May 26, 2017 at 09:49Comprehensive online marketing guide. Day 1. Three ways to scale a business
The day before yesterday I wrote an article in which I promised to publish a series of 60 publications about marketing and more. But as always, for some reason I postpone all the most important matters to the last moment, so the fulfillment of the promise once again fell overnight.
Under the cut you will find an introductory but extremely important concept that I was introduced to during my internship at a small American consulting company. And despite the fact that it is based on 3 methods for scaling a business (not marketing), I am convinced that good marketing should be formed around it.
Oh yes, one more thing: in a previous article I was reproached for the portrait of Stalin. It seemed to me that Stalin was better than all of these cats, but you yourself asked.
PS Since this publication is introductory - in the footer will be published links to all published articles from this series.
PPS There are a lot of pictures under the cut.
This extremely simple concept is practically not applied in Russian realities, but it is very coolly used by many American companies. But before moving on to this simple life hack, let me make a small remark about American business in general, because some representatives of the information business very often mislead their viewers, talking about how everything is pink and sunny in America and what super-breakthrough chips are here. This is not true!
In the United States, business can be divided into 2 conditional categories: large corporations - real whales of incredible size - for example, when you talk about a department store, you mean Macy's when you talk about a pharmacy, you most likely mean CVS or Walgreens when you talk about major retailers, you recall Walmart or Target, and there are plenty of such examples. That is, these are companies that were actually able to consolidate their association with entire product categories. And they are all very cool. In the literal sense, they have multimillion-dollar marketing budgets and in fact often do not think about the effectiveness of various advertising channels. They even raise airships with their ads!
At the same time, there is a large number of small, small and medium-sized businesses, which in fact is often not very good. The head of a small business in the United States, in contrast to our realities, as a rule, is far from the most educated person. Judge for yourselves: in America, unlike Russia itself, a university graduate can easily receive from 80 thousand dollars a year. Instead of going into a nervous and stressful business, many choose quiet work from 8 am to 4 pm for quite normal money. The approach to the development, promotion and optimization of small and medium-sized businesses in the United States is much worse than in most post-Soviet countries. Therefore, when you are told about the incredible breakthroughs of American entrepreneurs, treat such statements with caution.
But we, in turn, will focus on the most successful and successful examples. Returning to the announced methods of scaling up almost any business, I would like to draw your attention to only 3 very simple, but effective methods that are constantly used by the largest companies:
It looks simple, but most entrepreneurs in Russia, Ukraine, and any post-Soviet country, like usually focused only on increasing the flow of new customers.
I will not even focus on the fact that in most cases attracting new customers is much more expensive than optimizing internal business processes. I just want to show you that by increasing each of these categories by only 10 percent- which is absolutely a little and certainly easier than increasing any one by 30 - your income is increasing by 33 percent ! But what if you can increase each of the items by 30-50 percent?
Unfortunately, most people think that good marketing should only be responsible for increasing new customers, while I am sure that good marketing should always focus on EACH of these categories. A marketer, and indeed any good Internet promoter, is not a person who knows how to click on the correct sequence of buttons - we can teach you this in a few weeks. A good promoter is one who has a vision and understanding of both the target audience and the business processes of the company with which he works.
In this article I will not consider methods of attracting customers - we still have time to talk about all these “VKontakte”, “Instagram” and “Facebook”. Instead, let's look at a few examples that apply to the other two tools.
Firstly, you can always offer the customer an improved / more expensive version of the product. And this can be done in any niche. Airlines offer you to buy a place of superior comfort, hotels - to improve rooms. By the way, here is an example of a letter from Hilton that I regularly receive a few days before arrival at the hotel:
You can upgrade your room from as little as $ 6. And in fact - what is 6 dollars when you have already paid 100-300 dollars per night? But all of a sudden, the hotel realizes that by the date of your arrival it has rooms of the same category with direct access to the pool, why not sell them for $ 6? Or maybe you decide to add a room or move to a suite? No problem, we have options for you. These numbers may seem insignificant - what is 6 bucks for the Hilton? - but in the long run, all these efforts pay off with interest.
With this proposal, Hilton solves 2 problems: firstly, it tries to maximize profits from each customer, and secondly, it manages its inventory - room fund much more efficiently, trying to ensure the most complete occupancy of the most profitable rooms for the company.
By the way, with regard to improved rooms or plane tickets with more comfortable seats, this is a separate interesting topic, which is highlighted in a huge pricing unit in any good textbook on microeconomics, which we will definitely discuss in more detail in the future.
