chance for you to share your knowledge and expertise.  Through newsletters your customers and potential customers get to know what kind of business you are and how you value your customers.

Save your customers the trouble of hunting for your contact details.

Make sure you have your contact details on every newsletter or links to your website so it’s easy for customers to get in touch whenever they need or want what you offer.

At the simplest level a regular, informative e-newsletter  can bring your business, products and expertise, to the front of your customer’s mind.  

What you put in your newsletter can increase the chances of sales in the future.

Informative content such as top tips, how to articles and analysis of either legislation or current trends in your industry will be useful for your customers if you can present it from your customers' point of view.

How helpful content increases your expertise in the eyes of your customers?

Authoritative commentary also helps to establish you as an expert in your area.  People usually underestimate how much knowledge they have acquired to create and run their businesses.  By sharing that knowledge with your customers they learn more about the processes that create your products.  You may be an artist.  Once you start talking about how you achieve certain effects, people see very quickly that there is much more to it then a few brush strokes on a canvas.

This puts you in a very good light as far as your customer is concerned.  

Why does this work?  It works because:-

people expect businesses to sell to them rather than educate them, so you pique their curiosity
people can get the measure of your knowledge, passion or skills through what you write about
if your information helps them make better decisions or gives them knowledge, you become valuable to them
you show you value the customer’s interests and want to improve their experiences in your area.

How might a business do this?

A residential art school might send a series of e-newsletters on painting landscapes
An organic vegetable box scheme might send e-newsletters spotlighting different seasonal vegetable crops with advice on how to prepare, cook or pickle them.
A visitor attraction might offer tips on visiting the area with young children or dogs or disabled visitors
A restaurant might send articles on how to choose wine to go with your meal.

Distinctly different from an email marketing campaign focusing on short term promotions, an e-newsletter campaign can help build your reputation as an expert and educate your customers.  People still buy from people and e-newsletters are a great way to let your personality show.