"Feed your business and your business will feed you!"
In recent years this cliché has come to mean feeding your business a balanced diet from the following three food groups:
- Public Relations (PR)
Most business owners see these groups as a single spending category. That's a mistake. And in most small-business-owners' minds, they're often seen as synonymous terms. They are not. They must be separate spending accounts in your ledger. If not, you'll have an empty calendar and an empty bank account.
Public relations is the establishment of your company as the recognized expert within a specific demographic, geographic, and/or professional group. This is also known as "branding." Thus PR is the process of branding. At this stage, what your PR says is almost irrelevant as long as it positions you as the expert's expert.
Marketing is the association of your established brand with products and/or services in the mind of a particular person, or of a demographic, geographic, and/or professional group. A "market" is that identifiable person, demographic, geographic, and/or professional group. While PR is the process of branding, marketing is the process of "establishing the brand."
Advertising is the establishment of a sense of need for a product or service in the mind of the market. Even if your market knows your name, your brand, and your products and services, if that market doesn't know that it needs your products or services, the members of that market will never buy! On the other hand, if they "feel the need" and you have established your brand, they will seek you out.
So how much should you spend on PR, marketing, and advertising? The answer reflects the progressive nature of this process. In this case, one sum of money should be allocated for the entire process — a process that comprises PR, marketing, and advertising.
At first, with little marketing or advertising, the entire amount will be spent on PR — after all, your target market needs to be introduced to you as the expert.
As you become the recognized expert — which should take between one year and two years — spending on marketing increases and spending on PR decreases. The start of this period will overlap the one-to-two-year time frame for PR.
Finally, you will be established as the expert and your marketing will establish your brand in the marketplace. This is when you will begin to shift spending to advertising. Again, there will be overlap, but don't expect to spend much on advertising until at least one year after you begin a well-planned PR program and at least six months after you begin a highly targeted marketing plan.
This still leaves unanswered the question of how much should you spend on PR, marketing, and advertising. If you want success, the rule of thumb is between 10 percent and 20 percent of gross revenue. If you're a start-up still operating on loans or investment capital, budget 20 percent of that money per year for this process.
PR, marketing, and advertising remain critical, but in the past year an additional food group has emerged: social media.
Entrepreneurs, for example, are turning to professional social networks — services such as LinkedIn, Konnects, Ecademy, Plaxo, and even Facebook — which provide professionals the opportunity to meet and collaborate with colleagues worldwide. These professionals who utilize social networks fall into two distinct groups:
- Those for whom the emphasis is on the word "network" — These people seek to promote and expand their business.
- Those for whom the emphasis is on the word "social" — These people seek to promote and expand their Christmas card lists.
Social media marketing is the systematic approach to using social networks and other Web 2.0 and emerging technologies as a part of an all-inclusive marketing plan.
In less than six months, through social media efforts alone, one business:
- began providing customers with constant consultation updates with a Twitter-based microblog;
- secured two book contracts with mainstream publishers;
- obtained a monthly column in the largest distribution-industry magazine in a new market niche;
- contracted a consulting deal in a new niche market; and
- won consulting contracts with two foreign governments.
All this for the investment of an hour a day and no money.
About the Author
Dr. Maurice A. Ramirez (www.MauriceARamirez.com) helps companies to align business continuity plans with personnel and customer behavior during adversity. His new book, The Complete Idiot's Guide to Disaster Preparedness, is now available on Amazon.com.
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For the rest of the June 2009 issue of CRM magazine — The Social Media Issue — please click here.