The marketing of small hospitality businesses presents some interesting problems; especially when you make the comparison with the marketing of products or services within a larger company or corporation. I had to learn the hard way, by moving from a comfortable corporate umbrella into my own small business and finding my previous training and experience were largely irrelevant. I think I cost myself a fortune. My observations may be helpful…
Critical factors in marketing small hospitality businesses
- Most small hospitality businesses are undercapitalised. Even if there is a budgeted marketing strategy, new owners often find that everything costs a great deal more, and is a great deal less effective than first anticipated. An appreciation of budget marketing techniques can often mean the difference between your survival and demise.
- Small businesses generally trade within a more confined geographic area than larger businesses. Different marketing techniques apply. Small business owners often waste substantial amounts of money broadcasting messages beyond their ‘trading radius’. All effective marketing decisions should stem from understanding who and where your potential customers are.
- Usually, a small business owner cannot call upon specialist marketing support without having to pay prohibitive fees. The more skilled you are, the less work you need to contract out, and the more cost-effective your marketing becomes. If you are prepared to study and learn, you are going to save money.
3 ways to increase your income
There are three ways to increase income in your business — by bringing in more customers, by taking more dollars from each existing customer, and by increasing prices. The latter is a last resort. To attract more customers you should apply external marketing, to take more dollars from existing customers, you should practice service and sales skills (internal marketing). The distinction between external and internal marketing is most important, for without good internal marketing, you are foolish to embark upon a campaign to attract new customers. If you do fall into this trap, you will find yourself on the endless treadmill of ‘buying’ new customers to replace those you have lost.
Another reason you should practice sound internal marketing procedures is to stimulate word-of-mouth referrals. These are probably the cheapest and most effective form of marketing, but the most difficult to achieve in practice. The formula is not too difficult: your customers must conclude any transaction with a perception of quality, service, value and consistency beyond the standard generally available in the area. It is no good if your business is great one day, average the next.
It’s all about managing customer perceptions
You will notice that I used the word perception when referring to your customers’ view of your business. Perception is all there is in marketing; it does not matter what you think of your own business, your customers will view it in what Tom Peters so eloquently described as ‘their idiosyncratic and irrational way.’ How good are you at managing perceptions?