Returning to the upsells (this is what they call the approach to selling a more expensive or advanced version of a product for a higher cost), I mentioned quite large players like hotels or airlines, but the point is that almost any business can use this technique, especially if it is presented in the Internet. Here is another example from Hulu, which is a kind of Netflix analogue that allows you to stream TV shows and movies for a fixed monthly price.
As you can see, Hulu offers you to pay only $ 4 per month in order to get rid of annoying ads or add premium movies and TV shows for 8.99. And this is just one option. There are thousands of such examples, and I really hope that together we will soon find suitable options for your particular field of activity.
The second opportunity to increase the size of the purchase are the so-called cross-sells. From an economic point of view, we are talking about complementary goods - products that can in any way complement your main offer.
If you are selling a camera or camcorder, offer to buy an additional lens, battery or conditional cleaning kit. Almost every gas station, the main task of which is the sale of gasoline, currently also has a small store where you can always buy coffee with a bun and some other snack. Despite the fact that the main task of such a store is to reduce the costs associated with the cost of service personnel refueling, this is also a cross-cell, as well as additional services, such as changing the oil in your car.
Amazon.com is a great example to get to know all kinds of crosscell options in a wide variety of product categories. Perhaps you should study this site in more detail. But by the way, we will still talk about him later.
Speaking of increasing the size of the purchase, we will focus on the third paragraph, although this list can be continued indefinitely. Formation of sets.
Very often, in order to increase sales and get rid of low-liquid products in our supermarket, we combine a variety of products into different sets. Actually
this technique can be seen as a kind of cross-cell, when you combine a bottle of champagne with a box of chocolates to sell this set cheaper (or often even more expensive) than with a single sale. Many online and offline retailers use this technique. There is a wonderful coffee shop in Lviv where you can buy incredibly tasty freshly roasted coffee. But as soon as you ask to buy one bag of a certain grade - you will certainly be asked to choose one of the sets for 5-6 bags in order to feel the full bouquet of tastes and decide on your favorite coffee grade. By the way, these sets are constantly updated (so that you can try NEW sets as often as possible).
We mentioned attracting new customers and increasing transaction size. The last point of this magic triangle is an increase in the frequency of purchases, which can also be talked about endlessly, but I will give just a few very quick and clear examples so that you can easily find application for your company or product.
Take the same Amazon.com, which offers a discount of 8.62 from a purchase of $ 50 in honor of the fact that the company took first place in the prestigious Harris Pool poll:
Thus, the situation that happens with an additional info line and trigger for a new purchase company. To various nominations and victories in competitions (especially if there are none), you can safely add all kinds of “Celebrate 5 years on the market” and other birthdays of directors or the good mood of secretary Tamara.
Boxed - a service that delivers large boxes of products at low prices, offers to use the Pancakes promotional code on Sunday to get minus $ 5 from a purchase, or the Waffles promotional code for those who woke up only on Monday, but already for a $ 3 discount.
The company not only offers a situational discount, but actually skillfully works with the objections of those who did not see this message on time, but still got the opportunity to get a discount, although not so big.
Similarly, you can use any holidays that are not only the celebration of the New Year, birthday, March 8 and February 23. Take a look at the calendar and you will find there a huge number of holidays that take place literally every week. Moreover, you can even try to gather a certain hype around your company, regularly introducing customers to a variety of holidays and dates, which they had no idea about.
Below are examples of e-mails from hotels that offer to earn 2 thousand miles for every night spent in April at the Hilton:
The IGM network offers its users a monthly challenge with increasing bonuses for each next step:
SPG offers additional points for the first and second night for a certain period of time.
Someone may object, they say, it is easy to give examples of hotels and airlines - they have superbudgets. But in fact, I show them on purpose, because in these niches there is extremely great competition, and in fact all these hotel chains, airlines and other major players are forced to resort to such steps in order not to fly out of the market.
That is why each of these proposals is a work of calculation and reflection of many economists, marketers and other decision-makers. I am deeply convinced that they should not only be taken into account, but also taken into service for their projects.
In summary :There are 3 main ways to scale a business: attracting new customers, increasing the size of purchases and increasing the frequency of purchases. An increase of 10 percent from each of the above methods leads to a general increase in income by 33 percent (Which is easier? Increase one category by 30 percent or 3 by 10?). Attracting new customers is the most expensive but necessary method. The increase in the size of purchases is facilitated by the active introduction of upsells, cross-sells and the grouping of products / services into specific sets. Increasing the frequency of purchases can be achieved through well-established communications with customers. Do not forget to congratulate them on their next holiday, offer a situational discount or just wish you a good mood!
We’ll talk about retargeting tomorrow.
Under the cut you will find an introductory but extremely important concept that I was introduced to during my internship at a small American consulting company. And despite the fact that it is based on 3 methods for scaling a business (not marketing), I am convinced that good marketing should be formed around it.
