Smart ways to net new custom

Companies must think hard to avoid throwing good money after bad campaigns, says Ruth O'Callaghan.

THREE years ago, Mary and Dan Morrissey, who run Al-Uisce, a small building firm in Wexford, set up a website, which included pictures of houses they were building and related information. It was so successful that one sale came from a customer in Kansas - not a bad feat for such a small Irish company.

Depending on what sort of business a company does, marketing, advertising and image can be hugely important. Although manufacturing companies can survive by spending as little as 1% of their annual budget on image, companies in the service industry may need to spend 10%. The important thing is to be focused before you spend.

The Morrisseys paid Euro 2,000 to have their site redesigned by Speed IT, a Wexford company. Canyon Communications, a London hosting company, will set the site up on the internet and connect it, using keywords, to search engines so browsers looking for houses in Ireland will be directed to it.

To save money on the site, Mary Morrissey wrote all the content herself, took photos and designed graphics. She even did a voice-over about the company that will be played when users access the site.

For the same money, the Morrisseys spent on their new website, you could get about four advertising spots on the Ian Dempsey Breakfast show on Today FM, 60 spots on a regional radio station, a half-page ad in a regional newspaper, a week's advertising space on 16,000 takeaway paper cups in cafes around Dublin, or ads in 12 regional cinemas for a week.

All of this could be very beneficial to your company, and boost customer awareness and sales - if it's done properly.

In the past two years, small and medium-sized Irish companies have lost money, employees and clients because of the economic downturn. Many are reporting order books down a frightening 41%, especially in export markets.

As a way of dealing with this stagnation, some companies have been tempted to spend money improving, or revamping, their image. Be careful, experts warn, you could be wasting your time and money.

Denis Brennan, a marketing consultant who advises manufacturers and retailers, said: "People clutch at straws. A company thinks, business is tough. Let's do a bit of marketing. Let's bang in an ad or do a bit of PR. They believe these strategies are going to increase sales. It might help them sleep at night, but generally, it's a useless approach."

Unless the campaign is well thought out, it's probably going to be a waste of money, Brennan said. For example, if you're going to rent a stand at a trade exhibition, visit the show first and publicise the fact you're going to be there. Equally, make sure your target customers are the ones reading your ad in a newspaper.

What executives need to do first, when sales are stagnant or falling, is work out what they are doing and what they want to achieve in writing.

Irish small and medium-size enterprise (SME) owner/managers are typically hardworking, but tend to come out in a rash at the idea of writing reports, or putting strategies down on paper. Often, they indulge in what Brennan calls "pub talk", discussing projects but not dissecting them on paper.

"You need to write things down. If you don't write it down, you're not really thinking it out. It is like doing your taxes. But a lot of good, and bad, ideas come to the surface."

Instead of going ahead and paying a consultant, the exercise of putting things on paper means the company is in control of any marketing strategy. Reacting to this strategy doesn't have to mean starting an ad campaign. It can mean making a phone call or writing a short letter to customers.

Yvonne Boyle, an SME marketing consultant, said: "Before you throw money at things, analyse where the business is now. Before you bring in extra resources, have a basic idea of your problems and targets."

Recently, Boyle says she was approached by a company that had "gone in at the deep end".

It had spent a lot of money on an ad campaign which was having no result. Boyle put together a media plan and showed what sort of publications were most suitable, and most profitable, for the company to place ads in.

Sounds simple? Another company, with falling sales, approached Boyle for a marketing strategy. She sat down with the company and wrote out an analysis of where it was making sales, where it was losing, and where the potential growth areas were, so it had a list of existing and potential clients to target individually.

Many companies can't compete on price any more because of labour costs, but they have a reputation for quality and service, which they should capitalise on, experts believe.

Jim Curran, Irish Small and Medium Enterprises association's head of research, said: "It is difficult to compete on cost, but SMEs generally more than make up on provision of services. That's what gives them the edge. If an owner-manager takes a few minutes out of every day to phone existing customers, he or she can easily find out how the company is performing. Your most important asset is reputation. You're constantly banking goodwill with customers."

A clear, simple website might be the best way to start, if you don't already have one. It lists your company details, clients get instant information, and you can be connected to search engines related to your area of expertise.

Mary Morrissey said: "IT is here to stay. It won't ever replace word of mouth, but it does back it up. People from Dublin communicate with us by e-mail. You can print them out, and it means you rarely make a mistake."

If you have a website, put testimonials from customers on it for potential clients to read, Jim Curran advised. "A good website can give the impression that you're a lot bigger than you are. When you're providing good services, word of mouth will get you as much as advertising. Three or four testimonials are as good, if not better, than spending thousands advertising in the regional press."

WHAT IT COSTS

* Website: the basic, almost essential, marketing tool for an SME. Design, hosting, upkeep and troubleshooting of a good, informative site can cost Euro 2,000 or Euro 3,000 for a basic site, or between Euro 10,000 and Euro 15,000 for a top-of-the-range site.

* Direct mailshot: can be especially useful for a once-off effort, such as launching a new product. About 1,000 customers could receive a personalised message, or a small brochure, for about Euro 3,500, including consultant's fee.

* Exhibition stand: renting a stand can cost as little as Euro 700. Designing and manning it for anything up to a week, particularly outside Ireland, could cost as much as Euro 10,000.

* Advertising: remember - be creative. Know your target market. It costs about Euro 11,000 for a half-page black and white ad in a national newspaper (Euro 2,000 or Euro 3,000 for a regional paper).

* Employing a consultant: the price depends entirely on the size of your company and what needs to be done. A one-day meeting with a consultant to discuss possible strategies could cost as little as Euro 400.