VenturePORT Series - Business Development

What Is Business Development?

Almost nothing counts more in business than Business Development. This is the emerging term used to describe the field of sales and marketing, or the process of getting business. (The term is also used in financial circles to describe a company's acquisition strategy.) Whatever you call it, Business Development provides the fuel that powers your engine. The younger you are, the harder it will be to raise money from investors, so Business Development is the key to selling your way into business.

The good news: Big businesses waste lots of money on inefficient sales and marketing — much of it never even measured. Technology has more than leveled the playing field, it has made it possible for small, scrappy companies to look bigger and better than the Fortune 500 companies, even if the principals are working out of their garage wearing torn jeans.

Almost every recommendation below is within the resources of the most basic start-up. Thirty years ago, it would have been unthinkable for a small company to come close to presenting itself as a big company. Today, it's well within your grasp.

Many textbooks and articles on sales and marketing take a highly tactical view; that is, they focus on the specific types of programs you will use, such as advertising, public relations, direct mail, Web marketing, events, etc. This is the classic "process" approach to marketing. You will get better results from Business Development when you think of it as a fully integrated process based entirely on your customer needs, products and services, customer audience, and budget. Rather than assume you will have to use any set combination of tactics, the customer-focused approach selects tactics based specifically on the customer, your product or service, objectives, audience, and budget.

When you look at Business Development from your customers' point of view, it has to address the following issues:

Awareness, receptivity, action — Do customers know about you and think of you when in a buying mode? To accomplish this involves marketing tactics such as advertising, public relations and guerrilla marketing, event marketing, etc. Don't underestimate the challenge of creating awareness, even in a small, well-identified market or community. People are overwhelmed with messages from all sources and often require multiple touches just to retain the most basic of information.

Ideally, out of awareness comes leads — people who call you. But don't bet on that either. There is no guarantee any marketing campaign will result in enough leads to immediately pay for itself, no matter how well you design and execute it.

Credibility — Does your prospect or target audience trust that your organization can deliver? How will you convince them? To become known and trusted involves personal sales, your Web site, public relationships, speaking engagements, and participation in associations. American business people and media often look favorably upon young entrepreneurs. Use that to get out in front of local or business groups so that you become a known person among at least some portion of your target audience. A number of the entrepreneurs profiled elsewhere on this site gained visibility through articles and speaking engagements in which they talked about their entrepreneurial efforts.

Selling — What will move people from being a prospect to becoming a customer, remaining a customer, and telling their friends and colleagues about you? To accomplish this involves having people, appropriately designed space, or e-commerce designed with how people buy in mind. The more you focus on how and what the customer wants to buy, versus what you want to sell, the greater your competitive edge. Depending on your business, you will need salespeople who share your passion for your solution and who can sell by helping instead of simply trying to persuade.

Integrated Business Development — How do you make sure that your efforts to build awareness, credibility, and sales are working synergistically so you get the most measurable result for your investment? Whatever you do, whether it's advertising, promotion, events, direct mail, etc., it should be carefully coordinated so that it's targeted at the same audience.

Measurement — This is how you determine whether or not you achieved a return-on-investment from your marketing, and what sources appeared to yield the most business. Technology makes accurate measurement more possible than ever, as will be explained below.

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What to Expect from Business Development Efforts

Think of the Business Development process as a funnel. Prospective customers enter the funnel at various levels of interest and remain prospects until they have either bought or decided never to buy. You might be thinking of getting office space now and have perhaps contacted several realtors, but that doesn't mean you're yet ready to buy. This makes you a prime target. The big, often-overlooked opportunity is to focus on the people in the funnel. By focusing on prospects your competition may be lazy about, you can get a competitive edge.

Generally speaking, you have three potential outcomes from your Business Development:

1. Greater awareness for your product and service. Everyone has heard of McDonald's — that's awareness. It costs hundreds of millions of dollars to create that level of general awareness, but what counts for you is awareness among prospective customers. For many entrepreneurs, that means creating awareness with only a few hundred or few thousand companies in your region or business area. That's something almost everybody can afford. You merely have to compile a database of those people and start communicating.

One cautionary note about awareness: There is no direct correlation between awareness and sales. Awareness is the equivalent of air cover in war; it softens the marketplace for your sales effort, but doesn't necessarily finish the job.

2. Leads (people interested, who haven't bought yet). Leads represent the people who have entered the sales funnel; they have signed up at your Web site, they have called or e-mailed you, or have expressed interest to you when you or one of your team has called them. Leads come in all shapes and sizes, but any lead is almost better than none.

3. Customers. No matter what your business, customers are critical to survival, but they have much more value than most companies recognize. For not only does a customer usually buy one time, they can buy multiple times. And, even if they can't, chances are they know people who might benefit from your products and services. Also, a good customer in the business-to-business world can become a doubly good customer when he or she leaves one company to go to another. So when setting up your approach to customers, you should think in terms of many marketers now call "Customer Lifetime Value." This answers the question: What are customers truly worth to your organization in terms of how much money they can directly or indirectly generate over time?

