David P. asks
I am in the process of starting a small business building a product that is very "niche" oriented, but yet will have tremendous appeal to other possible users. The main problem I have is that advertising funds are practically non-existent at this time, but could start to increase as business starts. My question: Are there companies that will provide marketing and/or advertising services that do not require huge amounts of money up-front, and will charge fees related to actual business increases? Thanks; dp
Thanks for the question, David. The type of relationship you're asking about is called "pay-for-performance." It's more common with big clients and big agencies where the rewards are in the millions of dollars. What I've seen more commonly for small businesses are companies that will produce an inexpensive internet ad or print ad using a template and then get paid based on the number of responses the advertisement triggers. Not on the "actual business increase." There is an upfront or set-up charge. To use these kinds of services, you have to have a product that fits being advertised using the templates and business model they offer.
So what other "shoestring" options do you have?
Barter
With the right product, you might be able to barter for advertising services and include a "pay-for-performance" component.
Equity Position
If you can afford to reward the right agency to help you build a business, you might offer an equity position in the company based on their performance. Or maybe you can do a combination of some upfront money and an equity position.
Do-It-Yourself
A lot of small business marketers just put an avalanche of tactics into play that are no-cost or low-cost. You're leveraging your hard work and hustle and your time and creativity. Here's a list to start:
-
Press Releases
-
Writing articles
-
Speaking
-
Cause marketing
-
Blogging
-
Participating in online forums
-
Commenting at sites and establishing expertise
-
Sending out an email newsletter
-
Negotiating for unsold space in newspapers and magazines
-
Being active in industry associations
-
Using local Chamber of Commerce services
-
Networking - telling your story at every opportunity
-
Creating a buzz with a YouTube video on the product (see Blendtec, Will it blend?)
-
Using business networking opportunities on Facebook, MySpace, LinkedIn, etc.
-
Creating a SecondLife business presence
Direct Marketing
For relatively inexpensive and very effective direct mail, consider postcard marketing. According to Inside Direct Mail's recent tracking of national direct mail activity: "For B-to-B lead generation, postcards have become very popular-much more so than trifold self-mailers with tear-off BRCs."
Good luck and let us know more as you ramp up your business.
Resources:
Direct Marketing on a Shoestring by Alan Rosenspan - Article with lots of clever examples
NOTE: Whether you're doing B-to-C or B-to-B marketing, take a look at pbmarketingservices.com for postcard ideas and for affordable prices for mailing. You can mail to as few as 50 names at a time, so you can test ideas in small batch mailings. To create awareness of your new product, it's a good idea to mail a campaign of several cards over time to introduce ithe product's benefits and tout its features.