Marketing Your Small Business (How to Make the Phone Ring)

My first significant startup experience was in the mortgage business. The timing was great – 2002. I had a lot of confidence in my ability to think well, structure the operations efficiently, and motivate people. Some of that confidence was well-placed, some was a bit over the confidence-delusion divide. But, I think we (I had a great partner) had enough stuff (knowledge, experience, timing, whatever) to do well in that business at that time.

Naively, what we did not spend any time on was differentiating ourselves from our competition. And this hurt us. It hurt us a lot and for many years. We just assumed that, since our particular housing market was huge and rates were great, it would be easy to open up shop and take our slice of the pie. Unfortunately, that’s not generally how business works in 21st century America. Business is very competitive and, absent significant barriers to entry, you can almost always count on more supply (competition) than demand. Your expected “share of the pie” will probably not be enough for you to keep the lights on. We needed a way to separate ourselves from our competition and stand out to prospective customers in a crowded marketplace.

 You could spend a lifetime reading about marketing and branding and still not touch the surface of all that is out there. The two concepts that have come to mean the most to me for understanding small/medium business marketing are 1. positioning and 2. the importance of a unique selling proposition, or USP.

 To be clear, I am talking here about making the phone ring—actually generating sales. Mega corporations like Nike and Coke can spend a gazillion dollars on branding – well designed ads that don’t communicate much other than to keep reinforcing our collective beliefs about their A+ brands. But, smaller companies need to use their advertising dollars to generate immediate business. In other words, their marketing needs to spur action from prospects.

“Branding” is a long-term proposition with less direct, tangible results. Branding should not be ignored, but it should not be the primary driver of a small or medium-sized business’ advertising efforts. The primary driver of marketing for businesses with fixed advertising budgets should be to generate responses – emails, phone calls, visits into the store, etc. and those responses need to turn into sales (although actually converting leads is a topic for another post).

 Positioning as a concept was first introduced by Jack Trout. He and Al Ries wrote the book on the idea in 1981: Positioning: The Battle for Your Mind. Positioning is about finding an open space in the mind of your target customers, a way to differentiate how customers think about your company vs. the competition. Consumers are overwhelmed with options for products to buy and services to use and they only have a little space in their brains for remembering and managing the different competing companies. So, you need to find a space in their brains that is not already occupied.

 The challenge is that those minds have little spare capacity. A consumer can remember, on average, the primary marketing position of three to five companies per product or service category.

For example, when it comes to cars, most consumers all hold a few standard positions in their mind:

  • Safety- Volvo
  • Engineering- BMW or Mercedes
  • Reliability- Toyota or Honda

Cars are a crowded field and those obvious positions are already well-covered. If you want to enter that market, you will need something else, some other way to hook your offering to an open slot in the consumer’s mind.

If you don’t find a solid, open position you’re in danger of being an Oldsmobile.

When General Motors put that model to rest after 100 years, who knows what it stood for? It was big, it was mid-sized; it was for our parents, it was for youth; it was a value, it was luxury. GM was all over the place with its positioning for the Olds and it ended up owning no mind space in most consumers’ minds. Positioning is hard work. The position needs to be available and it needs to be one that will resonate in the market. Remember, most consumers will only hold in their minds three to five positions per product/service category.

 A position does not have to be a benefit of your offering. It does not have to be a thing or attribute consumers want in a product or service. For example, Harley Davidson is commonly known among motorcycle riders as the brand for macho outlaws. Virginia Slims is the cigarette for women. An old but classic example is 7Up, which made serious waves by positioning itself as the “Uncola”. None of these three positions is a benefit of the particular product offered, however the positions work because they are easily remembered by consumers.

That’s the key to positioning – it is focused on the mind of the consumer, not the essence of the offering.

 While you can use a unique selling proposition (USP) as a marketing position, the concepts are a bit different. USPs are directly focused on the product or service offering. What makes it different? USPs are generally benefits to consumers. Why will they choose your offering over another?

Price is a common USP (it’s also a good example of a USP that can double as a marketing position). Southwest Airlines is the low-fare airline. Another example – years ago, Domino’s Pizza took over the market with their “30-minutes or less delivery, or it’s free” USP.

Fast delivery is a strong benefit, which makes it a strong USP. It turns out that it’s also a sure fire way to ensure your delivery people speed and drive recklessly, leading to lawsuits, so take a deep breath before picking up that discarded USP. But, from the standpoint of making the phone ring, it sure did that.

 To summarize, whereas positioning is focused on the consumer’s mind, USPs are focused on the product or service itself.

The concepts can overlap, but they are different and you should understand both. To read more about positioning, I recommend the book I mentioned earlier –Positioning: The Battle for Your Mind (Trout and Ries, 1981). To learn more about crafting the elements of a good USP (although I am not actually certain the book uses that term), read Jump Start Your Business Brain (Hall and Peters, 2010). Both books will help you learn to make the phone ring more often.