How to set an effective marketing budget for your small business

marketing budgetSetting a realistic marketing budget is essential for SME’s

If you are a small business owner and haven’t yet got around to planning your marketing and marketing spend for the year ahead then now is the time to get started.

You may feel that creating a marketing plan and setting a marketing budget is a time-consuming exercise and only really useful for  businesses with extensive marketing departments and large budgets. On the contrary, taking the time to put together a marketing plan and marketing budget now will save you time, money and potential headaches later on in the year.

It is just as important that as a small business owner you plan the best way to spend your budget and that will mean putting precious time aside to do just that. A smart budget will help you make the most of a small pool of money by planning and tracking spend to ensure wastage is kept to a minimum – essential, if like most small businesses owners you need to make every penny count.

What should I set as my marketing budget?

According to the SBA (US Small Business Administration) the average marketing budget for small businesses lies somewhere between:

2-3% of sales for an up and running business

3-5% of sales for a start-up business

Essentially though it comes down to your own individual business. An effective marketing budget will be a combination of the following factors:

  • What you can afford?
  • What time you can give (are you planning to outsource or will all the marketing be done by you)?
  • Accurate reflection of a well thought out marketing plan

So before coming up with a figure, first take some time out to plan and think about the following questions: How is your business performing at the moment? What could you do better? What is it you want to achieve in the year ahead?

smart budgetThe importance of marketing planning

Planning is absolutely essentially to creating an effective, controlled marketing budget. It will eliminate waste and ensure you are making the most of your marketing spend.

A simple model to help get you started planning is the  SOSTAC model (Situation Analysis, Objectives, Strategy, Tactics, Actions and Control)which essentially helps you plan by looking at the following questions in regard to your business:

  1. Where are you now
  2. Where do you want to be?
  3. How do you get there (strategy)?
  4. How exactly do you get there (tactics)?
  5. Details of Tactics – who is doing what and when
  6. How will you monitor performance? 

Of course how detailed you go in your marketing plan is up to you and will probably depend on how much time and resources you have available. But by following a marketing planning model such as this and thinking about the questions it raises will help you focus on the best way to drive your business forward.

setting a marketing budgetHow to put together an effective marketing budget

An effective marketing budget is essentially a smart budget that gives you flexibility, keeps you in control of your spend and results in very little wastage.  Your marketing budget is an integral part of your marketing plan and helps you outline the costs of achieving the goals you have laid out within the timeframe you have planned.

Of course the budget you set will depend on what you have to spend and what you are trying to accomplish as a business. A marketing plan and marketing budget will help you stay savvy and smart in the way you spend you money. Monitoring and maintaining your budget will help give you flexibility in terms of spending by enabling you to cross check your results against spend. For example if a promotion isn’t working you can stop it and quickly move your spend over to a more effective activity.

Considerations: What should you include in your marketing budget?

This is why marketing planning is so critical, if you’ve properly planned for the year ahead then you should have everything covered. Your marketing budget should be broken down to reflect the details of your marketing plan. Here is a bit of a checklist to help get you started. It is in no way exhaustive and some activities won’t be relevant to your business but it will get you thinking of all the different areas you may need to cover to avoid any nasty surprises from unexpected costs.

  • Marketing promotions
  1. Email
  2. Mobile
  3. SEO – paid and organic
  4. Advertising (online and offline)
  5. PR
  6. Sales promotions
  7. Blogs
  8. Social Media
  9. Direct Mail (printing and postage costs)
  10. Sponsorship
  11. Affiliate marketing
  • Outsourcing copywriting, agencies, freelancers, fulfilment bureaus
  • Events – do you intend to attend any exhibitions or trade shows
  • Market research
  • Design (designers, photos and images)
  • Sales promotions (discounts offers , promotional mugs etc)
  • Website Design and maintenance

And remember there are always unexpected costs that crop up so putting some contingency aside is not a bad idea.

Marketing Budget Templates

There are plenty of useful marketing budget templates you can find online to use as a guide – from basic to all singing all dancing spreadsheets. I’ve added a few links below to templates I have come across online that you may find useful.

Microsoft Office Marketing Budget Template

Hubspot 8 Free Budget Templates

Entrepeneur Marketing Budget Excel Template and  Guide

Brandeo Marketing Budget Template

Sharpmind Marketing Budget Template

Alternatively create a  simple excel spreadsheet yourself outlining your planned marketing spend for the year ahead. A simple, effective way to monitor and control spend is to have a monthly breakdown of planned marketing activities with estimated costs against actual costs. This way you can have a clear analysis of spend against activity and can quickly see where you have overspent , underspent and enable you to monitor your potential ROI for each activity.

Don’t forget an effective, well thought out marketing budget enables you to spend smartly and get the most from your hard-earned money.

 We’d love to hear your thoughts and experiences on this subject, so please do leave a comment. 

  1. Budget image courtesy of Stuart Miles at
  2. Calculator image courtesy of Pong at
  3. Brain Thinking image courtesy of samuiblue at

10 Types of Emails that You Need to Start Sending Out Now

Email marketing is one of the oldest internet marketing techniques. It’s been around for ages. If you think, sending emails to promote your products/services is an anachronism of a bygone era, you couldn’t be more wrong. Emails are still a very effective way to attract and retain customers.

I know this will come as a surprise to you, but emails still deliver tremendous ROI. According to a Gigaom research report, ‘Workhorses and Dark Horses – Digital Tactics for Customer Acquisition’:

Types of Emails that You Need to Start Sending Out Now56% of respondents say email marketing is very effective for customer retention.

