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									             3rd edition


by Michael Phillips & Salli Rasberry
      edited by Peri Pakroo
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             3rd edition


by Michael Phillips & Salli Rasberry
      edited by Peri Pakroo
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          This book was last revised in: April 2001.
                                        THIRD Edition           APRIL 2001
                                                Editor          PERI PAKROO
                                         Cover Design           TONI IHARA
                                         Book Design            TERRI HEARSH
                                           Production           SARAH HINMAN
                                         Proofreading           SHERYL ROSE
                                                Index           NANCY MULVANY
                                              Printing          BERTELSMANN SERVICES, INC.

           Phillips, Michael, 1938-
                 Marketing without advertising / by Michael Phillips & Salli Rasberry.--3rd ed.
                     p. cm.
                 Includes index.
                 ISBN 0-87337-608-0
                  1. Marketing. 2. Small business--Management. I. Rasberry, Salli. II. Title.
               HF5415 .P484 2000

                    Copyright © 1986, 1997 and 2001 by Michael Phillips and Salli Rasberry.
                                ALL RIGHTS RESERVED. Printed in the U.S.A.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means,
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  With special thanks to Soni Richardson and Michael Eschenbach,
  Daniel Phillips, Tom Hargadon and Mary Reid.
Full Disclosure Note
  All the businesses and business owners mentioned in the book are real. The great
  majority operate under their own names in the cities indicated. However, because
  some of our examples are less than flattering, and for other reasons, including pri-
  vacy, we have changed the names and/or locations of businesses in a few cases.
      In some cases, the businesses used as examples in the book do advertise—their
  marketing ideas are so good we included them anyway. In most cases, if a business
  used as an example does advertise, it is a small part of their marketing mix.
    Table of Contents

1   Advertising: The Last Choice in Marketing
    A. The Myth of Advertising’s Effectiveness ............................................... 1/3
    B. Why Customers Lured by Ads Are Often Not Loyal ............................. 1/8
    C. Why Dependence on Advertising Is Harmful ...................................... 1/8
    D. Advertisers: Poor Company to Keep .................................................... 1/9
    E. Honest Ads ....................................................................................... 1/12
    F. Branding ........................................................................................... 1/14
    G. Listings: “Advertising” That Works ..................................................... 1/15

2   Personal Recommendations:
    The First Choice in Marketing
    A. Cost-Effectiveness ............................................................................... 2/2
    B. Overcoming Established Buying Habits .............................................. 2/4
    C. Basing Your Marketing Plan on Personal Recommendations ............... 2/5
    D. When Not to Rely on Word of Mouth for Marketing ........................... 2/7

3   The Physical Appearance of Your Business
    A. Conforming to Industry Norms ............................................................ 3/2
    B. Fantasy: A Growing Part of Retail Marketing ....................................... 3/5
    C. Evaluating Your Business’s Physical Appearance ................................ 3/11
4   Pricing
    A. Straightforward and Easy-to-Understand Prices ................................... 4/2
    B. Complete Prices .................................................................................. 4/3
    C. Giving Customers Reasonable Control Over the Price ........................ 4/6
    D. Internet Pricing ................................................................................... 4/9

5   The Treatment of People Around You
    A. Tracking Reputations via the Grapevine .............................................. 5/2
    B. How Employees Spread the Word ....................................................... 5/3
    C. Common Employee Complaints .......................................................... 5/7
    D. Handling Employee Complaints .......................................................... 5/9
    E. Finding Out What Employees Are Thinking ....................................... 5/11
    F. Suppliers ........................................................................................... 5/13
    G. Business Friends and Acquaintances ................................................. 5/17
    H. Individuals Who Spread Negative Word of Mouth
        About Your Business .......................................................................... 5/19
    I. Your Behavior in Public .................................................................... 5/20

6   Openness: The Basis of Trust
    A. Financial Openness ............................................................................ 6/3
    B. Physical Openness .............................................................................. 6/5
    C. Openness in Management .................................................................. 6/6
    D. Openness With Information ................................................................ 6/8
    E. Openness With Ideas ........................................................................ 6/11
7   Deciding How to Educate Potential Customers
    A. What Does Your Business Do? ............................................................ 7/2
    B. Defining the Domains in Which Your Business Operates .................... 7/7
    C. Providing Information on Businesses in Established Fields ................ 7/10
    D. Businesses in New or Obscure Fields ................................................ 7/13
    E. Whom to Educate ............................................................................. 7/15

8   How to Let Customers Know Your Business Is Excellent
    A. Tell Them Yourself ............................................................................... 8/3
    B. Help Customers Judge for Themselves ................................................ 8/7
    C. Giving Customers Authority for Your Claims ..................................... 8/16

9   Helping Customers Find You
    A. Finding Your Business .......................................................................... 9/3
    B. Convenience of Access ....................................................................... 9/5
    C. Signs ................................................................................................... 9/7
    D. Telephone Accessibility ....................................................................... 9/8
    E. Listing Your Services Creatively and Widely ...................................... 9/13
    F. Getting Referrals From People in Related Fields ................................ 9/15
    G. Trade Shows and Conferences .......................................................... 9/17

10 Customer Recourse
    A. Elements of a Good Recourse Policy ................................................. 10/4
    B. Designing a Good Recourse Policy ................................................... 10/5
    C. Telling Customers About Your Recourse Policy .................................. 10/8
    D. Putting Your Recourse Policy in Writing ............................................ 10/9
11 Marketing on the Internet
     A. The Importance of Passive Internet Marketing ................................... 11/3
     B. Yellow Pages Plus .............................................................................. 11/5
     C. What to Put on Your Site ................................................................... 11/7
     D. Designing an Internet Site ............................................................... 11/11
     E. Interactivity and Customer Screening .............................................. 11/14
     F. How to Help People Find You Online ............................................. 11/16
     G. Active Internet Marketing ................................................................ 11/19

12 Designing and Implementing Your Marketing Plan
     A. Your Marketing List: The “Who” of Your Marketing Plan ................... 12/2
     B. How to Evaluate Your List .................................................................. 12/3
     C. Marketing Actions and Events: The “What” of Your Marketing Plan ... 12/5
     D. Direct Marketing Actions .................................................................. 12/7
     E. Parallel Marketing Actions ............................................................... 12/15
     F. Peer-Based Marketing Actions ......................................................... 12/21

13 The Last Step: Creating a Calendar of Events
     A. Marketing Calendar for an Interior Design Firm ................................ 13/2
     B. Marketing Calendar for Jerry and Jess’s New Chiropractic Clinic ...... 13/4


  By the Publisher

                  ake a look around your         whether you need a roof for your house,
                  community and make a           an accountant for your business, a math
                  list of truly superior small   tutor for your child or a restaurant for a
businesses—ones you trust so thoroughly          Saturday night out, you ask for a recom-
you would recommend them to your                 mendation from someone you consider
friends, your boss and even your in-laws.        knowledgeable and trustworthy.
Whether your mind turns to restaurants,            Once you grasp the simple fact that
plumbers, plant nurseries or veterinarians,      what counts is not what a business says
chances are good your list is fairly short.      about itself, but rather what others say
   Now think about all the ads for local         about it, you should quickly understand
businesses that fill your newspaper, clutter     and embrace the message of this brilliant
your doorstep, spew out of your radio,           book. Simply put: The best way to suc-
cover the back of your grocery receipts or       ceed in business is to run such a wonder-
reach you in dozens of other ways. How           ful operation that your loyal and satisfied
many of these businesses are on your list?       customers will brag about your goods and
More than likely, not many. In fact, I’ll bet    services far and wide. Instead of spending
the most heavily advertised local busi-          a small fortune on advertising, it’s far bet-
nesses are among the businesses you              ter to spend the same money improving
never plan to patronize—or patronize             your business and caring for customers.
again—no matter how many 50%-off spe-              It’s the honest power of this honest mes-
cials you are offered.                           sage that made me excited to publish Mar-
   If, like me, you have learned the hard        keting Without Advertising ten years ago.
way that many businesses that loudly             Uniquely among small business writers,
trumpet their virtues are barely average,        Phillips and Rasberry were saying the
how do you find a top-quality business           same things I had learned as a co-founder
when you need something? Almost surely,          of Nolo—that the key to operating a prof-

itable business is to respect what you do        Marketing Without Advertising has been
and how you do it. This means not only         updated to provide a new generation of
producing top-quality services and prod-       entrepreneurs with the essential philo-
ucts, but demonstrating your respect for       sophical underpinnings for the develop-
your co-workers and customers.                 ment of a successful, low-cost marketing
   After many years of success, it’s a         plan not based on advertising. But this
double pleasure for Nolo to publish an-        isn’t just a book about business philoso-
other new edition of Marketing Without         phy. It is full of specific suggestions about
Advertising. Yes, lots of things about small   how to put together a highly effective mar-
business marketing have changed in the         keting plan, including guidance concern-
interim. To mention just a few, today          ing business appearance, pricing,
many of us routinely use fax machines and      employee and supplier relations, accessi-
e-mail to keep close to our customers, and     bility, open business practices, customer
some of us have learned to use the             recourse and many other topics.
Internet as an essential marketing tool. But     Consumers are increasingly savvy, and in-
some things haven’t changed. A trustwor-       formation about a business’s quality or lack
thy, well-run business is a pleasure to mar-   thereof circulates faster than ever before.
ket, and the personal recommendations of       The only approach worth taking is to put
satisfied customers are still the best foun-   your planning, hard work and money into
dation of a successful and personally re-      creating a wonderful business, and to let
warding business.                              your customers do your advertising for you.
                                                                     Ralph Warner
                                                                     Berkeley, California
 Chapter 1

 Advertising: The Last Choice in Marketing

A. The Myth of Advertising’s Effectiveness ........................................................ 1/3
B. Why Customers Lured by Ads Are Often Not Loyal ...................................... 1/8
C. Why Dependence on Advertising Is Harmful ................................................ 1/8
D. Advertisers: Poor Company to Keep .............................................................. 1/9
E. Honest Ads .................................................................................................. 1/12
F. Branding ...................................................................................................... 1/14
G. Listings: “Advertising” That Works .............................................................. 1/15

“Really high spending on advertising            broadcasting your message to many unin-
sales is an admission of failure. I’d           terested members of the public, and “list-
much prefer to see investments in loy-          ing,” which is directing your message to
alty leading to better repeat purchases         specific people interested in the product
than millions spent for a Super Bowl            or service, such as in the Yellow Pages.
                           —Ward Hanson,           Here’s where the figure about small
author of Principles of Internet Marketing.     business and advertising comes from:
  From The Industry Standard, 4/10/2000.        There are about 20 million non-farm busi-
                                                nesses in the United States. Of these,
                                                about two million are involved in con-

                    arketing means running a    struction; another five million deal in
                    first-rate business and     wholesaling, manufacturing, trucking or
                    letting people know about   mining. A small minority (30% of the total)
it. Every action your company takes sends       generate customers by advertising. The
a marketing message. Building a business        rest rely on personally knowing their cus-
image is not something invented by a P.R.       tomers, on their reputations and some-
firm; it’s a reflection of what you do and      times on salespeople or commissioned
how you do it.                                  representatives. Of the remaining 13 mil-
   A clever ad is what pops into most           lion businesses, 70% are run by one per-
people’s minds when they think about get-       son. It’s very rare for the self-employed to
ting the word out about their business.         find advertising useful; the single-person
The fact is, most of us know little about       business, whether that of a lawyer, doctor
advertising and a whole lot about market-       or computer consultant, relies almost ex-
ing. We are really the marketing experts        clusively on personal recommendations.
for our business because we know it bet-        That leaves the percentage of businesses
ter than anyone else.                           who might even consider advertising use-
   It may surprise you to know how many         ful at less than 19%. We think most of
established small businesses have discov-       them don’t need it either.
ered that they do not need to advertise to         There are four main reasons why adver-
prosper. A large majority—more than two-        tising is inappropriate for most businesses:
thirds in the U.S., certainly—of profitable         • Advertising is simply not cost-effec-
small businesses operate successfully with-            tive. Claims that it produces even
out advertising.                                       marginal financial returns are usually
        In this book we make a distinction          • Customers lured by ads tend to be
        between “advertising,” which is                disloyal. In other words, advertising
                                  ADVERTISING: THE LAST CHOICE IN MARKETINGS          1/ 3

      does not provide a solid customer         your picture. It reminds us of the man in
      base for future business.                 Chicago who had marble statues of lions
   • Dependence on advertising makes a          in front of his house to keep away el-
      business more vulnerable to changes       ephants: “It works,” he said. “Ain’t no el-
      in volatile consumer taste and thus       ephants in this neighborhood.”
      more likely to fail.                        James B. Twitchell, the author of Adcult,
   • Because a significant percentage of        notes, “Although elaborate proofs of
      advertising is deceptive, advertisers     advertising’s impotence are available, the
      are increasingly seen by the public       simple fact is that you cannot put a meter
      (both consciously and uncon-              on the relationship between increased ad-
      sciously) as dishonest and manipula-      vertising and increased sales. If you could,
      tive. Businesses that advertise heavily   agencies would charge clients by how
      are often suspected of offering poor      much they have increased sales, not by
      quality goods and services.               how much media space they have pur-
  Let’s now look at these reasons in more       chased.”
detail.                                           Paradoxically, even though some small
                                                business owners are beginning to realize
                                                that advertising doesn’t work, many still
A. The Myth of Advertising’s                    advertise. Why? For a number of reasons:
   Effectiveness                                because they have been conditioned to
                                                believe that advertising works, because
The argument made by the proponents of          there are no other models to follow and
advertising is almost pathetically simple-      because bankers expect to see “advertising
minded: If you can measure the benefits of      costs” as part of a business proposal.
advertising on your business, advertising         It’s important to realize that your judg-
works; if you can’t measure the beneficial      ment regarding advertising is likely to be
effects, then your measurements aren’t          severely skewed. You have been sur-
good enough. Or you need more ads. Or           rounded by ads all your life and you’ve
you need a different type of ad. It’s much      heard countless times that advertising
the same type of rationalization put forth      works. To look at advertising objectively
by the proponents of making yourself rich       may require you to re-examine some
by visualizing yourself as being prosper-       deeply held beliefs.
ous. If you get rich immediately, you owe         According to E magazine, advertising
it all to the system (and presumably            budgets have doubled every decade since
should give your visualization guru at least    1976 and grown by 50% in the last ten
a 10% commission). If you’re still poor af-     years. “Companies now spend about $162
ter six months, something is wrong with         billion each year to bombard us with print

and broadcast ads; that works out to about      history of advertising. In the mid-1980s its
$623 for every man, woman and child in          advertising agency, Foote Cone and
the United States” (“Marketing Madness,”        Belding, used the first popular national
May/June 1996). Information Resources           clay animation campaign. (Claymation is a
studied the effect of advertising and con-      trademark of the Will Vinton studios.) The
cluded, “There is no simple correspon-          annual budget was over $40 million. The
dence between advertising and higher            dancing raisins and their song “I Heard It
sales.... The relationship between high         on the Grapevine” created such a popular
copy scores and increased sales is tenuous      image that sales from dolls, other toys,
at best.”                                       mugs and secondary products generated
  To illustrate how pervasive the “advertis-    nearly $200 million in revenue and re-
ing works” belief system is, consider that if   sulted in a Saturday children’s television
the sales of a particular product fall off      program using the raisin characters. Raisin
dramatically, most people look for all sorts    sales went up for the first two years of the
of explanations without ever considering        campaign, largely because cold breakfast
that the fall-off may be a result of counter-   cereal marketers were so impressed with
productive advertising.                         the popularity of the ad campaign that
  Skeptics may claim that you simply can’t      they increased the raisin content of their
sell certain consumer products, beer, for       raisin cereals and joined in the advertising.
example, without an endless array of               After four years, the dancing raisin cam-
mindless TV ads. We refer these skeptics        paign was discontinued. Sales were lower
to the Anchor Steam Brewing Company of          than before the ads started (Forbes,
San Francisco, which very profitably sold       June 17, 1996). By the early 1990s, the
103,000 barrels of excellent beer in 1995       California Raisin Advisory Board had been
without any ad campaign. They believe in        abolished.
slow and steady growth and maintain a              The Internet and World Wide Web have
loyal and satisfied client base. (See Chap-     introduced a new test of advertising effec-
ter 12 for details on how.)                     tiveness. Billions of dollars had been spent
  And consider this: The fabulously             on advertising before the advent of the
sucessful discount warehouse, Costco, had       Web, yet no major offline advertiser was
profits of 25% in 1999 thanks largely to        able to create an online presence of any
their cost-cutting business approach—           significance. Even Toys ‘R’ Us, the major
which includes absolutely no advertising.       American toy retailer, ranked far behind
  Even apparent successes may not be            eToys in brand awareness online, despite
what they seem. The California Raisin Ad-       the fact that Toys ’R’ Us is a 25-year-old
visory Board ran an ad campaign that pro-       company and eToys lasted barely two
duced the most recognized ad in the             years. For Toys ’R’ Us, decades of advertis-
                                  ADVERTISING: THE LAST CHOICE IN MARKETINGS           1/ 5

ing simply had no staying power (March          they would obviously budget funds for
20, 2000, The Industry Standard). One of        promoting personal recommendations. In-
the biggest successes on the Internet,          deed, some businesses are apparently so
eBay, used no advertising at all.               unwilling to believe what market research
   One magazine with a significant audi-        tells them—that personal recommenda-
ence on the Internet is Consumer Reports,       tions work and advertising doesn’t—that
a magazine that carries no advertising. By      they run ads like the one on the following
eliminating advertising from its business       page.
model, Consumer Reports is able to main-           It’s not only large national corporations
tain a high degree of integrity and cultivate   that are disappointed in the results of ad-
trust among its readers, who value the          vertising. Local retail stores that run re-
magazine’s objective information.               deemable discount coupons to measure
   “Unlike many others who dispense             the effectiveness of their advertising usu-
online advice, Consumer Reports does not        ally find that the business generated isn’t
accept advertisements, does not earn a re-      even enough to offset the cost of the ad.
ferral fee for directing customers to spe-         Despite this, supporters of advertising
cific merchants and does not repackage          continue to convince small business own-
and sell its data as market research to the     ers that:
companies whose products are reviewed”              • The ad could be improved; keep try-
(The New York Times, 3/22/2000).                        ing (forever).
   One giant aircraft manufacturing com-            • All the people who saw the ad but
pany, to look at the effectiveness of                   didn’t clip the coupon were re-
heavily advertising an in-house computer                minded of your business and may
service through one of its subsidiaries,                use it in the future. Keep advertising
conducted a survey to find out how its 100              (forever).
newest customers had found out about it.            • The effects of advertising are cumu-
The results: 13% of these new customers                 lative. Definitely keep advertising
came because of the advertising campaign,               (forever).
23% because of sales calls, 56% signed up          But what about the favorable long-term
because of recommendations of other sat-        effects of continuous advertising? Isn’t
isfied customers and professionals in the       there something to the notion of continu-
field and 8% weren’t sure why they had          ally reminding the public you exist? Dr.
chosen that computer service.                   Julian L. Simon, of the University of Illi-
   This is actually a fairly common survey      nois, says no: “[attributing] threshold ef-
result. Yet, as we can see from their           fects and increasing returns to repetition of
bloated advertising budgets, very few com-      ads constitutes a monstrous myth, I be-
panies act on the information. If they did,     lieve, but a myth so well-entrenched that it
                                                is almost impossible to shake.”
                                  ADVERTISING: THE LAST CHOICE IN MARKETINGS          1/ 7

   Using advertising to make your business       television programs. The public was well
a household word can often backfire; a           acquainted with “ADM, Supermarket to the
business with a well-advertised name is          World,” by the time it became embroiled
extremely vulnerable to bad publicity.           in a price-fixing scandal and had to pay
   Take the Coors brewery as an example.         $100 million in fines. The moral of this
Thirty years ago, after it had vastly ex-        little story is simple. If these companies
panded its original territory and become a       had relied less on advertising, their prob-
household word throughout much of the            lems would have been much less of a
country with heavy advertising ($100 mil-        public spectacle.
lion per year in the 1980s), the Teamsters’         Sadly, many small businesses make sac-
Union waged a very effective consumer            rifices to pay for expensive ads, never be-
boycott against it. In Seattle, a strong         ing certain they are effective. Sometimes
union town, less than 5% of the market in        this means the quality of the business’s
the 1990s was drinking Coors. The Coors          product or service is cut. Other times,
of the 1960s, known primarily to its loyal       business owners or employees sacrifice
customers in the Rocky Mountain states,          their own needs to pay for advertising. We
where it had a third of the beer-drinking        think it’s far better to use the money to
market, was far less vulnerable to such a        sponsor a neighborhood picnic, take the
boycott.                                         family on a short vacation or put the
   Or how about the stockbroker E.F.             money into a useful capital improvement
Hutton, which spent many millions creat-         to the business. As John Wanamaker, turn-
ing a false advertising image: “When E.F.        of-the-century merchant and philanthro-
Hutton talks, people listen.” The image          pist, put it, “Half the money I spend on
backfired spectacularly when
Hutton was caught engaging in
large-scale illegal currency transac-
tions. The many jokes about who
really listens when E.F. Hutton
talks contributed to the dramatic
decline of the firm, which was ulti-
mately taken over by another bro-
ker at fire sale prices. Similarly, the
huge but little-known agricultural
processing company Archer
Daniels Midland, headquartered in
rural Illinois, made itself a house-
hold name by underwriting public          REPRINTED BY PERMISSION: TRIBUNE MEDIA SERVICES

advertising is wasted, and the trouble is, I        “When I advertised, I seemed to attract
don’t know which half.”                          people who came because of the discount
                                                 I offered. These clients often did not re-
                                                 turn, would cancel sessions and generally
B. Why Customers Lured by                        were not repeaters. The people who were
                                                 most enthusiastic, most loyal, and contin-
   Ads Are Often Not Loyal
                                                 ued with their sessions were almost always
Perhaps the worst aspect of traditional ad-      clients who had been personally referred.
vertising, one apparent to anyone who            Had it not been for the economics in-
runs a retail store, is that customers who       volved, I would probably not have learned
respond primarily to media ads don’t usu-        this important lesson: Personal recommen-
ally return. The same truth has been dis-        dation is the best advertising there is.”
covered by magazines and publishing
companies that rely heavily on junk mail
solicitations to sell their wares. The fact is   C. Why Dependence on
that customers recruited through scatter-           Advertising Is Harmful
gun advertising techniques such as TV
spots, newspaper ads, direct mail, contests,     To an extent, advertising is an addiction:
unsolicited telephone sales and Internet         once you’re hooked, it’s very difficult to
freebies rarely come back. Unscrupulous          stop. You become accustomed to putting a
Internet businesses such as DoubleClick          fixed advertising cost into your budget,
have used the Internet to invade your pri-       and you are afraid to stop because of a
vacy and sell your e-mail address to other       baseless fear that, if you do, your flow of
businesses who beseige you with so-called        new customers will dry up and your previ-
”targeted” marketing based on sites you          ous investments in advertising will have
have visited and purchases you have              been wasted.
made.                                               While of course there are rare occasions
   An example of this phenomenon familiar        when a particular ad can produce lots of
to most owners of small service-type busi-       business, it’s as rare in the small business
nesses comes from the experience of Laura        world as catching a 30-pound lake trout
Peck. She wrote to us that she used to ad-       off a recreational fishing boat or winning a
vertise her assertiveness workshops, but         $100,000 jackpot at a gambling casino. The
due to financial problems discontinued the       story of the great advertising success (the
ads. Instead, she started cultivating her        “pet rock” fad of years ago is an extreme
own community of friends and acquaintan-         example) becomes widely known in the
ces for clients. Two years later, her busi-      particular community and is picked up by
ness was thriving, and she noted:                trade journals and sometimes even the
                                  ADVERTISING: THE LAST CHOICE IN MARKETINGS           1/ 9

general media. As a result, many inexperi-      occasions. Palmer was a victim of her own
enced business people are coaxed into           flash-in-the-pan advertising success. Be-
spending money on ads. Overlooked in all        lieving that “advertising works” had lulled
the hoopla is the rarity of this sort of suc-   her into the false belief that she didn’t re-
cess; also overlooked is what often hap-        ally have to learn how to run a high-qual-
pens to the person whose ad produced the        ity business. There wasn’t much we could
quick profits. Flash-in-the-pan advertising     really tell her except to start over, using
success may bring an initial influx of cus-     the solid business techniques and personal
tomers that your business isn’t prepared        recommendation approaches discussed in
for. This usually has two unfortunate con-      this book.
sequences: many loyal long-term custom-            Palmer’s business is in direct contrast to
ers are turned off when service declines as     Gail Woodridge’s, who also specializes in
the expanding business stretches itself too     wedding photography. Woodridge doesn’t
thin, and most of the new customers will        do any advertising in the conventional
not be repeaters.                               sense, although she does list her services
   Mary Palmer, a photographer in San           widely in places likely to produce refer-
Jose, California, started her business with a   rals, as discussed later in this chapter and
simplistic but traditional marketing strat-     in Chapter 9. Her clients are primarily re-
egy, advertising on her local newspaper’s       ferred to her by wedding planners, bridal
“weddings” page. Palmer was one of the          gown and flower stores, friends and
first photographers in her area to insert an    former clients—people who know her and
ad for wedding photos. She very happily         trust her to do a good job. Since this ap-
took in $12,000 during the prime April-to-      proach has meant that her business has
August wedding season. The next year she        grown fairly slowly, she has had the time,
advertised again, but this time her ad was      and the good sense, to make sure that the
one of many. Not only did the ad fail to        many details of her business are in order,
generate much business, she got few refer-      including her office work and finances, as
rals from the many customers she had            well as her camera equipment, darkroom
worked for the previous year. Concerned,        supplies and filing system.
Palmer called us for emergency business
   Visiting her, we found her business to       D. Advertisers:
be badly organized and generally chaotic.
                                                   Poor Company to Keep
The overall impression it gave was poor. It
was easy to see why so few of Palmer’s          It is estimated that each American is ex-
customers referred their friends, or them-      posed to well over 2,500 advertising mes-
selves patronized her business for other        sages per day, and that children see over