Think of it this way. You might only spend $6 a week at your favorite fast food place. That may seem like very little, but if it's a national chain, you might go there at 2,500 times in your lifetime, making you worth something like $15,000 to them. Then, of course, you might have a family some day and increase that spending four-fold for a while, and create new families of people who spend that much or more going forward. We haven't even counted in the friends you've introduced to your favorite chain over the years. When you think of the potential lifetime value of a customer, you get a sense of the types of efforts and resources you need to apply to find and nurture them.

Believe it or not, many major companies don't think much beyond the next quarterly sales results, let alone track and identify the lifetime value of a customer. This provides you with a ready-made unique selling benefit: Focus your product or service on the needs and desires of a specific, identifiable market base — deliver your services based on customer needs rather than the other way around — and you're on your way to greater marketing efficiency than what is deployed by many of your potential competitors.

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Unique Selling Benefits

The more unique and desirable your product or services, the greater your chances. You want to ask: Why should someone buy your product or service versus someone else's? Or, if you feel you have developed something new: Why should anyone buy it? The best Business Development rests on a unique selling proposition that sets your product or service apart. Ideally, you can express that benefit in a sound-bite: You provide the fastest delivery; you provide the lowest price; you provide the complete solution, etc. It should take only a few seconds to explain your unique benefits.

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Strategy

Believe it or not, if you write up a formal marketing plan you will be ahead of lots of major companies. Whatever you may have learned in school about business planning, you'd be surprised to know how many major companies manage Business Development based on a budget, not a true plan. A good marketing plan is the part of your Business Plan that focuses on Business Development. Most companies have systems for planning and budgeting based on processes — the programs they intend to use to achieve their objectives. A formal Business Development plan goes beyond that by using a strategic process to orient all activities based on the customer, objectives, resources, etc. Many of your competitors may not use such a rigorous planning process, leaving themselves open to more aggressive entrepreneurs.

A formal plan starts with making certain you have pinpointed your unique selling benefits — what makes your product or service unique in terms of features, service, pricing, value proposition, etc. Then, you want to spell out your overall goals — i.e., where you want the company to go, followed by your measurable objectives, such as sales, profits, customer retention, word-of-mouth business generated, etc.; strategies, or how specifically you will accomplish the goals and objectives; and then your specific plans, the actions and tactics you will use, including who will do what and when.

Your strategy should include:

  • What do you need to convince people you can do the job in terms of selling tools — Web site, sales materials, presentations, etc.?
  • What audience do you need to target to generate leads, and what is the most efficient way to reach them; e.g., print or Internet advertising, direct mail, trade shows/events, public relations, telephone sales, etc.?
  • How will you manage the relationships? Sales don't always happen right away; you'll want a software product to keep track of your prospects and a strategy to build relationships over time?
  • How and who will sell? In addition: What happens to leads? How will those leads be tracked?
  • How will you measure results? What system will you have in place to determine what worked and what didn't?

A systematic approach to these issues is not only within the budget of most start-ups but will give you a leg up on the competition because so many companies fail to methodically address sales and marketing.

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Tactics

One of the great marketers said, "I know that half of my marketing works. I just don't know which half." Despite huge inroads made in marketing measurement, many big companies still live by that old adage, providing your start-up with a potential competitive edge.

It's amazing how bad many organizations of all sizes are at marketing. Why? Many shoot from the hip and rarely measure other than to determine if it was a good year or a bad year, or whether or not the promotion hit the desired sales target.

When you base your tactical plan on the strategic process outlined above, you'll have a lot better chance of not only hitting your goal but of more precisely knowing why and measuring the results. Determining your tactics starts with understanding not only your overall goals and objectives but what you hope will happen as a result of your Business Development efforts.

Here's a general list of tactics and where they fit in the overall marketing mix, based on generating awareness/leads, credibility, and sales.

Integrated Business Development. This refers to the process of stepping back and looking at your Business Development on a global basis — i.e., how will it all work together to deliver a measurable result.

The most successful Business Development focuses on the customer, and finds the most efficient way to reach him or her. Surprisingly, many people select tactics based on what they personally want to do. Many executives like television because their friends and family see it. Others like incentive trips because they enjoy wining and dining customers in exotic places. Others think direct marketing works, because they have a background in that. In fact, the tactics you select should be selected as scientifically as possible based on your objectives, audience, and budget, and not on what you personally like.

Using an integrated approach, you will select the tactics based on their ability to address awareness/lead generation, increase credibility, and generate sales, not on what tactic you personally prefer or have the most experience with.

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Your Web Site and Sales Materials. For many businesses, your first impression starts here. Thankfully, it is relatively inexpensive to have an effective Web site and professional sales materials, because it is no longer as necessary to print large quantities of brochures when you can usually get by with a Web site and PDFs or other electronic versions of your brochures or sales materials you can e-mail to prospects.

Unless you think an unprofessional and shoddy look is right for your audience, make sure you invest what's necessary to get a professional design right for your audience and have the right copy for your Web site to get your message across effectively.

