Tuesday, November 2, 2010

One magic question that could turn your business around

You've probably heard the saying about marketing - half of it works, the problem is knowing which half. Although we now have more data than ever before, marketing is still a black hole for most small businesses (and many larger ones). We're constantly bombarded with ways that we can spend more money promoting our businesses - but most of the time we're making decisions blindly. However, there is a fairly simple method that can help us evaluate our current marketing and guide future decisions...

You simply need to ask customers;
"How did you hear about us?"

Not clever, not perfect, but also not difficult.

And if you're not already doing this, asking this simple question really can transform your business.

Of course, there are a thousand reasons why this is difficult to do in your own business, but let's forget perfection and realise that having some data (imperfect as it may be), is an enormous improvement on having no data. Here are a few ways that this can be implemented easily within any business (including yours);
  • Include an extra column in your bookings book - there's a hairdresser I know that does this and uses a single letter code for her common sources of customers (this same hairdresser continues to swear that she gets 10-12 new clients every week from WOMOW)
  • For online orders or computerised bookings include a field in your data structure to capture this information
  • If it's too much to ask every customer, run a week-long drive twice a year and focus on asking every customer during this period only. Involve staff and make it fun to quiz customers on how they came to be using your services (I know a restaurant owner that does this with great success)
  • Spend a day on the coal-face yourself (or if you're already there, give some focus to this subject for a few days). Question each customer you come into contact with as to how they first heard about you - even customers that have been using you for a while.
  • Remember to drill into responses - if someone says, they found you 'online', ask what website they were on or what they were searching for. Likewise, if someone says 'word-of-mouth', ask who it was that referred them (you might find that certain customers are key referrers and it would be a great idea to send a thank-you)
  • Build the question into your forms so that sales/customer service staff will remember to ask the question (if this field is left blank, you should be asking some questions!)
  • If you're a retailer and can't easily build this into your POS system, consider running a mini contest between sales staff to see who can collect the most responses. Or put a prominent reminder on top of the bags or packaging so that staff are prompted to ask this question while they're chatting to customers. You can just have them fill out an paper sheet listing the purchase amount with the source of the customer.
Of course, marketing is not quite this simple as various elements usually work together and often it's not until a customer has seen you in several places that they decide to actually use you. Nevertheless, this simple question can give you some great insight and may provide some unexpected results. One mechanic I spoke to recently said "I never thought that so many people would be looking online for a mechanic - boy was I wrong!"

Be warned though, the results you get from asking customers how they found you will usually raise more questions, and you'll probably need to get a bit more scientific to answer those (which we'd encourage you to do). But likewise, it's an area where the Pareto Principle usually applies, meaning that you'll get the bulk of the benefits from this small snapshot of data. So it's an extremely worthwhile business discipline that you can implement this week!

Good luck and feel free to drop us a line to let us know how you go.