Do you know the story of the Magic Penny? If not, let me introduce you to the only small business marketing strategy you'll ever need. It goes like this… If given the choice of taking a penny that doubled every day for 30 days or taking $10,000 today, which would you choose? I’d take the penny every time! Why? Through the miracle of compounding that penny would double every day for the full 30 days…accumulating an astonishing $5.37 million (here’s an example of the math from USAToday).
Marketing works in much the same way (in fact many large things in life are accomplished by adding small things together, over and over). Most small businesses ignore the immense benefits of compounded marketing. Instead, opting for the one-big-shot approach.
For one of my clients, the one-big-shot was a beautiful full color oversized postcard. It was the first direct mail piece he’d run. It was beautifully designed and printed. Then he mailed it to thousands of prospects and customers in one shot. Later when we began working together he confessed that it had no effect. There was no marketing before or after that one shot.
For another client it was getting a prime spot at a large trade show not long before she hired me. She expected that with the big investment and “exposure” of the event she’d be slammed with new business…but only gained one new client.
When I first started in business I made the same mistake. The ad agency I’d hired at the time liked to say “Go Big or Go Home.” Which I later learned meant “spend big or we’re going home.”
The Compound Marketing Strategy
The better approach is to use the magic of compounding in your marketing. Compound marketing allows you to take small risks in your marketing, learn as you go and grow over time. Compound marketing demands more time than money. That’s one of the reasons it is such a good strategy for small businesses because you don’t need a $10,000 media buy to get started.
To make compounding work for you have to be consistent day-in and day-out. That consistency requires systems…you just can’t do it any other way.
Consistency is your strategic advantage. Very few if any of your competitors will do what’s necessary to take advantage of the compound effect. Even those that start will question whether they are on the right path because compounding starts slow. It takes time to build, but just like with the penny, you hit a tipping point. A point where compounding kicks in and it’s momentum begins to carry you forward.
The Best Small Business Marketing Strategy
When I speak to a group of entrepreneurs I’m invariably asked “What’s the best way to market my business…is it Facebook, Twitter, Groupon?…and I tried a postcard last year and it didn’t work.”
We all want the magic bullet that’s going to get all the clients we need. And we’re all tempted to chase the latest bright shiny new marketing tool that promises to be that magic bullet. But the truth is, there is no magic bullet. Sorry.
But there are “magic” principles that will give you all of the clients you need, if you apply them.
Over the years I’ve discovered three principles of compound marketing:
- Make small bets
- Test, test, test
- Market every day
#1 Make Small Bets.
The foundation for building sustainable marketing is making small bets. Invest $500 instead of $10,000 to begin. Small bets allow you to make a lot of bets and you need to make a lot of bets…you don’t know which ones will pay. Heck, even I don’t know which one’s will pay and neither does that expensive ad agency you’re thinking of using.
Few entrepreneurs want to make small bets. Small bets are messy. There are a lot of moving parts…a lot of change…trial and error. But in the end, only your market knows what will work. You’ve just got to get them to tell you by testing.
#2 Test, test, test.
I’m an engineer by training so I grew up with the scientific method…problem, hypothesis, test, analyze results, adjust…repeat. Marketing is much more scientific than it is creative. Winning with compound marketing requires you to test many small bets—small ads, blog posts, webinars, offers (and more). But to test you need marketing you can measure.
Unfortunately, most ad agencies and media sales people will tell you there’s really no way to measure specific results from an ad or a media buy. It’s not only possible, but also relatively easy and inexpensive to measure the results of all of your marketing.
You’ve got to be organized for sure, but it’s really not that hard. And testing is the key to learning from all your small bets. We want to know which ones are winners and which ones are losers. Keep the winners and kill the losers.
#3 Market Every Day.
If you want to get all the clients you need, marketing once a quarter isn’t going to cut it anymore. Your marketing must be working every day to trigger the compound effect and build momentum. Truthfully, the only way to achieve “every day” marketing is with systems.
You need a lead generation system to attract clients to you. Your lead generation might be any or all of the following:
- Ads – TV, radio, print, online
- A Blog
- A seminar, webinar or teleseminar
- A joint promotion with another business
- A direct mail campaign
- A referral program
Next you need a lead conversion system that moves potential clients through an educational process that results in a sale. Most of us focus on lead generation, but the real opportunity for increasing sales is in lead conversion. Why?
Simple, most of us only have time to follow-up with the hot prospect who’s ready to buy.
Few businesses have taken the time to create a follow-up system to do the education of a new prospect automatically and consistently for all prospects. Those that do, experience skyrocketing conversion rates…and little need for hard selling. The prospects bubble up out of your follow-up process and identify themselves when they are ready to buy.
Your lead conversion system might include:
- An educational report or video available on your website
- A pre-written series of emails to educate a new prospect, share testimonials and answer common questions.
- A regular e-newsletter or printed newsletter to keep in touch with prospects during a long sales cycle.
- Several pre-scheduled “check-in” calls to gauge where the prospect is during the sales cycle.
Finally, you need a client fulfillment system that lives up to the promises your marketing made to your prospect. And in your fulfillment system you’ve got to maximize each new client’s value to you by doing two things:
- Offering additional products or services that make sense for the client.
- Asking your new client for introductions to people they know who’d appreciate the same benefits they’re getting from you from.
If you’re ready to put the magic of compounding to work in your business, you might want to get my free email course on building a predictable system for getting clients.