Besides providing an electronic brochure of your unique selling benefits, capabilities, case studies, and testimonials from customers or supporters if possible, your Web site should also have features that help build your credibility with prospects and customers. In a sense, your Web site should mirror the sales funnel concept explained above. Those who come for the first time probably know little about your organization and want to get an idea of what you do as quickly as possible. Once they have interest, they will drill down and want to learn more. If they're ready to buy, they still might want to drill down and learn more before making the buy. So, your Web site should have multiple levels to appeal to each level of the learning or buying process related to your product or service, and address the way different types of people might want to get information.

Cynics will tell you no one reads that stuff. Well, your Web tracking software will show you otherwise, because people in a buying and planning mode actually do take the time to inform themselves. Different types of people want to interact in different ways; it's feasible now with sound Web design to accommodate those various levels of need.

In addition to sales information, your Web site can benefit by having useful how to and reference information related to your subject, links to useful noncompetitive sites, and other information features that show you care. This also builds your credibility as a trusted resource.

Most importantly, you should have a prominently mentioned sign-up form for receiving some form of opt-in communications from your company, such as an e-newsletter, invitation to events or trade shows in which your organization participates, or special promotions. People who have opted in have entered your sales funnel and are probably your best prospects next to existing customers. Just because they haven't yet bought, doesn't mean they won't. Focus your attention on developing a list of prospects in the sales funnel who have given you permission to market to them, and you can greatly reduce the cost and increase the measurability of your Business Development.

Many companies spend considerable sums on Web optimization, which involves using techniques to get your pages to show up in the search results of the three or four major search engines. Given that these search engines to varying degrees take pains to thwart optimization, and because the work involved can be outside of the financial resources of the typical young start-up, optimization is not necessarily a reliable tool to make sure you get Web site traffic. That said, there are basic rules about how to set up your site technology in order to be friendly to the major search engines, including using search-engine friendly content templates; URL names related specifically to the search words people would use to find you, properly named meta-tags in the file code; getting legitimately linked to through other sites, and avoiding fancy Flash or other graphic-based technologies search engine spiders can't find as they crawl the Web site looking for pages to index.

Who can help. You're in luck, because chances are you have friends and colleagues from school who know html design. That said, don't skimp on either design, navigation, or the copy and content of your Web site, because it provides a chance to put your best foot forward with people taking the time to check out your organization.

To give design guidance, check out the Web sites of other organizations in your space to get a feel for their strategies related to message, design, and content. Show what you like and don't like to your designer. Do your best to create a specifications document for every work that provides clear guidance as to objectives, audience, your expectations, timelines, and deliverables. With new designers and writers in particular, negotiate a kill-fee, a reduced amount you will pay if they cannot produce work to your written expectations. You shouldn't expect your creative team to think in a vacuum; the more information and direction you provide, the better they can help you.

Potential results of your Web site and Sales Materials and how they are measured.

  1. Awareness/leads. Your Web site builds awareness with those who have some level of interest, and generates leads in the sense that your sign-up form or contact page generates inquiries. Generally, you will have used some other marketing to get people to visit your Web site.
  2. Credibility. Effective Web site design, content, and sales PDFs really can have an impact on how an individual perceives your brand. Don't skimp on design, copywriting, and proofreading.
  3. Selling. A Web site and brochure are sales tools that help convince, and, in the case of e-commerce, they certainly can sell as well. The more complex or expensive your product or service, the more you will need sales or customer service people to supplement your Web sales effort.

Market knowledge. Your Web site has an additional benefit: It can help you gain critical market knowledge. You can learn through actual behaviors — what parts of the site people visited, and where they went after their visits — to identify what content or marketing really interests and drives people. Most media force you to rely on surveys to determine how your marketing has affected people, a highly imperfect way of understanding what people will actually do. Behavior-based information such as you can get from Web-site tracking provides greater insight because it's based on actions, not words.

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Advertising. The business of promoting your business through advertising has exploded over the last two decades, so that you now have multiple forms of television advertising (national, regional, and cable); radio (broadcast and Internet); billboards; print advertising (magazines, newspapers, weeklies); Web advertising (search and other options); e-mail/blog advertising, etc.

Whether or not advertising will really pay depends on how many customers or prospects you need. If a broad part of the market can buy your product or service — which applies to people selling food, general office repair, household services, etc., — then advertising can generate awareness in an effective way.

While all advertising can be effective in reaching a target audience, some advertising is more effective than others in generating a direct response, another name for leads. Ideally, you want people to call or e-mail you.

Generally, if you want your advertising to generate a response, you should try to place your advertising adjacent to content related to what you sell, so that a higher proportion of people seeing your ad might have some level of interest. This is why "yellow pages" advertising traditionally has driven more leads than most other types of print advertising. In addition, consider making a specific offer, such as a price or added-value promotion (see below), so that you can gauge actual behaviors resulting from the ad campaign. You usually have to run multiple ads in any media before you can gauge the results.

