This article is the first in a series of articles follows from my first article “4 things a retail business should do different in 2010 using software”
In this article we delve into more detail about the specific types of cheap marketing a business can use and how a business should be using that with software systems.
In my experience with my hair salon clients and men’s boutique clients, in the retail space, the cheapest forms of marketing are.
1) Bulk SMS
2)Bulk Email
3)Affiliate Marketing
I specify them in the order of profitability that I have observed over the years in my clients businesses and as I have veloped my point of sale software with these clients and their needs.
These days most retail businesses are making use of one of the 3 marketing methods from above with varying levels of success. What is critically important in using any of the above is that you must put the software systems in place to track, sms, email and affiliate programs 100% accurately.
In order to track this marketing correctly you need software that can store or display:
- The cost of the campaign
- The success rate of the campaign
- The income value of that campaign, ie how much money did you receive from sending the campaign and lastly
- The profitability of that campaign.
In a previous article I show you a manner on how to measure the return on bulk sms campaigns. I highly recommend you read this article. The basis for recording and tracking your marketing efforts 100% is that you must develop a manner in which you know exactly that the sms/email resulted in the sale. The most simple manner in which to do this is to simply attach unique numbers/ voucher numbers/coupon numbers to the sms or email and force that in order that the client can benefit from the marketing effort, that your system requires that you must provide the code that the client received.
What makes this marketing so cheap?
Well we all know that sms and email is relatively cheap in comparison with advertising in magazine/tv/radio. What are the costs however?
Sms Costs:
In general smses will cost anywhere between 22 cents and 45 cents depending on your service provider and the quantity of smses sent at one time. A sms campaign to 5000 clients will there cost R 1100 and R 2250. For this you will receive delivery reports (useful for knowing which clients cell numbers are no longer in use), replies to your sms via sms, targeting a specific set of clients from your database.
To put this more in perspective, in the case of my clients, lets use the hair salons for instance, it takes at the very most 5 clients out of 5000 to take advantage of your campaign to cover all your costs. That means you need to get a 0.1% success rate on your campaign in order to begin making a profit. If your business offers a great service your clients will come, typically my clients will experience a 10% – 50% return on their campaigns, this is not to say that they are sending 5000 smses everytime cause they aren’t they might send 600 – 1000 smses per campaign. This being the case they are still getting atleast 60 clients responding to and spending on a 45 cent sms sent to the customer. I am in the fortunate position that I can boast that I don’t have any clients that make less than a 100% return on the cost of sending the campaign. Without a doubt, sms turns a serious profit in any business and the costs are a non factor in actual fact.
Keep in mind as well that in South Africa SMS is very well received and there are very few people that don’t have cell phones.
E-mail costs:
Well email will in actual fact cost nothing but bandwidth if you send your emails manually. If however you are using your software system to send email for you, the changes are that emails will costs anywhere between 10 cents and 30 cents to send. For all the reasons above, email is just as effective as sms. Email has the added advantage of being able to add more content and more marketing information in the campaign. The other major advantage to email is that you can track what links have been clicked in your email campaign etc, this helps huge amounts in determining what was popular in the email campaign, what wasn’t well received etc. ultimately it helps you develop better emails in the future. Finally another added advantage is that because you can produce more marketing content, the potential is there to earn a even higher return from the campaign by virtue of the fact that you can market more than a single product for instance.
The down side to email is that you are reliant on a more technology savvy customer than with sms, there are many more people with cell phones that email addresses and more importantly still more people will see you sms campaign immediately with sms than email because many people don’t check there emails every day, everyone checks there cellphone when it beeps with a message. Basically a cellphone is more critical to a customers life then there email.
Cost of affiliate marketing
Affiliate marketing is the process of rewarding your clients for bringing new clients to your business. The cost of this is simply the cost of whatever it is that you are willing to give to the referring customer as discount, for free etc in order to get a new client or more. This is obviously a great means of marketing and is indicative of a business that has happy clients cause ultimately only a happy client will tell there friends about your business in the long run no matter what you are giving back to the referring customer.
I know very few retail businesses that implement affiliate marketing, I know for one it is something that I need to put in place for my clients this year as well so I will keep everyone posted with developments in this area. Again a good software system will be able to tell you the sales worth of all your referred customers as well as all te costs (discounts, products) given as reward to get these new customers.
Conclusion
I hope this article has been useful and gotten your business brains thinking a bit. I would really appreciate any commentary on this, Its my passion to devise manners in which to get my clients to generate money with the absolute least amount of effort.