Marketers also believe emails are the most effective model for revenue generation.

These figures leave very little room for doubt that the “humble” email, for long considered to be the old marketing workhorse, is as effective today as it was a few years ago. The efficiency and deliverability of email marketing hasn’t dulled one little bit in spite of the arrival of other tactics like content and social media marketing.

But there is a problem. With over a 100 billion emails being sent and received every day, the construct of your email assumes tremendous importance. You can’t just send any email to your target customers. You need to send an actionable email that makes people want to buy your products or services. As can be imagined, this is easier said than done. But, if you want to leverage the immense potential of email marketing, you can’t just send any email to your target customers; you need to send emails that work.

Let’s take a closer look at the kind of emails you need to start sending out, if you want to capitalize on your email marketing efforts:

1. The ‘We’ve Got Something Good for You’ Mail

We’ve Got Something Good for You

Send a mail if you really have something important to say to your target customers, for e.g. you’ve got a new product you want to introduce, a fantastic video chat lined up or something else.

The Inc. mail is talking about an amazing event that has been planned. It is a video chat with the founder of Quirky, and it’s free! The mail makes its point brilliantly, without going overboard. Its design is clean and professional looking and has an understated appeal about it.

The key here is to make your point in a manner that encourages recipients to take action. The focus must be on ‘conversion’. If you take a look at the example of the Inc. email, you will find that readers will want to ‘sign up’ for the video chat. The text and use of images is right on the ball. Its design and wording is absolutely perfect.

2. The ‘Offers’ Mail


If you are sending an email about special offers, make sure the best offers are clearly displayed in the mail. This is the kind of actionable email that has a higher chance of bringing customers to your website or even physical store. You will do well to remember that your target customers don’t have all the time in the world to go through your mail; what’s more, you are not the only seller sending them emails about product offers and discounts. So, it’s important you are able to make your point quickly and effectively.

3. The ‘Reminder’ Mail


A no-nonsense reminder email about a special offer that is about to end should be sent to people on your email list. Reinforce the USP of the offer without beating about the bush and end the mail with a link to the offer. Such mails are simple, straightforward and make their point quickly.

You don’t have to make a song and dance about a reminder. The Copyblogger mail makes its point in three lines. All one needs to do is glance at the mail to find out what it wants to say. It’s a text book example of a reminder mail.

4. The ‘Don’t Miss Out’ Mail

Did You Miss It This email illustrates the importance of an email subject line. The words ‘Last Chance to Register’ create a sense of urgency and a fear of missing out on a great offer. The email copy talks about the offer (chance to attend a webinar) and what’s it all about. The idea is to make sure the recipient gives your mail a reading if he/she hasn’t done so earlier.

Never stop trying to sell a product/ service to somebody who you feel will be interested in it. But how do you make sure your emails don’t put the recipient off? You can do this by ensuring your emails reinforce the point made in the earlier emails. Think of it as progressive reinforcement. This makes it easy for your mails to make a degree of sense to the recipient.

5. The ‘Leverage Holidays’ Mail

Leverage Holidays

One of the best times to send an email is during the holiday season, when your customers are looking for products that could be gifted to friends or family. If you are selling products/services specifically designed for the holiday season, send a mail like the one ‘Leaders in Heels’ sent its target customers. The mail includes an image of the product, a description that says why it’s a perfect pick for the holiday season and a link that takes readers to the ‘buy’ page.

As a business, you need to continuously explore new avenues that help you sell your products and services; the holiday season is a recurring avenue that shouldn’t be missed at all costs. If you are a products-based business, you could sell products that make for ideal gifts; on the other hand, if you are selling specific services then a special holiday discount on some or all your services will be a very good idea.

How you go about making the most of your holiday season is your call, but do it you must. And in email, you have a potent medium that will successfully put your holiday products/services offerings in front of your customers.

6. The ‘Welcome’ Mail


If somebody is showing interest in your products and services, send a welcome mail. It should include links to the download page (or products page) and also a ‘how-to’ page that offers detailed information about product functionality.

Evernote follows up the welcome mail with a series of ‘tip mails’ that help first time users create their first Note and also optimize the use of this suite of software and services. The idea here is to help users become more conversant with the functionality of your products. You don’t want a scenario wherein a target user’s interest in your product turns into frustration, just because he/she is unable to optimize its use.

7. The ‘Freebie’ Mail that Doesn’t Come Across as Such


A business needs to engage with its existing and potential customers regularly. If you are running a business, it’s difficult to come up with new product/services or send a personalized discount offer all the time.

The next best thing is to send useful, actionable niche centric information in the form of a freebie. It could take the form of free eBook, guide, video or podcast. Such freebies can boost your reputation and increase the trust factor in your brand.

The more such freebies land up in your customers’ inbox, the better it will be for your brand’s awareness and reputation. What you are also doing by sending such mails is telling your customers that you are not only interested in selling to them but also want to help improve their knowledge base; you are also interested in helping them take better business decisions.

At the end of the day, it is trust and reputation that will help in customer acquisition and retention.

8. The ‘Newsletter’ Mail


One of the ways you can use emails to regularly engage with your business’s target audience is by sending a weekly/monthly newsletter. This newsletter can include information about the latest product launches, discount offers and also the latest happenings in your niche. The key is to make your newsletters as interesting as possible. You want them to be read and the stories in them to be shared. You don’t want them to be ignored.