Probably the least expensive way to get exposure is a flyer program or construction wall poster campaign in urban areas. Your only costs are copywriting and design, printing, and the people you need to distribute. You'd be surprised how well flyers posted over time on cars in train stations can increase your exposure. Just make sure you do not run afoul of any local regulations, because your flyer will presumably make it easy for the authorities to find you.

No matter what marketing you do, you should have a system set up to track every lead that comes in from your Web site, the phone, e-mail, other through any other means. This usually involves some form of contact management system or customer relationship management software linked to a "permission form" on your Web site, so that you can easily capture the name of everyone who contacts you. (See the chapters on Selling and Technology.) It means making sure that everyone who answers the phone collects the basic information you need to evaluate the quality and source of the lead, including the basic questions: Do you have an immediate or future need? How did you hear about us?

Key considerations. When you buy media of any kind, remember these key considerations:

  1. You will need a compelling creative concept that not only creates awareness and potential leads, but also builds your credibility. Make sure the design makes you look like a real player. Don't base creative on what you like, but on what your potential customers will likely respond to.
  2. You will need to verify the circulation and/or exposure claims of whatever media you have selected. Don't get seduced by jazzy presentations; look for concrete evidence that the promised audience gets delivered.

Who can help. Your advertising budget at the outset will probably not be large enough to engage a major agency, so you will probably have the best luck if you find a freelance marketer who can help you on a part-time basis — unless, of course, you have the expertise yourself. Advertising involves creative, production, trafficking, media selection, negotiating, etc., so you will actually need help from probably at least three people; a copywriter, a designer, and an overall administrative person to handle the other functions. These are the services an agency provides.

Potential results of advertising and how they are measured.

  1. Awareness/leads. When the product, timing, media mix, and advertising creative work right, people will respond or will say they saw your ads.
  2. Credibility. Effective advertising does build credibility. People will have a greater sense that you're for real.
  3. Selling. Ads can sell for you, especially on the Internet, but don't rule out the role of effective humans to advance a sale. Generally speaking, ads generate leads; in most cases, you can't rely on them to close the sale.

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Interactive Advertising. Although technically part of advertising, we single this out because it's most likely in the budget range of start-ups. Google has democratized marketing by making it possible for even small companies to target people searching for information in their area of business or even area of the country. The Google AdWords program would probably take the typical 20-something about an hour to get the hang of, at least to the point of launching a test and seeing what happens. Google provides an Analytics package that enables you to get useful detail on how people are getting to your site, how many convert (do a specified type of transaction such as sign up for the Web site or purchase something), and how long they stay. The key to Web advertising is to find people specifically when they are looking for your category of product or service in your region of business, and the ability to pay only for actual clicks to your site. Fortunately or unfortunately, Google at least for now has the best model for many entrepreneurs, enabling you to pay-for-click at a budget you can set in advance and measure at least in terms of how many people click through. If you have an e-commerce site, you can take measurability to the next level by putting in a tracking code that lets you more closely track the source of conversions.

If you use Google AdWords, you will most likely get the best results by using the search engine advertising rather than their network of partner sites, even though you will get more impressions. Generally speaking, the quality of the traffic generated by the Google Search engine is superior to that generated by its network of other Web sites on which it can display its ads.

The power of the Internet is the ability to target people searching for information, which is usually when they are most receptive to plan or buy. So, if you're going to try other Web advertising beyond Google (or Yahoo and MSN — the other two most used search engines) look for Web sites on which you can place your ads adjacent to credible how-to and reference information related to what you sell. Those people wouldn't visit that article unless in some kind of buying mode. Make sure you can buy an ad unit large enough to tell your story.

Who can help. Interactive agencies have sprung up over the last decade but chances are a start-up can't afford these services. Once again, you can find freelancers who do this work for major agencies. Beware of extravagant claims about the ability to optimize your site. Three search engines make up about 90 percent of all searches, and there only about 10 positions on the first page of any search results. As with any marketing service you buy, make sure you set clear budgets, parameters, and performance measures.

Potential results of advertising and how they are measured.

  1. Awareness/leads. Search advertising is highly effective because it targets people specifically searching for related information.
  2. Credibility. Search engine advertising itself does not provide much opportunity for branding, but that's the benefit of advertising on how-to and reference information related to your area of business.
  3. Selling. Ads can sell for you, especially on the Internet, but don't rule out the role of effective humans to advance a sale. Generally speaking, ads generate leads; in most cases, you can't rely on them to close the sale.

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Promotions/Guerilla Marketing. Known in other countries as "below-the-line marketing," promotion marketing involves sweepstakes, contests, incentives, imprinted products (also called advertising specialties or promotional products), coupons, and event sponsorships. These increasingly are "integrated" with advertising in order to include a measurable call to action and an attempt to stimulate someone to engage, even if they are not ready to buy. Clever promotions sometimes can be used in lieu of advertising because of their ability to sometimes generate media interest. Of course, this can backfire as well. One marketer got a lot of publicity and into a lot of trouble in Boston when it paid a marketing agency to plant funny-looking devices around town that, unfortunately, bore too close a resemblance to bombs. They got lots of essentially negative publicity and probably very little business.