50,000 TV commercials a year. In our               ten or 20 pounds a week. True,
view, as many as one-quarter of all these          some people just might shed some of
ads are deliberately deceptive. Increas-           those unwanted pounds, but how
ingly, the family of businesses that adver-        many will keep them off for more
tise is not one you should be proud to be          than three months? According to
associated with.                                   Joan Price, in her book The Honest
                                                   Truth About Losing Weight and Keep-
                                                   ing It Off, 90% of dieters regain their
        What a Marketing Expert                    lost weight within one year. She ex-
        Says About Advertising                     plains, “Sorry, folks, there’s no
                                                   miracle way to block, burn, rub,
 “Increasingly, people are skeptical of
                                                   jiggle, vacuum, melt or wrap fat off
 what they read or see in advertisements. I
                                                   our bodies. There’s no magic pill, in-
 often tell clients that advertising has a
                                                   jection, cream or potion. If there
 built-in ‘discount factor.’ People are del-
                                                   were, don’t you think it would make
 uged with promotional information, and
                                                   the front page of all the newspapers
 they are beginning to distrust it. People
                                                   and medical journals instead of being
 are more likely to make decisions based
                                                   buried in an ad?” Nowhere in the ad
 on what they hear directly from other
                                                   is there a mention of permanent
 people: friends, experts, or even sales-
                                                   weight loss, because, of course,
 people. These days, more decisions are
                                                   whatever the method it won’t work
 made at the sales counter than in the liv-
                                                   over the long term. If the ad told the
 ing-room armchair. Advertising, therefore,
                                                   truth, no one would use the service.
 should be one of the last parts of a mar-
                                                 • Our friends bought their son a highly
 keting strategy, not the first.”
                                                   advertised remote control car for
        —Regis McKenna, The Regis Touch
                                                   Christmas. It had just hit the market,
                      (Addison-Wesley, 1985)
                                                   and our friends joined the long line
                                                   at the checkout stand picturing the
                                                   delight on their child’s face Christmas
  Do you doubt our claim that a signifi-
                                                   morning. It was not clear to our
cant portion of advertising is dishonest?
                                                   friends from the ads that the car
Do a little test for yourself. Look through
                                                   needed a special rechargeable bat-
your local newspaper as we did one re-
                                                   tery unit and when they returned to
cent morning. Here are a few of the ads
                                                   the store a week before the big day
we found:
                                                   they were informed that the batteries
   • An ad for a weight reduction center           were sold out and wouldn’t be avail-
     that promises its clients will lose five,     able until after Christmas. They went
                                   ADVERTISING: THE LAST CHOICE IN MARKETINGS         1/ 1 1

      back week after week until finally,           One type of dishonest advertising is es-
      two months after Christmas, the bat-       pecially irritating because it’s a bit more
      teries arrived. To add insult to injury,   subtle and involves magazines and news-
      the charger unit for the $50 car cost      papers that you might have respected be-
      an extra $20.                              fore you discovered their policy. It works
    • An ad that offers home security at a       like this: The publication touts the prod-
      bargain price in big letters sounds        ucts and services of its advertisers in its
      like just the ticket to protect your       news stories. For example, some computer
      family, until you read the fine print.     magazines have been known to favorably
      In very tiny letters the ad explains       review the products of their heavy adver-
      that the $99 price covers only the         tisers, and small newspapers often fawn
      standard installation and that an ad-      over the products and services of busi-
      ditional 36-month monitoring agree-        nesses that can be counted on to buy
      ment is also required. In addition, a      space. Once you discover this sort of
      telephone connection fee may also          policy, everything the publication reviews,
      be required.                               even businesses that are truly excellent, is
  We won’t belabor the point with the            thrown into question.
many other examples we could cite from              Devious advertising is rampant in our
just one newspaper. Obviously, whether           culture; from “enhanced underwriting” of
you look in a newspaper, magazine or the         public broadcast shows, featuring an-
electronic media, it is not difficult to find    nouncements that look identical to com-
many less-than-honest ads. Even if you ad-       mercial television ads, to paid product
vertise in a scrupulously honest way, your       placement (inserting brand-name goods
ads keep bad company. The public, which          into movies and TV). And we have come a
has long since become cynical about the          long way from the dairy industry giving
general level of honesty in advertising, will    free milk to children at recess. School dis-
not take what you say at face value. For         tricts across the country sell exclusive ad
example, suppose you own a restaurant,           space to the highest bidder on school
and instead of extolling the wonders of          buses, hallways, vending machines and
your menu in exaggerated prose you sim-          athletic uniforms. Channel One, which
ply state that you serve “excellent food at      gives participating schools video equip-
a reasonable price.” Many people, cynical        ment in exchange for piping ads into the
after a lifetime of being duped by puffed-       classroom, is the tip of the iceberg. Corpo-
up claims, are likely to conclude that your      rations have begun writing the very lesson
food couldn’t be too good if that’s all you      plans themselves.
can say about it.                                   Thirty years ago, a study done for the
                                                 Harvard Business School made clear how

the American public felt about traditional         • Just do it (Nike)
advertising: “43% of Americans think that          • It’s a Maalox moment
most advertising insults the intelligence of       • Winston tastes good like a cigarette
the average consumer. 53% of Americans                should
disagree that most advertisements present          • Not your father’s Oldsmobile
a true picture of the product advertised.”         • Travelers Insurance TV ad showing a
The chief reasons for hostility to advertis-          child with the caption: “This is not a
ing are that it is intrusive and patronizing          4-year-old; this is $3.4 million in life-
(73%), morally objectionable (50%), and               time income.”
false and misleading (36%). That the judg-        We’ve all heard these slogans or ones
ment of the general public about honesty       like them for so many years, and they’re
in advertising has not improved is demon-      so familiar, that we have to concentrate to
strated by this quote from the October         even hear them and really pay attention to
1983 issue of Advertising Age:                 understand if they are hype or simply not
   “Industry studies repeatedly show the       true. And more of them bombard us every
image of advertising very close to the bot-    day. You can undoubtedly think of many
tom of the ladder in comparison to other       more with no trouble at all.
professions. A study presented at a recent        People are apparently so sick of tradi-
industry conference shows advertising pro-     tional advertising hype that occasionally
fessionals next to last, just above used car   even counter-advertising is successful.
salesmen.”                                     Bernie Hannaford, who runs a diner
   Let’s take a minute to look at the adver-   named “The Worst Food in Oregon,” was
tising slogans of some of America’s most       quoted in USA Today as saying: “I’m a
prominent corporations. While the adver-       lousy cook, and my father always told me
tising business considers the following slo-   to tell the truth, no matter what.” Signs
gans “good” advertising and not dishonest      outside invite diners to “Come in and sit
hype, ask yourself, is this good company       with the flies!” and warn, “Food is ter-
for your business to keep?                     rible—service is worse.”
    • Bayer works wonders
    • Come to where the flavor is
       (Marlboro)                              E. Honest Ads
    • With a name like Smucker’s it has to
       be good                                 Lest you become completely discouraged
    • You can be sure if it’s Westinghouse     about the possibility of a better standard of
    • We build excitement (Pontiac)            honesty in advertising, there is hope. At
    • Quality is Job 1 (Ford)                  least two nations, Japan and Sweden, en-
    • You asked for it, you got it (Toyota)    courage honesty in their advertising. In

neither country do ads have “fine print”          minimal. The legal standards for advertis-
that contradicts the main message, nor do         ing are discussed in The Legal Guide for
they permit the sorts of puffery and hype         Starting and Running a Small Business, by
we are used to and which all too often            Fred Steingold (
amounts to little more than lying.                   We mention the Japanese and Swedish
   Japan’s tradition of honest advertising is     use of advertising to urge that, should you
a long one. In the first century A.D., Chi-       ever decide to advertise, you be sure your
nese visitors were so impressed with the          advertisements are scrupulously honest
honesty of Japanese businesses that they          and that they are as distinct as possible in
recorded it as a main attribute of their cul-     style, content and location from the gen-
ture. This 2,000-year-old history of honesty      eral run of other ads. For example, if you
is today reflected in many details: Restau-       limit an offering in a print ad in any way,
rants display samples of their food in the        do so in print as large as the offer itself. If
window and quote prices in round num-             you advertise a service, don’t overstate the
bers, including sales tax and tip. If you see     likely beneficial result of using it, and in-
an 800-yen price advertised for an item, it       clude a warning as to any risk.
is the total price you pay.’s
Stephanie Harolde, who lived and worked
in Japan, adds that Japanese businesses           F. Branding
never put down their competitors or used
comparisons that intimated their product          “Branding” has been a catch phrase in ad-
was better than the competitors’.                 vertising for the past decade and brand
   In Sweden, whose culture is closer to          managers can now be found in the mar-
our own, there has been a more deliberate         keting departments of large companies.
political decision to foster truthful advertis-   Branding is an ingenious response to the
ing. In that country, it has been against the     fact that traditional advertising doesn’t
law since the early 1970s to be deceptive         work. The idea is to make a product or
in advertising. To accomplish this, the gov-      service so well known that its consumer
ernment not only extended its criminal            recognition magically places it in the cat-
code to proscribe deceptive advertising,          egory of widely recognized and respected
but also formed an administrative agency          brands. The concept of branding is that a
to enforce the law. As a result, the Swed-        minor brand, Electronic Product X, can be-
ish people now strongly defend the integ-         come as well known as a major brand
rity of their advertising. Perhaps someday        such as Sony Electronics if Electronic Prod-
we, too, will be proud of ours.                   uct X simply spends enough in advertising
   Deceptive advertising is technically ille-     to “establish” its brand name.
gal in the United States, but enforcement is
                                  ADVERTISING: THE LAST CHOICE IN MARKETINGS           1/ 1 5

   The problem with this concept is that        many types of advertising do work for
true brand identity is created when a com-      small businesses.”
pany produces quality products or services         The types of “ads” that often work for
and stands by them with solid warranties,       small businesses include the telephone
product recalls and other methods to en-        Yellow Pages, business directory listings,
sure customer satisfaction. Running a busi-     flyers posted in laundromats, good
ness this way—not spending a fortune on         Internet Web pages and “notification” type
advertising—is what creates trust and           ads placed in all sorts of appropriate loca-
goodwill. In recent decades, several brand      tions, from free “penny saver” newspapers
names were devastated when they did a           to, in the case of a restaurant with late
lousy job of handling problems with their       evening hours, the program of the local
products. Perrier, Gerber baby products,        symphony.
Sears Auto Centers and Firestone each mis-         We make a major distinction between
managed product recalls and took years to       these types of ads directed at interested
recover. Gerber was ultimately sold to new      prospects and traditional print, broadcast
management, and Sears even damaged its          and electronic advertising. In fact, we pre-
reputation with its non-auto business. On       fer to call these sorts of notices, whether
the other hand, Tylenol handled a recall        paid for or not, “listings.” One good rule
beautifully and made its brand even stron-      to distinguish the two is that a listing is
ger.                                            found where people are looking for it. A
   For a branding strategy to be effective, a   traditional ad, on the other hand, like a
company must be vigilant about its prod-        billboard in front of some lovely scenery
uct and service quality—and be prepared         or a deodorant commercial in the middle
for emergencies. Without addressing these       of an engrossing TV show, is usually intru-
issues, a company’s reputation is a sitting     sive and often annoying.
target, waiting to be ruined. No amount of         Another aspect of traditional advertising,
advertising will be able to develop a good      but not of listings, is that advertising agen-
repuation for a company unless there’s          cies get what amounts to a kickback for
solid product integrity behind it.              selling an advertisement: They make most
                                                of their money from the discount the me-
                                                dia offers only to them. For example, an
G. Listings: “Advertising”                      ad agency might sell you an ad for
                                                $100,000 and then buy media time for
   That Works
                                                $85,000. If you list your business in the
“Hey, wait a minute,” you may be saying.        Yellow Pages, even using a large ad, you
“Traditional media advertising may not be       and the ad agency are charged the same
as worthwhile as it’s cracked up to be, but     rate. Putting up a successful website can

draw hundreds of thousands of viewers,               The Chamber of Commerce, employ-
even if you create it yourself. In other          ment and rental agencies, professional
words, listings almost never have an ad           newsletters, magazines and journals, and
agency discount policy.                           special interest books, such as those
   We strongly encourage the use of list-         geared to the writer or photographer, are
ings, and, for most businesses, insist on         commonly accepted places to list goods or
the importance of having a website. In-           services. And in some instances, newspa-
deed, for most businesses, listings are es-       pers have developed such strong special-
sential, particularly Yellow Pages ads for        interest sections that it also makes sense to
businesses that people use primarily in an        list one’s services there. For example, a
emergency: a drain cleaning service, a            travel agency specializing in charter flights
plumber or a locksmith, for example. List-        to Asia might place a list of prices in the
ings in the phone book Yellow Pages—              Sunday travel section. Similarly, small com-
and, where appropriate, the Silver Pages          munity newspapers exist primarily thanks
for seniors and ethnic Yellow Pages—are           to local advertising, which usually consists
invaluable.                                       of listings of goods and services. Many
   In a few instances, the concepts of list-      merchants find that this type of listing
ing and advertising have all but merged.          does produce good results. Local schools
For example, in many areas of the country,        and theater groups also depend on the
Wednesday is traditionally the day grocery        support of the business community. We
stores put items on sale. Thrifty shoppers        consider those kinds of ads as listings of
therefore check the full-page lists (ads) of      the best sort.
items for the best bargains. In our view,            In this vein, we have long been associ-
this sort of advertising qualifies as a listing   ated with the Common Ground directory,
as long as it is placed where consumers           a very successful cooperative enterprise
normally check.                                   that publishes information in newspaper
   Similarly, in the computer software busi-      form about businesses involved in per-
ness, a great deal of software is sold at dis-    sonal transformation. Interested people
count prices by companies that regularly          subscribe or pick up a copy at coffee
advertise their wares in computer maga-           shops, health spas or wherever the busi-
zines. The ads feature, in very small print,      nesses listing in Common Ground feel it is
long lists of available software. Sophisti-       appropriate to leave a stack of papers.
cated customers know to check these list-         Since distribution is taken care of by the
ings first whenever they need software,           people who list in the directory, the paper
because the prices offered are usually            has an uncanny ability to be located ex-
lower than in retail stores.                      actly where people who are interested in
                                                  the services listed are likely to find it.
                                  ADVERTISING: THE LAST CHOICE IN MARKETINGS        1/ 1 7

  Nonprofits face the same challenge that       from home, you list this fact as poignantly
for-profit businesses do: They need to tell     as possible on the corner telephone pole
as many people as possible about the ser-       or fence post. This sort of listing is so
vice or product they provide. The Palo          common that if someone in your neigh-
Alto, California, Information & Referral Ser-   borhood finds a pet, she is very likely to
vice has come up with a clever way to dis-      check out that same pole or fence. In rural
seminate a lot of information in a              areas all kinds of information is posted in
convenient package. It puts out an easy-        this way. When Salli was out on a walk
to-use directory that lists some 200 local      along her country road recently she no-
agencies and organizations and gives the        ticed a cardboard sign nailed to a pole:
Service’s number for further information.       “Warning! Don’t buy! Carl Chase [not his
  It’s important also to realize that listing   real name] delivers wet wood and won’t
can take lots of forms other than paid          return deposit. Ex-buyer.” There is nothing
space in publications. For example, in          new about this. The Romans used to paint
many areas, if your cat or dog runs away        information about upcoming gladiator


fights on the walls of buildings, and the      who live in a certain area will print a map
Greeks posted important notices on rotat-      along with a short description of their
ing columns at busy locations.                 work and host “open studio” weekends.
   For home service businesses such as         Motels and bed and breakfast inns are
chimney sweeping, babysitting and house        good places for many small businesses to
sitting, the laundromat bulletin board is      be listed as part of the establishment’s rec-
where many people look for help. Col-          ommended services.
leges and universities are a good source          Having a Web page is automatically a
for language schools, tutors, dance instruc-   “listing.” Helping people find your website
tors, typists and roommate referral ser-       is a unique and specific marketing issue
vices. In rural areas, being listed on the     that we cover in every chapter and in de-
Farm Trails Map (a guide for visitors inter-   tail in Chapter 11. No matter what your
ested in buying agricultural products) is      business, there are sure to be many excel-
one of the most important marketing tools      lent places to list its availability at low
for people selling fruit, nuts, vegetables,    cost. s
livestock and Christmas trees. And artists
 Chapter 2

 Personal Recommendations:
 The First Choice in Marketing

A. Cost-Effectiveness .......................................................................................... 2/2
B. Overcoming Established Buying Habits ......................................................... 2/4
C. Basing Your Marketing Plan on Personal Recommendations ......................... 2/5
    1. Trust ........................................................................................................... 2/5
    2. Backing Up a Good Recommendation With Information .......................... 2/6
    3. Responsibility ............................................................................................ 2/7
D. When Not to Rely on Word of Mouth for Marketing .................................... 2/7

“It is the thing you look for, ache for.”      business obviously comes from selling a
           —Charles Glenn, Orion Pictures      product or service at a price that substan-
                                               tially exceeds your cost to provide it. The

                   e hope we have succeeded    three main costs involved in doing this in
                   in getting you to think     any business are:
                   about the dubious value         • Providing the product or service the
of advertising for your business, if you              customer wants,
hadn’t already independently arrived at            • Getting new customers, and
this conclusion. Now it’s time to talk about       • Getting repeat business.
a marketing strategy that does work: per-         Notice that two out of three of these cat-
sonal recommendations. In our view, pro-       egories have to do with attracting custom-
moting personal recommendations is a           ers. If you can accomplish both of them at
superior, yet often overlooked, strategy to    a reasonable cost, your business should
attract and keep customers.                    prosper.
   The idea of people making recommen-            Clearly, the customer who is referred
dations to other people is so familiar to us   comes to you at a lower cost than the one
that it often takes a big stretch of the       who sees an advertisement. In addition, as
imagination to understand what a signifi-      we will discuss in more detail below, a
cant factor it can be in improving the prof-   customer who is referred to you is both
itability of your business. Most business      more likely to return and more apt to tell a
owners have no idea just how powerful          friend about your business than is the per-
this tool is because they don’t know how       son who responds to an advertisement. To
to use it efficiently. Yet ask yourself how    better illustrate this point, let’s look at
many of the interesting people you have        some businesspeople who have prospered
met, places you have visited, and more to      using a personal recommendation market-
the point, high quality small businesses       ing strategy.
with whom you have had positive relation-         Sam DuVall, who conceives of eating
ships, have come to you from friends who       places as theater, has owned very success-
cared enough to tell you about them.           ful restaurants: The Ritz Cafe in Los Ange-
                                               les and the Elite Cafe in San Francisco.
                                               The Elite Cafe was one of the first places
A. Cost-Effectiveness                          in Northern California to serve New Or-
                                               leans cuisine. Money was invested in good
The overriding reason why personal rec-        food, good service and in creating a
ommendations are a better source of new        unique ambiance worth talking about, not
customers than advertising is that they are    in advertising. DuVall neither advertises
more cost-effective. Monetary success in       nor does any paid promotion in the con-

ventional sense, yet the Elite Cafe has            “gripe and praise” forum where people
been packed every night for years. When            share their experiences, which have been
asked about his success, DuVall said,              overwhelmingly positive.
“Nothing works as well as word of mouth.             Substituting personal recommendations
People believe in it.”                             for advertising doesn’t mean that you do
  The equally famous and exclusive Los             nothing but hope that your customers will
Angeles restaurant, Ma Maison, takes an            tell others about your business. In fact, for
anti-advertising stand still further, refusing     most businesses, encouraging positive
even to list its phone number in the Yellow        word of mouth is an active and ongoing
Pages and totally depending on personal            endeavor involving the creation of a mar-
recommendations to produce customers.              keting plan that goes to the heart of the
And should you doubt this sort of market-          business. For example, the Caravan Travel-
ing approach can be successful except for          ing Theatre Company of Armstrong, British
the most exclusive of restaurants, there is        Columbia, relies heavily on personal rec-
TGIFriday’s, an estimated $500-million-            ommendations to promote its shows. As
grossing restaurant chain that is part of the      they travel from town to town in covered
Carlson Group (started in 1965 in New              wagons pulled by Clydesdale horses, this
York) that caters to singles. According to a       naturally colorful group attracts a lot of at-
July 1985 piece in Inc. magazine, Friday’s         tention and creates good publicity in an
“has marketed itself successfully without          honest, fun way.
spending a dime on advertising. And that is          The Caravan Company doesn’t, how-
not likely to change. . . . [According to the      ever, just rely on this sort of attention. At
founding president, Dan Scoggin], ‘if you’re       the end of each performance, the cast asks
performing by a standard of excellence,            members of the audience to encourage
you don’t have to advertise. People know           their friends in the next town (they sched-
and they’ll tell their friends. If you’re a res-   ule shows in towns reasonably close to-
taurant that is advertising, you must be me-       gether) to attend. Often, audience
diocre.’”                                          members get so excited about the show
  The most highly recommended restau-              that they not only call their friends but ar-
rant in the United States, the French Laun-        range to join them at the next stop to en-
dry in Yountville, California, has never           joy the show with them.
advertised.                                          The movie industry is one of those most
  eBay, as noted in Chapter One, doesn’t           obviously affected by personal recommen-
advertise but encourages their users to            dations. Even though well over a billion
spread the good word by hosting a feed-            dollars is spent every year on promoting
back forum. To help assure new users that          new movies, people talking to people is
the auction really works, eBay created a           what really counts. According to Marvin

Antonowsky, head of marketing for Uni-          B. Overcoming Established
versal Pictures, “word of mouth is like            Buying Habits
wildfire.” This point is well illustrated by
the number of low-budget movies that            Personal recommendations are also one of
have succeeded with little or no advertis-      the best ways to overcome a big hurdle for
ing—and by the number of big-budget             a business that wants more customers: the
flops.                                          tendency of people to patronize the same
   Like the movies, book publishing is an-      businesses over and over. The average
other industry where lots of money is tra-      number of significant monetary transac-
ditionally spent on advertising but can’t       tions (not counting newspapers, carfare,
begin to compete with the power of              etc.) for a family in the United States is
friends telling friends about their discover-   about 65 per month. This means that if
ies. A few years ago, The Road Less Trav-       you are typical, someone in your family
eled, by psychiatrist M. Scott Peck, was just   opens a wallet, writes a check or hands
another psychology/relationship book lan-       over a plastic card 65 times each month to
guishing on bookstore shelves. Then a few       pay for something. For most of us, the
people read it, told their friends, and         great majority of these transactions are
started a chain reaction that’s still going     conducted with people we have done
on. Today there are well over two million       business with before. Consider your own
copies in print.                                habits. You probably tend to repeatedly
   The two people most responsible for          patronize the same dry cleaner, hardware
spreading word of the book were one of          store, dentist, plant nursery and exercise
the publisher’s sales representatives, who      facility. If you’re like most people, it takes
was so impressed that he insisted that          a substantial nudge to get you to change
book buyers at stores read the book, and a      one of these business relationships.
teacher in Buffalo, New York, who gave             Given the fact that most people are fairly
copies to teachers and ministers she knew.      stable in their daily business patterns, how
As a result, two churches invited the au-       do you encourage a significant number to
thor to speak, the local bookstore began        give your business a chance? Or, put more
selling hundreds of copies, and the pub-        concretely, how do you get people to try
lisher (Simon & Schuster) took another          your stress reduction class, law firm,
look at the book. A promotional tour            laundromat or the new computer you are
boosted sales, which have kept rising. The      selling out at the shopping center? Per-
author has since published a teaching           sonal recommendations are the answer.
guide to the original book and a new               Overcoming buying habits is difficult.
book expanding on the ideas in The Road         However, once you realize that the major-
Less Travelled.                                 ity of people locate a new product or ser-

vice based on personal recommendations,           • Are your financial records in order
not advertising, you have at least half the         and up-to-date?
battle won. To win the other half, you            • Are your employees knowledgeable
must make your loyal customers, employ-             about your product or service and
ees, suppliers and friends an integral part         enthusiastic about working for you?
of your marketing plan so that your busi-         • Do you offer top-quality goods or
ness will be recommended enthusiastically           services?
and often.                                        • Do your customers have confidence
                                                    that if something goes wrong with
                                                    the products or services you sell, you
C. Basing Your Marketing Plan                       stand behind them?
                                                  • Is your website being kept up-to-
   on Personal
   Recommendations                              Just the simple exercise of asking and
                                              answering these few questions may
Once you have decided to base your mar-
                                              prompt you to make changes in your busi-
keting plan on personal recommendations,
                                              ness. The rest of this book should help
your next job is to understand why people
                                              you implement changes that will really al-
go out of their way to recommend certain
                                              low you to take advantage of personal rec-
goods and services and not others. What
gets them motivated to sing the praises of
                                                Before we deal with the many practical
a business they think highly of? Have you
                                              techniques you can use to encourage cus-
told a friend about a particular business—
                                              tomers to recommend your goods and ser-
perhaps a seamstress, gardener, dentist or
                                              vices, it’s important to understand the
cheese store—in the last six months? What
                                              elements that go into a positive recom-
were the things about each of these busi-
                                              mendation. To succeed in the long run, a
nesses that caused you to recommend
                                              marketing campaign based on personal
                                              recommendation must be in tune with all
  Most of this book is devoted to analyz-     of them.
ing these kinds of questions. But the an-
swers can be summed up as follows: If
your business is truly worthy of being rec-   1. Trust
ommended, you will be able to answer all
or most of the following questions in the     Before you accept a recommendation from
affirmative:                                  someone, you must trust his or her judg-
    • Is your business running smoothly       ment and integrity. Dr. Sidney Levy, chair-
      on a day-to-day basis?                  man of the marketing department at

Northwestern University, explains it this     “tasted fishy.” Did he confuse bouillabaisse
way: “More personal than advertising and      with borscht? Would you take seriously his
smacking of ‘inside’ information, word of     recommendation of a seafood restaurant or
mouth can be a uniquely powerful market-      fish market?
ing tool. If somebody you trust suggests         Another friend, Linda Richardson, spent
something is meaningful, that is more im-     three months traveling around the U.S. and
portant to you than information presented     Asia studying coffee roasting methods in
in an impersonal way.”                        preparation for starting her own coffee
  A good example is when a friend goes        shop. Linda knows more about coffee than
out of his way to introduce you to some-      anyone else we know, so when we took a
one. Such introductions are explicit or im-   trip to San Diego recently, we tried out her
plied personal recommendations, and most      favorite shop. The espresso was great, as
people are careful about making them.         we knew it would be. The difference be-
When you are on the receiving end of          tween Walter’s and Linda’s ability to make
one, you evaluate the person making the       reliable recommendations is obvious.
introduction as carefully as you do the       Linda knew her coffee. Walter did not
person being introduced. For instance,        know his fish.
think of three people you work with and          Finally, think for a minute about how
then imagine that each recommends a dif-      many people you know who almost al-
ferent pilot (none of whom you know) to       ways steer you accurately, and others who
take you up in a small plane. Whom            sound off on every subject whether they
would you be more likely to go with?          know anything about it or not.
Would you go with any of them? How               Word of mouth works incredibly fast on
much would your choice be influenced by       the Internet. Even a seemingly innocuous
the person doing the recommending?            e-mail sent to a good-sized mailing list
                                              with an instruction to “pass this e-mail on”
                                              can easily spread like wildfire. Some
2. Backing Up a Good                          people like to keep everyone on their mail
    Recommendation With                       lists informed about things they deem im-
    Information                               portant—which can sometimes be virtually
                                              anything and everything. Our advice is to
We must also consider whether or not our      carefully consider and check out informa-
friends know what they are talking about      tion before passing it on. A friend or busi-
when they make a recommendation about         ness associate might understand one “save
a business. One friend, Walter, once or-      a starving child, click on this website”
dered bouillabaisse, tasted it, made a face   scheme, but will quickly learn to mistrust
and quietly sent it back, complaining it      your judgment if you do it over and over.