Coming up with an interesting and extremely readable newsletter every week, or month, isn’t easy. You need to think of it strategically and cannot afford to take this task lightly. Your marketing team needs to sit down with your content writers to brainstorm ideas. These ideas need to be worked out keeping the needs of your target audience in mind. Think of your newsletters as ‘solutions providers’; thinking of them as marketing material will just make them one dimensional. Try and make your newsletters as multidimensional as possible.

This will ensure your target audience looks forward to your newsletters.

9. The ‘Did You Miss It’ Mail

Did You Miss It

Don’t confuse this with a reminder mail. This one starts off with the assumption that the recipient must have missed out on signing up for a particular service (read solution) or buying a particular product.

Now, one of the reasons why this happens is they were not interested in your product or service in the first place. But that was then and there is a good chance that circumstances have changed; your product/services can make more sense to them now than they did earlier. There is no harm in sending a mail talking about the recipient having missed an opportunity to use your product/service and the fact that it is still available to them.

Such mails make a great deal of sense if they are backed by solid evidence that the recipients are actually interested in using your product/service.

10. The ‘Give it a Rethink’ Mail

Give it a Rethink

Think of a scenario where a potential customer has signed up for a free service, but you want to get him to sign on for its paid version. You need to keep reminding that person the paid version is a sound investment and can deliver high ROI. The fact is that your target customers will sign up for different free services they believe will help their business in some form or other.

If you don’t remind them to try the paid version of your service, they might continue to use the free version; and if and when they do decide to try out a paid version of a service, that particular service might not be yours; some other provider might have beaten you to the finishing line because he might have sent those ‘rethink’ emails, which you hadn’t.

It’s important to remember that when a customer finally makes a decision to sign up for a paid service he chooses the service provider who’s been making a solid case for the paid service.

Your Turn

If you are not sending in these emails to your existing and potential customers, you are missing out on a huge opportunity to grow your sales. If you belong to a school of thought that sending emails is an outdated marketing tactic, its time you rethink and start implementing a well-defined email marketing strategy. You will soon realize that emails are a great way of adding new customers and retaining old ones.

The great part about using emails is that their scope is not limited. You can craft them the way they fit and in a way that you believe will deliver maximum returns. This is what makes email marketing so special and is a big reason why it has stood the test of time as a marketing tactic.

Image Source: (1, 2, 3, 4, 5, 6, 7, 8, 9, 10)

10 ways small businesses can maximise email opportunities

email marketingIs your small business making the most out of email?

We rely on email for all sorts of essential business related activity. Indeed the majority of us would struggle to do with out it. As a communication tool email has a number of great benefits and yet many small businesses are probably not using email to its full potential.

Email is an essential component for any business’ marketing toolkit, therefore taking a fresh look at how you can maximise your use of email is a worthwhile exercise. You may be surprised at just how versatile a tool it can be.

Email offers small business owners a number of benefits

Email is one the most cost-effective and flexible communication tools a small business can use.  Despite consumer concerns over privacy and spam, it still remains an extremely popular way for people to communicate.

The benefits of email:

  • Cost-effective – there are a number of excellent, competitively priced email marketing software solutions available so it doesn’t cost much to get up and running. And, as you can see from the statistics above ROI is impressive.
  • Adaptable – email can be used for all sorts of business communications, from simple order confirmations to sophisticated advertising campaigns
  • Targeted – you can segment your audience any which way you like. Specific groups can be targeted with relevant and appropriate content.
  • Do-it-yourself – automated email software is straightforward to use which makes it simple for you to produce creative, professional emails all by yourself.
  • Quick – email can be put together and dispatched remarkably quickly enabling you to send out spontaneous communications or respond to competitor activity almost instantaneously.
  • Brand building – each and every time you send out branded emails you are reinforcing your brand, growing your brand presence and building awareness amongst your target market.
  • Measurable – email marketing can be measured quickly and easily enabling you to test and tweak your promotions each time to maximise response rates

10 ways small business can maximise their use of email

Succesful email marketing is about utilising email strategically to deliver a variety of messages. Email shouldn’t just be used for sending out business communications such as order confirmations or shipping and delivery information. There are many other excellent ways to maximise your use of email marketing. We’ve listed a few ideas below to help get you thinking about how you can use email more effectively to help grow your business.

1. Promotions: Email has to be one to the most versatile vehicles for communicating your promotional messages – whether you are sending out a stand-alone email promotion or supporting a wider integrated marketing campaign. So if you haven’t already started using email to offer special promotions to customers then now is the time to get creative.

Segmenting your emails and testing promotions on different audiences is simple with email. This makes it a quick and cost-effective way to test and measure the effectiveness of various promotions on different target groups. So think about what email promotions you can offer your customers  such as discount voucher codes, early-bird sales previews, free delivery and returns, refer a friend and so on.

2. Newsletters: Of course despite having just espoused the benefits of email sales promotions, successful email marketing shouldn’t be just about sales. Vary  your email communications by also sending out informative content to customers such as emailing out a regular newsletter. Your newsletter should have content that is focused on adding value to customers for example company news, industry trends and developments, links to blog articles – essentially information that your customers will find engaging and of interest. 

3. Announcements: Good news should be spread!  If you’ve got something important to announce such as a new product, improved services (especially if the improvements have been brought about by customer feedback!) or interesting company developments then send out a standalone email. An interesting subject line about a new product launch is bound to get interested parties opening your email.