While promotion marketers hope to get free attention by generation buzz or media coverage with creative promotions, they can also use them to help get attention to their brand and message and to build permission-based databases of people willing to hear from them.

Some of the major promotion types include:

Sweepstakes — a pure game of chance in which you select winners in a drawing. Anyone can enter. You cannot legally require people to pay anything to participate without running afoul of lottery laws.

Contests — same as a sweepstakes except that the person might have to submit an essay or solve a puzzle. Again, you cannot require anyone to pay anything to enter.

Incentives — some kind of added-value offer to someone for signing up to a newsletter, making a purchase, referring a friend, making a repeat purchase, taking a test drive, or otherwise sampling a product or service, etc. An incentive can consist of cash or a branded product or tickets to some kind of experience. Companies often use noncash incentives to add to the perceived value, fun, and buzz of a promotion. An iPod used as a giveaway sounds more exciting than $200, and provides the recipient with long-term tangible value they won't get if they receive cash. Whatever you use, make sure you publicly make the offer to all who could qualify and that the same rules apply to all. Among the most familiar incentive programs are the frequent-buyer or loyalty programs used in the airline business, or the gift-with-purchase offers used in the fast-food business.

Events — One of the hottest forms of promotion today, event marketing involves sponsoring or creating a live event — a concert, sporting event, theater, an exhibition, a fair, etc. — at which your organization can get highly targeted exposure and build a database of people who come by your stand or booth. This can also involve exhibiting at a trade show of companies like yours that attracts potential customers, either consumers or business-to-business buyers.

To make an event or promotion more effective, and to create a call-to-action and measurability tool for advertising, you should integrate your advertising and other lead-generation activities so that you maximize the potential success of your event in terms of participation by your target audience. Always make sure you have some way of tracking the names of people who show up at your booth or stand and ask those two basic questions: Do you have an immediate or future need? How did you hear about this?

You can't imagine how little most companies know about their source of business. The more you know, the better you can target your precious marketing dollars.

Promotional products. When used properly, imprinted products provide a powerful way of enhancing branding and awareness with a targeted audience. The challenge is to find the right types of items at the right price to appeal to your target audience.

Coupons: A classic call-to-action in advertising and direct marketing (see below), coupons involve a certificate entitling someone to a discount. This often is used to measure the effectiveness in marketing, when in fact you also have to take into account the true or perceived value of the coupon. To the average consumer, 10 percent off doesn't mean anything unless they believe that the true price really is 10 percent more.

Whatever tactic you select, you will get better long-term results when your program delivers your marketing promise and does not attempt to deceive or manipulate.

Who can help. As with advertising, many agencies specialize in so-called promotion marketing, or in now what is increasingly called integrated marketing. Again, small companies have little chance of getting a major agency to handle their work, and will have the best chance with small local agencies or even independent contractors who help plan and execute promotions. Young entrepreneurs often have the creativity required to come up with attention-getting promotions, and won't necessarily require a retainer.

Potential results of promotion marketing and how they are measured.

  1. Awareness/leads. When your promotion, incentive, or event hits home, you will certainly generate names of people, but these people may or may not be prospects. What you have proven is that they have interest in your promotion. Based on what they signed up for, you don't necessarily know if they have an interest in your product or service. The best promotions are designed to find people who actually have an interest in what you sell.
  2. Credibility. Effective promotion can build credibility or make you look cheap, so carefully consider how far you'll go to get attention. The last thing you want to do is come out looking foolish because you got some bad media coverage based on poor taste or failure to deliver what you promised. Because many marketers have a very short-term view of customers, they often use misleading promotions in order to get more attention. You'll get better long-term results if your promotions have a true value with no inappropriate strings attached.
  3. Selling. Promotions rarely sell. They get attention; they increase traffic; they increase sign-ups; they increase awareness; but somebody or something still will have to close the sale.

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Public Relations. Here's the bad news. Getting positive articles about you and your company in the media will not necessarily change your life. We know of one entrepreneur who was featured in the New York Times with his photo with a very positive article about the business he ran. He received one call — from the organizer of his high school's 10th reunion who had been trying to track him down. That said, publicity is a valuable credibility-building tool, because that entrepreneur distributed copies of the articles in sales kits sent to customers and prospects for the next year or so.
About the only edge a young entrepreneur has in business is in the area of PR, because for some reason business reporters often have a lot of curiosity about young entrepreneurs and will give them more attention than they might a comparable business run by an older company. Don't be afraid to stress your age in your marketing.

To get press, you either have to know the right people, or know people who know the right people, or go about it the old-fashioned way — try to make news. That consists of positioning your business as part of a trend — such as part of the increasing number of young people turning to entrepreneurialism, with you as an example; or, launching a specific new product or service of interest to the media outlet's audience; or by creating a very clever promotion. The great thing about public relations is you can target specific types of media, often in specific subject areas or geographic areas, so in fact you don't have to reach out to but several dozen or more reporters and editors. And, it takes only a few hits to help improve your credibility.

