Holden P.R., Wilde N. Marketing and PR on a Shoestring
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Buying a computer
Let’s look at this from another angle – trying to buy a computer. A
typical computer store is out of town, usually very busy at the week-
end, and run through a centralised stock system. Most consumers are
unlikely to be very knowledgeable about the technical aspects of
computers. The shop floor can be daunting, as can their sales staff,
who use technical jargon constantly. Even if they sell you a model, it
might not be in stock. They offer you no apologies but the chance
to come back in your own time to pick it up. No, they won’t waive
the delivery charge on this occasion. When you do get it home, it
inevitably goes wrong and you are passed on to the helpline
which you pay for on a premium rate.
All this ties in with some research which looked at the expect-
ations of customers, based on the goods or services that are being
purchased
11
. We mentioned earlier the experience of car servicing
and all of you who have ever dared to step into some car showroom
can relate in some way to the findings. They concluded that cus-
tomers start with low expectations . . . and even these are rarely met!
How about . . .?
Working out what the moments of truth are for your busi-
ness, using our examples. You should look at this from a
customer’s point of view and write down all the times that
the customer has contact with your business.
If you are going to run a hotel, then stay in one to see how
well they do things. Pretend to be on business and request
the things that you think should be standard. How do they
deal with things that go wrong? If the internet access isn’t
working then do they have any alternatives?
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How well do their staff protect the business? If you are
going to set up a restaurant, then what kind of experience is
it, and what do they promise you?
Our thanks to Gary Cook at BEP Solutions for sharing some of
his experiences as a Training Provider frequently staying in
hotels all around the UK.
The value of failure
In every service encounter, there is the possibility of failure. There
isn’t an organisation in the world that doesn’t occasionally disap-
point a customer. This is the moment of truth par excellence. When
something goes wrong, you put it right. There is nothing more
straightforward or more challenging. It means that the person right
there in front of the customer or holding the phone has to be able to
act immediately for the benefit of the customer.
Look back at the Gotcha security example on pages 122–123.
Those figures for the ongoing marketing costs to customer B could
just as easily be a budgeted figure for your sales people or key
account manager. With £100 (figuratively) in their back pocket for
the client when things go wrong, what couldn’t they do? If you think
this is fanciful then think again. We know several small businesses
(and one or two large ones) that give everyone in the front line their
own budget to spend on customers. It’s rapid and flexible, staff just
have to report on how it’s spent, afterwards. The system is . . . don’t
let the system get in the way of satisfying customers.
Even if customers leave you, it’s still worth keeping in touch with
them. They haven’t ceased to exist, they’ve just made a decision.
They might come to regret that decision and you should give them
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reasons to do so as well as plenty of opportunities to return. These
kinds of customer are still more valuable and easier to recruit than
completely new ones. You’ll think about these customers as you work
through Chapter 6 since they are the best prospects for generating
new business. So if you have list of old customers, use it.
What next?
The message from this chapter is that before you embark on the
pursuit of brand new customers, it makes economic sense to spend
more time working on the relationships with the customers you
already have. You should be able to quantify the value of customers
and begin to prioritise them.
We looked at how research will help you to understand this
relationship and customers’ requirements of you. By simply improv-
ing customer service and looking to add value, not only can it
increase sales but it might also help you to prevent a future loss in
customers and ultimately in revenue.
You should now be aware of the importance of Lifetime Value
and the benefits of improving relationships with customers who
don’t always make frequent purchases. You need to explore how you
can add value through extra service and identify your customers’
moments of truth with your company.
All this will prepare you for the next chapter where we concen-
trate on gaining new customers who, of course, you will also want to
retain.
Notes/References
1. Brady, N. (2004). ‘In search of marketing orientation. An experi-
ment in key account management.’ Market Intelligence & Planning
22(2): 144–159.
2. All information concerning individuals collected by a company
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is subject to data protection legislation. You can find guidance
on this at the Information Commissioner’s Office website
(www.ico.gov.uk). Incidentally, this is not something that can be
ignored – all organisations, no matter how small, must register
and can be fined if they fail in their duties under the regulations.
3. www.bcentral.co.uk which contains some useful information as
well as links to software.
4. Hey! You’re a customer on the top left of the Holden-Wilde mat-
rix. It’s expensive and troublesome; it’s certainly high involvement,
you won’t make this purchase very often. Now, how do all those
computer companies help you out?
5. Those of you who are extremely picky, or smart, might point out
that the engineer is charged out at £50, but we don’t say how
much he or she costs. Well, the point is that our engineers are
salaried so they represent a fixed cost – they cost the same no
matter how many hours they work. That makes it difficult to
allocate these to individual customers. Nevertheless we should try
– but it can only be an estimate.
6. OK, OK. Let’s deal with it. Someone is asking about the difference
between gross and net profit, and do the figures take into account
overheads? Well we’ve already said that the engineer’s time
doesn’t show any profit on a job-by-job basis; our aim therefore is
to book out as many hours as our engineers have. We can do a quick
calculation to work out the break-even number of hours – how
many we have to sell per month or per year to pay for the engineers.
We could do the same for any other costs that are, in fact, over-
heads – the costs of running the office, etc. But crucially, these
can’t be allocated to individual jobs. Instead we can look at the
profit per job above, and treat it as gross. Then gross profit here is
seen as a contribution to overheads.
Also important, is that if we bill NO jobs in a month these
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overheads still have to be paid. So if those overheads (other
than engineers) amount to, say, £700 a month then that is the
break-even figure for gross profit on jobs invoiced; only after you
cover this do you start to make real profit. Clear? Good.
7. The Lifetime Value resource is at http://hbswk.hbs.edu/ arch-
ive/1436.html and another similar resource is at http://
www.dbmarketing.com/special_ltv.htm. Both are in dollars and
take some work to understand, but they are easy to adapt to
your own needs.