4. Welcome emails: If someone has just purchased from you for the first time or registered with you, then a welcome email shows you appreciate their custom and is a great way to start building an ongoing relationship. You want your welcome email to be personable and encourage two-way dialogue. So thank new users for their business and give them some helpful information that such as how to contact you.  Also, promote interaction where you can such as adding links through to your website or social networks.

5. Customer retention: Email is an excellent way to ensure you are keeping in regular contact with customers. It is important to reward customers for their loyalty – remember it is this group of customers that are your most profitable so neglecting them makes no business sense. We’ve already mentioned email newsletters as a great way if keeping in contact but also think about showing loyal customers you appreciate them by emailing them special offers that reward loyalty such as:

  • Sneak VIP previews to new collections or products launches
  • Early doors to any forthcoming sales
  • Occasional loyalty rewards such as a money-off voucher, a discount code or free delivery .

6. Abandoned cart emails: With the average shopping cart abandonment rate about 68.07% anything you can do to help reduce it can only be positive! Sending out a gentle reminder email to customers that have abandoned  their basket mid purchase can work really well. Indeed according to e-consultancy in 2013 48.1% of basket abandonment emails were opened and of these 33.3% went on to purchase a product.

7. Seasonal greetings: As we’ve previously mentioned your emails shouldn’t just be sales, sales, sales. Sending out a timely holiday email greeting at the end of the year thanking people for their custom and wishing them all the best for the year ahead is a good way of showing you appreciate their business and will stand out from all the other sales emails they are receiving this time of year.

8. Social sharing: Email is a great way to encourage interaction on your social media sites. So when sending out your emails, actively point out your social media presence by making sure you have your social sharing buttons visible. Remember all your marketing tools should be integrated and supporting each other to achieve the best results for your business.

9. Blogs: If you are writing blogs for your website, then don’t forget to email your customers and potential customers informing them of each new post. Not only are you providing customers with added-value content that they may well find interesting you are also building customer relationships by keeping in regular contact.

10. List building – Use email to build your email list! Putting a prominent ’email sign up form’ on your website is a simple and effective way to gather permission based email addresses. Publishing an email newsletter is a great way to grow your list, you can encourage opt-ins with an email sign up form saying something like ‘subscribe to our Newsletter’. Customers can then simply add in their email address there and then.

Conversely, you should also use email to keep you contact list clean and up-to-date. Putting a Unsubscribe button on all your emails will get rid of uninterested contacts and ensure you are only sending out information to those parties who are genuinely interested.

It’s simple to get started…

Getting started with more creative email marking isn’t difficult and needn’t be expensive. There is some excellent marketing software available – many of who offer free trials or a free service for emails under a certain quantity. For example MailChimp allows you 2000 subscribers and up to 12,ooo emails for free – which is great if you are just starting-up in business. Of course you’ll need to do a little research to choose the right email marketing software for your particular business. To help get you started I’ve listed a few (both big and small) below.

We’d love to hear your thoughts and experiences on this subject, so please do leave a comment.

Image courtesy of adamr at FreeDigitalPhotos

To Drop or Not to Drop: The Pros & Cons of Dropshipping

To Drop or Not to Drop
Who would not like to be their own boss? Decide your own hours, choose your own salary, work from wherever you please and best of all, do exactly what makes you happiest while getting paid for it. What’s not to like?

This leads us to the next logical question.

If being your own boss and running your own business is so awesome, why doesn’t everyone do it? Why do we have millions of unemployed folks hunting for jobs working for other people, when running your own business is next to professional nirvana?

Because running a business is not easy.

Besides a huge helping of sheer guts, starting and running your own business is a 24x7x365 day job. Your business is your baby – a constantly crying and wailing baby that you can’t afford to set down for even a minute. Even with businesses moving online, the demands on a typical entrepreneur’s time can be brutal to say the least.

Setting up a retail business online

Retail is a popular route to market for a lot of wannabe entrepreneurs. It’s easily understandable, most of us have experience about the ‘shopping’ aspect of retail. Besides, setting up an e-commerce store does not take longer than half a day. What’s more, if you already have an existing website that’s live, a shopping cart plug-in like ShopIntegrator lets you set up shop in a matter of minutes. It’ll take care of your store layout and design, your checkout flows, order management, inventory management, accepting and processing payments.

But that is the easy part, the part that can be automated. The tough bit in e-commerce is the part that still needs human intervention – product sourcing and fulfilment.

You can source the products that you want to sell either by manufacturing them yourself, outsourcing the manufacture to someone else or buying a ready item from a reseller. Then there’s the whole fulfilment process, where the item goes from your supplier to you to your shipping partner to finally your buyer’s doorstep.

That’s a lot of work for someone to handle all by themselves. Even the smallest e-commerce companies typically have at least a couple of employees to help with the logistics of procurement and dispatch of the physical goods.

Now, what if you decided that you don’t want to spend any money on getting employees to help with your logistics? What if you wanted to go it all by yourself? What would you do?

Dropship of course.

What is Dropshipping?

Dropshipping is a retail model where the online retailer does not own any inventory directly. When a customer places an order, this order is forwarded by the retailer to a manufacturer, distributor or wholesaler who then packages and ships the item to the customer directly.

In other words, a retail business built on a drop ship model is pretty much a front-end store that takes and processes customer orders, with the backend fulfilment operations being handled entirely by a third party.