The primary value of any media coverage is how you market it to customers or even to potential vendors and investors. While media coverage can lead to calls from interested parties and every once in a while help create an upward spiral, it often doesn't. So, make sure you include any coverage about you on your Web site, in your marketing materials, and wherever else is appropriate. Media coverage improves your credibility.

Who can help. Most public relations consultants want retainers, usually starting at about $10,000 per month, although depending on who and where and what you expect, you can often find other arrangements with independent public relations contractors used by the big PR companies you can't afford. Those companies also rely on independent contractors for excess work. If possible, try to negotiate a project fee for one complete campaign. You can often do a lot for under $10,000, even for a national campaign, if you have carefully narrowed down the media you will target.

Those with the know-how or background can do basic PR themselves. It takes knowledge of how to write press releases, and an understanding of how to get the attention of journalists by identifying a compelling trend or news angle, and, of course, lots of e-mails and phone calls.

Potential results of public relations and how you measure them

  1. Awareness/leads. Unless you really score big time and get positive exposure across a variety of media in your region or area of business, you will probably get some improvement in awareness and a few leads, but it's only the few for whom one press success provides that wonderful catapult to success. We're not saying it can't happen; it does. We're saying, try not to put all of your hopes of financing on that outcome.
  2. Credibility. Effective public relations improves credibility when you use it properly with customers and prospects.
  3. Selling. Public relations does not reliably sell anything for you, but it can. You will get calls from potential customers from time to time who will say they "read about you somewhere," and you might even hear from an interested buyer in your company someday through some kind of media coverage.

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Word-of-Mouth Marketing. Most business owners will tell you they get a lot of their business from people telling their friends and colleagues. Because word-of-mouth is so hard to track, it's another area of marketing that has gotten little attention until recently. Now, with the help of the Internet and customer databases, it has become easier to track word-of-mouth business and to even promote it by recognizing and rewarding people who spread the word. The goal is not necessarily to motivate people to refer you. Most people will not put their reputations on the line to promote something they don't believe in, nor do they have the time to sell for someone unless they really believe or get compensated. So, while you should be highly aware of the importance of providing great service and products so that people leave happy and tell their friends, the use of incentives and promotions to promote and track word-of-mouth business warrants a strategy, plan, resources, and time.

Who can help. So few companies focus on word-of-mouth marketing, it's an area generally handled by promotion agencies when anyone thinks of it at all. Only recently has there sprung up a community of marketing agencies focusing on this, many of whom belong to the Word of Mouth Marketing Association.

Potential results of Word-of-Mouth Marketing and how they are measured.

  1. Awareness/leads. Since most of your business will likely come from word-of-mouth anyway, if you do a good job, the real question is: Can you better track or improve it by attempting to promote it with recognition or rewards for referrals?
  2. Credibility. There is no greater form of credibility than the personal recommendation from one friend to another, but the only way to achieve this is by delivering what you promise.
  3. Selling. Word-of-mouth is the next best thing to having an unpaid sales team. But, it has its limits. Every once in a while, a new brand — notably in fashion, entertainment, or electronics — is so hip and right for a target audience that it creates an army of evangelists willing to go out and share that brand with their friends. We have to caution you: Dare to dream, but have a back-up plan if your product or service fails to generate that magical upward spiral of demand.

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Sales. Many textbooks and Web sites put selling in a category apart from marketing. We see it is as part of the continuum in the Business Development process. To separate marketing from sales is to cut off your troops from their supply line. If you're lucky enough to grow your company, you'll discover that there's often even a rivalry between sales and marketing types, with the sales manager complaining the leads have no value, and the marketing team frustrated that no one follows up on the leads, etc.

Selling is critical. Without it, nothing happens. Every entrepreneur dreams of coming up with a Google-like model in which people simply buy with no human intervention. Again, it happens, but not usually to 23-year-old entrepreneurs with maybe $25,000 from a friendly aunt or uncle. Under most scenarios, you will either have to sell, or find someone else to sell for you.

Selling is a necessity for which surprisingly few people are truly suited. Fortunately, people have to buy, and they'll buy despite poor salespeople, but many companies settle for a very low level of sales capability, as you know from your own shopping experiences. The elements of successful selling are well-known — having a passion for the product or service, understanding the customer's needs, and finding a desirable solution based on those needs — but how many salespeople live up to this? Most salespeople start by trying to sell rather than by truly stopping to listen to understand the customer's needs. Even when they do care, they often lack the expertise or knowledge to help the person make the right decision, because management hasn't provided it. Are we wrong? Have you experienced otherwise in most of your encounters? In fact, in many cases, people identify their favorite suppliers of something by the people, and not the company itself.