Oh yes, one more thing: in a previous article I was reproached for the portrait of Stalin. It seemed to me that Stalin was better than all of these cats, but you yourself asked.
PS Since this publication is introductory - in the footer will be published links to all published articles from this series.
PPS There are a lot of pictures under the cut.
This extremely simple concept is practically not applied in Russian realities, but it is very coolly used by many American companies. But before moving on to this simple life hack, let me make a small remark about American business in general, because some representatives of the information business very often mislead their viewers, talking about how everything is pink and sunny in America and what super-breakthrough chips are here. This is not true!
In the United States, business can be divided into 2 conditional categories: large corporations - real whales of incredible size - for example, when you talk about a department store, you mean Macy's when you talk about a pharmacy, you most likely mean CVS or Walgreens when you talk about major retailers, you recall Walmart or Target, and there are plenty of such examples. That is, these are companies that were actually able to consolidate their association with entire product categories. And they are all very cool. In the literal sense, they have multimillion-dollar marketing budgets and in fact often do not think about the effectiveness of various advertising channels. They even raise airships with their ads!
At the same time, there is a large number of small, small and medium-sized businesses, which in fact is often not very good. The head of a small business in the United States, in contrast to our realities, as a rule, is far from the most educated person. Judge for yourselves: in America, unlike Russia itself, a university graduate can easily receive from 80 thousand dollars a year. Instead of going into a nervous and stressful business, many choose quiet work from 8 am to 4 pm for quite normal money. The approach to the development, promotion and optimization of small and medium-sized businesses in the United States is much worse than in most post-Soviet countries. Therefore, when you are told about the incredible breakthroughs of American entrepreneurs, treat such statements with caution.
3 methods to scale a business
But we, in turn, will focus on the most successful and successful examples. Returning to the announced methods of scaling up almost any business, I would like to draw your attention to only 3 very simple, but effective methods that are constantly used by the largest companies:
It looks simple, but most entrepreneurs in Russia, Ukraine, and any post-Soviet country, like usually focused only on increasing the flow of new customers.
I will not even focus on the fact that in most cases attracting new customers is much more expensive than optimizing internal business processes. I just want to show you that by increasing each of these categories by only 10 percent- which is absolutely a little and certainly easier than increasing any one by 30 - your income is increasing by 33 percent ! But what if you can increase each of the items by 30-50 percent?
Unfortunately, most people think that good marketing should only be responsible for increasing new customers, while I am sure that good marketing should always focus on EACH of these categories. A marketer, and indeed any good Internet promoter, is not a person who knows how to click on the correct sequence of buttons - we can teach you this in a few weeks. A good promoter is one who has a vision and understanding of both the target audience and the business processes of the company with which he works.
In this article I will not consider methods of attracting customers - we still have time to talk about all these “VKontakte”, “Instagram” and “Facebook”. Instead, let's look at a few examples that apply to the other two tools.
So how can you increase your purchase size?
1. Upsells
Firstly, you can always offer the customer an improved / more expensive version of the product. And this can be done in any niche. Airlines offer you to buy a place of superior comfort, hotels - to improve rooms. By the way, here is an example of a letter from Hilton that I regularly receive a few days before arrival at the hotel:
You can upgrade your room from as little as $ 6. And in fact - what is 6 dollars when you have already paid 100-300 dollars per night? But all of a sudden, the hotel realizes that by the date of your arrival it has rooms of the same category with direct access to the pool, why not sell them for $ 6? Or maybe you decide to add a room or move to a suite? No problem, we have options for you. These numbers may seem insignificant - what is 6 bucks for the Hilton? - but in the long run, all these efforts pay off with interest.
With this proposal, Hilton solves 2 problems: firstly, it tries to maximize profits from each customer, and secondly, it manages its inventory - room fund much more efficiently, trying to ensure the most complete occupancy of the most profitable rooms for the company.
By the way, with regard to improved rooms or plane tickets with more comfortable seats, this is a separate interesting topic, which is highlighted in a huge pricing unit in any good textbook on microeconomics, which we will definitely discuss in more detail in the future.
Returning to the upsells (this is what they call the approach to selling a more expensive or advanced version of a product for a higher cost), I mentioned quite large players like hotels or airlines, but the point is that almost any business can use this technique, especially if it is presented in the Internet. Here is another example from Hulu, which is a kind of Netflix analogue that allows you to stream TV shows and movies for a fixed monthly price.
As you can see, Hulu offers you to pay only $ 4 per month in order to get rid of annoying ads or add premium movies and TV shows for 8.99. And this is just one option. There are thousands of such examples, and I really hope that together we will soon find suitable options for your particular field of activity.