This model offers budding entrepreneurs that chance to experience running a business first hand with very little sunk costs. The only things that the retailer would really spend on upfront are:

a. Site design and maintenance
b. Marketing and Demand Generation
c. Order processing
d. Managing the business’ finances
e. Employee costs (if any)

The retailer typically has a re-seller account with the dropship partner. When the retailer receives a customer order, he passes on the order to the dropshipper and rests easy. The dropshipper now swings into action.

He locates the ordered item in his inventory and packages the order with the retailer’s branding on it based on the invoice received. He then prints shipping labels with the end user’s name, address and order details on them and puts the right labels on the right products. Once packaged and labelled, the products are shipped off to customers directly from the dropshipper’s warehouse.

As you can see, the retailer’s degree of involvement in an arrangement like this is minimal, at best. Seemingly, the retailer gets all the benefits of running an online retail business, with none of the real hassles. While dropshipping may seem like a silver bullet for any online retailer, it comes with its fair share of pluses and minuses.

Let’s take an unbiased look at both sides of the tale.

The Benefits of Drop Shipping

1. Hassle-free way of starting a new business

As we discussed in the previous sections, dropshipping is as hands-off a method of conducting a retail business as any. A newbie entrepreneur can go into business in a matter of days once the agreements with the dropship partner are set up. In this sense, dropshipping offers a turn-key solution to starting an online retail store.

2. No Need to Hold Inventory

With a third party taking care of manufacturing, storing and transporting the goods, the retailer doesn’t have to worry about how much stock to hold or where to store the items. All they need to do is raise a procurement order for the dropship partner as and when they receive a customer order and leave the rest to the dropshipper to handle.

3. No Overheads from Warehousing

Storing products in a warehouse or any other storage facility comes with inherent overhead costs. There is rent to be considered, electricity and other utility bills to take care of, cost of manpower to run the warehouse facility and so on. If you choose to lease a portion of a larger warehouse, some of the costs are reduced but there’s still the question of rent and insurance at the very least.

4. Potential to Offer Wider Variety of Products

When a manufacturer starts selling a product directly to consumers, they are restrained by the variety of products that they can manufacture at any given point of time. A distributor or wholesaler is limited by the amount of warehousing space he has and the access to different types of products, when it comes to selling direct to consumer.

The fact that the retailer holds no inventory, means he is free to approach multiple dropship providers if need be, to create a wide range of products to be sold via his online store. This unlimited product variety provides a great win-win situation for both the retailer and the customer in a dropship setup.

5. Lesser Manpower Needed

With all the key manual activities involved in the fulfillment process outsourced to a third party, the retailer does not need too many people to run his business. Most e-commerce software or shopping cart plugins automate of a large chunk of the transaction process, leaving very little to be managed by the retailer. A high degree of automation translates into huge cost savings in terms of paying for employees, their benefits, training costs, administrative costs etc.

6. More Time to Focus on Marketing, Demand Generation and Customer Service

One of the biggest benefits of dropshipping, is the gift of time that it gives to a retailer – time that can be used to focus on more complex and productive activities like creating awareness for the brand, generating demand for the products, building a relationship with users and offering world-class customer service to new and existing customers.

7. Flexibility

Dropshipping means you can now own a business sitting anywhere on the planet as long as the dropshipper ships your products to where your customers are located. Since you don’t need to hold any inventory or request any minimum number of units per order, your customers can order whatever quantity they desire and it will be shipped to them, no questions asked. When your business grows in size, scaling up your supply side is as simple as placing larger orders with your dropshipper or supplementing your existing dropship partner with another one.

The best part? With dropshipping taking away a whole bunch of manual tasks away from your plate, as an entrepreneur you finally have some much desired me-time!

The Problems with Drop Shipping

1. Uncertain Service Levels

One of the most important aspects of e-commerce is shipping, handling and delivery. If a customer does not receive the right product, in the right condition, within the right time frame; it results in a terrible shopping experience. A slip up in even one of these different factors can have disastrous consequences on the customer’s satisfaction and the possibility of a repeat purchase.

In a dropshipping scenario, a retailer can only have service level agreements (SLA) with dropshippers detailing out their expectations in terms of product quality, packaging, shipping and delivery timelines. It is eventually upto the dropshipper to live up to their end of the bargain and fulfill all the promises made to the retailer. While generally a dropshipper would try his best to complete an order as per the SLA, there can be unforeseen circumstances where he is unable to do so. In such cases, the retailer is completely at the mercy of the dropshipper and has no control over when and how the customer will be serviced.

2. More Expensive Than D.I.Y.

That the entire process of warehousing products, sorting through them, packaging, labelling and shipping them to the customer is challenging, is an undoubted fact. However, the cost of doing so in-house is often cheaper than outsourcing the entire process lock, stock and barrel to a third party. The reason for this is simple.

If you carry out your own order fulfillment, you are likely to negotiate the lowest rates possible for each step in the process. However, when a dropshipper offers his services to you, he tacks on a generous markup to each step of the process to ensure that he makes his profit out of the transaction. These markups at every step of the way, add up and raise the landed cost of goods substantially. This in turn results in more expensive prices for the customer, which might run the risk of making the products uncompetitive in the market.

3. Unscrupulous Dropshippers

On paper, the dropshipping process seems like a great idea for both retailers and wholesalers. While the retailer gets rid of the trouble of warehousing and product fulfilment, the wholesaler gets an assured demand for his products with an extra margin tacked on to compensate for the services that he provides.