Are you looking for a competitive edge? Focus on how you can elevate your sales process so that it truly focuses on the customer, addresses their needs, informs them, and builds relationships based on credibility rather than fast talk. Easy to say; harder to do. But you have one thing going for you — passion. When combined with integrity, passion will be one of your greatest selling tools.

Remember that anyone in your organization can help sell. Anyone who makes a good impression, understands what you sell, knows how to identify a prospect, and has enough information, can open a door or improve an impression about your company in a highly effective and personal way. It's worth an effort to make sure all employees know what you do and how their actions can affect the perception of your brand. Many companies overlook the impact of their people on their brand.

Who can help. Look in the yellow pages and you'll find names of sales consultants and trainers. Hundreds of books and Web sites address sales motivation and training from every angle. It takes the inspirational abilities to attract sales people to work with you, or the ability to sell yourself, and it's questionable how easily such abilities can be taught without the innate ability or lots of experience. Should you feel a need to hire a sales consultant at the earliest stage of your business, that's a signal your start-up team is missing a critical component that you unlikely cannot address through a consultant — and that is having people who can sell.

You will likely get the most use of sales consultants when you have more employees and need a consistent method of training and communications but can't necessarily create your own in-house staff.

Potential results of Sales and how they are measured.

  1. Awareness/leads. Depending on your business, a lot of your awareness and leads will come directly from your salespeople. They will be the living embodiment of your "brand," because people often will judge your company by them.
  2. Credibility. Salespeople can make or break the credibility of your organization.
  3. Selling. With the exception of certain kinds of e-commerce, there is no underestimating the value of great salespeople when it comes to increasing sales.

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Distribution. This refers to organizations that sell through other companies or independent contractors. Distributors are people who resell products or services manufactured by others and come in an almost infinity variety of sizes, shapes, and industries. Distributors can be tiny, one-person operations based in a house — often a great place for entrepreneurs with little capital to start — or a major operation with warehouses throughout the country and thousands of trucks making deliveries to tens of thousands of companies. One of the great dreams of any entrepreneur is to find distributors; that is, people who will sell your product and service so you don't have to.

This way of getting into business, if you can pull it off, has major advantages, because these distributors have their own sales forces that presumably have relationships you could never have. The term "distributor" used here makes general reference to any type of broker or agent or wholesaler that can bring a product to market on your behalf. Needless to say, the best of these distributors have lots of products and services to sell, and have people continually knocking on their doors, but they can make a true difference if you have created and can deliver a product or service desired by their clients. As important, you have to deliver and support those customers in a way that provides them a proper profit margin for selling on your behalf.

This same concept can apply to the Internet. At the outset, Google was distributed to customers by other Web sites and search engines (notably Yahoo) that wanted to use its technology. Google used this distribution method to gain the credibility and awareness that enabled it to become the world's top search engine with almost no advertising budget.

Another distribution alternative is multi-level marketing, which, while often abused, remains a highly viable distribution method if applied ethically to a quality product, as is the case in of many cosmetics, household products, and nutritional items.

As with public relations, you can get some very big results from only a few hits with an effective distribution plan. In a given field, there might be only 20 to 50 major distributors; get even a few to handle your product and off you go. To convince them, you will have to make a compelling case that you can meet the needs of their customers. They will ask tough questions and quite likely do a test before making a major commitment. Beware of companies that ask you to pay upfront to distribute your product or service. There are times these types of payments will be painful but legitimate, but you must make absolutely certain that these payments are above-board and directly related to some kind of tangible results.

Other fundamental questions involve with working through distributors: Who invoices the customer and how does the distributor get paid? In some cases the distributor buys the product from you and re-sells to the customer, meaning that you invoice the distributor. In other cases, you actually invoice the customer and pay a commission to the agent. Generally, different industries have different common practices related to these payments that you will have to live with.

Who can help. Nearly every business trade has consultants who assist with developing distribution. The best will have direct access to the distributors and can at the very least open up important doors. This access, of course, comes with a price you may or may not have the resources to pay. You should try to check a consultant's track record by asking others in the field, and by make sure the compensation program is based in part on its performance.

Chances are, you will need to get in with only a few major distributors to have a significant impact on your business, so it's often something entrepreneurs handle on their own.

Potential results of Distribution and how they are measured.

  1. Awareness/leads. Getting major companies to sell or distribute your product can provide awareness and sales if they truly get behind your product. Just because a company takes on your product or service doesn't mean they will focus on it. You will have to market to them, try to train their people, provide incentives, and make sure you deliver on your promises if you want to make real headway in terms of actual sales volume after they take you on.
  2. Credibility. Getting other companies to actively sell your product is a great form of flattery and a dream scenario if you can find the right distribution.
  3. Selling. Distributors actually close sales without your having to do that.

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Customer Relationship Management. One of the best ways to achive a competitive advantage is through communications strategies, tactics, and software that manage each customer relationship. You'd be surprised how many companies large and small still fail to take full advantage of a technology and target marketing strategy that greatly automates and enhances customer relationship-building. Customer Relationship Management (CRM) strategies involve identifying people willing to hear from you, and undertaking ongoing communications campaigns that can include useful information, news, promotions, invitations, incentives, thank-you gifts, etc.