2. Crossell
The second opportunity to increase the size of the purchase are the so-called cross-sells. From an economic point of view, we are talking about complementary goods - products that can in any way complement your main offer.
If you are selling a camera or camcorder, offer to buy an additional lens, battery or conditional cleaning kit. Almost every gas station, the main task of which is the sale of gasoline, currently also has a small store where you can always buy coffee with a bun and some other snack. Despite the fact that the main task of such a store is to reduce the costs associated with the cost of service personnel refueling, this is also a cross-cell, as well as additional services, such as changing the oil in your car.
Amazon.com is a great example to get to know all kinds of crosscell options in a wide variety of product categories. Perhaps you should study this site in more detail. But by the way, we will still talk about him later.
3. Formation of sets / sets
Speaking of increasing the size of the purchase, we will focus on the third paragraph, although this list can be continued indefinitely. Formation of sets.
Very often, in order to increase sales and get rid of low-liquid products in our supermarket, we combine a variety of products into different sets. Actually
this technique can be seen as a kind of cross-cell, when you combine a bottle of champagne with a box of chocolates to sell this set cheaper (or often even more expensive) than with a single sale. Many online and offline retailers use this technique. There is a wonderful coffee shop in Lviv where you can buy incredibly tasty freshly roasted coffee. But as soon as you ask to buy one bag of a certain grade - you will certainly be asked to choose one of the sets for 5-6 bags in order to feel the full bouquet of tastes and decide on your favorite coffee grade. By the way, these sets are constantly updated (so that you can try NEW sets as often as possible).
How to make buying more often?
We mentioned attracting new customers and increasing transaction size. The last point of this magic triangle is an increase in the frequency of purchases, which can also be talked about endlessly, but I will give just a few very quick and clear examples so that you can easily find application for your company or product.
Use company related news
Take the same Amazon.com, which offers a discount of 8.62 from a purchase of $ 50 in honor of the fact that the company took first place in the prestigious Harris Pool poll:
Thus, the situation that happens with an additional info line and trigger for a new purchase company. To various nominations and victories in competitions (especially if there are none), you can safely add all kinds of “Celebrate 5 years on the market” and other birthdays of directors or the good mood of secretary Tamara.
Offer situational promotions / discounts
Boxed - a service that delivers large boxes of products at low prices, offers to use the Pancakes promotional code on Sunday to get minus $ 5 from a purchase, or the Waffles promotional code for those who woke up only on Monday, but already for a $ 3 discount.
The company not only offers a situational discount, but actually skillfully works with the objections of those who did not see this message on time, but still got the opportunity to get a discount, although not so big.
Similarly, you can use any holidays that are not only the celebration of the New Year, birthday, March 8 and February 23. Take a look at the calendar and you will find there a huge number of holidays that take place literally every week. Moreover, you can even try to gather a certain hype around your company, regularly introducing customers to a variety of holidays and dates, which they had no idea about.
Below are examples of e-mails from hotels that offer to earn 2 thousand miles for every night spent in April at the Hilton:
The IGM network offers its users a monthly challenge with increasing bonuses for each next step:
SPG offers additional points for the first and second night for a certain period of time.
Someone may object, they say, it is easy to give examples of hotels and airlines - they have superbudgets. But in fact, I show them on purpose, because in these niches there is extremely great competition, and in fact all these hotel chains, airlines and other major players are forced to resort to such steps in order not to fly out of the market.
That is why each of these proposals is a work of calculation and reflection of many economists, marketers and other decision-makers. I am deeply convinced that they should not only be taken into account, but also taken into service for their projects.
In summary :There are 3 main ways to scale a business: attracting new customers, increasing the size of purchases and increasing the frequency of purchases. An increase of 10 percent from each of the above methods leads to a general increase in income by 33 percent (Which is easier? Increase one category by 30 percent or 3 by 10?). Attracting new customers is the most expensive but necessary method. The increase in the size of purchases is facilitated by the active introduction of upsells, cross-sells and the grouping of products / services into specific sets. Increasing the frequency of purchases can be achieved through well-established communications with customers. Do not forget to congratulate them on their next holiday, offer a situational discount or just wish you a good mood!
Marketing 101. Comprehensive Marketing Guide
General concepts
Social networks
- In contact with. We configure advertising for users of certain sites using the VK authorization widget.
- In contact with. We give advertising to visitors of FOREIGN forums and sites.
Miscellaneous
- Preparatory work that will help to conquer Kickstarter
- Startuper note. A cozy book post for you and your project.
We’ll talk about retargeting tomorrow.