8. Jones, Thomas O. and Sasser Jnr, W. Earl (1995). ‘Why Satisfied
Customers Defect’, Harvard Business Review, Nov/Dec.
9. www.Loafhair.com, as featured on Channel 4’s Risking It All TV
programme.
10. Carlzon, J. (1987). Moments of Truth, Ballinger Publishing Com-
pany, Massachusetts.
11. Shaw and Ivens (2005), The Marketing Forum.
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6GETTING NEW
CUSTOMERS
We look at the ways of attracting new customers to your
business within a pre-determined budget, using your exist-
ing customer base to help target similar types of customer.
We add to the direct methods already described dealing
with low-cost ways of communicating with potential cus-
tomers and so generating sales. We also introduce you to
the importance of branding as the basis of consistent mar-
keting communications.
So, how do I get new customers?
The first stage in using a direct approach to gain new customers is
. . . to look at your existing customers. Really look at them. It’s called
profiling. So re-read Chapters 2 and 3 and remind yourself what you
know about your best customers (that’s their profile) and, from
Chapter 5, what you are doing to keep them and grow them.
As a result of knowing your customers, you will have at least one
(and possibly two, three or more) ‘clusters’ of the kind of people (or
companies) you serve. These are your guides to finding new customers.
Many marketing books will ask you to consider a target in which
your customers are at the centre. The problem with this image is
that you may have several customers in different places, so each
represents a different kind of target. In any case, what do the outer
rings really mean? Should you be happy if you pick up customers
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who are ‘off target’? For large companies with a wider margin for
error, the broad target is okay. In truth, most small companies can’t
afford to hit anything other than the bullseye.
As we said right at the beginning, there are customers out there
who are rightfully yours and they are the ones you should be aiming
at. You should, if you already have (good) customers, be considering
how you go about targeting others who are exactly like them. We
think it’s more useful to think of your actual customers as being a
very small cluster of customers (in a big market) right at the top of a
pyramid (see the diagram opposite).
The key principle
The whole aim of this chapter then is to prompt you to start acquiring
new customers with the most direct methods possible. Only when
you cannot meet your objectives in this way do you then consider
more ‘distant’ methods – even here you will encourage close inter-
action. Later, if you can afford it, you may use other methods to help
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‘warm up’ the market. But to start with, you should start at the top of
the pyramid; we’ll come to the labels on the diagram later.
One customer at a time
Remember, really small companies are aiming at getting one cus-
tomer at a time – and quite rightly. It’s expensive to gain a customer
and it’s just as expensive to serve that customer. So if you break the
bank recruiting one customer (from the wrong place) who turns out
to be difficult to satisfy (because, in truth, you can’t possibly do
everything they want you to), then you’ll really suffer. To help you
think about targeting your ideal new customers, you need to think
about the ‘channels’ you could use to communicate with them.
Right at the top of the pyramid are your customers (of course,
you don’t have them all as your customers yet . . . but give it time).
These are the people that you should be talking to as if they are
customers, even if they are not. Look back at your customer service
ideas developed in Chapter 5.
Companies who give information out as part of their service can
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do this easily. The marginal additional cost of sending your customer
newsletter to people you really want to be your customer is minimal.
If you usually speak directly to your existing customers (and you
should), then you should do the same with prospective customers
who fit the right profile.
So, at the top of the pyramid you use the most direct, targeted
‘channel’ possible. Everyone you address here is either a customer or
a potential customer with a proven need for your product and so
there is no wastage. You MUST consider talking face-to-face, using
the telephone or, occasionally, writing personal letters as your pri-
mary forms of communication. On a shoestring, there is no substi-
tute; it is the most effective.
If, as a result of the research work you’ve done (in Chapter 3),
you now know the names and addresses of very high-value potential
customers, then you should be looking after them very well – directly.
Don’t waste time finding clever ways to reach them . . . call them now.
Of course, if you’re dealing with a large number of customers (of
smaller value) and are unable to deal with them all individually, you
still need to look after them, but much more efficiently – perhaps
online, perhaps simply encouraging them to visit your store. It’s in
these parts of the Holden-Wilde matrix that you may need to use
more conventional ‘marketing communications’ channels.
Let’s make this very clear. If you know who your customers
are and who should be your customers; you know their
names and where they are, and that the total number you
can identify more than meets your objectives, then you do
not need to consider any further ‘customer acquisition strat-
egy’ such as advertising or PR.
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How about . . . ?
Talking directly to potential customers. If you wanted to talk
to the people who were buying interactive kiosks for stores,
airports and other situations, for example, you’d have to
visit KioskCom, the two-day exhibition at London’s Olympia.
Make sure you go with plenty of your business cards and
brochures, if you have them. Visit the stands that offer what
you offer and stand alongside customers as they enquire.
Chat to people. Ask them what they think of the competitors
on view.
For most business-to-business exhibitions, you don’t have to
pay to visit – and you get around a lot more than if you buy
a stand.
If you decide to invest some money, think about volunteer-
ing to run a conference session, where you’ll be talking to a
sub-set of exhibition visitors who are really interested in
what you have to say; they’re right at the top of your ‘cus-
tomer pyramid’.
Going further afield?
If you find that you can’t reach your objectives just from the poten-
tial customers you can contact directly – if you are on the right-hand
side of the matrix – then you will have to look further. This is when a
wider range of communications activities might be employed. You’re
looking further down our pyramid, trying to get ‘your’ kind of
customer to identify themselves – so-called ‘hand waving’.
Now look back at the labels on the pyramid diagram on page
139. On the left of the pyramid are the kinds of media you might use
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