However, the rising demand for dropshipping services has not gone unnoticed by unscrupulous characters out to make a quick buck any way they can. Horror stories of retailers being duped by so-called dropshippers who take their money and their order but never fulfill the order at the customer’s end are stuff of e-commerce legend. The fact that retailers seldom meet with the dropshippers face to face and all they have to go by is the online reputation of a dropshipper, this scenario makes it a fertile ground for scam artists galore.

The Final Verdict

As we just saw, dropshipping offers this exciting opportunity to start an e-commerce business on the fly, but it also comes with its own share of risks and loopholes. So, is it worth putting your money and time into a dropshipping venture?

I would say, definitely.

Dropshipping is a low risk, low cost method of entering the world of e-commerce. Be extra cautious about picking the right dropshipping partner. Hunt far and wide for the right supplier who offers the products that you intend to sell. Check out their product range and quality. Confirm that they deliver to the locations that your users are located. Compare the pricing of different dropshippers and deeply research their past performance reviews before zeroing in on a dropshipping partner.

Even if you don’t start your own store, you can wet your feet by using dropship services and selling your products on eBay or Amazon to begin with. Once you learn the ropes of the business, become more confident of how to run the business and scale up your eBay store sufficiently; starting your own online store will be the next logical step.

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How small businesses can build customer loyalty with 7 simple, cost-effective tips.

customer loyaltyMost small business owners appreciate the importance of improving customer loyalty and why customer retention is so important to their business. We know that it costs far more to acquire a new customer than to retain an existing one and that loyal customers spend more money than new ones.

So how is it far more of our time, effort and budget is focused on acquiring new customers, whilst existing ones get sidelined or put at the bottom of the to-do list?

You don’t need a huge budget to improve customer loyalty

So, if you are a small business owner wondering how on earth you can stretch your budget to incorporate improved brand loyalty then don’t worry, enjoying high customer retention rates doesn’t just need to be the domain of big companies with big budgets. In fact, where customer loyalty is concerned, small businesses may actually have the upper hand. A smaller customer base gives businesses the advantage of being able to really get to know their customers and offer a more personalised service, which is one of the key components to winning customer loyalty.

Of course, the ultimate goal of improved customer loyalty is not just to win repeat business but to get your loyal customers to become advocates of your brand. Having a loyal band of customers who actively recommend your business to friends and family is invaluable. Indeed 92 percent of people trust recommendations from friends and family more than all other forms of marketing. Strengthening the relationship you have with your customers is well worth the time and effort you may need to out in.

“Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you” Chip Bell

Fascinating customer loyalty statistics

Lets first remind ourselves with some interesting statistics of why small businesses need to spend some time planning and implementing ways to improve their customer retention rates.

7 tips to increase customer loyalty without a huge budget

As I mentioned earlier you don’t have to have a huge budget and offer all singing, all dancing marketing communications or grand loyalty schemes to improve customer retention. There are simple, cost-effective and common sense ways to improve customer loyalty that require little more than a bit of time and effort.

Customer centric1. Be customer-centric

“Revolve your world around the customer and more customers will revolve around you”. Heather Williams

The starting point is to always have your customers right at the heart of your business, from planning,  product development, strategy, marketing communications, customer services, shipping, website design, content strategy to your online checkout process. If everything you do puts the customer first then you are probably giving your customers an all round positive, relevant experience. The result being the higher the likelihood of your customers returning for more.

Of course making the customer the centre of your business does means it is essential that you spend time really getting to know and understand your customers. The beauty of being a small business means you have a smaller client base and more direct and frequent contact with customers. This can be used to help you build up a better picture of who you customers are and what it is that makes them tick. Get that right and everything else follows on from there.

customer journey2. Focus on the customer journey

To build customer loyalty you need to focus on improving your customer’s whole experience with you. The journey your customer takes from start to finish should be excellent. You may have an amazing, competitively priced product, but if other areas let you down for example, your website design is confusing, your checkout frustrating, shipping inflexible or your customer services poor – you will not get a customer to come back.

  • 8% of consumers have bailed on a transaction because of a poor service experience
  • 47% of consumers said that although they may have a company preference, if they can’t find what they’re looking for on that site quickly, they’ll go elsewhere
  • 48% of consumers say that it’s when they make their first purchase or begin service is the most critical time to gain their loyalty 

So look at all of the individual elements that make up the whole customer journey and see how they can be improved on.

old vintage telephone representing customer services3. Offer exceptional customer service

Poor customer service is a surefire way to ensure customers don’t return to your business – regardless of how good your product is. Every year businesses loose 10 to 30 per cent of their customers, for which bad customer service accounts for 68%.

“This means if you have 100 customers you could lose 20 customers every year due to bad customer service (even if you don’t agree it’s bad!). These ex-customers will each tell 8-16 people about their bad experience, which means up to 320 people could be thinking bad things about you.” Marketing Donut

You are no doubt all familiar with the saying ‘good manners cost nothing’. Well good manners is at the heart of exceptional customer service and isn’t something that requires any budget whatsoever. Excellent, personable customer service will appreciated by your customers and goes along way towards building a positive image of your business. Much of the loyalty around the John Lewis brand is built around how it strives to offer exceptional customer service. This is a quote (one of many) on the John lewis website that highlights just how successful John Lewis is at this:

“I probably could have bought it cheaper elsewhere but I wanted the reassurance of the John Lewis service” John Lewis customer comment

Of course unlike huge companies with dedicated customer service departments, the chances are as a small business owner customer service is just one of the many hats you have to wear yourself. However, his doesn’t mean excellent customer service is unattainable. A few simple things can make a huge difference:

  • Be patient, polite and well-mannered at all times. Please and thank you goes along way and costs you nothing. Try to offer your customers the service you would expect to receive yourself.
  • Answer complaints quickly and pleasantly. Don’t forget a disgruntled customer will remain loyal is they feel that they have been listened to and their complaint has been dealt with satisfactorily.
  • If you are pressed for time then set up a Frequently Asked Questions page.  Directing more frequent customer queries to this page will free up time for the more complicated ones.
  • Be consistent. If other members of staff also deal with customer service then make sure they are fully briefed on how you expect them to deal with queries and complaints.