3. Responsibility                              can really trust you to stand behind your
                                               product or service should something go
Because of the nature of friendship, per-      wrong.
sonal recommendations carry with them a
degree of responsibility for the outcome. If
your friend introduces someone to you          D. When Not to Rely on Word
who turns out to be untrustworthy, it can         of Mouth for Marketing
deeply strain the friendship, and your
friend must make a sincere attempt to          We come now to an important warning
make the situation right or risk eroding       about the power of word of mouth. There
your friendship.                               is an extremely good reason why many
   Obviously, carelessly recommending a        American businesses may not want to
business can also strain a friendship. Imag-   adopt a marketing plan based on the sorts
ine your feelings if a friend recommended      of things we discuss in this book. This rea-
a carpenter who tried to jack up the price     son is simple. Word of mouth is just as ef-
in the middle of the job, or a computer        fective in getting out the bad news about a
consultant who screwed up your payroll         business as it is to spread good tidings. In
system and then disappeared two days be-       fact, the Ford Motor Company estimates
fore payday.                                   that a dissatisfied car owner tells 22
   And if a product or service you recom-      people, while a satisfied car owner tells
mend to someone doesn’t work out, it’s         eight.
not always clear what you can do to deal          These figures may be going up; with the
with your friend’s hurt feelings. For ex-      Internet, it is easy for knowledgeable
ample, if your favorite hairdresser gives      people to complain to tens of thousands of
your mother-in-law a frizzy permanent,         other people—and they do.
you will probably hear about it for years,        A good example is the former website,
whether you buy her a filet mignon dinner Dr. C. Everett Koop was a
or not.                                        well-respected Surgeon General in two Re-
   Given the responsibility that goes with     publican administrations. He started a
making a recommendation, people will           website that used his name to dispense
not recommend your business unless they        medical information and advice. His site
feel confident in it. As a direct conse-       spent $147 million to solicit business on
quence, your business policies and prac-       other websites and was one of the most
tices concerning errors, mistakes and          visited health sites on the Web. Why did it
problems are of great concern to your cus-     fail? Negative word of mouth. Nurses in
tomers who make recommendations. They          America had complained for years about
will recommend your business only if they      rashes caused by rubber gloves and been

told by Koop when he was the Surgeon            poor quality merchandise successfully to
General that it was an imaginary problem.       gullible viewers but were eventually de-
When was founded, word               stroyed by word of mouth. One was a
got out that Dr. Koop had been on re-           miniature fire extinguisher, about six
tainer to a rubber glove company at the         inches long, designed to be placed near
time he dismissed the nurses’ complaints.       the kitchen stove, and the other, an aero-
Moreover, “the site came under attack...for     sol can of air used to inflate flat tires. Nei-
failing to notify visitors that a group of      ther product worked in an emergency, as
hospitals had paid to be included in a sec-     promised in the ads. In each instance it
tion on community resources, and that           took about six months for enough people
Koop himself was receiving a commission         to buy them, rely on them in an emer-
for products sold on the site.” (Industry       gency, and tell their friends what rotten
Standard, April 17, 2000.)                      products they were. The advertising con-
   Certainly, if your product or service is     tinued, but word of mouth was so power-
no better than average, you should put          ful that both companies were soon out of
down this book and avoid like the plague        business.
a marketing plan based on word of mouth.           We’ve also found, after years of giving
Businesses with average or negative at-         marketing advice to small businesses, that
tributes succeed only if they rely on such      it’s bad practice to help a business devise
things as extensive advertising and high-       a marketing plan to encourage personal
rent locations. Such is often the case with     recommendations unless it can handle
businesses that cater to (or prey upon)         more customers. Even if your business is
tourists. For example, in Boston’s wharf        in decent shape, it may still not be run
area, there are numerous restaurants that       well enough to handle the expansion that
Bostonians sneer at but unsuspecting tour-      a marketing plan based on personal rec-
ists are eager to patronize. Many visitors      ommendations will bring and still maintain
don’t know any Bostonians and don’t have        its quality. When a business is not ready
the benefit of the natives’ negative word of    for expansion, a large influx of new cus-
mouth. They don’t know that when they           tomers can easily produce a waking night-
trustingly order local lobster, far from get-   mare complete with dissatisfied customers,
ting a freshly caught crustacean, they are      low employee morale and general frustra-
being served lobster fresh from the freezer.    tion at not being able to provide good ser-
   Even a media blitz won’t save an inferior    vice. Naturally, when this happens,
product from bad word of mouth in the           customers will tell their friends, and a
long run. Two products come to mind             downward business spiral begins.
when we think of expensive national TV             For example, a well-known shoe manu-
advertising campaigns that initially touted     facturer sent out a mailer advertising a

sale. Rasberry was excited as she has a        catalogue was updated, the names of doz-
very narrow foot and they advertised her       ens of businesses that had failed in the in-
size in styles she liked. When she went to     terim had to be omitted. In a significant
the store, she was very disappointed as        number of instances, the reason for failure
not one of the styles was available in her     was that the business didn’t know how to
size. She was told by a frazzled sales-        cope with the large volume of new orders.
woman that they only stocked one of each          It’s not only small businesses that are
style in each size! Still, since she was       vulnerable to this phenomenon. One of
promised the shoes she wanted were             the largest HMOs in the country continu-
available from the warehouse, Rasberry         ally spends large sums of money advertis-
decided to order two pairs. A week later,      ing for new clients while leaving their
she received a phone call saying one pair      current clients standing in long lines at the
was actually no longer being made. A           pharmacy and unable to get appointments
week after that came a rather poignant         with their doctors. When they finally are
note from the salesgirl and her manager        able to schedule an appointment, they are
saying the other pair was also unavailable.    allotted such a short time as to leave both
They did enclose a 20% off coupon for her      patient and doctor frustrated. The results:
next visit. Needless to say there won’t be a   an exodus of doctors who can no longer
next time.                                     tolerate the situation and dissatisfied cus-
   Another, dramatic example of this phe-      tomers who are not shy to tell anyone
nomenon occurred when The Last Whole           who will listen. One of the authors lis-
Earth Catalog (Random House), a publica-       tened to the complaints of an elderly
tion that reviewed thousands of high-qual-     woman propped up on her cane as she
ity products designed for simple living,       waited in line for her medicine while an-
sold over a million copies and produced a      other patient went ranting down the hall-
huge upsurge of orders for some of the         way shouting, “Stop spending money for
products reviewed. When a year later the       commercials and get me a doctor!”

       Marketing Without Advertising Checklist

         1. My product or service is up-to-date and is the best it can be.
         2. I have an open, visible, understandable and very generous recourse
            policy, which is clearly posted on my website.
         3. I can clearly describe my business and so can most of my clients, sup-
            pliers, friends and employees.
         4. My pricing is clear and complete and tells customers what they need
            to know about my level of expertise and my target clientele. The price
            allows them to tailor elements to their needs.
         5. My business is open in its financial information, management policies,
            physical layout and its operating functions.
         6. My clients know as much as they want to know about my product or
            service, including the ways it is outstanding and unique. Referrals and
            evaluations from other respected people in the field as well as from
            customers are easily available and posted on the website.
         7. Old clients and others who have lost track of the business can easily
            find it in countless listings, reference materials, Internet search en-
            gines, Web directories, and through neighbors and business associates.
         8. I have a complete list with mailing addresses and phone numbers of
            my current and former clients as well as my suppliers, friends and in-
            terested parties. When relevant, referral sources are noted.
         9. I have a current calendar of marketing events and regularly schedule
            activities of interest to which I invite my customers and other appro-
            priate associates. Everyone who attends feels a part of my community
            when they leave.
        10. I know how big I want my business to be and am prepared to handle
            growth created by my marketing. I am prepared and alert to cutting it
            off whenever a new customer gets better treatment than an old client.

 Chapter 3

 The Physical Appearance of Your Business

A. Conforming to Industry Norms ..................................................................... 3/2
B. Fantasy: A Growing Part of Retail Marketing ................................................. 3/5
   1. Cleanliness ................................................................................................ 3/7
   2. Smell ......................................................................................................... 3/8
   3. Clutter ....................................................................................................... 3/9
C. Evaluating Your Business’s Physical Appearance .......................................... 3/11

                   ost of us give the physical   be a customer and ask yourself whether
                   appearance of our business    the appearance of the business would in-
                   a great deal of thought—      spire your trust. If you feel you are just too
at least at the beginning. Signs, packaging,     close to your business to really see it with
window displays and office layout are all        fresh eyes, elicit the help of a friend, or of-
given great attention. Unfortunately, as the     fer to check out another business in ex-
months turn into years, we tend to de-           change for getting an assessment of your
velop sloppy habits. Window displays that        own.
were once cleaned weekly and redone                Keep in mind five goals for your
monthly now stay up a couple of weeks            business’s appearance:
longer and are rarely cleaned in the in-             • It should conform to, or exceed, the
terim. Employees who were once required                norms of the business you are in.
to look fresh and clean now sometimes                • It should be squeaky clean.
work in T-shirts and raggedy jeans, and no           • It should have an appropriate smell.
one has gotten around to fixing the dent             • It should be uncluttered.
in the delivery truck or thought to run it           • Your website should be updated as
through a car wash.                                    often as is possible and appropriate.
   While the graphic presentation (espe-
cially packaging, promotional material and
listings) of most businesses improves with
time, carelessness almost always creeps          A. Conforming to Industry
into other areas. Sloppy storage areas and          Norms
restrooms, messy bookshelves in offices,
boxes of files piled in inappropriate places     When your business’s appearance isn’t
and half-dead plants in the corner of the        what your customers expect, you risk
office are all things that a business owner      making them uncomfortable—even when
may hardly see, but are sure to turn off         the divergence improves the look of your
customers. If this is what it looks like in      business. Customers have a fairly clear im-
the visible parts, customers wonder, what        age of what most businesses “should” look
might lurk in the file cabinets and drawers      like. If they don’t know it from their own
hidden from view? And more important,            observation, they rely on movies, televi-
who can have confidence in the skill of          sion or magazines for models.
management?                                         When they encounter a business that
   Whether you are about to open a busi-         doesn’t conform to these ideas, they feel
ness or have been in operation for some          dissonance, the sense that something is
time, review all of the key elements of the      out of whack, out of balance. It’s an un-
appearance of your business. Pretend to          comfortable feeling that many people
                                    THE PHYSICAL APPEARANCE OF YOUR BUSINESSS         3/ 3

won’t be able to verbalize; they just know       appliance store which displays a relatively
something is wrong.                              small amount of merchandise works fine if
   The point is simple. If you give your         it clearly communicates to customers that
customers something that they don’t ex-          the appliances displayed are samples and
pect, it is essential that you examine how       orders are filled from a nearby warehouse.
they will react to this divergence. In retail-   Consumer Distributing, a discount retail
ing, for example, a large amount of              hard goods chain, uses this model.
densely packed stock is generally associ-           Many types of businesses traditionally
ated with low prices, while widely spaced        have miserable surroundings. Auto scrap
stock conjures up images of high price           yards are an extreme example; many
tags. A clothing store such as Ross’s Dress      laundromats are another. This is almost
for Less, displaying racks packed with           certainly one of the reasons why many
clothes, is presumably cheaper than a            small yards have failed in the last few
store such as Comme des Garcons, of San          years. Customers will no longer put up
Francisco, Tokyo, Paris or New York,             with greasy, dangerous surroundings. If
where each display features a very limited       the appearance of typical businesses like
number of items. By tinkering with these         yours is generally considered to be poor,
customer expectations, you risk creating         rising above the industry norm is an essen-
confusion. A customer shopping in a jew-         tial part of building customer trust. An ex-
elry store that offers a few items, widely       ample of a business that exceeds the
spaced, would very likely find low prices        industry norm is an optometrist who has a
disconcerting and might wonder if the            clear, meaningful display in the window
pricing were wrong, the goods were fakes,        instead of the usual pile of empty eyeglass
or worse yet, stolen. Disconcerting cus-         frames and faded photos of models wear-
tomers a little is by no means always bad.       ing last year’s sunglasses. Another is a
The store selling bargain jewelry in an un-      plumber with a clever and educational
cluttered atmosphere might well prosper,         window display featuring different types of
assuming other marketing techniques were         pipes and fittings instead of a couple of
used to reassure the customer.                   pink toilets. Similarly, auto repair shops
   Carefully planned deviations from the         with clean offices, waiting areas and spot-
norm can be effective. For instance, an in-      less restrooms are a welcome improve-
expensive restaurant can emphasize               ment over the usual dirty, battered-looking
widely spaced tables and a quiet atmo-           garage waiting areas we have all come to
sphere if this deviation from the expected       dread.
is clearly understood, as might be the case         Professional office waiting areas provide
if it used a name such as “Beggar’s Ban-         another example where standards are
quet.” Similarly, an uncluttered discount        commonly low. A doctor, dentist, architect

or lawyer who has a well-designed office           In the course of our work, we have
with comfortable furniture, often-changed       been asked to go into a lot of business set-
educational displays and materials about        tings and suggest changes. Indeed, we
the particular area of practice, as well as a   have done this so often that it has become
broad selection of magazines less than six      almost second nature to walk into a busi-
months old, is still a welcome exception to     ness and mentally redesign it. Perhaps
the norm. Many Nordstrom’s department           you, too, have been tempted to do this. If
stores make their atmosphere more pleas-        not, why not begin? Think about how you
ant than most retail stores by inviting local   would improve the appearance of the next
piano teachers to play a grand piano in         ten businesses you visit, keeping in mind
their high fashion departments. It’s good       that your redesign plan should work with,
for the teachers, too, who can give out         not against, industry norms. Once you get
their cards.                                    adept at this, apply the lessons you have
   Going beyond industry norms and com-         learned to your own business.
municating the improvements to your cus-           British Airways wanted to keep custom-
tomers should be a goal in any good             ers happy, so asked regular customers on
marketing plan. The upholsterer across the      the transatlantic run what they most
street from our office, who currently dis-      wanted. The answer was an overwhelming
plays two beautifully restored art deco         “Leave us alone and let us sleep!” Passen-
chairs in his window instead of the more        gers wanted their own comfy universe,
typical pile of fabric (which tells us noth-    and they got it. British Airways first-class
ing about the quality of his workmanship        passengers currently dine on a five-course
or his specialties), is a good illustration.    meal with fine linen and candlelight in the
And then there is a travel agent we know        waiting lounge before they board the air-
who decided that the usual run of travel        craft, and then it’s to sleep right after take-
posters was simply a bore and instead dis-      off.
plays (and changes monthly) period cos-            The seat reclines almost to horizontal—
tumes of the country he is featuring. In        as close to a bed as you can get. The air-
this regard, one of our favorite store win-     line lends you a two-piece running suit
dows is Campus Shoe Repair in                   that is like a nice pair of pajamas and pro-
Westwood, California, near UCLA. It dis-        vides you with a comforter and face mask.
plays a mechanized cobbler resoling a           If you don’t want to sleep, you have your
shoe, along with miniature replicas of a        choice of movies at your own seat and an
football, baseball glove, boots and other       in-flight banquet.
items the proprietor can fix.
                                  THE PHYSICAL APPEARANCE OF YOUR BUSINESSS         3/ 5

B. Fantasy: A Growing Part                     usually fantasy-land creations on a minia-
   of Retail Marketing                         ture scale. Many retail business interiors
                                               are sketches of a fantasy, with images and
For many centuries there has been a trend      artifacts on the walls and in the aisles.
to mix fantasy and product sales. Today,          Restaurants often invoke a fantasy atmo-
the trend has grown to such an extent that     sphere, whether is it is Olde England with
all businesses need to think about fan-        leather benches, wooden beams and imita-
tasy—especially when considering a             tion pewter mugs or a Polynesian island
business’s appearance.                         with bamboo, fish nets and tropical paint-
   Medieval trade fairs in Europe and West     ings.
Africa had clowns, dancers, musicians,            Many direct-mail catalogues are 100%
puppets and storytellers to create a festive   fantasy creations. They show people in
atmosphere. The fantasy that these enter-      landscapes and exotic settings with distinc-
tainers were trying to create was “para-       tive clothing and accoutrements for sale.
dise.” Today, businesses create fantasies      In many cases the descriptions of the items
that stimulate demand for their products.      read like an exotic travel brochure.
   We have fantasies in the form of physi-        The growth of direct-mail catalogues in
cal locations; Disneyland is a good ex-        the past two decades has played a role in
ample. Disneyland has a fantasy                accelerating the active use of fantasy in
turn-of-the-century Main Street, jungles       business. There are many cases of cata-
and underwater worlds. At Tinseltown Stu-      logues that paved the way for retail stores
dios near Disneyland in Anaheim, Califor-      in keeping with the catalogue’s fantasy
nia, you can totally indulge your desire to    theme, from Smith & Hawken and
be a star at a fantasy Academy Awards cer-     Crabtree & Evelyn to Victoria’s Secret and
emony. Customers at Tinseltown are not         The Sharper Image.
treated as guests but as screen idols. Once       In traditional businesses, it is hard to
you enter through the door you are bar-        know how much fantasy to invest in. A
raged by autograph seekers, the paparazzi,     law office that has a modest investment in
reporters and TV crews. As you walk            shelves filled with law books (rarely used
down the long red carpet, all eyes are on      anymore, in the electronic age) and high-
you. Tinseltown lives up to its slogan of      back leather chairs is better off than a
“taking unknown people and turning them        similar office resembling a sterile dental
into screen legends.”                          waiting room. But putting a large invest-
   Many retail stores go directly for a        ment into maple burl paneling, a fireplace
Disneyland-like reproduction. Victoria’s Se-   with a real fire and a courtroom railing
cret lingerie stores, for example, have a      might not be justified.
racy boudoir ambiance. Store windows are

   Gone are the days when a vacation ho-       with information and suggested conversa-
tel is sought for its uniformity. Today’s      tions for the would-be academic.
pleasure traveler who can afford it seeks         Our favorite recent example of a busi-
the thrill of a unique experience. She         ness that fully comprehends the notion of
wants to escape the familiar and try on a      fantasy is in Tokyo (always the leading
new identity—if only for a weekend. Bill       edge in marketing) near Roppongi Corner.
Kimpton operates several such fantasy-ori-     This retail store was named after an imagi-
ented boutique hotels; the one we person-      nary island with an imaginary culture. In
ally enjoy is the Triton near San              the store is everything one could buy on a
Francisco’s Chinatown. The Triton is a         trip to this island: clothes, sandals, jewelry,
showcase for local artists. A dreamy, flow-    fabrics, art pieces for the wall, furniture
ing mural of pastel hues covers the wall       and incense. The design of everything was
and ceiling of the lobby. Handcrafted          perfect to the last detail and was a synthe-
tables and lamps and rock and roll music       sis of elements from Southeast Asia. All the
create a mad-hatter tea party type atmo-       pieces for sale are custom-made for the
sphere. Like most of Kimpton’s boutique        store.
hotels, the occupancy rate is around 80%.         Whatever your business, it is worth
   A new business based entirely on fan-       thinking about the fantasies concerning
tasy, such as a multimedia production          your product or service that would support
company, needs to put a significant invest-    additional sales. Think boldly, because we
ment into the fantasy appearance of the        are in an era of bold immersive fantasies.
workspace. Fantasy is the industry norm in     Doctors, lawyers, chimney sweeps and taxi
this emerging field.                           drivers are not immune to this emerging
   No existing business is exempt from         marketing trend. We have already seen
thinking about the fantasy aspect of busi-     doctor’s offices that feel like a science lab
ness. Whole new businesses are being cre-      and sell books, videos and magazine sub-
ated out of the consumer’s immense             scriptions about their specialties, including
appetite for new fantasies.                    toy medical equipment and hospital uni-
   We can expect to see marketing in the       forms—all done with style and profes-
near future where the customer who fanta-      sional dignity. We already know of taxi
sizes being an academic can order an en-       drivers who drive outrageous classic cars,
tire cozy, academic reading room with a        sell models of their vehicle and offer pho-
complete wall of books, bookshelves,           tos of the passenger sitting in the driver’s
framed prints for the wall, a leather chair,   seat, properly attired.
reading lamps, Persian carpets, suitable          One client, Terry Miller, a women’s
clothes, pens, eyeglasses and videotapes       clothing designer and manufacturer whose
                                               business is based in San Francisco (the
                                  THE PHYSICAL APPEARANCE OF YOUR BUSINESSS           3/ 7

Terry McHugh store), had been selling to       draped with a design the women were
major department stores for many years.        currently sewing. She also displayed el-
Finally, she grew tired of having to pro-      egant sketches and pattern swatches on
duce a high volume of top quality goods        the walls near the design table, cleaned up
under tight time pressure on a slim profit     the table itself and created a little sitting
margin and then wait months to be paid.        area complete with the new editions of
Sensibly, Miller decided to cut back on de-    high-fashion magazines such as Vogue and
partment store sales at the same time she      Elle. Most important, she removed price
opened the doors of her manufacturing          tags from the garments in the work room;
studio to customers and developed a direct     only the clothing in a separate sales room
sales business. Unfortunately, her direct      was tagged. Miller also kept the boxes
sales business took off with all the pizzazz   used to ship clothing to stores such as
of a cold turtle.                              Bloomingdale’s and Saks stacked promi-
   Convinced that her direct sales concept     nently in the workroom. Direct sales
was a good one despite the poor results,       doubled in two months and doubled again
Miller called in one of the authors for a      in four.
consultation. When Michael visited her           Later she moved to a retail store that has
manufacturing studio, he realized immedi-      a design and manufacturing section that
ately that the physical setup was not what     could have come from anyone’s fantasy of
most people would expect from a top-of-        what such a set-up should look like. Her
the-line design studio. Too many details       business is booming, and she’s looking to
conflicted with the romantic popular im-       expand.
age of what such a business should look
like that people see in movies and on TV.
For example, the women sewing the gar-         1. Cleanliness
ments had unattractive piles of cloth and
racks of hangers next to their stations, the   Cleanliness is crucially important in all
design table was cluttered with books, pa-     businesses, and is perceived by the public
pers and the occasional abandoned coffee       as a measure of management competence.
cup. Worst of all, the finished clothing       Despite this, most businesses, whether re-
hanging on the racks in the work space         tail, wholesale, restaurant, consulting or
displayed price tags.                          professional, are not clean. If you doubt it,
   Michael recommended that Miller rede-       think about how many businesses you
sign her studio to conform more to her         know that are spotless. Not very many, we
customers’ image as seen on TV and in the      bet. And those that do meet this high stan-
movies. Miller agreed to give it a try. She    dard are almost surely very successful.
brought in several mannequins, which she

   Years ago, when gasoline stations were       2. Smell
trying to attract customers, many displayed
signs extolling how sanitary their              Smell is such an important, but often over-
restrooms were. These signs often stated        looked, aspect of a good marketing plan
that the restrooms were for the conve-          that it’s worth focusing on in detail. Good
nience of customers and if everything           smells can be an incredibly powerful part
wasn’t perfect to let the management            of the image of many businesses—and in-
know. Some large oil companies even had         appropriate ones can ruin it.
strict national inspection programs to sup-        The smell of disinfectant can be a posi-
port their claims. Then along came the          tive attribute in a medical environment and
gasoline shortage, and many gas station         a definite negative in a bakery. Certainly
operators became so arrogant they forgot        the location of bathrooms and the result-
about time-tested good business prin-           ing smells in a retail store, coffee shop or
ciples, including clean restrooms and           medical clinic can influence clients very
friendly service. While there are, of course,   strongly. For example, the authors visited
a number of complicated economic rea-           a well-known luncheon restaurant that
sons why so many gas stations have failed       boasted great sandwiches accompanied by
in the last few years, certainly one is that    a fashion show, but left after five minutes
most are so poorly run that customers           because they were seated close to the
have absolutely no reason to be loyal to        restroom, which reeked of cleansers.
them. Restrooms remain a good barometer            Peet’s Coffee stores in the San Francisco
as to how well a business is run.               Bay area are a famous instance of a busi-
   By contrast, part of the phenomenal          ness that owes a large part of its success to
growth of several national franchises, in-      a magnificent smell. Over 30 years ago,
cluding McDonald’s, Supercuts and Midas         Mr. Peet opened a tiny neighborhood shop
Mufflers, is directly connected to their        to sell the coffee beans he imported and
reputation for cleanliness. Before these        roasted on the premises. Coffee drinkers
companies changed industry norms, many          could not resist the aroma of fresh-roasted
hamburger stands, barber shops and brake        coffee that permeated the immediate
shops were notoriously dirty. In each of        neighborhood. When they ventured inside,
these instances, the commitment to be ex-       they were met with a pleasant surprise—a
tremely clean was powerful enough to            little coffee bar where they could enjoy a
transform an industry.                          superior cup of coffee for a reasonable
                                                price. These and other techniques contrib-
                                                uted to Peet’s becoming the first extremely
                                                successful coffee store in an area of Berke-
                                                ley, California, that has since become fa-
                                  THE PHYSICAL APPEARANCE OF YOUR BUSINESSS         3/ 9

mous as the first true gourmet ghetto in       3. Clutter
modern America. The original Peet’s was
the model for Seattle’s Starbucks in its       Small neighborhood grocery stores tradi-
early days. The many coffee stores in our      tionally have a problem with clutter, not
neighborhoods are there at least in part       only because they are inefficiently de-
because Mr. Peet opened the windows            signed to handle the high volume of in-
next to his roaster, and the customers         coming products but also because they are
flooded in.                                    often short of storage space. This is one
   Fine Design, which sells furnishings, an-   factor that led to the success of 7-11 or
tiques and sweaters in New York City,          Quick-Stop type convenience stores,
uses pine boughs to fill the store with a      which feature an open, uncluttered look
pleasant aroma around the holidays. Al-        that is much more appealing to many cus-
though this technique may sound obvious,       tomers.
we encounter very few businesses that use         Cleanliness and lack of clutter aren’t
smell positively. Unfortunately, smells        only important to retail stores, of course.
more commonly detract from the atmo-           For example, one of our editors recently
sphere. Ice cream stores—because sugar         reported stopping by the office of the
and oil don’t smell good—top the list.         company that delivered diapers for his
   Good smells aren’t an effective market-     baby. The dirty, sloppy office looked like
ing technique only for retailers. A real es-   it belonged to a poorly run machine shop.
tate broker friend in Dallas, Scott Park, is   Recordkeeping was so disorganized that it
very successful in the residential market.     took five minutes to find the correct ac-
One of his approaches is to fill the houses    count card. In addition, the counter was
he is showing with fragrant fresh flowers      dirty, the windows hadn’t been washed re-
and to bake an apple pie in the oven at a      cently and there was no display material,
very low temperature for the four to six       publications or anything else to create a
hours that a house is typically shown.         feeling that anyone cared about babies. In-
   Similarly, in the Urasenke Tea School in    deed, the whole atmosphere was so dis-
New York, which teaches students the tra-      heartening that he cancelled the diaper
ditional art of the Japanese tea ceremony,     service, even though the diapers delivered
the teachers wipe with a moist rag the         to his house had always seemed clean
tatami mats the students walk on, to bring     enough.
out the delicate bamboo-like fragrance of         Or how about a picture framing shop
fresh tatami.                                  that, of all businesses, ought to be aes-
                                               thetically pleasing. The one down the
                                               street sports streaky windows behind
                                               which are piles of dusty frames and dull

racks of unassembled frames instead of          simple and straightforward. Many people
framed artwork that would capture the at-       may not remember the days when search
tention of passers-by.                          engine sites typically were cluttered with
   Nearby there is another marketing disas-     banner ads and blinking messages almost
ter: a store large enough to run ads on         to the point of obscuring the search results
television that has for months had seven        themselves. Since the intuitive measure of
sloppy handwritten signs stuck to its glass     search engine competence is the ability to
door with yellowing scotch tape. The signs      deliver a focused group of results, Google
aren’t even of the temporary “closed for        communicated the correct message: a
vacation” variety; they appear to be per-       clean uncluttered page with nearly 98% of
manent. To make matters worse, the store        white space. Google rose to be one of the
sells eyeglasses!                               top three search engines and established
   In the late 1950s, Lawrence Ferlinghetti,    the cleanliness norms for the industry.
well aware of the industry norms for small         When Salli brought her new-to-her car in
independent bookstores, was determined          for its first tune-up at the C&W Ford repair
to let his staff and customers know that        shop in Sebastopol, California, she was
their store wasn’t going to have the typical    surprised and impressed with how unclut-
dingy cave-like atmosphere. He built his        tered and clean the shop was. The place
idea into the name of his now-famous City       she had been taking her car to did a good
Lights Bookstore, which was truly a pleas-      enough job but always left her with a
ant, bright and uncluttered store. His cus-     slightly queasy feeling. The carpet in the
tomers appreciated this innovation. Today,      waiting room was stained and full of lint,
this idea has been copied by bookstores         and the entire office was grungy. She
nationwide, including many of the national      couldn’t quite see through the grimy win-
chains. Interestingly, it has most enthusias-   dow where they worked on her car. The
tically been adopted by a very profitable       contrast was amazing. At the Ford com-
three-store California business named A         pany, every tool was in its place, the shop
Clean Well-Lighted Place for Books, which       was open, airy and clean and the office
through its name elevates its inviting atmo-    sparkled.
sphere to the position of the centerpiece          Now it’s time for you to do some work.
of its marketing strategy.                      Look at your business as an outsider
   On the Internet, one of the best ex-         might, using the checklist below to evalu-
amples of an uncluttered website is             ate whether your business conforms to or
Google, one of the first online businesses      exceeds industry norms, is truly clean,
to understand the allure of keeping a site      smells appropriate and is free of clutter.
                                  THE PHYSICAL APPEARANCE OF YOUR BUSINESSS         3/ 1 1

C. Evaluating Your Business’s                  and architecture; inside aspects such as
   Physical Appearance                         cleanliness, lighting, etc.
                                                 Step 2. Rate your business on each of
Step 1. In the “Your Business” column, list    the elements you have listed as “poor,”
the key aspects of the physical appearance     “adequate” or “excellent.” Use the “Com-
of your business. We can’t do this for you     ments” column to describe specific details.
because there are thousands of types of          Step 3. Also in the “Comments” column,
businesses. To give you ideas, we’ve in-       make a note of any particular elements in
cluded at the top of the worksheet a list of   your business that differ significantly from
elements that commonly apply to retail         industry norms, and ask yourself if the
and wholesale businesses, organized by         positive reasons for this difference are
category: outside elements such as signage     clearly communicated to your customers.

