Improvement’s not enough, businesses need to innnovate

Imagine, for example, that you’re offering a service to the local community, such as computer repairs. When the economy was booming, you might have relied on personal recommendations.

If you can get them, recommendations and testimonials are the most powerful marketing possible – a happy customer recommends you to five friends and there’s a fair chance that one or two of these will at least consider you. However, when business dips, fewer customers recommend you to fewer friends, which causes a further drop.

Kaizen is of limited use in such a situation. You might try to make it more likely for customers to recommend you; you might improve your efficiency so they get their computers back more quickly; or you might lower your prices – all of which might sound sensible, but they’re akin to polishing door knobs on the Titanic.

What’s needed is a complete reappraisal of your business, including whether your market is still viable. Assuming it is, your priority is to attract customers, and for most small businesses the internet is the most effective place to look.

My previous two columns have covered Facebook marketing, and there’s no doubt in my mind that using Facebook Profile information to target potential customers is worth investigating, but the majority of customers actively looking for your service will still be using search engines.

For a local business, it’s pretty straightforward to get ranked highly in Google’s search results, in part because most companies seem unaware that search engines offer local searches (despite the fact that most internet users encounter them every day). The main reason, though, is that you have fewer competitors locally than nationally.

Marketing with L-plates

As an example, I recently helped with the relaunch of a driving-school business run by my sister. She’s an excellent driving instructor, but an awful business person. She was very young when she first qualified 20 years ago, and has relied almost entirely on recommendation via word of mouth since then. Her idea of a marketing campaign is a leaflet drop.

Step one was to establish whether there was still a viable business. Higher fuel and insurance costs, along with rising youth unemployment, have decreased the number of young people learning to drive, and this had seriously impacted on her business.

There’s no doubt in my mind that using Facebook Profile information to target potential customers is worth investigating

However, looking at the number of driving schools still operating in her local area suggested that some people were making money. So I conducted an analysis of her local competitors to see what deals they were offering, what they were doing well, and what their weaknesses were.

Rarely have I seen such consistently diabolical websites, so there was an obvious opportunity to improve her site so that she comes across as more professional and up to date than the competition. There’s a temptation to slash prices to attract new business, but this not only reduces your profit margin, but can also be perceived as desperation.