Blog definition image4. Give your business a personality

Remember people like to do business with other people.  As a small business owner you are in the opportune position to give your business some of your personality and make your brand more memorable. A business able to build an emotional connection with their customers is more likely to have a higher rate of customer retention. Social media is a great way to interact with your customers in a more personable way – it is your opportunity to let customers see the human behind the business and build stronger relationships. A blog or email newsletters are also excellent ways to stamp your business with a bit of personality.

reward customer loyalty5. Reward loyalty

62% of consumers don’t believe that the brands they’re most loyal to are doing enough to reward them. Thanking customers for their loyalty doesn’t have to involve a sophisticated loyalty programme.  It’s just taking the time to think about how you can show your most loyal customers that you appreciate their business. For example:

  • Reward loyal customers with an occasional gift voucher or special promotion such as 20% off or free postage
  • Give loyal customers ‘early doors’ to any sales you have planned
  • Offer special VIP previews of new product launches or ranges

I recently received a ‘no strings attached’ £10 gift voucher from a well known clothing company as a reward for being a loyal customer. Not only did I feel valued, the company benefited from me purchasing clothes well over the value of the  £10 voucher that I probably wouldn’t have thought to have bought otherwise!

customer voice6. Give your customers a voice

Providing the opportunity for your customers to be able to feedback and comment on your business helps build a relationship by showing them that their opinions matter to you.   So always welcome feedback (both positive and negative) and thank customers for taking the time to comment. Create an environment where it is easy for your customers to interact with you, such as having the facilities for customers to review your products or services, be active on social media, send out a customer survey or encourage comments on your blog. Of course make sure you take the time to thank customers for their comments and respond appropriately!

customer communications7. Keep in regular contact

Keeping in regular contact with customers is important and doesn’t need to cost the earth. Email and social media a both effective and low-cost ways to keep your customers up-to-date with whats going on with your business. This doesn’t mean bombarding customers with sales promotions all the time, rather focus on added-value content like highlighting new blog posts they may find interesting, sending out an informative newsletter, show them new products you may have launched or keep them up-to-date with wider industry news. It’s all about making your customers feel they are a valuable, important part of your business.

We’d love to hear your thoughts and comments on this post, so please do leave a comment.



6 Things That Take Your E-commerce Store from ‘Good’ to ‘Great’

Starting an e-commerce store today is not a huge deal. Topped with a good idea, even a basic website can transform into an e-commerce store in no time with a simple shopping cart plugin like ours.

Trouble is, there are millions of such e-commerce stores out there on the internet that set up shop and hope to win wallet-share on a wing and a prayer. My bet is that your store is a lot more valuable to you to leave outcomes like success, failure or mind-blowing popularity in the hands of pure chance.

So what would you do to take that e-commerce store of yours from good to great? Here’s what.

1. A Pleasure to Use, Not Easy to Use

Don’t you hate having to hunt through umpteen different aisles to get that one thing you came to pick up at your local supermarket? The feeling of being completely at sea when hunting for your desired products is by no means restricted to the physical world.

I can recount numerous instances where sifting through an e-commerce store in pursuit of that elusive item has left me tearing my hair out.

Spare your users this agony by building an online store that is easy to use. Why easy, build one that is a pleasure to use. Some key aspects to cover when working on improving usability are:

  • Simple and intuitive product categories
  • Navigation that is easy to follow and follows from the product categories
  • Appealing, yet not overwhelming website design with ample white space
  • Beautiful images that help users experience the product even when they’re unable to touch and feel it
  • Support multiple languages, currencies based on the geographical areas that your site services
  • Pages that load fast and are compatible with various browser types to make the entire shopping experience smooth flowing

Invest some time and effort into A/B testing every feature of your website that your user interacts with – the product categories, site navigation, the checkout process, post purchase service levels. A disappointment in even a single aspect of usability has the potential to ruin the overall user experience – something that a great e-commerce store will never tolerate.

2. Being House-Proud

Classical romance demands grand gestures that sweep ones partner off their feet to establish your affection for them. Many brands go ahead and implement such grand gestures every now and then to remind customers how important they are to them.

The WestJet Christmas MiracleThe WestJet Christmas Miracle

However, everyday lives cannot be filled with grand gestures. Everyday special demands paying attention to the little things. Turn to the oft-ignored but strangely powerful little things that populate your website and turn them into unexpected spots of joy that leave customers coming back for more.

Work on your web copy. Instead of writing your own website copy or getting it done in-house to cut costs; get a real professional to write your copy. Smart, sharp copy doesn’t simply tell customers about your business; it holds a conversation with them.

If copy is important, micro copy is equally vital. Micro copy refers to those little instructions in tiny font that you see on web pages that offer you real-time advice on what to do next. Microcopy tends to be contextual and often witty. Thoughtful, well written microcopy not just saves a customer time when they’re filling up a web form, it also offers a wonderful piece of whimsy that brings out your brand’s personality.