   Physical Appearance That Develops Trust
   Outside        Inside              Sales Staff   Sales Materials   Product       Mail Order/Online

   signage        cleanliness         clothes       neatness          protected     answers key questions
   display        clutter             breath        clutter           well marked clear meaning
   architecture   lighting            teeth         understandable    return address exciting
   cleanliness    smell               car clean     standard sizing   design        consistent style
   neighborhood spacing, general      identifiable completeness       dated         convincing
                  spacing, merchandise prompt                         labels
                  amount of stock

  Your Business                      Comments

  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________
  ________________________           _______________________________________

 Chapter 4


A. Straightforward and Easy-to-Understand Prices ............................................ 4/2
B. Complete Prices ............................................................................................. 4/3
C. Giving Customers Reasonable Control Over the Price .................................. 4/6
D. Internet Pricing ............................................................................................. 4/9

               crucial element in any good       all the circumstances of the transaction.
             marketing plan based on build-      For example, if you specialize in selling
             ing customer trust is a sound       bulk goods, your price per unit should go
pricing policy. Pricing is a key factor in de-   down as volume increases, at a regular
termining your customers’ expectations. To       and reasonable rate. A produce market
use a somewhat exaggerated example, a            that offers grapefruit at “25 cents each or
classy saloon that has cognac on its menu        four for a dollar” is sure to drive away cus-
for $3.99 and serves it in a plastic glass       tomers. A customer may not do the arith-
will never be considered trustworthy. Simi-      metic the first time he visits the store, but
larly, a lawyer or architect who charges         eventually he will note that the retailer is
$37.75 an hour will have a very difficult        misusing a standard marketing device by
time convincing potential clients that she       charging the same amount for volume pur-
does high quality work.                          chases rather than offering customers a
  Some pricing tips:                             small discount to encourage such pur-
    • Make your prices straightforward and       chases.
       easy to understand.                          Similarly, the parking garage that adver-
    • Pricing should be complete, includ-        tises in big letters “75 cents for the first
       ing everything a customer expects.        hour” and then charges 75 cents for each
    • In setting your prices, give the cus-      additional ten minutes is attempting to
       tomer reasonable control over the         mislead its customers. You may park in
       purchase transaction.                     such a place once, when you are late for
    • On the Internet, you may need to           an appointment and don’t have time to
       break prices down to the lowest           read the fine print on the sign carefully,
       useable unit.                             but you are almost certain to go some-
  Let’s look at each of these elements indi-     place else next time, even if it means park-
vidually.                                        ing a few blocks farther from your
                                                    Confusing and misleading incremental
                                                 prices aren’t the only way a business can
A. Straightforward and Easy-                     abuse its customers’ trust, of course. There
   to-Understand Prices                          are many ways to list prices in a misleading
                                                 way. For example, how do you feel about a
It’s important to make sure your pricing         rug cleaner who offers to clean “five rooms
policy does not confuse or mislead your          for $89,” and then, in small print, defines a
customers. The price you state should re-        room as being 6’ by 8’? Although this might
flect the total cost of the transaction. It      appear to border on the dishonest, it is ac-
should also be an honest one considering         tually a typical practice in the rug cleaning
                                                                        PRICINGS      4/ 3

business. Rug cleaners who avoid this type      know how much it charged and feared the
of pricing, however, are appreciated by         worst. Enough said, we hope.
their customers. For example, a friend re-         Don’t be afraid to be redundant. No one
cently told us about a service that prided      gets angry at a lawyer who finds three
itself on cleaning any rug, regardless of       ways to tell you her hourly (and incremen-
size, for a fixed price, and doing up to        tal) rates for consultation, research and
three throw rugs free as part of every job.     court time, but everyone dislikes getting
We plan to try that business next time we       an unexpectedly large bill after services
clean our rugs, and if it is as good as         are rendered. For instance, many people in
claimed, will surely tell others.               the home contracting business don’t in-
   To be clear, a price should also be easily   form their clients of their overhead and
discernible by all potential customers. This    profit billing. A naive client assumes the
is particularly important for service busi-     contractor works as a salaried person in-
nesses, which don’t have a tangible prod-       stead of growing a business as in other
uct to which a price can easily be              fields. Naturally the customer goes ballistic
attached. Many potential customers shy          when they see 20% or more “tacked” onto
away from some businesses simply be-            their bill.
cause they don’t know what the service             Chapter 10 discusses in detail the issues
costs and for one reason or another feel        of customer recourse and warranties (also
shy about asking. So, whether you run a         part of any description of price). People of-
typing service, a commercial fishing boat       ten want to know if they will get their
or are a child care provider, tell customers    money back if they are not satisfied, and
clearly how much your service costs be-         under what conditions deposits, partial pay-
fore they have to ask. For example, a typ-      ments and full payments are refundable.
ist might do this with a fact sheet listing
prices of $3 per page or $30 per hour,
with a 20% surcharge for rush work that         B. Complete Prices
must be done after 5 p.m., a 50% sur-
charge for rush jobs typed after midnight,      The completeness of a price is determined
and $1 extra per page for statistics and ad-    both by the norms of a particular business
dress lists.                                    and by general honest business principles.
   If you doubt that communicating prices       Ideally, your price for a particular good or
can be a big part of any marketing plan,        service should include everything that a
think about how many times you have             typical person expects to pay for, and a
shied away from patronizing a particular        little bit more.
business or service because you didn’t             Examples of incompleteness in pricing
                                                that annoy customers are:

    • Computers priced without keyboards         and orange juice as part of the room price.
      or software.                               Speaking of hotels and pricing, there is
    • Hotel room prices for rooms without        nothing more annoying than a confusing
      private baths.                             phone policy. You have probably stayed
    • Legal fees for incorporating a busi-       (most likely only once) at an establishment
      ness that don’t include state registra-    that charged an exorbitant rate for calls
      tion fees.                                 and as you were checking out were pre-
     • “Price-fixed” meals that don’t in-        sented with an extra $10 or $15 charge for
      clude coffee.                              those few calls you made back home.
    • Expensive flowers that don’t include          If you are a regular traveler, chances are
      greens.                                    you will return to establishments that offer
    • A high-priced suit that doesn’t come       extra amenities. In one little neighborhood
      with free alterations.                     restaurant in Kyoto, Japan, customers who
   Surely you can think of similar examples      sit down alone are given the latest edition
in your field. Also, pay particular attention    of the daily newspaper after the food or-
to the fact that customary pricing practices     der is taken. The restaurant rarely has an
in some businesses do not give customers         empty seat.
a very good deal. In this situation, a busi-        To take an example of how something
ness can quickly build customer trust by         extra can make a big difference, consider
offering a little extra. For example, in most    how the Japanese auto companies success-
communities, it is customary for a used car      fully captured a large part of the U.S. auto
dealer to sell cars “as is,” with the expecta-   market. They established a reputation for
tion that they are probably in such rotten       good value, at least partially because they
condition that they will expire ten minutes      priced cars to include most of the optional
after a purchaser takes title. By contrast, a    features that purchasers of American cars
used car dealer that offers a real 90-day        customarily paid extra for, such as a radio
warranty violates this custom in a positive,     or outside rear view mirror. By contrast,
business-building way.                           pricing in the U.S. auto industry is so con-
   Similarly, the norm in American hotels        fusing that Consumer Reports magazine,
and motels is a bathroom supplied with           which rates products, has had to develop
soap, towels, washcloth, shampoo, condi-         an almost impossibly complicated formula
tioner, shower cap, water glass and toilet       to compare prices, and even sells com-
paper. To this, many establishments have         puter printouts to help readers determine
added fax services, modem plugs for por-         what they are paying for.
table computers, body lotion, bathrobes,            In some industries, no service at all is
slippers, shoe cleaning supplies, dispos-        the norm—and nowhere is this more evi-
able toothbrushes, free newspapers, coffee       dent than in the Internet service provider
                                                                        PRICINGS      4/ 5

(ISP) business. Almost everyone has horror      nightmare of misunderstanding between
stories of the constant busy signal, being      business and customer and result in the
put on endless hold, or only being able to      worst kind of word of mouth about the
access the provider through e-mail whose        business. Trustworthy businesses in these
system always seems to be down. Rasberry        fields must go out of their way to identify
has found an ISP,, that not         all items included and not included in
only has a friendly human that answers          their price and be sure this information is
your phone calls if your computer crashes,      accurately communicated to customers.
but immediately answers questions that are      And when a customer makes changes to
e-mailed to its technical support staff. You    the original bid, a trustworthy business
can be sure that benefits from      writes them down accurately along with
the customer loyalty engendered by these        the extra charge and has the client read
business practices.                             and sign the “change orders” so there
   A friend rented a car at a New Jersey air-   won’t be any surprises.
port for a few weeks, and when he went             This is especially important when deal-
to pay his bill there was a large additional    ing with inexperienced clients who may
charge for a dirty, bottom-of-the-line          not be familiar with industry norms. You
child’s safety seat that could have been        should go out of your way to clarify items
purchased retail for half that amount.          that are excluded from a bid, even if such
Nothing had been said about this extra          exclusions are standard in your particular
cost when the car, with baby seat, was re-      business.
served. Contrast this unpleasant and ex-           For example, a website designer, when
pensive example with the young couple           quoting a price to build a client’s site,
who moved to Hawaii and had to rent a           should make it clear from the beginning
car for a few weeks before theirs was           exactly what the customer is expected to
shipped over. Not only was the car seat         provide, such as graphics, text or any
free, but when the couple’s own car ar-         other features that will be available at the
rived and they returned the rented car, the     site. In addition, it should be clear to the
rental company offered to rent them a           customer that the price does not include
baby seat for a few dollars until they could    maintaining the site. Similarly, if a house
buy their own.                                  painter customarily charges separate fees
   If in your business, bidding on a job is     for paint and labor, or a building mainte-
the norm, as it is in house painting, con-      nance company expects the building
sulting or carpentry, the issue of “com-        owner to supply cleaning equipment and
pleteness” in pricing is a fairly common        supplies, the business should say so from
and often sticky problem. If it is not ad-      the beginning.
dressed forthrightly, it can develop into a

   Carefully consider whether everything       C. Giving Customers
you do on a job is included in the price          Reasonable Control Over
you quote. If you identify extras that you
charge for separately, ask yourself if there
                                                  the Price
is really a good reason for the additional
                                               If a customer has to buy too much, too of-
charge. How much would you lose if you
                                               ten or in inconvenient units to get a good
included some or all of the extras in your
                                               price, your pricing policies simply do not
base price? Next, ask yourself whether
                                               engender trust. Customers should have as
charges for extras are really fair. Finally,
                                               much choice as you can give them over
check whether you adequately communi-
                                               the final price or the amount of goods or
cate your pricing policy to your customers
                                               services they want to buy.
by asking yourself how many of them
have ever been confused as to what was           Good examples of businesses that pro-
and wasn’t included in your price. If even     vide customers with a high level of control
a small number have been, you obviously        over pricing include:
need to make some changes.                        • A car repair garage that phones the
   A store that solved an unusual price-             customer before installing an unex-
completeness problem was Filene’s, a                 pectedly high-priced replacement
fancy French store in San Francisco known            part.
for its expensive, beautiful handbags. A          • A hardware store that sells nails by
large portion of Filene’s business involved          weight as well as by the bag.
sales to Japanese tourists and                    • A laundromat that has washers and
businesspeople.                                      dryers in several different sizes so
   For the first six months Filene’s was             that a customer with a small load
open, many Japanese customers were an-               doesn’t have to pay for a large one.
noyed by the addition of a sales tax to the       • A printer who tells the customer that
price of their purchases. In Japan, all              preparing a page layout that can be
quoted prices are in round numbers, with             put on a larger press will mean a
the sales tax included. Filene’s solved the          lower unit cost.
problem by using the Japanese method of           • A bike repair shop that takes the
prefiguring tax into the final price rather          time to show customers how to
than adding it on, and only had to explain           make their own routine repairs.
to its non-Japanese customers that the            • A natural foods store that gives cus-
price includes sales tax. These customers            tomers credit for recycling peanut-
were delighted, because the total price              butter tubs.
was less than they thought. Interesting           • A lawyer who encourages people
problem. Interesting solution.                       with a self-help bent to do a portion
                                                                       PRICINGS      4/ 7

      of their own work on routine matters     generous discounts for the larger amounts.
      and discounts the fee accordingly.       Sonoma Compost is located at the county
    • A picture framing shop that has a fa-    landfill and “recycle town.” As a bonus to
      cility for customers to do their own     its customers, if you bring your trash or
      framing at a reduced rate.               recyclables in you get a 50% discount on
   Your pricing goal should be to give your    up to five yards of screened organic com-
customers maximum choice of sizes,             post on that day. This “bring a load . . .
amounts, hours of time purchased and so        take a load” offer is very popular.
on—consistent, of course, with the sensible       Bad examples of pricing situations in
operation of your business. For example, if    which the customer is treated with little re-
someone asks for plain ice cream rather        spect include:
than the “Strawberry Delight” you have on          • Lunchmeat packaged only in large
the menu, you may make a loyal customer              amounts.
if you not only serve the ice cream without        • Undertakers who promote super-
the fruit sauce, but also subtract an appro-         fancy, overpriced caskets and keep
priate amount from the bill.                         the reasonably priced ones out of
   A good example of a business that offers          sight, and when asked for the “plain
flexible pricing is Sonoma Compost in                pine box” wrinkle up their noses and
Petaluma, California, which provides pre-            attempt to make customers feel
mium quality compost and mulches made                cheap and uncaring.
from recycled organics. It has a very clear        • Service businesses and professionals
written pricing policy and offers a wide             who bill a half-hour for a five-minute
variety of mulch. The customer has com-              phone call without making this incre-
plete control over the pricing and can or-           mental billing policy clear to clients
der as little as 1 to 2,000 yards, with              before the fact.

 • Appliance repair businesses that                   • A car rental company that, instead of
   charge an arm and a leg to come and                  prorating by the hour, charges for an
   check out a problem, even though                     extra day when you keep a car an
   you have already accurately diag-                    hour or two too long.
   nosed it.

                  A Different Pricing Mechanism: Online Auctions

The Internet has provided the opportunity for      services to be auctioned at charitable
individuals to be sellers in a large market,       events. Such price-entertainment activity
particularly with the growth of online auc-        can be useful publicity.
tions. In the last few years, auction sites have     One caution is worth considering. In the
become enormously popular as garage sales          1990s the term “commodity” came into
and flea markets have migrated online. Be-         use with a specific meaning: a product or
sides allowing sellers and buyers to bargain       service that is so standardized in quality
over prices, selling items by auction also of-     and performance that it can be industrially
fers entertainment value. Case in point is         produced and replicated. The word has a
eBay, a lively online auction that has suc-        negative connotation because it means
ceeded in large part because it has figured        that the lowest cost producer will be the
out how to form an online community.               most successful in a business dealing with
   For small businesses, auctions can be an        a commodity. You can unintentionally
opportunity to obtain publicity for their          make your product or service appear to be
products and services. By auctioning off a         a “commodity” by offering too many
few examples of their product or service           samples in auctions. If your product or ser-
online, the business can not only generate         vice does become perceived as a com-
sales but gain exposure. This strategy is not      modity, you will be faced with other
new; it has been common since the mid              entrants in the market who will aim for the
1970s for businesses to donate products and        lowest cost of production.
                                                                        PRICINGS      4/ 9

D. Internet Pricing                             lower than buying a whole book. Nolo
                                                also sells downloadable eGuides which
If you’re in the business of selling informa-   contain focused information about specific
tion, particularly over the Internet, your      legal problems for users who simply want
pricing strategy needs an additional con-       to answer a particular question, rather than
sideration. Perhaps the biggest impact of       to buy a whole book. Like Nolo’s
the electronic revolution on media busi-        WebForms, the eGuides are considerably
nesses is the fact that information can now     less expensive than books.
be efficiently packaged and delivered to           One piece of the puzzle that’s still being
customers in entirely new ways. One of          worked out is how to efficiently collect mi-
the most popular developments has been          cro-payments online. Due to credit card
to deliver smaller packages of information,     transaction fees, it’s generally not profit-
such as individual articles from The New        able to conduct individual transactions for
York Times or single tracks from popular        anything less than $5 or so. Several com-
CDs. Besides developing a system for dis-       panies have been working on payment
tributing small information packages            systems to overcome this problem; at the
(many ingenious systems continue to be          moment, the most successful appears to be
introduced by pioneering online busi-           PayPal (, in which users
nesses), you’ll need to figure out how          set up a PayPal account connected to an
much to charge for them, and how to col-        online bank. As payment methods on the
lect payments efficiently.                      Internet improve, people will become
   One example of an information package        more comfortable paying twenty-five cents
tailored to the Internet infrastructure is      for just one article, photo or graphic; fifty
found at’s website. Nolo offers        cents for a favorite song or $2.00 per
downloadable WebForms which address a           month for a service that reminds them of
particular need such as buying a car or ex-     birthdays, events and personalized news.
ecuting a promissory note. For example,         As online customers increasingly expect to
one form allows the user to appoint a tem-      be able to purchase just what they want
porary guardian for their minor child           and nothing more, it’s important for online
who’s traveling abroad with someone             media purveyors to remember to break
other than the parent. The customer pro-        down your product or service into smaller
vides the information online, and the           packages and price them accordingly.
document is instantly generated and avail-
able to download, all for a price much

       Evaluating Your Pricing Policy

       YES NO

                Some customers complain about prices.
                Some of the trivial but necessary things I offer with my basic product
                or service (for example, keys, base stands, containers, refills, etc.) are
                priced at an amount that is more than people expect.
                My product or service is offered in enough different measures that by
                and large my customers can buy what they need.
                My product(s) can be bought in more than one unit of measure
                (bunches, pounds, bags, lugs, liters, cartons, gross, boxes).
                My services can be bought in time increments convenient to my cus-
                tomers (days, half-days, hours, minutes, etc.).
                My pricing practices are written down on: (flyer, price sheet, website,
                the wall).
                Any exceptions from my standard pricing practices are well explained
                (for example, senior citizen discounts are stated on a sign with large
                I estimate that approximately ____% of my customers pay for more of
                my product or service than they really need or want, because:
                I estimate that approximately _____% don't buy all of my product or
                service that they really need because:
                My volume discounts are:
                My volume discounts are available to:

 Chapter 5

 The Treatment of People Around You

A. Tracking Reputations via the Grapevine ........................................................ 5/2
B. How Employees Spread the Word .................................................................. 5/3
C. Common Employee Complaints ..................................................................... 5/7
    1. Unequal Treatment .................................................................................... 5/7
    2. Arbitrariness of Management ..................................................................... 5/8
    3. Exploitation ............................................................................................... 5/8
D. Handling Employee Complaints .................................................................... 5/9
E. Finding Out What Employees Are Thinking .................................................. 5/11
F. Suppliers ....................................................................................................... 5/13
G. Business Friends and Acquaintances ........................................................... 5/17
H. Individuals Who Spread Negative Word of Mouth About Your Business ..... 5/19
I. Your Behavior in Public ................................................................................ 5/20

                  he way you treat employ-      quite likely to have a friend who either
                  ees, suppliers and friends    knows Joe or knows someone who does.
                  is an important element in       Think of it this way. If you have 400
gaining and keeping the trust of your cus-      friends and acquaintances (although this
tomers. In fact, it is not an exaggeration to   sounds like a lot, if you include old school
say that positive relations with all of them    chums, business associates and casual so-
is one of the invisible foundations of any      cial acquaintances, you probably know
successful business. Why? Because how           lots more than that), and each of them
you relate to these people is routinely         also has 400, you have an immediate
communicated to your customers and po-          friendship network of 160,000 people.
tential customers.                              (There will probably be some overlap be-
                                                tween your friends and your friends’
                                                friends, but just the same, the numbers are
A. Tracking Reputations                         impressive.) These 160,000 friends of your
                                                friends are linked in the same way to 64
   via the Grapevine
                                                million people, or about one-third of the
Assume you live in Kansas City, Missouri,       adult population in the United States.
and a friend tells you about Joe Green, a          You can try a similar experiment yourself.
skilled bootmaker, who specializes in just      Randomly pick the name of any
the type of custom-made boots you want.         businessperson in the Yellow Pages of an-
Aside from Joe’s name and occupation,           other city. Next, ask any friends who live or
you know nothing about him. A few days          do business in that city if they know any-
later, when you decide to call Joe, you         one in that or a related business. If they do,
find you can’t get his number from your         call that person and ask about the person
friend because she’s left on an extended        whose name you picked. Chances are that
vacation.                                       if they don’t know the person you are look-
   You consider giving up the hunt, but         ing for, they can refer you to someone who
then, looking at your old battered boots,       can. If there is either very good or very bad
you wonder if you can find Joe yourself.        news about this person’s business, you’re
But no Joe Green is listed in the phone         even more likely to find him.
book. You decide to persevere and ask              The point of these exercises is not to
friends and acquaintances if they know          teach you to run your own detective
Joe. No luck. Your next step is to ask them     agency, but to illustrate that even in our
to check with their friends who might           large and complex society, we are still
know him. Believe it or not, at this point      amazingly connected to each other, espe-
there is an excellent statistical chance that   cially when we run a business that affects
you will locate Joe. One of your friends is     the lives of other people. It follows that it
                                                doesn’t take long for an interested party to
                                       THE TREATMENT OF PEOPLE AROUND YOUS           5/ 3

learn a lot about us from those we deal        his manuscript was returned after three
with regularly. If you mistreat your em-       days with the most perfunctory two-sen-
ployees or suppliers, they’ll spread the bad   tence rejection form letter. The pages of
news. Similarly, if you go out of your way     his manuscript appeared to have been un-
to treat these people well, the good word      touched and they forgot to take out his
spreads. Sometimes this                        cover letter. Needless to say an outraged
interconnectedness is hard to believe, be-     James has told everyone this story, includ-
cause just about all small business owners     ing other authors.
feel pretty isolated at times. And it’s true      How often have you been asked if an-
that the word about your business (good        other business pays its bills to suppliers on
or bad) may be dormant for a while, but        time? We know dozens of smaller compa-
when someone does inquire about your           nies that are reported to have poor em-
business reputation, it will wake up and       ployment practices, slow or erratic
promptly continue its journey from person      payments to suppliers and bad records
to person.                                     when it comes to dealing with indepen-
  Rasberry was at the local Hospice Thrift     dent contractors. These poor business
Store one rainy afternoon and the popular      practices are not an infrequent conversa-
store was filled with shoppers. A young        tion topic among businesspeople at trade
woman lugged a vacuum to the checkout          fairs, coffee shops or over lunch, and for
stand and the person next to her com-          good reason; most small business owners
mented, “You don’t want that vacuum.”          can’t afford to deal with people who don’t
She preceded to tell a horror story of her     pay their bills on time or who otherwise
motor conking out in the same model after      treat them badly.
only two months of use, and that when
she read the small print in the warranty it
excluded the motor. Other customers start-     B. How Employees
ing putting in their two cents worth, and at
                                                  Spread the Word
the end of ten minutes the thrift store put
the vacuum in the trash out back.              One of the easiest ways for anyone to
  James, a well-known author, had              learn about how you run your business is
worked on a book for over six years and        by talking to your employees. Because
in the process interviewed several hundred     your employees’ lives are so intertwined
people. A publisher was mentioned to him       with yours, and because you affect them
by several people as being “just perfect”      so directly, your treatment of them will al-
for this book. Having published many           most automatically be communicated to
books in the past, he could pretty much        their friends and family, even if inadvert-
choose his publisher but decided to give       ently. And remember, because your em-
this one a try. Imagine his dismay when        ployees spend more time with you than

anyone outside of their immediate family,           • Whole Foods operates with a wide-
they know about you and your business in               open financial system. Sensitive fig-
a way few others ever can.                             ures on store sales, team sales, profit
  How you run your business may be re-                 margins, even salaries, are available
ported indirectly when employees make                  to employees in every location. The
such statements as:                                    company shares so much information
   • “I’m exhausted; the inventory is such             so widely that the SEC has desig-
      a mess that I had to work late last              nated all 6,500 employees “insiders”
      night.”                                          for stock-trading purposes.
   • “I don’t know when I’ll get a vaca-          To return to our Coors beer example
      tion; no one has made an entry in         from Chapter 1, in an amazing series of
      the general ledger in three months.”      public statements, the Golden, Colorado,
   • “Don’t phone this week; everyone’s         company so alienated many of its Chicano
      nerves are on edge. Two people quit       employees that their union led a boycott
      a few weeks ago, and we are trying        against the company.
      to do their work as well as our own,        Syndicated business columnist Milton
      and it looks like the boss isn’t going    Moskowitz, along with co-authors Robert
      to replace them.”                         Levering and Michael Katz, responded to
   • “The boss poor-mouths all the time,        the concern so many Americans feel about
      but he’s always getting twenties out      the quality of the companies they work for
      of the cash box.”                         by writing a best-selling book. In The 100
   • “I have to hold my paycheck for a          Best Companies to Work For in America
      day because there isn’t enough            (Doubleday, 1993), the authors describe
      money in the bank to cover it.”           the practices of 100 American companies
  If you have any doubt about how fast          in detail. Working conditions, pay, ben-
word of your treatment of employees is          efits, firing and promotions policies and all
passed along, consider these examples:          sorts of other information of importance to
   • Many American Jews, as late as the         employees are discussed.
      1950s, avoided one major brand of           How did the authors get all their “inside”
      gasoline because of their belief that     information? While the task was time-con-
      the company had an anti-Jewish em-        suming, it wasn’t as difficult as it might
      ployment policy in the 1930s.             seem. The reputations of businesses, even
   • TWA was one of the first major air-        those with only a few hundred employees,
      lines to hire black pilots. Years after   such as Celestial Seasonings and Odetics
      other airlines had also broken the        (both of which were included in the 100
      color barrier, many black Americans       best list) are really quite well known.
      still went out of their way to patron-      Not only do employees know a lot
      ize TWA.                                  about their own employers, they know a
                                                great deal about the employment practices
                                           THE TREATMENT OF PEOPLE AROUND YOUS                5/ 5

of others in their line of business. For ex-        practices. The same was true for compa-
ample, Moskovitz, Levering and Katz                 nies with policies that encouraged employ-
learned that companies with outstanding             ees to study for advanced degrees (Bell
reputations in promoting blacks                     Labs), companies where retirement poli-
(Cummings Engine, Levi Strauss and                  cies are outstanding (Johnson Wax), and
Polaroid) and women (Hallmark Cards,                even companies that have great parties
Federal Express and Nordstrom) were                 (Advanced Micro Devices) or employee
widely known and respected for their                gardens (Control Data).

