Which way to vote? Finding the party for small business.

I am a floating voter.

I can’t ever recall having been so interested in the outcome of an election and my vote is there for the taking by the party that can convince me that it is the party for small business.

After more than 12 years of Labour government, and a definite sense of this being the low point, I can see the argument for it being time for a change. I live in dread, however, of the country being slammed into reverse by a Conservative party that is bent on unwinding all previous policies and that will spend at least 2 years blaming its performance on the situation it has inherited rather than concentrating on recovery.

As I have said in an earlier post, I rate Brown as a financial manager and the prospect of Osborne in No.11, who I have yet to hear say anything meaningful, leaves me cold.

To help resolve my dilemma, I have spent the morning reviewing the websites of the 3 main political parties to try and decipher their policies for small businesses.

Surprisingly, or not, depending on your persuasion, the Labour party doesn’t have a specific section for business on its website, nor does it list business under its policies. Surely, this is a major own goal.

I want to know where the Labour party stands on business in general and employers' NI and Corporation Tax in particular.

Employers' NI is an explicit tax on recruitment and it seems illogical to me to be increasing this at a time when we want to get people back into work. Corporation Tax drains small businesses of funds for investment or survival. What was the rationale for removing the £10k tax free band and, more importantly, does Labour propose to bring it back?

The Conservatives do a lot better. Business is listed as a clear policy area on the website and within it there are pledges that counter the Labour position.

The Tories promise to abolish tax on new jobs created by new businesses.

I like the sound of this and want to know more. Will the policy only apply to businesses that start-up post the election? I hope not. There should be an incentive for all small businesses to take on new staff. Established small businesses offer a more stable and secure employment environment than start-ups and are better able to fuel sustainable growth.

The Tories also say they will cut the small companies’ Corporation Tax rate. Unfortunately, there is no detail on when, how and by how much.

The Lib Dems seem destined to remain the perennial third party. They too promise to cut the rate of corporation tax and say they will do this through the removal of complex reliefs.

Digging a little deeper I find a policy that says the party will allow small businesses to choose to be taxed on cash flow rather than accounting profit. This sounds interesting. In theory, it will allow growing businesses like ours to reinvest.

As a business that has just moved premises and is investing in their improvement, the Lib Dems' pledge to cut business rates for smaller businesses and calculate rates on site values also catches my eye. The present system of total rental value penalises us for the improvements we are making.

So, a mixed bag with intriguing, but unsubstantiated ideas dotted all around.

The one thing that all the parties have in common is a promise to cut red tape and ease the burden of regulation. Politicians always make great play of this and yet never seem sure about what red tape and regulation they are referring to. This seems to be an easy line to bulk up the manifesto, without any real substance or measure of success. Red tape and regulation are nowhere near the challenges that tax and cash flow are and I wonder if it simply betrays a lack of understanding of where the real issues are.

Despite lauding small businesses as the engine room of the economy, none of the parties seem to be talking about the sector in any detail yet. I have written to each of the parties with specific questions. The best response is likely to get my vote.

Why most marketing fails

If I had a pound for every time I’d heard someone say: "we tried marketing once and it didn’t work", I could have retired long ago.

Not only does the phrase betray a lack of understanding of what marketing really is, it is often a reliable indicator of how the fateful marketing programme will have been run in the first place.

Despite many advances in knowledge and information sharing, marketing remains one of the least understood of the business disciplines. Shrouded in mystery, and slippery in its accountability, it is a topic that everybody has an opinion on and most people believe they can do better than the marketing department.

Marketing isn’t rocket science, nor does it demand significant creativity or originality (albeit a little imagination helps). Largely it is a matter of process, understanding of the human psyche and persistent effort – otherwise known as hard work.

Most marketing programmes operate like this:

A marketing campaign will be sent out. The target buyer will respond or not (most often not). Any orders will be followed up (hopefully) and the remainder will be discarded and forgotten.

This formula applies whether we are talking about a direct mail campaign, e-shot, advert, trade show or any other form of marketing.

Is it any wonder that responses are typically way below 1% and that there is no return on investment?

To run a marketing campaign in this way borders on insanity. No regard is given to the buying process and little respect is given to the intelligence and needs of the buyer. In other words, the campaign is not buyer centric.

In earlier posts, I have referred to Jolles model of the buying process and the stages that we all go through when considering a purchase. The stages apply whether it is an impulse buy or a major capital investment – all that changes is the speed with which we go through the phases and potentially the number of people that will be involved in the decision.

If we take a step back for a moment, it is clear that the buying process is highly sophisticated. The buyer operates under a whole range of influences:
– Past experience
– Peer group comment
– Social media
– Google searches
– Webinars / Seminars / Events
– Advertising / direct marketing

While advertising and direct marketing still has a role, we as buyers are much more resistant to it. We like to feel that we are researching and finding our own solutions and only want to engage the sales person in the final stages of the buying process, when our mind is pretty much made up.

An intelligent marketing programme therefore needs to take account of the buying process and run like this:

The buyer will be engaged at all stages of the buying process with methods and content that are appropriate to where he or she is in the cycle.