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Choose to go ad less across the site to improve your users’ experience? Highlight this benefit to your users so they are aware of your gesture on their behalf. Is users’ privacy a driving concern for you? Are you taking all possible measure to protect it? Inform them about it and win them over with your user friendly policies.

Small things are remembered long after the initial excitement of those grand gestures wears off. Aim at being spectacularly memorable, mere spectacular is for also-rans.

3. Giving Customers a Voice

User generated content like product reviews on e-commerce sites, helps in making the content on each product page richer and more useful to other readers. Top online retailers like Amazon, Walmart, Old Navy, and others actively solicit user reviews and include them in their product pages.

This practice has the added benefit of having Google’s blessing. You see, user generated content like reviews are correlated with increase in click-through rates. Further, Google’s local updates are known to factor these in while ranking pages in their search results. So content about your brand by third parties that you did not have to pay for, pretty much translates into a vote of confidence for your brand, hence improving your SEO ratings. This comes as no surprise if you think of it, but it has to be mentioned as a key reason to promote user generated content, nonetheless.

Understandably, users tend to give more credence to the real experiences of fellow consumers to the advertising magic that brands try to pull off. This explains the popularity of social review apps like Yelp or TripAdvisor.

Giving Customers a Voice

According to a study by Bazaar Voice, 51% of Americans trust user generated content over other sources of brand information. This need for validation from other users is even stronger for certain types of purchases like major electronics purchases (44%), cars (40%) and hotel bookings (39%).

4. Being a Part of Something Bigger Than You

It’s easy to offer users a couple of coupons or special discounts and buy their loyalty, however fleeting that will be. A great brand on the other hand, inspires customers to buy from them whether or not there are discounts thrown in. What’s more, these are brands that make customers feel good for buying from them.

They do this by aligning themselves with goals that are loftier than mere bottom line numbers. When users know that your brand stands for something that is altruistic and close to their hearts, they’re not just loyal to you, they become brand evangelists for you.

A great example for this is TOMS Shoes.

TOMS Shoes was founded on the principle of ‘One for One’ where each pair of shoes bought by a customer would be matched by another pair of shoes donated to a needy child in developing countries like Argentina, Ethiopia, Haiti and others.

TOMS Shoes

This ‘business with a purpose’ was lapped up eagerly by young consumers who looked at shopping from TOMS as their contribution to a better world. It also helped that TOMS has some pretty cool shoes to go with the promise of doing good for the needy.

The support from their users is amply demonstrated by their annual ‘One Day Without Shoes’ event where millions of TOMS customers from around the world spend a day without shoes to raise awareness for the millions of under privileged children who live without shoes every day of their lives.

5. Staying Top of Mind, without Stalking Customers

No brand can hope to have a loyal fan following if their users don’t even remember them after one purchase. Most brands spend millions of dollars in advertising, sales promotions, one-on-one events with customers, celebrity endorsements and more; to remain relevant and memorable to their target audience.

Spending pots of money is not a problem if you are a Coke or Samsung or McDonald’s. Smaller folks like you and I need to get creative to stay on top of users’ minds. Digital media and big data have combined to ensure that we don’t have reason to despair.

Use the biggest asset that your website generates on a daily basis – big data – to help you build brand recall and brand preference among your users. Based on users’ actions on your site, create segments and target each user segment with communication that is relevant to them. Email marketing is a perfect tool for reaching out to various customer segments with tailored messages at zero cost. The great thing about email marketing is, that it offers the highest conversion rates among all other digital marketing tools available – paid or otherwise.

Another tool that you can employ easily without burning a huge hole in your pockets is social media. Pick social networks that matter to your target audience and post content on these networks that your users will appreciate. Top of mind recall does not mean salesy content that pushes your product down people’s throats and timelines. It is content that they willingly seek out.

The same goes for your website blog. Make your readers actually seek out content on your blog, instead of force feeding them promotional content that they’re naturally blind to anyway. Here are some great examples of content marketing by brands that manage superb top of mind brand recall without talking about their business much.

6. Remembering Customers without Sales on Your Mind

Just as it is important to maintain top of mind brand recall among your target audience, it is even more critical to let your customers know that they mean more to you than mere sales.

Building a real relationship with your customers helps in sales not just today or tomorrow, but for years to come.

Invest in building a relationship marketing program where the basic aim of your communication is to become your customer’s friend and not con them into buying your next product. People trust their friends, not pushy salesmen out to close a deal.

Reach out to customers when they least expect it. Birthday greetings are standard by now. Keep in touch with your customers for events like their first anniversary of shopping on your site or celebrate the 5th purchase made by them on your site with a special gesture and so on.

Even a simple ‘Missing You’ note tells the user that you’re thinking of them and they’re not just another customer for you.

Remembering customers without sales

Another way of reaching out without being promotional, is by being actually useful to your customers. Remind them of things that matter to them, for example if a customer has bought one pack of sanitary napkins from your store, you obviously know that she will be needing another pack around the same time, next month. Proactively send out an email reminding your user that she might be out of stock and might want to stock up in time.

Over to You

Thankfully, by now the clunky websites of the nineties have been left behind in the last century and most websites are decent, if not pretty good in terms of their usability. But then again, how many of us remember every single site that we shopped on, ever? Unless it offered something truly outstanding, most e-commerce sites just blend into each other.

Don’t let your online store be yet another statistic. Invest in some (if not every single one) of these little gestures and ensure that your brand remains memorable long after that first purchase.

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