            Cody’s Bookstore: “Finding Good People and Keeping Them”
 Cody’s Bookstore in Berkeley, California, is      ties they serve which includes treating em-
 as much an institution as the university in       ployees fairly.”
 whose shadow it sits. Its fame for diversity         Ross is pleased that his 60 employees
 and completeness of stock is rivaled only         elected to join a union, because “it keeps
 by the reputation for erudition and exper-        management more professional and consis-
 tise its employees enjoy.                         tent in our treatment of employees.” He
    The bookstore trade has traditionally          thinks that encouraging good, experienced
 been noted for low-paying salaries. The           staff to stay by paying a decent wage is
 work is desirable, and employees are often        money very well spent. “In a bookstore with
 viewed as an “easy come, easy go” propo-          over 140,000 titles,” he says, “new employ-
 sition. This causes high turnover, low mo-        ees just aren’t very valuable. Finding good
 rale and a perpetually inexperienced staff.       people and keeping them is the key to a
 Anti-traditionalist Andy Ross, owner of           store’s success.” In keeping with this theory,
 Cody’s, is a believer in paying as high a         Cody’s employees receive, besides a rela-
 wage as possible and treating his employ-         tively high salary, a profit-sharing plan in the
 ees as his most valuable resource. He even        form of a healthy annual bonus based on
 did several surveys to make sure that his         merit (judged by Ross and the five employee
 wages are high relative to other bookstores.      managers) as well as the store’s profits.
 And this kind of care for employees pays             Another way Ross has found to maintain
 off in healthy sales, high employee morale        good employee relations is to encourage
 and customer loyalty.                             their participation in the store’s operations
    At a time when many small bookstores           by delegating responsibility while trying not
 are going out of business due to the so-          to look over too many shoulders. “Besides
 called “superstores,” Cody’s continues to         the fact that employees come up with great
 grow. Ross’s perspective is that                  ideas, their morale is an important ingredi-
 “bookselling at its best is not just a job. In-   ent for the business to run right—a factor
 dependent booksellers bring their own             that is often overlooked in the bookstore
 unique sensibilities rooted in the communi-       business,” he says.

  In a small business, the payment of         then pays at least slightly more, even if
wages and benefits takes on particular im-    they have to cut their own income to do it.
portance. Employees need to feel they are     They reason correctly that their employees
being treated fairly. An open book policy     will be proud of the fact that they are val-
in which everyone knows what everyone         ued highly and as a result will not only
else makes, from the boss to the teenaged     work harder but spread the good word.
delivery boy, is an excellent idea, espe-        Malden Mills, in Massachusetts, produces
cially when the business genuinely tries to   Polartec®, a fabric made from recycled
pay people fairly. (See the discussion of     plastic bottles. It is an exemplary company
“openness” in Chapter 6.)                     known to be a trend-setter in employee/
  We all know of companies (big and           employer relations and to have an incred-
small) where most of the employees            ibly high rate of employee productivity.
scrape by on minimum wage while the           Aaron Feuerstein, the owner, a spry man
owner keeps the amount of his own pay         of 70-something who quotes Shakespeare,
and benefits a secret, plays golf twice a     is dedicated to improving the earth’s envi-
week during business hours and drives a       ronment and pays his employees well.
Mercedes to work. This kind of behavior       Some years ago there was a big fire at the
almost always results in low employee mo-     mill, and business was shut down.
rale and gives pause to customers. Cus-       Feuerstein informed his worried employ-
tomers will consciously or unconsciously      ees that their wages and salaries would be
ask themselves whether the fact that the      paid through the period of reconstruction.
employees are treated unfairly means that     Needless to say, his employees love their
when push comes to shove, their concerns      boss, and the mill was up and running
will also be held hostage to the owner’s      within the month. The feelings of the em-
needs. On a more positive note, we know       ployees toward Feuerstein, the mill and
of more than one small business owner         the product is demonstrated through high
who regularly checks on wages paid by         productivity, love of the company mission
similar businesses in their community and     and incredible loyalty.
                                          THE TREATMENT OF PEOPLE AROUND YOUS           5/ 7

                     Job Applicants Deserve Good Treatment, Too

 Don’t forget to extend good practices to       monotypeset work and then gives them a
 your hiring process. Unfortunately, when       gift of a hand-pulled page done by a famous
 it comes to interviewing prospective em-       typographer. Other creative businesspeople
 ployees, many companies don’t pay              develop similar techniques to be sure the
 much attention to people’s feelings. They      people they consider for a job have a good
 forget that each applicant will learn          interview experience.
 enough about their business to form an            These gestures make a great deal of sense
 opinion and spread it. Pay attention to        for two reasons. First, they acquaint others
 this in the light of its effects on personal   in a personal way with your business and let
 recommendations. For example, one              them know you care about people. Second,
 small electronics manufacturing company        a large proportion of the people interviewed
 we know gives a nice sample as a gift to       may find work in your field, and you are
 everyone applying for a job. This helps        very likely to have to deal with them in the
 cushion the fact that, inevitably, a major-    future.
 ity of those interviewed are not offered a        Use the same concerned approach with
 job. Another very effective approach is        occasional and part-time workers, freelancers
 used by a printer we know, who shows           and others who come into contact with your
 job applicants examples of his                 business on an occasional basis.

C. Common Employee                               1. Unequal Treatment
                                                 An unequal treatment complaint is a syn-
The most common areas of employee                onym for any differences in pay, work
complaint are unequal treatment, arbitrari-      rules, expense accounts, job opportunities
ness of management and exploitation. Let’s       and perks that an employee doesn’t under-
examine the causes of each of these              stand or accept. The best medicine to both
briefly, and look at some suggestions that       cure and prevent the recurrence of this
should help avoid, or at least ameliorate,       nasty infection of your workplace is to em-
problems.                                        brace a system of open books and an
                                                 open management style, complete with
                                                 well-defined personnel policies and fre-
                                                 quent performance reviews. And keep in

mind that, legally, company policies on va-    3. Exploitation
cation, sick leave, promotions and other
important matters must be applied in a         In the small business world, complaints
nondiscriminatory manner.                      that management is exploitive usually
                                               point to an atmosphere in which financial
                                               data is kept secret and there is a percep-
2. Arbitrariness of Management                 tion that some employees (often the own-
                                               ers) get a disproportionate share of the
A complaint that management is arbitrary       financial returns. This sort of complaint
stems from much the same problems, but         also commonly occurs when employees
also usually signals that important business   observe customers and suppliers com-
policies are being developed in secrecy, so    plaining about the treatment they receive
that employees don’t know what the busi-       from management with no apparent re-
ness is doing and why.                         dress or explanation from the company.
   One good example is a public relations      You’ll often hear this kind of complaint in
firm whose top management decided to           businesses where it is routine to use highly
drop one client, whom their financial          competitive language like:
records showed was unprofitable, and put           • “No matter what else you do, you
extra energy into another one which was              have to win.”
more profitable. Unfortunately, the infor-         • “A lot of people are out to screw
mation was secret and the decision was               you; the only way to handle that is
never explained to the rest of the staff.            to screw them first.”
The company dropped by the P.R. firm               • “As long as the bottom line is
was in the recreation business and was re-           healthy, there is nothing to worry
spected by the staff for a number of good            about.”
policies, while the one that got the extra         • “What they don’t know won’t hurt
attention was in a business that several             them.”
employees of the P.R. firm didn’t respect.         • “If we didn’t do it, someone else
Because the reasons for the decision were            would.”
never explained or discussed, several em-         Again, the best methods of prevention
ployees quit.                                  and cure for employee feelings of exploi-
   An open management style, involving         tation include a commitment to open fi-
employees in decision-making to the maxi-      nancial records and an effort to
mum extent possible, is the best way to        compensate employees fairly.
prevent this sort of complaint from devel-        One company that successfully follows
oping in the first place and curing it if it   these practices operates a resort/confer-
does (see Chapter 6).                          ence facility near Tucson, Arizona. When it
                                       THE TREATMENT OF PEOPLE AROUND YOUS          5/ 9

began, the company took over and remod-        D. Handling Employee
eled an old and respected hotel. The exist-
ing staff was initially careless and did not
respond to the new management group.           How you handle employee complaints is
Finally, the resort manager, with the ap-      central to how your business is viewed by
proval of the owners, posted the monthly       employees and ultimately the public,
financial report in the kitchen area, where    which hears about how you treat them.
employees could see it. Not one employee       Creating a positive way to encourage and
asked any questions for almost two             deal with complaints is a sign to your em-
months. Finally, at a newly organized bi-      ployees that you care about them and that
monthly staff meeting, one of the oldest       they are appreciated. Again, the idea is
workers asked why the figures showed the       simple. If employees truly feel that their
business was losing money and expressed        concerns are taken seriously, they will
concern that the business could not sur-       walk an extra mile (or maybe even ten) for
vive the coming months. The key financial      your business because they will regard it
issues were discussed, and the concerns of     as their business too.
management that sloppy staff performance          Perhaps the best example of the value of
was contributing to the problem were           a procedure for handling employee com-
aired and fully understood by every em-        plaints is a company with one of the worst
ployee. Morale changed overnight. Worker       records: the United States Postal Service
productivity improved so much it amazed        (USPS), a semi-private organization that
even the workers themselves. The out-          was partially separated from the U.S. gov-
come was visible in the quality of upkeep      ernment in the late 1960s. Because the
of the grounds, the dining room service,       USPS was originally a government bureau-
and particularly in the behavior of the        cracy it retained a rigid structure that was
front desk staff. Before long the figures      inappropriate for the type of employee re-
posted on the kitchen wall showed a            lations that prevails in the commercial
healthy profit.                                market. The consequence became evident
                                               in the late 1980s and well into the 1990s
                                               when several USPS employees killed their
        The Employer’s Legal Handbook, by      supervisors and other employees in the
        Fred Steingold (Nolo), explains your   workplace. The American public became
legal responsibilities as an employer, in-     greatly alarmed as the horrors of work-
cluding your duty to treat employees in a      place homicide spread to other industries.
fair, nondiscriminatory manner.                During this time the phrase “going postal”
                                               was commonly used to mean workplace
                                               homicide. TV comedians suggested that

when a flag flew at half mast over a Post       Finally, a tight procedure to keep com-
Office this was a sign that it was hiring       plaints confidential is obviously a crucial
new personnel.                                  part of any formal complaint procedure. In
   All of this changed when the USPS intro-     the best circumstances, an employee com-
duced employee mediation services in the        plaint process should also include an ap-
late 1990s. Throughout the United States,       peals process for serious matters where
in hundreds of cases per week, postal em-       management’s judgment may warrant a
ployees are offered free mediation ser-         second opinion.
vices, with paid time off to mediate all          If you don’t have a good grievance pro-
disputes and disagreements with manag-          cedure, an employee who feels there is no
ers, supervisors and fellow employees.          internal structure to deal with a problem
The consequences have been very positive        about termination, demotion or salary may
and as the success becomes recognized,          seek help outside the business. This can
similar commercial enterprises have copied      often mean either that employees will sue
the Postal Service.                             you, or try to organize a union. For ex-
   In most small businesses, there is an in-    ample, we know a small wholesale busi-
formal complaint structure. An employee         ness which recently—unilaterally and
who doesn’t like something tells the boss       without consultation—changed a series of
or a supervisor face-to-face. This process is   employee rights and benefits. In the view
generally workable as long as the prob-         of management, the benefits conferred on
lems are minor and the business small.          the employees by the change were much
However, when a business employs more           greater than what the employees lost in
than five or six people, a formal process,      perks. So when the employees turned to
including personnel reviews, makes it           the Teamsters Union, management was
easier to deal with a wide array of prob-       initially both flabbergasted and angry. It
lems that are not so minor.                     never occurred to them that the employ-
   Even in very small businesses, a formal      ees, suddenly facing a whole new set of
employee grievance process should be            work rules, some of which they thought
written, posted and given to each em-           were very unfair (for example, loss of pay
ployee to sign. The grievance procedure         for lunch hour), went outside the company
should specify where and how to com-            for help because there was no fair griev-
plain about all types of potential problems.    ance and appeal procedure or, for that
It should discuss in detail how the com-        matter, any process that allowed them to
plaint will be investigated and, if neces-      communicate their position to manage-
sary, be formally considered and resolved.      ment.
                                         THE TREATMENT OF PEOPLE AROUND YOUS              5/ 1 1

                        Sample Employee Grievance Procedure

 Here is material excerpted from the formal      pany president and another employee cho-
 grievance procedure of a 20-person soft-        sen by the person filing the grievance. There
 ware development company. It isn’t a com-       is no appeal for final decisions of this group.
 plete grievance plan, but illustrates some of      Grievances concerning ethical behavior
 the issues that should be covered.              of employees or management concerning
   Grievances concerning personnel re-           termination of employment, matters of ille-
 views: The person with a grievance is to        gality, public issues, discrimination: The
 write a letter to the chair of the grievance    procedures shall be the same as above, ex-
 committee requesting a hearing time and         cept that the full grievance committee shall
 date. The chair will hear the matter, put       be called. The person filing the grievance
 comments in writing for the employee per-       letter can specify individuals to be excluded
 sonnel file and take whatever actions are       from the committee where their presence
 necessary in the matter. No further appeals     would directly bear on the grievance matter.
 are provided. If the chair of the grievance     Appeal on the decision of the committee
 committee is a direct supervisor of a party     can be filed with the Chairperson of the
 involved, the latter shall be sent to a com-    Board, within two weeks of the final deci-
 pany lawyer who is the alternative chairper-    sion of the grievance committee, and the
 son.                                            Board shall as a whole make a final decision
   Grievance concerning salary, benefits or      at its earliest convenience.
 office working conditions: Same as above           All personnel involved in the grievance
 except that the grievance committee chair       process are expected to maintain confidenti-
 shall include in the deliberations the com-     ality when requested.

E. Finding Out What                              ment of trust so that your employees will
    Employees Are Thinking                       feel confident in saying negative as well as
                                                 positive things.
One good way to find out what your em-             If your business is larger, you may want
ployees think about you and the practice         to rely, at least to some extent, on a writ-
of your business is to ask. If you have only     ten questionnaire. Here is a sample which
a few employees, you may want to talk to         you can adapt to your needs. Give it to
each individually or have a series of meet-      employees and allow anonymous re-
ings, taking care to establish an environ-       sponses.

       Employee Questionnaire

       The working conditions here are generally…

       The working conditions, compared to other jobs I've had, are…

       Handling of serious employee problems that are brought to managers is…

       When most employees describe the business management they say…

       I know the established policy for handling employee problems and grievances.

                   YES     NO     THERE ISN'T ONE                          It is…

       I know the established policy for handling employee wage disputes.

                   YES     NO     THERE ISN'T ONE                          It is…

       I know the established policy for handling conflicts between employees.

                   YES     NO     THERE ISN'T ONE                          It is…

       When someone is fired most fellow workers know the circumstances
       in which the employee can appeal the decision within the company.
                   YES     NO     THERE ISN'T ONE      The appeal process is…

                                                                                             YES        NO

       I am paid fairly.

       I know what others are paid.

       Most employees know their jobs.

       Most employees understand the direction, policies and goals of the business.

       Comments and suggestions for improving working conditions:

                                          THE TREATMENT OF PEOPLE AROUND YOUS           5/ 1 3

F. Suppliers                                      countants, bankers, maintenance people,
                                                  office supply stores and a variety of neigh-
It has long been remarked that the tallest        borhood businesses. Those of you in retail,
buildings in a society reflect its central con-   wholesale or restaurant businesses must re-
cerns. Only a century ago, church spires          late to many more.
defined the skyline. They were replaced by           From the marketing vantage point, sup-
the buildings of major industrial concerns.       pliers can be seen as similar to family
Today, bank buildings, insurance compa-           members who share the same house. Your
nies and office towers filled with invest-        actions have immediate and important ef-
ment companies and law firms dominate             fects on each other. When at home a child
the rest. A focus of all these businesses is      leaves the cap off the toothpaste, the next
credit and credit-worthiness.                     person must deal with the dried-up glob
   As a nation we have been taught to trust       on the end of the tube. Similarly, your fail-
the integrity of these giant financial enter-     ure to pay a printing bill on time means
prises because of their track records. How-       your printer may have to deal with the
ever, some of these institutions, such as         nasty mess of not having enough money to
savings and loans, have proved themselves         pay his bills.
unworthy of trust. A number of huge but              Both at home and in the business com-
financially troubled banks have been sold         munity, how you handle problems is
to other huge banks to avoid failure. It may      quickly noticed by others. At home, if you
not be too soon to wonder what institu-           yell and scream and make the erring child
tions will replace the banks on the top           feel miserable, chances are she will act out
floor of urban America.                           her resentment in some way. The same is
   When it comes to small businesses,             true when problems develop in business. If
people are judged more on how they treat          you make little or no effort to view prob-
their creditors than on how big their head-       lems from your suppliers’ point of view,
quarters is. Having a good record in paying       you have no right to be surprised if your
bills is insurance against negative stories       relationships with them deteriorate. The
being circulated about your small business.       surprising thing is that people so often ig-
Having an extra-good record can be a posi-        nore their suppliers’ needs—in spite of the
tive marketing tool that can work to im-          fact that even a modest effort to communi-
prove your business when the people you           cate about your business difficulty will go a
deal with spread the positive word, as they       long way towards solving it.
inevitably will.                                     The worst mistake a small business
   Every business has suppliers. They vary        owner or manager can make is to ignore
greatly depending on the business, but al-        the fact that many of your primary business
most everyone must deal with lawyers, ac-         concerns are, at bottom, the same as those

of the businesses you deal with. This is         pay the printing bill. Given this somewhat
particularly true when it comes to taking in     marginal financing scheme, it is not surpris-
enough money to meet payroll on time,            ing that printers who deal with small pub-
pay off bank loans and generally fulfill fi-     lishers routinely keep tabs on how each is
nancial obligations. Far too often, small        doing. They constantly tune into the book
businesspeople become so manic about             business grapevine to check on who is
making their accounts balance at the end         keeping up on their accounts payable and,
of the month that they forget that their sup-    more important, who isn’t. It’s amazing how
pliers have the same needs, that their ac-       quickly word gets around when someone
counts payable are someone else’s                begins to slip up. The reason that this word-
accounts receivable.                             of-mouth system works so well is that all
   Think of it this way: When it comes to        sorts of people (bookstores, wholesalers,
economic survival, businesses, especially        graphic artists, freelance editors and dozens
small ones, are like links in a fence. If one    of others) in addition to printers absolutely
business doesn’t fulfill its obligations, the    need to know that they are dealing with a
fence is weakened. If a large number don’t,      solvent publishing house, and take the time
the fence collapses. For this reason, every      to find out.
small business owner knows which ac-                When even a modest amount of negative
counts pay promptly, carefully and consid-       information about a particular publisher is
erately. Surely, in your business, even small    spread, the results can be disastrous to that
accounts take on disproportionate promi-         business. Part of the reason for this is that
nence if they pay you slowly and always          books (unlike most types of merchandise)
make excuses. By the same token, you can         are typically returnable by a bookstore to
safely assume that, though you may be only       the publisher for at least a year after pur-
a small account to someone else, they know       chase—but obviously not if a publisher de-
very well how you treat them. The criteria       clares bankruptcy. If a bookstore, or worse,
they use in judging you are the same ones        a large chain of stores, learns that a particu-
you use: how promptly you pay, and how           lar publisher is way behind in its bills, they
honest and forthcoming you are in explain-       are likely to make a special effort to quickly
ing the reasons for any delays.                  return all of that company’s overstock, hop-
   How does all of this directly affect mar-     ing there is still time to be reimbursed.
keting? Let’s consider the book business.           This sort of loss of trust can quickly
Small publishers, of which there are literally   snowball; we’ve seen it sink several pub-
tens of thousands, often pay the printer late.   lishing companies that might otherwise
Part of the reason for this is that many of      have been able to cope with their short-
these publishers depend on sales from the        term financial problems. For example, the
first few thousand copies of a new title to      computer book field went from boom to
                                        THE TREATMENT OF PEOPLE AROUND YOUS           5/ 1 5

bust between 1982 and 1984. Several small       other. Accordingly, whenever we give ad-
publishers failed and others teetered on the    vice to small businesses with cash flow
brink of insolvency as nervous bookstores       problems, we urge them to immediately
quickly returned perfectly salable books to     notify their suppliers, by phone, about the
companies rumored to be in trouble. The         problem, explain their plan to solve it, and
bookstores sensibly feared that if they de-     ask for permission to delay or modify pay-
layed and the books didn’t sell, the pub-       ments. We have never seen a reasonable
lisher would be out of business.                request along these lines refused. Often,
   Two revolutions have occurred in the         this sort of interaction actually improves re-
book business that reflect the way that         lationships. We know of several instances
commerce and technology have responded          in which the positive communications that
to these supplier trust problems. The first     developed during a crisis resulted in sup-
was implemented by the pioneer of online        pliers helping their customers finance their
book sales,, who established         expansion once the crisis was past. In one
a fully automated online publisher account-     instance, when the Japanese economy de-
ing system. The system orders a small           clined for five years in the early 1990s, an
number of books to be kept in Amazon            American company that sold pre-fab
warehouses, and automatically reorders by       houses to the Japanese was encouraged by
e-mail as books sell. The system pays auto-     the cooperative Japanese distributor to shift
matically every 60 days and the publisher       the business in several directions, all of
can track the entire accounting online. The     which resulted in new and rapid expansion
second innovation has been publishing-on-       when the Japanese economy finally picked
demand. Publishing-on-demand uses com-          up in 1996. In other instances, suppliers
puter printing technology to print one          who were kept in the picture liked what
book at a time. The publisher pays the          they learned and actually invested in the
printer for the set-up costs for a book, and    business.
then orders any number of books as the             If you want to know how your suppliers
books sell. This has fit in perfectly for the   feel about you, why not ask? Here is a
niche markets of small publishers with          questionnaire you may want to give to sev-
small market books. Both of these revolu-       eral of them.
tions occurred in response to the problems
of supplier trust and credit.
   Of course, most businesses face a cash
flow problem at one time or another, and
suppliers help finance these periods. There
is nothing wrong with this as long as all
concerned are honest and open with each

       Questionnaire for Suppliers

       I have found in my dealing with ______________________________________________

                                                   NAME OF YOUR BUSINESS

       that you and your key employees are generally:

       Accessible when I need you…

       Reliable in your payments and financial projections…

       Polite in your general business dealings…

       Reliable in doing what you promise on time…

       Able to handle any problems with your product and services satisfactorily…

       Careful and neat when it comes to recordkeeping…

       Generally trustworthy in all dealings…


                                       THE TREATMENT OF PEOPLE AROUND YOUS           5/ 1 7

G. Business Friends and                        ing strategy because they have a predispo-
   Acquaintances                               sition, often a strong one, toward seeing
                                               your business prosper. Unfortunately, de-
There is a direct connection between a         spite this predisposition, we often hear
good small business marketing plan and         friends, or even business acquaintances,
how your friends think about and under-        say something like this: “I don’t really un-
stand your business.                           derstand what you do or how your busi-
   A friend is someone who is connected to     ness as a public health research (or solar
you by mutual esteem, respect and affec-       energy, land use, or waste disposal, etc.)
tion. Acquaintances are people to whom         consultant works.” Or, “I know you distrib-
you have been introduced and are socially      ute shoes (or books, candy, tape recorders
free to speak with again by recalling an       or trees), but what that really means is a
earlier encounter. This latter group in-       mystery to me.”
cludes, for example, school classmates, fel-      The point should be clear: Friends can
low employees, members of the same             be extremely important in your effort to
military unit and people you come into         market your product effectively, but only if
friendly contact with at trade meetings,       you give them a reasonable chance to
conventions and continuing education           help. How do you do this? By keeping
courses.                                       your social network aware of your opera-
   Satisfied customers have some of the        tion—your joys and disappointments as
qualities of friends. In at least one impor-   well as the nuts and bolts of how your
tant way they share values with you, since     business works. Sometimes months go by
you both view your business with esteem.       without talking with our friends about busi-
However, because your relationship is          ness. In order for friends to recommend us
probably limited by a business context,        we have to make the effort to keep them
they are in most instances more like ac-       current. It’s worth the effort to periodically
quaintances. Certainly, like acquaintances,    make a phone call or fax a poem or car-
they have the right to approach you with-      toon you think a friend would enjoy along
out a new introduction. They just call up or   with an update about any changes in your
walk up and say, “You fixed my plumbing        business. An added benefit is that it helps
a few years ago and did a wonderful job.       keep your friendship network healthy.
How’ve you been doing lately?” They even       When you e-mail business associates news
have the right to subject us to bad jokes.     about your business be sure to include
“You’re the guy with the shade shop. I’m       your friends on the list. Friends will often
glad to see you hanging in there.”             let you know when you are going in the
   All of your friends, family and acquain-    wrong direction, and will be there to listen
tances should be involved in your market-      and help put your problems in perspective.