In the consideration phase, which may be conscious or unconscious, we need to be educating and informing to stimulate interest. This could be with White Papers, blog posts and press releases or indeed with advertising and direct mail – it is the content that is important, not the medium of delivery (which should be varied).

Once the buyer has decided to act, he or she will then start to work out exactly what they want from their purchase. Case studies, product sheets and seminars can be useful in this phase.

When the criteria are defined, the buyer will then start to look for solutions to meet those needs. Past experience, peer group recommendations and web searches will all come into play.

If our previous engagement programme has been successful, we will be firmly on the consideration list – and potentially the only name on it.

The process of converting a prospect into a client can take many months – years in some cases. Jolles tells us that we spend 79% of our time in the consideration phase, umming and ahhing over whether we have a need or not. Our marketing contact programmes must therefore be multi-faceted and continuous.

Of course, the process doesn’t stop when our product or service has been selected. We need to keep engaging the client to make sure that our solution has properly met the need and then stay in touch to ensure retention, repeat purchases and up-sell.

When we look at the buying process in this way it is obvious that simple outbound campaigns are destined to fail. Marketing must comprise multi-touch activity that builds dialogue and engages the prospect at all stages in the buying process.

The theory, when converted to practice, produces results. Recent research by Forrester Consulting showed that businesses that market successfully:

1. Focus on lead generation as a process


2. Profile and segment prospects based on customer behaviour (not just demographics)


3. Design content that builds dialogue


4. Employ some form of lead scoring / prioritisation measure


5. Nurture prospects that are not yet ready to buy


6. Make certain that marketing works collaboratively with sales
   

The Forrester research further shows that these businesses enjoy a more robust pipeline, better customer insight, improved marketing and sales accountability and ultimately improved marketing ROI.

What more can anybody want?

Acknowledgements

How managing leads pays off in a stronger, more qualified pipeline - Forrester Consulting November 2009

Adam Needles - Demand Generation Blog 2009-10

Real Business #2 - Henry Kaye

Real Business is a series of posts that analyses the marketing opportunities and challenges of real businesses in the South East. The articles are also appearing in The Courier.

Sevenoaks-based Henry Kaye recently opened a showroom at its headquarters in Dartford Road – so that members of the trade and the public can view the company’s wide range of wedding accessories, which include bridesmaid dresses, wedding shoes and boots, hosiery, gloves, jewellery and wedding umbrellas.

Sharon Gavin bought the business in 2006 from Mr Henry Kaye, who aged 82, wanted to retire. The company was then based in Eastbourne, but Sharon moved it up to Sevenoaks and, for the first year or so, operated it out of her home. Sharon moved the company into its premises at 47 Dartford Road in November 2007.

Henry Kaye had been operating for more than 20 years and one of Sharon’s first moves was to update the range, as well as introducing new, more modern, colours – moving away from pastels to include shades such as plum and coffee. The company already had a website, but Sharon made a priority of building a new one and getting it fully optimised.

While sales have continued to grow, customer behaviour has changed during the current downturn.

“People are still getting married, but they are spending less – perhaps having one less flower girl, or not buying as many extras,” she explained.

Today, company sales are split 50:50 between the trade and consumers.

Sharon said: “We sell nationwide to the trade and are successful because we are affordable and hold everything in stock, while many other companies make dresses to order.”

Sharon has recently expanded into girls’ dresses and dressing-up outfits and has launched a dedicated website for this range called www.girlspartydresses.net. The range is also available in the Sevenoaks showroom.

Sharon is currently looking for ways of building the Henry Kaye brand.

“We are well-known within the trade and our sales are continuing to grow, but we want to be a recognised brand outside of that,” she said. “We exhibited at the National Wedding Show in London this year and our stand was swamped. However, most of the visitors were planning weddings for 2011, so that was a profile-building exercise for us, rather than one which resulted in lots of sales.”

Now that the showroom is open, Sharon wants to build on that and is looking to form partnerships with others involved in the wedding industry in the local area.

The Marketing Eye says:

Before embarking on a brand building exercise, Sharon should define the brand she wants to build.

There are two very distinct markets for Henry Kaye: the trade and the public. The trade wants low prices and ready availability. The public wants a wide range of choice, an attractive and easy to use website and good service.

Now could be the time to think about updating the brand, or even running two brands side by side. The Henry Kaye brand could be retained for the trade, as there is good recognition in this area, and a new identity developed for the public – something aligned to the proposition rather than the name of a previous owner. This will allow appropriate marketing to be delivered to each audience without creating conflict.

While search engine optimisation is one tactic to maximise visitors to the website, it is important to find other ways of building the brand and driving traffic to the business. A Google search for wedding accessories doesn’t bring up Henry Kaye very quickly, so pay-per-click advertising should be investigated to supplement the optimisation activity. Sharon shouldn’t overlook off-line marketing, such as advertising, events and direct mail either.

The fact that the stand was swamped at the National Wedding Show is a good sign that the proposition is right. These visitors are only likely to return if they are re-marketed, so capturing data and building a marketing database to stay in contact with potential customers is vital. Local shows might be more successful than national ones for consumer business in future.

With thanks to freelance journalist, Angela Ward, who is interviewing the businesses featured in these posts.