Most business advice is not geared towards us small-business owners.
When I started my first (tiny) business in 1984, I read a book about direct marketing.
Big companies did not do this kind of marketing back then.
A tiny start-up like mine could afford about 15 cents on marketing for every R100,000 a big firm like IBM spent.
In my case, IBM was our main opposition. We were trying to steal a tiny slice of their sales.
They had teams of expert reps calling on every single IBM site. They also had teams prospecting into every potential IBM site. That tiny slice was worth millions of rands of income to us. They were so big they did not notice it.
We were trying to take a tiny piece of their communications business away.
I’m embarrassed I cannot recall the author’s name. He advised we send letters direct to every IBM user we could identify. Each letter needed 15 cents for an envelope and a stamp.
I began to draft letters. At first, I typed them. I handwrote the envelopes. I signed them by hand with a blue pen to show they were genuine. And then I lugged them to the post office to despatch them. We identified about 100 IBM users.
We spent most of our energy “building our list” in modern parlance.
We identified every single user of these minicomputers. We scanned every computer magazine and newspaper in the country. Whenever IBM, a software house, or a reseller made a sale, the news reported it.
We added each of their new clients to our list.
We attended every quarterly user gathering. Computing was very “elite” back then. User groups formed to help users help each other.
We followed this exact process for eight years. During that time, we identified another 500 users.
We started with 100 names. We soon realised nobody understood the technology. They understood the problem. The problem was that IBM’s remote terminal and printer took six months to arrive and cost a hell of a lot of money.
My first letter was about Trans-Hex Diamonds, talking about a problem they faced. That letter outlined how we solved the problem for less than 1/10 of the cost of IBM’s solution. We delivered in one week, about 23 weeks faster than IBM could.
We did not mention the technology. We mentioned the PC and how the firm could use it for other things. For instance, the accountant could use it to do budgeting and spreadsheets.
A couple of weeks later, we got an enquiry from an IBM user who had an oil rig a few miles offshore. Could we do the same for them? And when we did, I wrote their story as well.
The two stories prompted a few more people to call us, and we wrote about their stories. Every fortnight, I wrote another story about a new problem we had solved. Each story prompted more enquiries.
It wasn’t long before we had a solid list of 450 faithful clients. None of this had anything to do with our technical competence. It was those letters.
This mix of letters and installations got us into the local headlines a few times. We were the third-most admired IT supplier in South Africa for two years in a row. All because we wrote those letters every fortnight.
After those letters came faxes. And later, in a different century, those faxes became emails.
The bottom line, for me, is discovering the huge value of direct marketing.
Social media platforms can find people who face the problems your business solves. So can Google advertising. You have to pay top dollar each time you target those prospects. It makes sense to treat each prospect with intense care. Put them onto your list as fast as you can.
Then you can connect with them by email without having to pay to reach them ever again.
Now, 37 years later, I use precisely the same process to grow my business. Regular emails talk about the problems we solve. We illustrate the problem, give examples, and talk about success stories. That list of people is sacrosanct.
A change at Google or Facebook does not get in the way of reaching out to our clients and prospects.
It’s the best marketing you can ever do. And it is almost free.
When POPIA was first unveiled it looked like direct marketing would die. It won’t.
We’ll talk about this at Wednesday night’s free POPIA compliance webinar.
Peter D Carruthers
Serving Entrepreneurs since 1995
With grateful thanks and very best wishes,