Just as important, they will know enough        recommendations without a strong friend-
to really appreciate your successes and cel-    ship and peer group network. For others
ebrations. And, of course, they will actually   (say a drain cleaning service or a butcher
help you sell your product or service.          shop), the good opinion of friends may not
   For example, if you are a landscape ar-      be so crucial as is listing the availability of
chitect and often lunch with the lawyer in      your service in all the right places, but it is
the next office who shares your enthusiasm      still helpful.
for soccer, don’t forget to make her knowl-        Even a dentist, however, can do a great
edgeable about the nitty-gritty of what you     deal to establish a good friendship network
do, how you get business, how much you          in a hurry. One extremely kind and good-
charge and so on. Sooner or later your          hearted dentist we know did just this by
lawyer friend will find herself in contact      following his best instincts. New to a
with someone who needs some landscap-           strange town, with few friends and very
ing done—perhaps a business which con-          limited resources, he spent every spare mo-
sults her about zoning problems connected       ment visiting old people’s homes and fix-
with a new building. When this occurs,          ing the teeth of the indigent residents free.
you want her to be able to mention your         After a few months, when it was apparent
business confidently and knowledgeably.         that he was sincere, some of the people
Be sure to remember to tell others that         who worked at the convalescent homes
your business benefits from referrals and to    began to call him for appointments and re-
show appreciation when they give you one        fer their friends. The local dental society
by expressing thanks in person or by send-      was so proud of his work that established
ing a note, flowers, a gift certificate or      dentists began to refer their overflow.
whatever is appropriate.                        Within a couple of years, our public-spir-
   The opinion your business peers have of      ited friend had enough patients that he was
you is also very important to your busi-        able to buy the old Mercedes he had al-
ness. Being in contact with people in your      ways coveted. To his credit, however, he
field is one of the best ways of learning       still drives it over to one or another of the
about new products and innovations that         old people’s homes a couple of afternoons
may be directly useful to you. In addition,     a month and fixes teeth for free.
consulting people in your peer group net-          La Blue’s Cleaners in Sebastopol, Califor-
work is one of the common ways potential        nia, has been in business for more than
customers check out your business as part       40 years. In addition to providing pick-up
of deciding whether or not to patronize         and delivery service to homes and offices,
you. For some businesses (for example, a        they are known in the community for ex-
new pediatrician or chiropractor in town),      tending a hand to the temporarily unem-
it may be difficult to create good personal     ployed. If you are out of work they will
                                         THE TREATMENT OF PEOPLE AROUND YOUS           5/ 1 9

custom dry-clean and press one suit or one       to you, you usually decrease the effect of
dress and launder two shirts or blouses at       her malice. You also let others know that
no charge. This information is posted on a       you are objective about the problems in
sign inside the store which says “This is        your relationships. Finally, your efforts to
our gift to you so you will look your best       be more than fair will probably get back to
at your next job interview.” Customers re-       the person and may cause her to treat you
ally appreciate it, and you can be sure that     more fairly in turn.
when they are back among the employed               Second, mediate or arbitrate your differ-
they bring their business to La Blue’s.          ences with this person, if it’s appropriate.
                                                 Mediation is a process in which arguing
                                                 parties select someone who helps them
H. Individuals Who Spread                        reach their own agreement. In arbitration,
   Negative Word of Mouth                        the parties agree in advance to let some-
                                                 one else make the final decision. Both
   About Your Business                           techniques are good ways to avoid long-
                                                 term hostility and the negative word of
Most of us want to be liked, if not consid-
                                                 mouth that flows from it. And when a
ered perfect or adorable. However, unless
                                                 business openly promotes these alternative
you are a very rare person indeed, you
                                                 dispute resolution techniques in an honest
probably have at least a person or two
                                                 effort to resolve differences without initiat-
buried somewhere in your network of per-
                                                 ing a formal court action, it gains a reputa-
sonal relationships who consider you the
                                                 tion for honesty and fairness.
first cousin to a scorpion. It’s important to
                                                    Even if the person who dislikes you
have a strategy for dealing with those few
                                                 won’t try to resolve a dispute through me-
misguided souls who have chosen you or
                                                 diation or arbitration, at least others af-
your business for their hostility. This is im-
                                                 fected by the dispute will know you have
portant, of course, because negative word
                                                 done your best. It takes a thick-skinned in-
of mouth about a business, especially
                                                 dividual to resist the pressure of his peers
when someone goes out of his way to
                                                 to work things out.
spread the bad word, can have truly bad
                                                    Despite this good advice, many people
long-term consequences to your business.
                                                 find it hard to admit some people feel
   Here are two strategies that often work       negatively about them. A four-year-old
well:                                            friend, Joshua, has a philosophy that may
   First, emphasize the positive attributes of   be helpful in encouraging you to do this
the person who dislikes you whenever             exercise. One day Joshua came home from
possible. When you emphasize the posi-           pre-school and told his parents about a kid
tive attributes of someone who is hostile        who had called him a series of truly ugly

names. The parents, who were themselves        District Attorney and judges in their county
somewhat upset, were surprised when            and even the lawyers who had sued them.
Joshua indicated very little concern. When     Simons and her colleagues invited one of
the parents questioned him about his feel-     the lawyers to the local meetings of the
ings, Joshua replied, “He just needed          California Association of Independent
someone to pick on. He really doesn’t          Paralegals. They had him to lunch. They
know me.”                                      invited him to speak at their meetings. He
   We also like the approach of Virginia       invited them to speak to a bar association
Simons, an independent paralegal in            lunch. They told him that if he thought
Bakersfield, California, who has had a lot     they were doing a bad job that they were
of experience dealing with attacks from        open to having him teach them to do bet-
bar associations. She was sued by a bank-      ter. The District Attorney’s office is now a
ruptcy trustee in federal court, charged       member of their advisory committee.
with practicing law without a license be-
cause she had helped customers prepare
their own bankruptcy forms. She told each      I. Your Behavior in Public
of her customers what was going on and
that the suit was being brought in a effort    Two people were sitting behind us on an
to put her out of business, not because of     airplane talking about a client in very nega-
incompetence on her part. Several of her       tive terms. The conversation was so vitri-
colleagues, who were also targeted by the      olic that our ears perked up. When they
local bar, joined forces with Simons. They     mentioned the name of the client and the
got their clients to sign petitions on their   name of their own firm (a national ac-
behalf. They went to bankruptcy court          counting organization), we were shocked.
when it was in session and took notes as       It didn’t speak very well of their own com-
to any unequal treatment given to non-         pany to be so negative about a client in a
lawyers representing themselves. Twenty-       public place, and some of the mud they
five people from all over California           were slinging stuck to their company.
showed up in court to support them, and           A far more blatant example of how im-
they won their case.                           portant our public behavior can be to our
   Instead of gloating or spreading negative   business success occurred during a San
word of mouth about the bar association,       Francisco restaurant strike, when a psycho-
they decided to open up the lines of com-      therapist punched a picketer. A prominent
munication with their opponents and con-       newspaper columnist picked up the item. It
vince individual lawyers that many people      certainly wasn’t good for his word of
couldn’t afford them and needed the ser-       mouth in the psychotherapy business.
vices of paralegals. They contacted the
                                           THE TREATMENT OF PEOPLE AROUND YOUS          5/ 2 1

   It’s often difficult to think of ourselves in   and respond by beating up the offending
a public sense, always being a representa-         machine, anyone present who recognizes
tive of our business; to know that our lan-        you will probably view you as a highly
guage, appearance and personal dealings            volatile person. (This, of course, is unfor-
shape our customers’ attitudes. But it’s           tunate, we hasten to add, because kicking
true, from small town America to the larg-         a machine that has done you wrong can
est city.                                          sometimes feel very good.) In the back of
   A businessperson must always be “on,”           their mind they may hold this image of
to a certain extent. For example, if when          you for a long time, and it may shape their
making copies at the local self-serve copy         future dealings with you. s
shop, you lose 50 cents in the coin slot
 Chapter 6

 Openness: The Basis of Trust

A. Financial Openness ....................................................................................... 6/3
B. Physical Openness ......................................................................................... 6/5
C. Openness in Management ............................................................................. 6/6
D. Openness With Information .......................................................................... 6/8
E. Openness With Ideas ................................................................................... 6/11

           penness in business is definitely     sphere of secrecy. On the other hand, a
            not a strategy taught in business    business that is obviously open with its
            school. Sadly, the currently pre-    customers is so refreshing that this policy
vailing view is that it’s best to “play your     itself stimulates positive recommendations.
cards close to your chest” about almost ev-         Promoting openness in your business
erything from the way a product is made          counters the accurate public perception
or a service delivered to profits to pay         that most businesses watch out for their
scales to who qualifies for what business        own interests while often ignoring those of
perks. This is a serious mistake. Openness       their customers. For many years, this tradi-
builds customer trust, which, as you             tion found support in our law under the
should know by now, is the prime requi-          doctrine of caveat emptor, or “let the
site of any marketing without advertising        buyer beware.” These days, courts and
campaign.                                        legislatures have shifted much of the re-
   If you doubt that openness leads to           sponsibility for selling safe products to
trust, consider the public sector. These         business, but there is still a widespread
days we require public officials to report       feeling in the business community that if
their campaign finances and top officers in      consumers aren’t canny enough to watch
publicly held corporations to report their       out for their own interests, they deserve to
salaries and stock transactions. Similarly,      be taken advantage of.
nonprofit organizations that receive tax            As a result, customers tend to be wary
subsidies must file a public financial state-    both when dealing with individual busi-
ment; and even private corporations that         nesses and the business community gener-
seek to raise funds in the financial markets     ally. For example, these days, someone
must publish much of their financial data        who reads in the newspaper that a local
and supply the Securities and Exchange           Merchants’ Association favors a particular
Commission with even more. In short,             political position is likely to conclude that
openness in financial dealings is fast be-       the position promotes the merchants’—not
coming a fundamental legal requirement in        the public—interest. And although this is
all sorts of contexts.                           not always true, it is an understandable as-
   Despite this powerful trend, and despite      sumption when you consider how many
the fact that openness obviously contrib-        industries, from those making birth control
utes to building customer trust, many small      devices and drugs to those making autos
businesspeople still try to hide as much as      and insulation, have at times cynically
they can about their financial and operat-       placed their own interests before those of
ing affairs. This is a miserable policy, espe-   their customers.
cially from a marketing perspective.                How open is your business? Can people
Nothing destroys trust as fast as an atmo-       see what you do and how and where you
                                                 OPENNESS: THE BASIS OF TRUSTS        6/ 3

do it? When they are interested, do you             when he ran into several problems.
explain the technical parts of it they don’t        The first was that he had borrowed to
understand, or do you jealously guard this          the limit of his personal credit to keep
information as a “trade secret”? Is your            his business going, and the second
profit-and-loss information generally avail-        was that the printer still had an out-
able to your customers? Do you let your             standing bill from the first edition.
customers know in advance what they can             Howard had pre-sold some of the new
expect of you if there is a problem with            editions at less than $12, and that was
your product or service?                            the break-even point by later calcula-
   An attitude of openness should be built          tions. What was he to do?
into all of the details of the way you con-            Howard first considered and rejected
duct your business: your pricing, your              accepting advertising in the manual.
treatment of employees and your willing-            Although it would have bailed him out
ness to answer questions about your prod-           of his financial problems, it would
ucts and services.                                  have been at the expense of credibility
                                                    among his readers. What he did, in-
                                                    stead, was to announce that he had a
A. Financial Openness                               problem and described it to a group of
                                                    bicycle product manufacturers at a
The few leading-edge businesses that actu-          trade show. They too thought it was a
ally post or publish their financial informa-       bad idea to take ads. After his an-
tion where their customers can monitor it           nouncement, two people came to him
constantly get surprised and pleased reac-          and offered to co-sign a loan for him.
tions from customers. It’s one of those
simple, excellent ideas that customers intu-       Small businesspeople are reluctant to
itively understand and respond to. It           open their books for much the same rea-
should be standard procedure for all top-       son many people are timid about appear-
notch small businesses. If you don’t know       ing in a bathing suit. They don’t want
how powerful this technique can be, con-        people to know that they’re in less than
sider this example from our book Honest         perfect condition. This sort of shyness is
Business (Clear Glass, San Francisco,           unwarranted, because openness is reassur-
2000):                                          ing regardless of the actual financial condi-
                                                tion of the business.
    Howard publishes the finest bicycle            This point is clearly illustrated by Chris
    repair manual for the 6,000 bicycle re-     Andersen, who runs a construction com-
    pair shops in the United States. He         pany in Stockholm, Sweden. Chris promi-
    was ready to print his second edition       nently posts his financial records on the

work shed near his current construction         even the electrical appliances are the most
site. When asked at a recent small busi-        durable ones on the market. This is open-
ness conference, “Doesn’t your smallness        ness of a unique form. The products them-
worry your customers?” he answered with         selves cry out, in an organic, simple way,
a resounding “No. People can see from my        to be trusted.
balance sheet that I can afford to finish         A fascinating San Diego, California, com-
their project,” he explained, “and that’s       pany with 240 employees, Action Instru-
what they primarily care about. When they       ments, has a unique explanation for its
occasionally see that I have underbid a job     commitment to openness, which it calls
and am not making money on it, they rave        “the rights of ownership.” Action, which
to their friends about what a great deal        began in the early 1970s and expects to
they got. And when I make a profit, they        pass $100 million in annual sales soon, has
always say they are coming back to me for       a five-part openness program:
the next job and they expect a lower bid.”          1. In the center of its main building,
   One effective open marketing approach               which houses a cafeteria and meet-
was initiated by a store that opened a few             ing rooms, is the InfoCenter, where
years ago in Tokyo called “No Brand.” It               each department posts all of its cur-
now has over 200 locations throughout Ja-              rent financial and operating reports.
pan. No Brand sells a wide range of prod-           2. Each employee has an “Owner’s
ucts and, true to its name, none of them               Manual,” which explains how the
have brand names. We might call it “ge-                company works and how to read the
neric” in English, but it really isn’t, since          InfoCenter reports. Not all employees
all products are top-of-the-line quality and           are, in fact, owners, but most are.
the “generic” concept in the U.S. has gen-          3. Daily at 9 a.m. there are announce-
erally been marketed as bottom-of-the-line             ments over the public address system
or economy quality. The Japanese stores                about crucial issues of the day and
are very small, 600 square feet, but very              about visitors expected that day.
efficient. Clothing is of the highest quality       4. A newsletter keeping everyone
and the materials are all natural: cotton,             abreast of important company news
wool, linen or silk. The packaged foods                comes with each paycheck.
are organic, with no additives. Paper and           5. On Fridays, starting precisely at 4
cardboard products are from recycled ma-               p.m. and ending precisely at 5, is the
terial. All products come in limited colors:           $100 Million Club, which anyone can
black, brown, beige, tan, white or natural.            attend (50 to 75 employees come
The whole store is designed to give the                regularly). It’s an informal talk by an
sense that you can completely trust what               outside guest about business, man-
you buy. Nothing secret is added, nothing              agement, the industry or related sub-
harmful lurks in unknown ingredients, and              jects.
                                                OPENNESS: THE BASIS OF TRUSTS       6/ 5

B. Physical Openness                           of shoes line the walls so that their entire
                                               stock is out in the open. You know for a
One of the most interesting business de-       fact if they have your color and size.
velopments in the United States has been          Or consider the case of Berkeley Fish.
an increased physical openness in the          Since this small store moved its sushi-mak-
workplace, which has been enthusiasti-         ing area from the back of the store to the
cally supported by customers. For in-          front window, people gather to watch the
stance, small photo developing shops have      Japanese delicacy being prepared. Many
sprung up where customers can watch the        are so impressed that they come in and
machine that processes their film. It’s also   purchase some for the first time.
reassuring and fun to watch your car via          This strategy could be followed with
video as it’s being repaired. Restaurants      success by all sorts of other retailers, but
and bakeries that have designed their          for the most part, it isn’t. Most businesses
kitchens to be clearly visible to their cus-   still prefer to do much of their work in a
tomers announce that they have nothing to      back room, far from public view. Are we
hide. Hospitals invite fathers and other       alone in suspecting that this is often for
close relatives into the delivery room dur-    good (or should we say bad) reason?
ing childbirth so they can see exactly what       Whether you run a garage or small radio
is going on.                                   station or fish hatchery or beauty salon,
   Can this approach be made to work in        ask yourself how you can change the
your business? Absolutely. A Step Ahead in     physical layout of your business to let your
Petaluma is California’s oldest shoe store,    customers better see what you do. The
and we can see why it’s been in business       harder this is to do, the more they are sure
so long. Instead of just the ordinary dis-     to appreciate your efforts and the more
plays and the rather mysterious curtained-     likely they are to comment favorably about
off stock room of most shoe stores, boxes      your business to others.

                     Avoiding Conflict by Being Open With Clients

 Jim Sullivan is an activist in the land preser-    the client must have trust in the landscaper
 vation movement, writer and landscape              or conflicts are likely to develop.
 contractor/designer who lives and works in            “To develop trust, I try to be absolutely
 Sonoma County, California. He has found            open about everything I do. I put all the
 that being open with clients is essential to       specs of the particular job into every con-
 the success of his business. He describes it       tract, and write the contract on a computer.
 like this:                                         Then I print it out and read the entire four
    “Often a client approaches me with a de-        or five pages to my client. While this may
 sign idea he wants a bid on, and a problem         sound tedious, I have learned the clearer
 can arise when they don’t have enough              our understanding, the fewer problems that
 money to implement their plan. If you can          will arise. Reading aloud with the client
 be open with your client and create a good         makes it easy to discuss any questions they
 atmosphere, usually you can mutually rede-         may have and make necessary corrections
 sign to reduce costs. One problem is that in       before work begins. The more precise de-
 the landscape business most of the money a         scription we work out the better. It also
 client spends is not visible. The actual plants,   gives me a chance to explain all the ’hid-
 for instance, are only a small part of the cost.   den’ work that must be done for a really ex-
 The bulk of the cost actually goes into plan-      cellent job.”
 ning, overhead, soil reconditioning, irriga-          A building contractor we know does all of
 tion, transporting materials, site preparation     the above and also adds his profit and over-
 and labor. Because these costs are invisible,      head on the estimate instead of the usual
                                                    practice of “hiding” these figures in the bid.

C. Openness in Management                           are mistakes. When employees have an
                                                    overall perspective on the business opera-
In addition to building trust, openness has         tion, they can make better decisions where
the great advantage of increasing business          it most counts: at the lowest level of op-
efficiency. When each employee has to be            eration.
given detailed instructions and requires
careful supervision, a large hierarchy of
middle management is inevitable, and so
                                                  OPENNESS: THE BASIS OF TRUSTS          6/ 7

                              The Open-Book “Revolution”

 Here’s what Inc. magazine (cover story,           “Teach the basics of business…. Some
 June 1995) had to say about the radical idea    [employees] believe that revenues are the
 of giving employees lots of financial infor-    same as profits. Or that profits are whatever
 mation about the companies they work for:       a company has in the bank. Not many em-
    “Companies large and small have been         ployees can tick off the expenses a com-
 inventing an approach to making money           pany must pay.
 that is as radical as it is simple. The open-     “Empower people to make decisions
 book revolution. More and more CEOs have        based on what they know…at Foldcraft (a
 discovered what was missing from all the        chair manufacturer in Minnesota) every
 past decade’s management cures—and              unit is accountable for its own numbers—
 have invented a new way of running a com-       and every man and woman in that unit
 pany that overturns a hundred years of          shares in the accountability.
 managerial thinking. The new system gets          “Make sure everyone—everyone!—
 every employee to think and act like a          shares directly in the company’s success,
 businessperson—and it gets astonishing re-      and in the risk of failure….
 sults.…                                           “Manco, a box manufacturer in Balti-
    “There are a few basic principles and by     more, sets annual targets for net earnings
 now, a lot of people...have experience put-     and return on operating assets. If employ-
 ting those principles to work in companies.     ees hit both targets, the company ’Makes
    “Get the information out there…not only      bonus,’ meaning that employees collect
 what they need to know to do their jobs ef-     payouts ranging from 10% to 50% of their
 fectively but how the division or the com-      total compensation. Want to know the
 pany as a whole is doing.                       prospects? Check out that lunchroom wall.”

  A wonderful example of this kind of            Organization” to “An Introduction to Sys-
openness is Scandinavian Airlines (SAS).         tems Development.” The second year’s
SAS “study circles” were created so that         subjects range from “Strategic Develop-
each employee can learn about basic man-         ment” to “Planning for the Next Genera-
agement issues, such as the long-range           tion of Aircraft.”
plans of the company. In the first year’s           Even more important than bringing man-
study circles, there are ten topics covered,     agement-level issues directly to each em-
with about six hours of tapes and study          ployee, SAS publishes a weekly
per topic. Topics range from “A Functional       newspaper that presents and explains cur-

rent financial information about the            enough to demystify your precious infor-
company’s operations. In one edition, the       mation, they will feel more comfortable,
financial information was even broken           satisfied and appreciative of what you’re
down into subsidiaries such as hotel and        doing for them.
catering services that the company oper-          Few people outside the particular pro-
ates.                                           fession understand how a dentist, lawyer
   The newsletter includes letters from cus-    or architect evaluates a particular problem.
tomers (including complaints) and an            Too often, the professional works like a
open forum for staffers. For instance, in       “black box”: the client feeds in a problem
one issue Jan Sorenson complains that a         and out comes an answer. The client has
company brochure “is pure nonsense” and         no real understanding of what a root ca-
Nancy Johnson, in reservations, suggests a      nal, temporary injunction or soils test is all
better way to handle prepaid tickets.           about.
   The paper has very detailed operational        To change this situation, a doctor can
information as well. For example, a chart       stock the waiting room with material (writ-
on the back page shows the amount of            ten, audio cassette or, increasingly, com-
available seating on various routes for the     puterized) that answers medical questions.
coming three weeks.                             A real estate broker’s office can hand out
                                                information going into detail on all proce-
                                                dures for selling a house. A bank can ex-
D. Openness With Information                    plain how its policies make its loans or
                                                checking accounts a better deal than other
More and more businesses sell information       banks.
instead of, or at least in addition to, tan-      If you find yourself reluctant to give out
gible products. Think about why you go to       free information about the details of what
optometrists, lawyers, stockbrokers, banks      you do, you should rethink what you’re
or real estate agents: you need the special-    charging your customers for. Are you
ized information only they have access to.      afraid that if you give them information
   If you’re in a business or profession that   they’ll realize they don’t need you? If so,
trades in information, being open about         perhaps openness isn’t for you unless you
your finances and how you organize your         are willing to change some fundamental
workspace, while important, are clearly         aspects of how you work. However, if you
not the only elements in your efforts to be     come out from behind the professional jar-
open. Your real task is to be open with         gon your colleagues hide behind and let
your customers by giving them the maxi-         your customers in on the maximum
mum amount of information about what            amount of useful information without pay-
you do. If you trust your customers             ing you to interpret it for them, you will
                                              OPENNESS: THE BASIS OF TRUSTS         6/ 9

find that your work satisfaction will im-
                                                         Advice by E-mail
prove because you are now helping edu-
cated participants rather than ignorant       Michael’s offer to do telephone consulta-
skeptics. And at least as important, your     tion in the first edition of this book now
income will go up too, because your cli-      has a new twist, thanks to one of his
ents will surely tell many others about       phone clients, The Center for Traditional
your refreshingly open and honest busi-       Medicine in Cambridge, Massachusetts.
ness practices.                               When the Center decided to plan a new
   Here is a questionnaire to help you mea-   marketing event, instead of phoning
sure how open your business is. This is       Michael again for advice, they sent him a
important and well worth the time it will     postcard asking three questions and offer-
take to complete. The authors’ years of       ing multiple choice answers for each.
consulting experience with small business     Michael cried “brilliant!” and instantly
clearly demonstrate that the more boxes       added the Postcard Question Service to
marked with an “X” on the right-hand side     his repertoire. Soon afterwards, he began
of the page, the more effective the market-   offering this service by e-mail.
ing program. Few “X” marks is a red flag         You can obtain an e-mail Multiple
indicating serious problems.                  Choice Consultation for just $10. (Be-
                                              cause of the background information re-
                                              quired—see the information on telephone
                                              consulting in the Appendix—this offer ap-
                                              plies only to businesses who consult with
                                              Michael on the telephone first.) For infor-
                                              mation on how this service works, see
                                              Michael’s website at
                                              user/mp/mwa.html. This is also a new
                                              form of accessibility (see Chapter 9).

       How Open Is Your Business?

                                                                                                                  SOME CUSTOMERS

                                                                                                                                   ALL CUSTOMERS
       We are willing to answer the following specific


       questions about our business to:



                    cost of goods...

                    source of supplies...

                    financial problems...

                    profits and losses...

                    specific techniques...

          I personally will show or explain in detail:

                    How I do what I do...

                    How my equipment works...

                    How I price a product or service...

                    How I keep track of time...

                    How I keep track of costs...

         My financial statements are available to anyone                                               YES                          NO

       who wishes to see them...
                                                  OPENNESS: THE BASIS OF TRUSTS       6/ 1 1

E. Openness With Ideas                             In 1977, RCA developed a video player
                                                 requiring a specialized video disc. It did
Many businesses deal in what has become          not license this product to others and tried
known as “intellectual property.” Intellec-      to monopolize what it correctly saw as a
tual property consists of ideas, designs,        phenomenal new business. Unfortunately
trade secrets and practices, as well as pat-     for RCA, Matsushita and Sony developed
ents, copyrights and trademarks that you         videotape players that produced similar re-
own.                                             sults (the Beta and VHS systems). Both
   Licensing is the main way that owner-         were licensed to many manufacturers. By
ship of intellectual property is shared. For     1983, RCA’s basically excellent product
example, books are licensed to filmmak-          was so isolated in the marketplace that the
ers, films are licensed to video cassette dis-   company canceled it. A few years later it
tributors, toy designs are licensed to           was clear that of the two surviving sys-
manufacturers, promotional advertisements        tems, the one which had been licensed
are licensed to local TV stations and inven-     most widely (the VHS system) was scoop-
tions are licensed to manufacturers.             ing up the lion’s share of the business.
   Another way that intellectual property          There are lots of similar examples of
can be made available to others, of course,      companies refusing to license their intellec-
is simply to give it to them. A restaurant       tual property losing out to others who were
can make its recipes available to its cus-       more open. Audio tape is one, where reel-
tomers, a computer programmer can post           to-reel and eight-track systems lost out to
a program online for public use and an           small cassettes because the Dutch Philips
author can give away his poem.                   company licensed the systems for making
   Many businesses, of course, neither li-       and playing the tapes to virtually anyone
cense nor give away their legally protected      interested at a very reasonable rate.
property but try to monopolize it for their        Two Internet businesses offer the best
own gain. The world is full of secret for-       and most recent examples. The Web-
mulas, patented inventions and fiercely de-      browsing boom was virtually created by
fended trademarks. Like other sorts of           the founders of Netscape who gave their
secrecy in business, most businesspeople         Web browser software free to consumers
never question their monopolistic practices.     and only charged businesses for the li-
   They should. A small business that tries      censes. The Internet server business has
to monopolize intellectual property treads       been revolutionized by Linux, a free soft-
a very dangerous course. To illustrate this      ware program that has become a major
point, let’s look at a big business example      force in the formerly closed server market
of a product that most people are familiar       dominated by Microsoft. Linux is served by
with.                                            the community of “volunteer” program-

mers around the world and by commercial          Simply that those who are most open to
businesses that have also grown up to pro-       including others in what they are doing
vide service to large corporations.              are far more likely to prosper than those
  What is the moral of this for small busi-      who don’t.
nesses that develop intellectual property?