To manage all of this, and to manage each relationship, you need some type of contact management or Customer Relationship Management software. This can include basic desktop applications such as Outlook, Act, or Goldmine, etc., which are adequate for many businesses, to a multitude of Web-hosted CRM applications. Simply put, the software makes it possible to target, automate, and measure your communications over time, so that you can more measurably convert the prospects who enter the sales funnel into customers.

In the simplest terms, it works like this: Every time anyone new contacts your company, that person's name goes into a database accessible to anyone on your team who can help customers or who is in charge of building long-term relationships. That could, of course, be you. Ideally, the fields in the contact screen for each prospect are customized so that you can get answers to key questions related to their needs and desires and their ability to buy what you solicit. Every time thereafter you have any contact with that individual, or conduct any type of marketing communications, or do any business, you should try to politely get additional information and enter it in their records so you can provide even better service going forward. Properly designed screens will yield valuable data on what people buy and at what time of year; what sources of marketing yield more customers correlated with how much they buy; and much more. And most importantly, it can help you identify how the customer wants to be treated.

Based on the permissions people give you to receive information, you can send out e-mail communications with useful information, promotional offers, invitations, or rewards for loyalty or referring you to other people.

Sound expensive? Incredibly, a small business can patch together a basic CRM solution for under $1,000. Sending out permission-based e-mail communications costs a fraction of traditional direct mail. It costs very little to have a big impact with people who have given you permission to communicate with them.

Who can help. Almost any computer or office supplies store sells software for managing your contacts. If you expect to remain a one-person shop, almost any type of desktop CRM or account management software will do. Those of you who expect to grow and have multiple people talking with customers and prospects, as well as an ongoing marketing program will benefit from Web-based software that makes it easier to share information between multiple people. You will also want to find software that integrates easily with your permission-based, e-mail marketing efforts.

Potential results of Customer Relationship Management and how they are measured.

  1. Awareness/leads. By definition, the Customer Relationship Management process does not generate leads; it converts prospects into customers, and helps turn customers into advocates.
  2. Credibility. Building meaningful relationships by helping customers is one of the most effective ways to build credibility with the people who count most. The question, though, is how you use the information generated from CRM to benefit the customer relationship.
  3. Selling. Probably no marketing strategy more directly targets the very people you are trying to sell and build profitable relationships with.

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Internal Branding. Unless you experience explosive growth, it could take a few years before you will need to focus on internal branding in the same way as you do external marketing. After all, you don't necessarily need an agency to communicate with 10 employees. Nonetheless, it's a good idea to keep internal marketing in mind, especially because so few companies yet understand it.

Internal marketing or branding refers to making sure your employees and channel partners (or anyone who re-sells or distributes your products and services) fully deliver on your "brand promises." Companies often spend a lot more on marketing that makes promises than on efforts to make sure those promises actually get delivered by employees. You'll often experience this when you respond to an ad and find that employees barely know what you're asking about or fail to act with the enthusiasm you would expect.

Internal branding means making sure all of your people understand your unique selling proposition, the promises you are making in your Business Development efforts, and how they can help reinforce those promises through their own behaviors and actions.

Who can help. While new breeds of marketing, branding, consultants and recognition companies have begun to address internal branding, you can address internal branding using the same resources you use for external marketing to create internal communications programs that mirror the external programs so that your people understand the promises you make in marketing. For small businesses, this type of marketing occurs in face-to-face meetings.

Potential results of Internal Branding and how they are measured.

  1. Awareness/leads. Internal marketing can generate leads when you have enough employees and you're in the sort of business in which your own people can help generate leads. They also can help recruit employees.
  2. Credibility. Internal branding is critical to your organization's credibility, because how your employees act when they encounter your customers, or the quality of work they do, will have much to do with customer perceptions of your brand. Deliver what you promise, and people generally will think more highly of you.
  3. Selling. Highly engaged employees who fully understand your "brand" promise help sell wavering prospects, keep customers coming back, and can even prompt them to refer friends. It's hard to measure this precisely other than by tracking your rate of repeat customers.

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Measurement

Today, you can measure Business Development to an extent never before possible. The key is to use Customer Relationship Management software and make a point of collecting information on every prospect or customer you come in contact with. Simply by asking how they heard about your company, you can get a better handle on what marketing is working how. Those of you with e-commerce businesses often can obtain even more precise information by tracking conversions from your pay-for-click advertising.

Even a small company today can afford software solutions that allow for precise tracking of customer activities and nearly every marketing, sales, or service touch point, so you can correlate actual sales activities with various marketing. You now have the potential to move into a realm where you have far more information available to you than other competitors who haven't awakened yet to this potential.

Don't get too excited, though, about this advantage, because, in the end, companies with good products, service, and pricing who get the word out, however sloppily, can do just fine. The best long-term results come from delivering what people want, when you said you would, at the agreed-upon price.

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