Marketing Home Care: The “MoneyBall” of No B.S. Grassroots Marketing

February 28, 2012 By valerie Leave a Comment

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By: Jeff Slutsky

I recently watched the movie Moneyball, based on the book by the same title, which I read several years ago. Without realizing it, it occurred to me that I employed some of the same strategies in my No B.S. Grassroots Marketing program as Billy Beane, the GM of the Oakland A's, featured in the book and film. Beane created a 2002 winning team that made the playoffs using a fraction of the payroll as the NY Yankees.

Billy Beane identified the key elements that win games. It's not necessarily hits, home runs, bunts or stolen bases, even though those are the highly prized talents that teams pay a premium for. The answer was getting on base. It didn't matter if the player was walked, got a hit or got hit for that matter. So, they analyzed a number of undervalued players who consistently got on base. They didn't care how they looked, how old they were, or even what position they played. A similar strategy works in your local promotions. Ask yourself "what is it that will increase my sales consistently?" Our version of "getting on base" is "putting butts in seats." That is, recruiting more repeat or regular customers. And how do I do that? I must get those potential ideal customers to come in and try me out for the first time.

So if I know that a standard low cost, grassroots type cross promotion between my business and, let's say a local florist, during the Valentine's Day season, will generally bring me 100 first time buyers, and I know that on average, for every 100 first time buyers I get I'll probably convert 30 to become new regular customers, I can predict my growth. Then with 30-40 various promotions over the year, I will be able to increase my sales to the level that I target.

In No B.S. Grassroots Marketing there's a chart that outlines this process, but it goes one step further. I include the formula for calculating the value of that new customer. For example, if a new regular customer spends an average of $1000 a year with you and you want to increase your gross sales this year by $100,000, you need to get 100 new regular customers. To do that (depending on your conversion ratio) you need to bring in perhaps 350-400 first time buyers. And to get those 400 first time buyers you will know how many of each type of promotion you need to accomplish that. Then armed with that information you simply execute your plan.

When it comes to grassroots marketing local businesses, the problem is the tendency waste a lot of time and money on promotions that just do not increase sales or show a significant return on their investment. The reason is simple. They focus on the wrong things. In my new book, No B.S. Grassroots Marketing (coauthored with Dan Kennedy), I spend a great deal effort explaining the key elements that make an effective, on-going community based grassroots marketing program. Here are some of the most important:

Simplicity. Some businesses have a tendency to make a promotion extremely complicated. In order for you to incorporate an effective grassroots strategy in the long term, keep those promotional tactics simple and easy to implement. The easier they are for you, the more likely you are to continue your community promotional efforts.

Low cost. You don't have to spend a ton of money to have a promotion that brings in new customers. Expensive local sponsorships, coupon mailers, and internet marketing may bring you some business, but at what cost? Before opening your check book, I suggest you open your eyes to see the hundreds of low-cost opportunities for getting new business, some of them are right in your own back yard. 

Drive Sales. Way too many local promotions are geared to create "good will" or "exposure" in your market place. That's fine but does it really bring in business? For the small local business person, I recommend that if you're going to take the time to implement a local promotion make sure it has the goal of driving in a customer to try you out. You'll still get the good will and exposure as an extra benefit. 

Avoid Mass Couponing. Once you start down this road it's hard to come back. Mass couponing will generally help your short term sales, but at what cost? If you do this too much, the new customers you've generated from the coupon drops will wait until they get the next coupon. When you buy space in your local print medium or insert your coupon in a group mailer, it tells the consumer that you've "paid" for the right to discount your own product. You've told them that your regular pricing means nothing. "Come on in and beat me up!" The savvy grassroots marketer will use very selective discounting to a targeted group of consumers who are not typically the crazy coupon people. 

Tracking. This is super critical. Realistically, you only can implement so many promotions in a given week or month, so choose those promotional tactics that allow you to track the results. Without tracking you'll never know which ones are working and which ones are wasting your time. Then, once you start gathering some stats on how well each type of promotion works, you can reasonably forecast what it would take to increase your sales by a targeted amount.

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Regards,

Valerie VanBooven RN BSN

Owner/ Managing Partner

LTC Expert Publications

Phone: 888-404-1513

Email: valerie@ltcep.com

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