                     Generous Marketing Proves Historic Success
 The late Andrew Fluegelman, formerly edi-       users. Into this environment stepped one of
 tor of PC World and senior editor of            the most astounding marketing achieve-
 MacWorld, prominent computer magazines,         ments in history. Marc Andreeson started
 authored a program to allow certain types of    distributing, free, a program called
 computers to talk to each other, called “PC     Netscape. Netscape was elegantly simple at
 Talk.” Instead of selling this program,         the outset and allowed good graphics, di-
 Fluegelman gave it away, in the process re-     rect access to files that were made public
 fining a marketing strategy now known as        on the Internet and easy movement to other
 “freeware.” Those who were given a copy of      distant files. The new environment was
 “PC Talk” were encouraged to voluntarily        quickly called the World Wide Web, and
 send a licensing fee to Fluegelman. If they     Netscape became the standard.
 did, they qualified for free program updates.      Netscape charged commercial users for
 The result is a computer business legend.       its program and sold its services for internal
 With no advertising, Fluegelman’s program       corporate use. The company sold public
 became a substantial success, bringing in       shares of stock in early 1995 and created a
 over $200,000 in 1984 alone. Indeed, until      sensation that played a direct role in lifting
 his untimely death in 1985, Fluegelman’s        the whole domestic American stock market
 total revenues from “PC Talk” exceeded the      nearly 30% in one year. Then Andreeson’s
 net return of all directly comparable pro-      company achieved another historic first by
 grams, many of which were marketed with         generating revenues in excess of $100 mil-
 expensive advertising hoopla.                   lion in its first year of existence.
    Fluegelman’s program allowed computers          Marketing Without Advertising deserves a
 to link to networks, which in the early         tiny amount of credit. The 1986 edition of
 1980s were new and limited. By 1993,            this book was the first published account of
 computer networks were beginning to grow        generous marketing, the RCA, Dutch
 and the Internet had several million active     Philips and Fluegelman stories.
                                                   OPENNESS: THE BASIS OF TRUSTS          6/ 1 3

   At this point you may be saying, “Great        a greater effort to sell it if she has an exclu-
story, but what’s the point for my small          sive deal. In reality, the small manufacturer,
business? I don’t write software, splice          artist or craftsperson faces the same situa-
genes or have a pantry full of secret reci-       tion as do giants like RCA and Philips. The
pes.” While the issue of licensing and the        exclusive agreement makes it much harder
principle of generosity in marketing doesn’t      for your ultimate clients to find and buy
come up often for small businesses, some-         your product or service because it inevita-
thing very similar does commonly occur for        bly results in severe restriction of the many
all providers of goods (and sometimes, ser-       ways it can be sold, displayed and mar-
vices) under the guise of exclusive market-       keted. Indeed, no matter what the incen-
ing agreements and exclusive territory            tive, it is almost never worth signing an
agreements.                                       exclusive agreement of any sort. Some-
   We have seen many businesses con-              times this means making a tough decision
fronted with a retailer or wholesaler who         to turn down what seems like a very lucra-
says, “I’ll carry your product only if I can      tive deal. Do it. Never let short-term greed
have an exclusive agreement in this area          get in the way of long-term good business
for selling it.” At first examination, it makes   practices. s
sense: The retailer or wholesaler may make
 Chapter 7

 Deciding How to Educate
 Potential Customers

A. What Does Your Business Do? ....................................................................... 7/2
B. Defining the Domains in Which Your Business Operates .............................. 7/7
C. Providing Information on Businesses in Established Fields .......................... 7/10
D. Businesses in New or Obscure Fields .......................................................... 7/13
E. Whom to Educate ......................................................................................... 7/15

F                                              A. What Does Your Business
                 or the most powerful
                 marketing force—positive         Do?
                 recommendations—to work,
most businesses have a major communica-        Before you can sensibly design a market-
tion job to do. After all, if people don’t     ing plan based on personal recommenda-
know the details of the goods and services     tions, you need to articulate a clear, easily
you offer, they are unlikely to be effective   understandable statement of what your
in recommending your services to their         business is about.
friends. But before you can design an ef-         A statement of what your business is
fective marketing plan, you must decide:       may seem so obvious to you as to not
    1. The general kind of information         bear mention. It isn’t. After working with
       people need to know about your          many small businesses, we have learned
       business so that they can tell others   that the business owner who can clearly
       about you, and                          communicate what he does is the excep-
    2. What specific groups of people you      tion. When many of us are asked what we
       want to target for your educational     do, we make statements such as, “What
       efforts so that your marketing plan     don’t I do?” or “Isn’t it obvious?” or “You
       based on positive recommendations       know—pretty much what the average
       will be maximally effective.            small office CPA (financier, vet, etc.)
   This chapter helps you focus on these       does.” This sort of vagueness usually exists
issues. Once you’ve decided them, Chapter      even in seemingly straightforward opera-
8 deals with the specifics of getting your     tions such as bicycle repair or independent
message across effectively.                    grocery store businesses.
   Before we get into the details of how to       Charmian Anderson is a therapist who is
best spread the word about your business,      excellent at marketing her services. She
however, we suggest you run a little test      started her practice in San Francisco with
as to how accomplished you already are in      the few clients she acquired while finish-
disseminating information about your busi-     ing graduate school, but needed more.
ness. Ask ten friends and acquaintances—          Anderson discovered early on that men-
people you live near, or participate in        tioning the fact that she was a therapist
sports with or know from the PTA or a so-      with a Jungian bent didn’t generate much
cial club—to give a brief description of       business, so she decided to concentrate on
your business. How well do they describe       describing her business in a way her
what you do? Could they convincingly tell      friends and potential clients could easily
others about what you do? Or do they           understand. To do this, she created and
need more information to really recom-         memorized a simple 25-word statement: “I
mend you?                                      help successful people with executive jobs
                             DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS                7/ 3

or their own businesses who have short-          be based on this fact. The truth is, how-
term emotional problems such as divorce,         ever, if you assume that your business has
family stress or trauma.” She includes it in     to do only with cooking, you will consider
her written flyers and other materials and       only a part of your possible market.
delivers it orally at all sorts of gatherings,      Let’s see what happens to your market-
including meetings of businesspeople—the         ing options if you consider these addi-
kind where you stand up and tell who you         tional facts:
are and what you do.                                 • Your pots are stored somewhere, so
   The brevity and clarity of her statement             you are also part of the “kitchen stor-
allow Anderson’s friends and supporters to              age” domain.
actually find potential clients for her be-          • Your pots must be cleaned, so you
cause they have a concrete way to com-                  can add the “cleaning” domain.
municate what she does. By contrast, her             • If some cooking methods, such as
earlier definition of “I’m a therapist” was             boiling and steaming, work in your
virtually useless.                                      pot while others, such as frying,
   Obviously, to create a good description              don’t, you might conclude that you
of your business, you must thoroughly un-               are in the “health” business.
derstand it yourself. Surprisingly, many             • Your pots (their color, shape, finish,
businesspeople, even those who have                     etc.) will play an aesthetic role in the
worked in a field for a long time, haven’t              kitchen, so you are in the decorating
fully thought out all aspects of their busi-            domain.
ness.                                               By broadening your own thinking about
   One place to start is by developing a         what your business is, you may well end
clear understanding of the broader domain        up defining it in ways you haven’t thought
in which your business functions. Let’s          of before. Some of these new ways may
take an example. Suppose you manufac-            turn out to be keys to developing a suc-
ture a cooking pot. It would be easy, but        cessful marketing action plan.
only partially correct, to say you are in the       Each of our businesses is dependent on
business of making cooking pots. To de-          other businesses. This interdependence is
velop a meaningful description of your           pervasive and shapes our activities. Think-
business—one that will help you develop          ing about that interdependence can help
a marketing strategy—you must consider           improve your self-definition as well as
the role of the pot in the lives of your cus-    help others place you in the spectrum of
tomers. The idea is to look at all the pos-      commerce. An architect is a cog on a big
sible ways your business touches                 wheel that includes her graduate educa-
customers’ lives. Pots are for cooking, so       tional institution and the contractors, engi-
any marketing strategy should presumably         neers, landscapers, decorators, lawyers
                                                 and graphics people she works with.

   Consider another example. In 1850, the      your business attracts attention only in the
quill pen used by secretaries to copy          price domain. Many grocery stores never
documents could be repaired by a wide          go much beyond this sort of marketing. In
range of semi-skilled craftspeople using       other words, they implicitly describe their
many readily available materials. By con-      business as “food for sale at reasonable or
trast, keeping a contemporary copy ma-         low prices.”
chine in operation is a far more complex          But what about broadening the defini-
task. To start with, the copier is dependent   tion of your grocery store to include the
on the proper electric power supply. It        fact that the food your customers buy they
functions within a limited temperature and     must cook, clean and store. And when you
humidity range and requires a certain type     think about cooking, don’t forget that a
of paper and very precisely manufactured       significant percentage of your customers
fluids and powders. Further, it needs          regard the preparation and eating of food
highly specialized maintenance by people       as an important hobby, and a few elevate
who show up with a trunk full of replace-      it to the status of a religion. Thinking
ment parts that are impossible to get any-     about all of this might prompt you to:
place else.                                        • Put on a demonstration of how to
   The copier, then, is clearly in many do-           cook an unusual vegetable currently
mains: repair service, complex parts main-            in season. This would be an excel-
tenance, reproduction, electrical apparatus,          lent way to both focus attention on a
information transfer, chemistry, xerogra-             produce department aware enough
phy, aesthetics and toxicology (some fluids           to carry the vegetable in the first
are poisonous). Each of these domains has             place and to show your customers
an impact on the marketing of copy ma-                that you think of food in ways other
chine manufacturers, wholesalers, retailers,          than how much it costs.
consultants and repair people.                     • If you are located in a congenial
   To understand all the aspects of your              neighborhood or a small town where
business and define the wide range of do-             such events are popular, you might
mains in which you can legitimately sell              invite some local chefs to make their
what you do, ask yourself these questions:            favorite barbecue sauce. Pass out
    • What exactly is the role of my busi-            samples of chicken dipped in the
       ness in the life of my customer?               sauce as part of a contest to crown
    • How many domains does it touch?                 the local Barbecue King or Queen.
   For example, suppose you own a small            • Invite a nutritionist to autograph
grocery store and your only marketing                 books inside your store.
technique is having periodic sales, featur-        • Set up a display of kitchen storage
ing discounted items. When you do this,               systems.
                            DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS               7/ 5

 • Demonstrate how to make a casse-               Many of these things are done by stores
   role in a microwave oven.                    that understand how to view their product
 • Have your local Tupperware dis-              in domains other than price. By broaden-
   tributor set up the food storage con-        ing their view of their business, they are
   tainers and explain how they keep            able to broaden their marketing plan. Un-
   food fresh.                                  fortunately, the great majority of busi-
 • Invite a cookbook author to sign             nesses have yet to really take advantage of
   copies of his book in the store.             the concept. In other words, they define
                                                what they do too narrowly.

                              Boiling Down What You Do
When we are approached by friends whose            A photographer’s card read as follows:
small service businesses are slow, we often       • photograph valuables for insurance
suggest a very simple technique that draws            records
on the principles discussed in this chapter.      • am very patient with babies and small
We ask the service provider to list four              children
things she does on a 3x5 card and include         • frame photos, and
her name, phone number, hourly rate and           • make home visits.
available hours. Their next step is to dupli-      Within two weeks after each of these
cate the card and give it to friends and ac-    people sent their cards to twenty friends,
quaintances. Even this simple type of           both were busy.
description always generates business.             One reason this simple card approach is
  For example, a bookkeeper friend who          effective is that it forces you to describe
needed more customers listed:                   your business in terms that make sense to
  • check reconciliation                        potential customers. Your description tends
  • preparation and filing of quarterly tax     to fit the customers’ language and speak to
    returns                                     their immediate needs better than a
  • general ledger posting, and                 nondescriptive title like “bookkeeper,”
  • making budget projections.                  “photographer” or “therapist.”

  What My Business Does

  The following is a definition of what my business does, in about 35 words:

          We support—with information, training, and equipment and whatever
        else is needed for greater safety and enjoyment—individuals who are in-
        terested in kayaking. We offer good storage and beach areas, help them
        form clubs, offer trips and support others in the industry.

      What My Business Does

      The following is a definition of what my business does, in about 35 words:

           We help individuals and businesses effectively define their aesthetic
         and spatial desires. We use our skills and talents to organize the rel-
         evant businesses, products and technologies to create the desired
         goals. We work best with groups of five to 50 people.
                            DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS            7/ 7

B. Defining the Domains in                     what consultants you use, and make a list
                                               of them. Last, think over the general func-
   Which Your Business
                                               tions you fulfill (the major domains in
   Operates                                    which you operate) from a customer’s per-
                                               spective. Below are two examples.
By now you should be convinced that a
                                                  Now, put your lists together, think about
clear, creative definition of your business
                                               them and refine them. Once you do, you
is an essential basis for a marketing action
                                               should be able to describe your business.
plan, and that you simply cannot develop
                                                  If your business has a Web page you will
concrete marketing steps until you know
                                               find this domain exercise has an additional
who you are aiming at and what, exactly,
                                               value. The current structure of the Web al-
you offer. Once you know what your busi-
                                               lows websites to list key words called
ness does, you can focus on those ele-
                                               “meta-tags” on their website that are not
ments that make it unique.
                                               visible on the Web page itself. The meta-
   Start by listing the domains your busi-     tag is read by search engines and in many
ness operates in. To help in this process,     cases can be useful in helping customers
examine your list of payables to see with      find you. The “meta-tag” is a perfect place
whom you really work on a continuing ba-       to put the relevant words that define the
sis. Now, review your checkbook to see         domain of your business.

 The Domains in Which Your Business Operates

 The major domains in which I operate (taken from my payables) are:
        water safety equipment, marine suppliers, sports clothes,
     navigation equipment, equipment storage, imported kayaks

 The major domains in which I operate (from looking at checks paid to my consultants) are:
         sports clubs, emergency first aid, environmental science, fabric technology,
      salt water lore and tradition, water safety education

 The general functions I fulfill (the major domains in which I operate)
 from a customer’s perspective are:
         recreation, health, stress reduction, weight control, travel,
      family fun


 The Domains in Which Your Business Operates

 The major domains in which I operate (taken from my payables) are:
      lumber yards, hardware stores, paint suppliers, specialty catalogs, county
    refuse site, insurance companies, electrical sub-contractors, plumbing sub-
    contractors, moulding company

 The major domains in which I operate (from looking at checks paid to my consultants) are:
        accountant, law firm, materials specialists, architects, painters, mac-users
      group, computer programmers

 The general functions I fulfill (the major domains in which I operate) from a customer’s per-
 spective are:
        bring dreams to reality, create an efficient, utilitarian, aesthetically pleasing
      environment, child safe play areas and entertainment centers for the family
                          EXAMPLE FOR A CONSTRUCTION COMPANY
                             DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS                  7/ 9

                    Bob Schwartz’s Tarrytown Conference Center
Bob Schwartz incorporated his vision of a         narrowest bottom-line sense, Schwartz orga-
business conference center into a larger do-      nized a wide range of conferences at
main than just meeting facilities: the do-        Tarrytown, including the friends of Margaret
main of ideas and issues. Bob took over a         Mead discussing anthropological issues,
beautiful country estate in the rolling hills     Judith Crist with weekends on film and a
just north of New York City and turned it         number of creative thinkers discussing the
into the Tarrytown Conference Center. By          social concerns of business. Tarrytown’s
the beginning of the 1980s, he had made it        reputation began to grow.
into one of the most successful and presti-          To this Schwartz added a School for En-
gious corporate meeting centers in the U.S.       trepreneurs and later a School for
Bob’s background was in journalism, work-         Intrapreneurs (see Chapter 8). He also cre-
ing for Time-Life and helping found New           ated a 15,000-subscriber mailing list for a
York magazine; also, along with his wife,         Tarrytown newsletter, which reported on the
he opened a small Japanese inn in the             exciting diversity of the conference center’s
Catskill mountains, long before there was a       activities and provided background material
single sushi bar in the U.S.                      on guest speakers and their ideas.
   All these experiences combined to give            As Schwartz’s view of his business broad-
Schwartz the necessary skill to create the        ened, he continued to add new projects. For
Tarrytown success. In his favor, the bases        example, he organized a conference and a
were well covered from the start—the estate       group—The Tarrytown 100—made up of
was beautiful, and he hired superb people         many of the most innovative entrepreneurs
to run the hotel and dining facilities. But       in the U.S. This project is not only glamor-
plenty of conference centers have both of         ous and fun, but also will enhance his pri-
these attributes and still fail. Schwartz’s ge-   mary market as many of the young
nius was to realize that corporate execu-         entrepreneurs take their places at the heads
tives, who were his principal market, were        of future Fortune 500 companies. Says
high energy people like himself, interested       Schwartz: “The power of an idea or a vision
in the world, ideas and the excitement of         is the driving force behind a successful mar-
social issues. While other conference cen-        keting strategy, and the ‘whole’ has to fit to-
ters focused on “strictly business” in the        gether perfectly.”

C. Providing Information on                      provide such exceptional service. Skeptical
   Businesses in Established                     customers are like amateurs; they know
                                                 enough to doubt. Michael suggested that
   Fields                                        they develop five humorous stories about
                                                 service calls made at odd hours and re-
Those of you who are in well-established
                                                 count them on radio talk shows and at real
fields—anything from a grocery or bakery
                                                 estate luncheons, chamber of commerce
to a television repair shop or retail clothing
                                                 meetings and similar occasions. The real
store—normally need not be concerned
                                                 message of the stories, of course, is that
with communicating the basics of what you
                                                 Joseph’s really does make house calls at
do. You are fortunate because the public
                                                 any hour; that message will come through
has a pretty good knowledge of your type
                                                 the humor of the stories.
of business. If you show a group of strang-
                                                   It’s not too difficult to figure out what a
ers your business card, you can expect the
                                                 bed store might offer, but the Berkeley De-
great majority of them will generally under-
                                                 sign Shop offers a whole lot more than the
stand your business and know at least
                                                 usual mattresses and box springs. Michael
some of the reasons why they need you.
                                                 Lavin, the owner, is in the business of sell-
Obviously, however, these people won’t
                                                 ing a good night’s sleep. He has done ex-
know what special services and extras you
                                                 tensive research during his 25 years in the
offer, such as the women’s clothing shop
                                                 business on how to make a comfortable
that does minor alterations at no extra
                                                 mattress and is extremely knowledgeable.
charge, the grocery store that delivers, the
                                                 Lavin usually spends an hour and some-
laundromat that serves free coffee, the
                                                 times two with a customer as they try out
used auto parts company that delivers to
                                                 different mattresses and learn about what
commercial accounts, the bakery that ac-
                                                 goes into a comfortable night’s sleep. As
cepts phone orders for specialty cakes and
                                                 part of his initial research he gave away
so on. To fully enlist the positive energy of
                                                 beds to physical therapists in exchange for
your friends and acquaintances, you must
                                                 their feedback. He also had them come
give them something to talk about. Your
                                                 into the store two nights a week for a year
job is to make sure they are aware of the
                                                 to answer customers’ questions. And later
things that set you apart.
                                                 Lavin installed a pressure-mapping com-
  A business Michael consulted with,             puter that greatly facilitates a custom match
Joseph’s Sewer Rooter of Los Angeles, has        between mattress and customer. As you lie
been in business more than a decade and          on the bed, Lavin receives an instant read-
makes service calls 24 hours a day, seven        out on the monitor indicating your particu-
days a week. Joseph’s problem is convinc-        lar pressure points.
ing a skeptical public that it really does
                             DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS            7/ 1 1

   When you leave the Berkeley Design           the business, if not the affection, of poten-
Shop you are a truly educated customer,         tial customers. A bondsman who accepts
and after a night’s sleep on your new mat-      collect calls, takes personal checks or jew-
tress will probably tell all of your friends.   elry in an emergency, is open 24 hours and
   To take another example, almost every-       has a radio dispatched car and national ser-
one has some idea of what a bail bonds-         vice should emphasize these facts.
man does. Just the same, a bondsman who            A bank is another business that doesn’t
provides better service can do a lot to gain    need to be explained to potential custom-
                                                ers. So, rather than bore people with expla-
                                                nations of check cashing services or safe
                                                deposit boxes, a wise banker will empha-
                                                size unique services. Take, for example,
                                                the National Bank of the Redwoods, head-
                                                quartered in Santa Rosa, California. This lo-
                                                cally owned bank specializes in providing
                                                services to small businesspersons and tells
                                                customers that its commitment is “to bring
                                                the bank to you.” For example, bank per-
                                                sonnel often go to the borrower’s place of
                                                business by appointment. In addition, the
                                                bank underwrites a messenger/courier ser-
                                                vice to deliver paperwork and pick up de-
                                                posits and other important documents,
                                                making banking less time-consuming. To
                                                make changing from other banks easier,
                                                NBR sends out an account executive to
                                                work with the business’s accounting per-
                                                sonnel. This includes helping them with
                                                the forms, endorsement stamps and other
                                                paperwork needed to complete the switch.
                                                   When the woman in charge of New Ac-
                                                counts was asked how the National Bank
                                                of the Redwoods (NBR) informs customers
                                                of these services, she commented: “I sit
                                                down with every new customer and assess
                                                their needs, suggesting services that seem
                                                appropriate for them. In addition, I give

them pamphlets that explain our services
and charges. Of course, we are continually
working on new services such as online
banking, having grown from our original,
innovative electronic banking which re-
quired a different approach. In the first
case, we formed a focus group of custom-
ers and did role-playing exercises to help
figure out what customers might require.
We then devised a questionnaire that we
sent to 170 customers. From their feed-
back, we now have ten questions we can
ask potential customers to help them de-
cide if this is a useful service. We use those
questions for our online banking product,
phoning customers we think might be in-
terested in online banking and offering to
go to their place of business to give them a
   Salli banks at the Sebastopol branch of
NBR and notes that in addition to offering
personalized service to the small
businessperson, the bank employees make
the trip to the bank a pleasurable experience.
Unlike many austere banking institutions
where the tellers and bank managers treat
their customers impersonally, the staff is
cheerful, friendly and genuinely helpful.
They even provide dog biscuits and, on the
last Friday of the month, cookies for humans.
   There are many ways an established
business can inform customers about these
kinds of extra services. For example, the 7-
11 convenience store chain brilliantly
chose a name that told its customers that it
was open earlier and later than traditional
grocery stores. More typical methods in-
clude flyers sent out to your mailing list
                              DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS             7/ 1 3

and signs in retail stores or office waiting      specialized travel agents, services that buy
rooms. You can also note an extra service         airline seats in bulk and negotiate low rates
or two on your business card and person-          at no charge to the customer. Specialized
ally explain the availability of extra services   agents can get flights to Hong Kong, Tokyo
when customers visit your business. In oc-        and Amsterdam at rates that are half of
cupations where you deal with a relatively        published fares.
few people, you can even call them to let           Many owners of new types of businesses
them know about a particularly valuable           do realize they must educate people about
new service. Chapter 8 discusses many             their field in order to create customers.
more strategies.                                  Take the tofu business as an example. For
                                                  the uninitiated, tofu is a Japanese soybean
                                                  extract: the cottage cheese of soybean
D. Businesses in New or                           milk. It was introduced in the United States
   Obscure Fields                                 in the early 1970s as part of the health food
It’s one thing to market an established             Bill Schurtleif and his wife, Akiko
business by convincing customers that you         Aoyagi, were among the pioneers in creat-
do a better job or offer extra service, and       ing the first small market for the product
quite another to let people know about a          with their Book of Tofu (Ballentine), which
business in a field they have never heard         they promoted with a nationwide media
of. For example, if you are a                     tour. On their tour, they gave order forms
businessperson who sells wholesale lapi-          to interested people to buy “do-it-yourself”
dary supplies or structural mylar members,        tofu-making kits. Schurtleif and Aoyagi un-
very few people will know what you do             derstood that if they were to sell many
from a quick perusal of a business card.          books, people needed more and better in-
Even if your business isn’t quite this ob-        formation about tofu, the most important of
scure—say you are a freelance video tech-         which was what it tastes like.
nician, a computer-aided drafting firm or           Now, several decades later, many people
the operator of a papermaking studio—ex-          in the food business take it for granted that
actly what you do may not be clearly un-          everyone knows what tofu is. This, of
derstood.                                         course, is nonsense; probably a majority of
   Don’t assume that your business is im-         Americans have yet to taste tofu. In other
mune from the need to educate existing            words, people in the tofu business, even
and potential customers because it has            after years of educating potential custom-
been in operation for some time. For in-          ers, have barely scratched the surface. To
stance, even today there are many people          further expand their market, they still have
who don’t take advantage of the services of       a major teaching job to do.

   Redwood Hill Farm, an award-winning          put his music on cassettes, a medium
goat dairy that has the greatest variety of     which had almost no retail market at the
goat milk products of any dairy in the          time. After questioning a number of people
United States, has been in business in          who responded favorably to his music, he
Sonoma County, California, for over 20          found that many patronized natural food
years. Not only is it in a rather obscure       stores. One by one he called on these
field, it also has the added challenge of       stores and played his tapes for the owners.
overcoming buyer resistance to its product.     Sure enough, they liked it, stocked them
Even though the dairy is successful, it         and even played the tapes as background
never lets up on efforts to educate both ex-    music for their own enjoyment. Not sur-
isting and potential customers. The most        prisingly, the tapes slowly began to sell.
effective way that owners Jennifer Bice and     Each tape had an address and price for ad-
the late Steven Schack found was to give        ditional ordering. Several years later, when
out samples of their yogurt, milk and a         FM radio stations began playing his music,
wide variety of cheeses so customers can        Halpern’s audience grew even more rap-
taste for themselves. Jennifer brings some      idly.
of her 400 goats to fairs and invites the          Ambica, a potter, was among the first
public to “Open Farm” days during the           Americans to work successfully with low-
summer to milk the dairy goats and play         fired raku, a process of firing pottery that
with the babies and enjoy goat milk yogurt      was relatively unknown and unappreciated
and cheese. The animals are extremely           among art, craft and pottery buyers. To
friendly, and the public can see that the       help people understand it, she scheduled
operation is immaculate. Along with the         regular evening events where she served
samples, they hand out recipes and litera-      tea and snacks in her studio. Generally,
ture at fairs informing customers that the      she was able to attract ten to 15 guests a
farm uses organic feed whenever available,      month. At each event, she encouraged
does not use hormones such as BST to in-        people to make an object of clay which
crease milk production and is committed to      she would glaze and fire. For those who
producing the best-tasting, least-processed     were shy, she had ready-made pieces that
goat milk products possible.                    they could engrave or personalize. Nearly
   Steve Halpern is a composer and per-         everyone came back to pick up their
former of a very specialized type of sooth-     pieces after the firing and looked around
ing and meditative electronic music. In the     the studio at Ambica’s work as well. The
early 1970s, he was a pioneer in a field that   market developed, and her work sold.
later attracted many musicians (of course,         Charmoon Richardson, the owner of
Ravel and others had done it earlier with       Wild About Mushrooms, has developed an
traditional instruments). Halpern chose to      excellent marketing plan based on educat-
                            DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS             7/ 1 5

ing potential clients. Many people are         newsletters that discuss the products. The
leery about eating mushrooms other than        Good Vibrations motto is, “If you want
the ordinary kind found in supermarkets,       something done right, do it yourself,” so it
and the more adventurous often have no         is fitting that it is the sponsor of Masturba-
idea how to prepare the exotic mushroom        tion Month, which has been picked up by
varieties. Charmoon has figured out how        national magazines. Within the catalogue
to educate both kinds of clients.              they make sure customers know just what
   Salli first met Charmoon at an environ-     they will be getting by clearly marking
mental gathering where he was cooking          each category. In the book section, for ex-
exotic mushrooms with a delicious mari-        ample, under Family Sexuality are titles
nade, giving out samples and answering         such as Talking With Your Child About Sex
questions. She loved his samples and at-       and Period; in the smut series there are
tended his Feast of Forest Mushrooms held      titles like Modern Lust and Lusty Lesbians.
at Mistrail, a popular eatery. The event in-      The business also makes potential cus-
cluded an introductory talk and slide show     tomers, who would never patronize the
and displays of fresh wild and exotic          typical store that sells sex toys, comfortable
mushrooms, followed by a five-course din-      by assuring them of confidentiality. It never
ner featuring a variety of forest mush-        sells, rents or gives customers’ names to
rooms. Some of Charmoon’s other events         anyone else, and all items and literature are
include mushroom identification walks, the     shipped in plain brown packaging with
Wine and Mushroom Festival, weekend            their corporate name (Open Enterprises)
forays for mushroom gathering, and mush-       on the return label. To encourage custom-
room dying and paper making.                   ers to tell their friends, they offer to send
   Some businesses, if not exactly obscure,    them a brochure. The mature approach
are traditionally very low-profile. Good Vi-   taken by founder Joanie Blank and
brations, a San Francisco and Berkeley         adopted by the current worker/owner co-
store that sells sex toys, video and audio     operative sets Good Vibrations apart from
tapes, guides to safer sex and books, has      others in the field.
broken out of the sleazy sex-shop mold
and now, after two decades of operation, is
recognized world-wide. Education is cen-       E. Whom to Educate
tral to putting potential customers at ease.
The business does public outreach at hu-       Once people in a new business face up to
man sexuality courses and clinics, sponsors    the need to educate their customers, the
workshops, hosts book signings and acts as     next question becomes whom to educate.
a resource in the community. It publishes      Don’t assume, as many small
informative and humorous catalogues and        businesspersons do, that this is a trivial

                                       question. The key to getting a good personal
                                       recommendation marketing plan in motion is
                                       to get your message before the eyes and ears
                                       (and in some instances, the noses and
                                       mouths) of the right people as efficiently as
                                       possible. To put it another way, because all
                                       small businesses have finite (often painfully
                                       finite) resources, you must concentrate your
                                       educational energies on the people most
                                       likely to respond positively.
                                          The following chart illustrates categories of
                                       potential customers.

                                       Categories of Potential
                                                      NAIVE   AMATEUR STANDARD   EXPERT


                                       Light user

                                       Medium user

                                       Heavy user

                                       Where are your current customers?
                                                      potential customers?
                                                      potential sources of referrals?

                                         It may be surprising to you to learn that
                                       many users do not fall along the diagonal,
                                       increasing their usage of your business as
                                       they become more expert about what you
                                       do. This is important to know, because
                            DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS            7/ 1 7

most marketing strategies are based on            The point is that any good marketing
moving people along this diagonal—teach-       strategy must communicate with customers
ing them more about your business as they      who have a number of different levels of
increase their use of your product or ser-     expertise. If you own a mountaineering
vice, with the idea of increasing use even     shop and concentrate on communicating
more. There is nothing wrong with this         with your class 5 climber customers, you
strategy unless you overlook the facts that    are likely to talk over the heads of, and
lots of potential customers also exist in      perhaps even alienate, the much larger
other categories (the boxes on our chart),     number of weekend backpackers.
and that catering to the needs of these cus-      Similarly, if you own a men’s clothing
tomers can also produce excellent results.     store and concentrate all of your market-
For example, there are people who don’t        ing strategy on educating people about
use a product but have expert knowledge,       fabric, you may totally lose the interest of
such as an aerodynamics engineer who           the many men who simply want a decent
doesn’t fly, or a professor of criminal law    suit that won’t wrinkle on airplanes.
who rarely, if ever, sees the inside of a         If you have ever been to a typical audio
courtroom. Both of these people are surely     store where the salespeople (if you can
asked by friends and relatives (and maybe      find one) don’t have a clue about the
even by business or government, if they        equipment and the music plays at full blast
are retained as consultants) for recommen-     as you try to figure out what’s what, you
dations about businesses or people who         will appreciate The Good Guys. They hire
provide services in their fields.              salespeople who understand their products
   Similarly, there are heavy product users    and will give you an educated opinion
who are naive, such as the wealthy cham-       about what to expect for the price. The
pagne drinker who just loves “those happy      mood is low-key and calming, and there is
little bubbles,” or the person who orders      no pressure to buy until you are ready. For
large bouquets for the home each week          the high-end user there are sound-proof
because it’s expected, but doesn’t know        rooms available for you to test out the
the names of most of the flowers. People       various speakers and other components,
in these groups may have no interest in in-    and the salespeople will help you put to-
creasing their sophistication about the        gether the system that is right for your
product. The naive user of a flower service    level of expertise and budget. For the low-
may care a lot more about whether the          end user, there is a vast array of products
business will deliver on short notice than     available.
about whether it publishes a newsletter full      To make this point in a different but im-
of interesting horticultural facts.            portant way, consider how often people
                                               who are naive about a particular product

or service purchase it as a gift, as is often    the body to break down toxins, and thor-
the case when a man buys a woman jew-            oughly cleanses and beautifies the skin.
elry, or someone who knows a relative is         The bath often relieves aches and pains,
into photography buys her a camera lens.         and is especially beneficial for people suf-
   Businesses that traditionally cater only to   fering from tension, fatigue and high
men or only to women should be particu-          stress.”
larly aware of changing societal gender             Since the enzyme bath is almost un-
roles and broaden their marketing accord-        known in the United States (even though
ingly. Thirty years ago, men bought most         it’s been enjoyed by the Japanese for over
cars. Today, women buy cars (and trucks)         40 years), Stusser clearly must teach people
by the millions. If you’re selling pickup        a good deal about this product before they
trucks and assume that women are only            are likely to buy it. In this case, trying to
picking out the color after some man de-         move a lot of people up the diagonal line
cides on the model, you’re going to over-        on the marketing chart from naive/light
look a lot of potential customers who are        user to expert/heavy user would almost
probably eager for helpful information           surely be both incredibly time-consuming
about what you’re selling. Similarly, today      and expensive, probably involving writing
men buy skin lotion, cookware and diapers        a book (and a number of magazine and
in numbers that would have seemed amaz-          journal articles), doing extensive public re-
ing less than a generation ago.                  lations to sell the book and giving public
   Osmosis, a company that marketed the          demonstrations and teaching classes, to
first enzyme bath in America, got immedi-        mention just a few.
ate results by directing its marketing at ex-       Perhaps eventually Stusser will find the
pert non-users. Owner Michael Stusser            time to do many, or even all, of these, but
printed a brochure explaining the enzyme         because he needed customers right away,
bath to potential customers:                     he decided instead to concentrate his mar-
   “A remarkable form of heat therapy from       keting effort not on informing potential us-
Japan, which relaxes, soothes and ener-          ers, but experts in the field of body work.
gizes the body, mind and spirit. Unlike          These people are primarily health profes-
other heat treatments, the enzyme bath           sionals who practice alternative healing
generates heat biologically, through fer-        methods and have studied Asian medicine.
mentation, nature’s purification process.        Some of them had heard about the enzyme
The bath is composed of fragrant antiseptic      baths but had never had a chance to expe-
cedar fiber, rice bran and over 600 active       rience them. Stusser provided them with an
enzymes. The action of the enzymes pro-          opportunity to take a complimentary bath.
duces a special quality of heat that im-         Many of those who responded loved the
proves circulation and metabolism, helps         enzyme bath and immediately began refer-
                             DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS             7/ 1 9

ring their clients who they felt would ben-      has the chance to enthusiastically educate
efit from the relaxation and penetrating         her customers about Italian delicacies, her
heat.                                            favorite subject. Most people who hear her
   Sylvana LaRocca owns Made to Order, an        share her excitement and take home a bag
Italian delicatessen in Berkeley, California.    or two of goodies they hadn’t planned to
She concentrates on educating non-users          buy when they entered the store. Eventu-
about Italian delicacies. In addition to fresh   ally, many even learn the correct pronun-
pasta and imported cheese and wines,             ciations, which they use to impress their
LaRocca stocks a wide array of Italian deli-     friends, thus educating a whole new group
cacies, many flown to her fresh. Realizing       of potential customers.
that her customers are unlikely to purchase         Byerly’s is a prospering chain of grocery
things they can’t pronounce and have             stores that almost never advertises. The
never tasted, she follows the fairly standard    manager of each store in the Minnesota-
practice of placing samples of many items        based chain has considerable leeway to
on the counter. In addition, however, she        provide services in the particular neighbor-
hand-prints large colorful signs, which she      hood. Every store has a full-time home
hangs on the wall behind the counter,            economist who helps customers with nutri-
which say things like, “Mascarpone: made         tion and menus. A wonderful example of
from fresh cream. A heavenly cheese from         its superior service and education of cus-
Italy that can be eaten with fish, fruit or      tomers in this health conscious age is
spread on chocolate cake—perfect on              Byerly’s color-coding of foods for special
bread with olive oil and salt.”                  diets. For example, all low-cholesterol
   LaRocca’s idea is to stimulate her custom-    foods in the store might have a blue tag,
ers to ask about these products. She then        and customers can also get a list of them
                                                 from the store’s home economist.

                       Working With Knowledgeable Customers
 Nan Hohenstein, a skilled publicist whose       publicist. These people really don’t know
 one-person San Francisco agency special-        enough to appreciate the work that goes
 izes in handling publicity for the publishing   into what I will do for them. If lots of
 industry (such as author appearances on ra-     people show up at an event I organize,
 dio and TV shows) and also publicizes           those clients tend to assume that it’s in the
 events such as fairs and trade shows, con-      nature of things, not acknowledging how
 centrates on knowledgeable businesspeople       much my getting the word out contributed.
 in the field—for example, small publishers      That’s why I prefer to concentrate on cli-
 with an even smaller budget. Many people        ents who know a good deal about how the
 in this group, because they have been only      publicity business works, say someone who
 light users of publicity services, fear that    has worked in an arm’s-length relationship
 comprehensive public relations (P.R.) ser-      with a big P.R. firm that has charged them
 vices will be too expensive. Holstein’s goal    high prices. While these people are gener-
 is to help these people become medium or        ally knowledgeable, they don’t know how
 heavy users by explaining to them how she       to use my more personal and flexible ser-
 can lay out an overall campaign but allow       vices, which allow the client to save a great
 them to do many of the time-consuming           deal of money by doing their own envelope
 P.R. tasks themselves at a very reasonable      stuffing, follow-up calls, etc. My job is to
 cost.                                           educate this second group on how to use
    Hohenstein explains, “I’m really good at     my services effectively. Once I do this, it’s
 what I do but have a difficult time with cer-   usually relatively easy to produce positive
 tain kinds of clients—the worst client for      results at a moderate cost and I naturally
 me being someone who has rarely used a          get repeat business.”

  Allen/Vanness, which began by selling          real appreciation of the extraordinary qual-
elegant woven fabric available in a wide         ity of the handwoven fabrics used in the
range of patterns at craft fairs, decided its    garments; they just liked them. To increase
best marketing strategy was to educate cli-      sales, Allen/Vanness decided to help cus-
ents in the “naive heavy users” category. It     tomers understand why they liked woven
expanded to include scarves, shawls,             products so much. They taught the sales-
wraps and ties, selling to expensive de-         people in the various shops about how
signer stores in San Francisco, Los Angeles      their handwoven goods were made and
and New York. Initially, the people who          why they offered such a superior value.
patronized these pricey outlets had little       When this information was passed along to
                                                 the customers, sales went up.
                            DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS             7/ 2 1

   Consider how educating customers can         doesn’t pill and doesn’t get itchy. It stays
lead to better business. Pastorale, a Free-     soft and comfy; it is rain repellent, can be
stone, California, business that emphasizes     treated with Scotchguard for waterproofing
natural fibers, sells beautiful clothing made   and lasts and looks great for a long time.
of silk, rayon and wool. Larry and Nancy        Technically speaking, all clothing on the
Rowinsky, the proprietors, go to great          American market must pass rigid tests for
lengths to educate their customers about        flammability. This one is no exception.
the care of what they buy. Their main con-      Now and then you hear about a recall;
cern, however, is that light users are often    there have been none on this product. Cus-
naive about taking care of fine wool gar-       tomers take pride in wearing the jackets
ments and exotic silks and rayons. For in-      because they feel they are participating in
stance, they put a wet wool cap on a hat        recycling.
rack or sweater in a clothes dryer—and             Our favorite yarn store follows the tradi-
when the hat stretches and the sweater          tional approach of converting novices to
shrinks, uneducated customers typically         amateurs to encourage them to patronize
blame everyone but themselves. To deal          the business more. The shop owner esti-
with this, Larry and Nancy put a lot of ef-     mates that at one time or another, 40% of
fort into teaching new customers how to         her customers depend on her to help them
care for their fabric. In addition to the tab   with a project. As they become better knit-
inside each garment and the hang tag, they      ters and crocheters, many of her patrons
believe in verbally informing each cus-         move from naive/light users to amateur/
tomer of the safest and surest way to care      medium users. Without instruction, busi-
for their purchase. The time spent with         ness would surely suffer.
each purchaser makes for satisfied custom-         For another wonderful example of how
ers who feel confident in buying and car-       helping your customers to become better-
ing for their items.                            informed users can improve your business,
   Recently they have branched out into         let’s again refer to the National Bank of the
clothing products that are environmentally      Redwoods. This bank has a credit analyst
friendly and made in the USA, so they have      on hand to help unsophisticated small
the job of educating customers about an         business owners put their financial infor-
entire new field. An example is Polartec®       mation into a form the bank can deal with.
jackets, made of a fabric made from re-         This not only provides the bank with the
cycled plastic bottles. They inform each        correct information it needs to make loan
customer that the quality of the product is     decisions, it helps turn naive light and me-
unsurpassed. Not only do they come in           dium users of the bank’s services into
stunning colors, it’s a friendly plastic. It    steady and profitable customers.

  Do People Know What You Do?

  At a party, ____% of the people who hear the name and a very brief description of my
  business will know a little about the details of what I really do. [For instance, 100%
  would know what a barber does, but only 3% would know that an oncologist studies
  At a meeting of business people generally (for example, the Chamber of Commerce),
  about _____% of the people who hear the name and a very brief description of my
  business will know a lot about it.
  When a potential new customer approaches, how much does he or she really know
  about what I do?
    Doesn't know anything        Knows a little      Knows quite a bit and is very confident
  Among new customers, _____% have used someone else in my field (or a similar prod-
  uct) before.
  Are there experts in my field (or closely related fields) who have had little or no experi-
  ence with my goods or services?
    YES    NO

  List by category: ___________________________________________________________
  Are there specific categories of people who would have less than an average level of
  knowledge about my field who might use my business if they knew more about it, such
  as people who seldom travel (about the travel business), landlords, commuters, etc.?

                         DECIDING HOW TO EDUCATE POTENTIAL CUSTOMERSS                 7/ 2 3

Do People Know What You Do? page 2

Do any of these categories of people include good prospects for my business? List:


I have available the following information about my business:
  Descriptive brochure                      Guide book for new customers
  Descriptive label                         General instructions or manuals
  References     Articles                   Order form for more general information
I provide:
  Personalized instruction                  Classes
  Examples of other customers               Samples
  Introductory discussion                   Free first lesson

 Chapter 8

 How to Let Customers Know
 Your Business Is Excellent

A. Tell Them Yourself .......................................................................................... 8/3
B. Help Customers Judge for Themselves........................................................... 8/7
    1. Direct Measures ........................................................................................ 8/7
    2. Public Measures ...................................................................................... 8/10
    3. Educational Measures .............................................................................. 8/13
    4. Referrals .................................................................................................. 8/14
C. Giving Customers Authority for Your Claims ............................................... 8/16

                    e’ve just talked about the   without any wrinkles, and it does, that per-
                    need to decide which         son has clear evidence that you and your
                    groups of customers and      business can be trusted. Or, if a respected
friends to focus your marketing efforts on.      financial columnist states that for a certain
This chapter discusses the best ways to          type of investment, a 15% return is excel-
give those people enough information             lent, and your personal finance advising
about your business so that they will know       service has just done substantially better
why it is good and be able to communi-           than that, you will want to be sure your cli-
cate this to others. The point of doing this     ents are aware of how you compare.
is obvious. To really become effective mis-         New Balance bases their marketing on
sionaries on your behalf, your customers,        the concept that high quality athletic shoes
potential customers and friends need to          can be made in America at competitive
know specifically what sets you apart from       prices. They include a hang tag with every
others in your field.                            purchase explaining their commitment to
   How do you make sure your customers           providing jobs for American workers and
have enough information about you to             to support domestic manufacturers and
spread the word knowledgeably? One way           suppliers where possible.
is to tell them yourself. The way you run           A second way to ensure that your cus-
your business, of course, makes a strong         tomers have information is to have some-
statement. However, you should also make         one they trust tell them how good your
an effort to give your customers informa-        business is. Positive validation by a trusted
tion that lets them judge the quality of         person can be extremely effective. For in-
your business for themselves.                    stance, think about how good you would
   For example, a plumber might say, “I’m        feel if a fashion designer told you the suit
glad you let me install 3/4-inch copper          you were wearing was beautifully tailored,
pipe instead of plastic, because I feel con-     or if your uncle who is a dentist looked
fident it will last two generations without      into your mouth and assured you that your
giving you any problems. Also, it works so       regular dentist did excellent work or if an
well that the pressure in your shower is         award-winning architect remarked posi-
now good enough that you can take a              tively about the remodeling job you had
shower while washing the clothes and             just done on your kitchen.
running the dishwasher, without loss in             You can and should, of course, use both
pressure.”                                       of these methods to let your customers
   Or, if you tell a customer in your bou-       know that you run an excellent business.
tique that the half-Dacron, half-cotton          Once they know this, they will not only
jumpsuit she is considering buying to bring      tend to patronize you more themselves,
on a trip will dry on a hanger in two hours      but will also surely recommend your busi-
                   HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS               8/ 3

ness to others. Let’s now look at these        or sexier. Make the communication mean-
techniques in detail.                          ingful and interesting—beyond a func-
                                               tional description of what you’re selling. A
                                               catalogue can educate your customers
A. Tell Them Yourself                          about what you do, especially if you tie it
                                               to a story. We all love a good story, and
How can you effectively communicate            are more likely to patronize a business that
your confidence and pride in what you do       takes the time to tell us one. The following
without boring people to death or appear-      brief excerpts from mail order catalogues
ing hopelessly egotistical? The most imme-     illustrate the technique.
diate way is to have your own genuine             Burgers’ Smokehouse, located in the
good feelings about what you do be so          Ozark Mountains of Missouri, has this to
pervasive that your customers immediately      say about its hams: “These are the hams
pick up on them. Earlier in this book, we      our fathers, grandfathers, and their forefa-
discussed the importance of having a clean     thers made. It is the ham that was made at
business, enthusiastic employees, open         the time of the Pilgrims and long before.
books, honest pricing, and offering lots of    They are cured the old-fashioned way—
extras as well as selling a quality product    outdoors in a corn crib or, as in our case,
or service. All these things tell your cus-    in a special building which allows fresh
tomers that you are a first-class operation.   country air to move continually around the
In addition, it is extremely important to      hams—and aged for a year. Because it is
pay attention to details, such as how you      so time consuming, most production of
finally present your product or service, in-   this type of ham is for private consump-
cluding the wrapping, if any, clear instruc-   tion, and we are virtually the only firm that
tions on use and what to do if something       makes it in commercial quantities.”
goes wrong with a product or a service            The House of Tyrol in Cleveland, Geor-
proves disappointing.                          gia, sells beer steins to collectors. Its cata-
   Once these basic good business tech-        log contains not only detailed descriptions
niques are in place, you are ready for the     of the steins, but background information
next step: maintaining a high level of com-    that is bound to captivate collectors. For
munication with your customers. Commu-         example, with a description of a stein that
nication (oral when possible, written when     depicts Frederick the Great and the Prus-
not) should be built into the operation of     sian eagle is the following story:
your business. There is no need for this          “His father thought him a weakling, beat
contact to be boastful. People are sick of     him, and cast him into a dungeon for a
being told by advertisements that a certain    spell. Indeed, Frederick II played the flute,
product or service is bigger, better, faster   corresponded with Voltaire for 42 years,

was known as the philosopher king, and                 articles by people prominent in the
even anonymously published a refutation                field discussing the best mediation
of Machiavelli. Yet, Frederick, inheriting an          techniques and other important in-
army of 100,000 giants, wrested Silesia                formation about the field. Lande
from Maria Theresa, held off the combined              sends his newsletter to other lawyers
forces of Austria, Russia, and France, and             who might refer mediation cases to
later joined in the first partition of Poland.         him, as well as to a wide range of le-
When he died in 1786, he was known as                  gal practitioners and former clients
the Great, and Prussia rivaled Austria for             who might know of others who
control of the German states.”                         could use his services.
   Here are several other examples of busi-         • The Redwood Funeral Society pub-
nesses that tell their customers how good              lishes an annual “Consumer Protec-
they are in creative and helpful ways:                 tion Price Survey on Death
    • A delicatessen that makes sure all               Arrangements” which lists prices bro-
       new customers know how to prepare               ken down by services offered and
       the exotic foods they purchase.                 whether they are an independent
    • A caterer who has a favorite recipe              provider or part of a conglomerate.
       printed on business cards.                   • Mary’s Flowers in Seattle sells special
    • A craftsperson who includes a card               flowers, shears, decorative figurines
       with every piece of finished work,              and vases used for traditional Japa-
       explaining how it was made and                  nese flower arrangements. She al-
       where the materials came from.                  ways has a fresh arrangement in the
    • A bakery that prints on its bags its             window created by a person skilled
       policy about using only natural in-             in the field. This subtly, but obvi-
       gredients.                                      ously, tells her customers that her
    • A dentist who calls the evening that             flowers and other materials are first-
       he performed a root canal to ask                class.
       how you are feeling.                        No matter what your business, you can
   Here are some small businesses that do        offer a descriptive brochure about your
a good job of having others communicate          goods or services, extensive descriptions
favorable information about them:                on your label (if that is appropriate), guide
    • John Lande, a lawyer who specializes       books, instruction manuals or handouts
       in mediation, publishes a newsletter/     containing basic information about your
       bulletin to educate people about the      goods and services. Remember, if your
       reasons for choosing mediation over       business is truly a good one, the more
       an adversarial approach to dispute        your customers know about your field, the
       resolution. This newsletter contains      better you will stack up.
                     HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS                         8/ 5

  The options in providing general infor-              though far from exhaustive, is designed to
mation about your field of business are                stimulate your thinking and imagination.
very broad. The following questionnaire,

        Do You “Tell Them Yourself”?

        Do you give verbal assurance to customers about the quality of your goods or service?

                    NEVER                 SELDOM            OFTEN                ALWAYS

        How? What kinds of things do you tell customers?

        Is specific evidence given to customers to back up this assessment?
        [Examples: “Call me back if you don't see a result in three days.”
        “Measure it before and after you put it in a cold wash to make sure it doesn't shrink.”]

                    YES                   NO

        Who usually tells the customer?
                    I TELL THEM                             SOME EMPLOYEES TELL THEM

                    MOST EMPLOYEES TELL THEM                ALL EMPLOYEES TELL THEM

        Is follow-up done to check new customer satisfaction?
                    NEVER                 SELDOM            OFTEN                ALWAYS

        Is follow-up done to check regular customer satisfaction?
                    NEVER                 SELDOM            OFTEN                ALWAYS

                                   Pinchot & Company
Selling a service to the top executives of      and American companies, and Pinchot
Exxon, Xerox and DuPont can’t be consid-        worked with them to learn how to deal with
ered an easy job, especially when your first    large corporate clients.
post-college business experience was               Next he, with the support of the Swedes
blacksmithing. That is precisely what Gifford   and Norman Macrae, editor of the presti-
Pinchot III has done. His firm, on Vashon Is-   gious Economist magazine, gave the meth-
land near Seattle, sells an Intrapreneurial     odology a name: Intrapreneurship. With the
training program. Included in Pinchot’s sales   name and the direct client experience,
packet is an “Innovation Audit” for major       Pinchot opened the School for Intrapreneurs
corporations designed to see if they are en-    at Tarrytown Center and marketed the
couraging the development of new ideas. A       courses to the Center’s big business commu-
full-scale audit can cost upwards of $50,000    nity. In addition to instant credibility, this
and take several months. The company also       provided him with students.
offers a mini-audit for less.                      Pinchot’s next step was to begin to talk
   Pinchot started with his own                 about his ideas with the American business
entreprenurial spirit and experience, first     press, which was eagerly soliciting informa-
farming and then blacksmithing for eight        tion about his new ideas. As part of getting
years and running an inventor’s brokerage.      the word out, he wrote his own article on
He had the respectable academic creden-         the material, published in International Man-
tials necessary for many mainstream jobs        agement magazine, which led to further cov-
but preferred running his own business.         erage by Inside R & D.
   In the late ’70s, he participated in the        Simultaneous with the beginning of his
School for Entrepreneurs at Bob Schwartz’s      publicity campaign, Pinchot started work on
Tarrytown Center (see Chapter 7). While         a book called Intrapreneuring, which was
there, he asked himself the question, “Could    published in 1985 by Harper and Row. The
a large corporation keep the entrepreneurial    book was based on interviews with
spirit within itself?” As he said in USA To-    “intrapreneurs” from major companies and
day (August 22, 1985): “One very large firm     provides examples for his prospective clients.
lost 37 people that they really thought were    When the book was published, Pinchot got
important. They discovered after five years     widespread publicity in the general press and
that those 37 people had formed businesses      made special efforts to be covered by the
which were 2.5 times as large as the com-       business press. The result was large articles in
pany they had left.”                            Inc., Boardroom Reports, Business Week and
   Although Pinchot clearly had a good busi-    other publications.
ness idea, he had to do a number of things to      Finally, because he frequently used the 3M
appeal to major business clients. Many of       Corporation in Minneapolis as an example of
them had to do with giving potential clients    an intrapreneuring company, Pinchot asked for
information with which to measure his work.     permission to study the company. Not expect-
To accomplish this, Pinchot first developed     ing payment, he was surprised when 3M felt it
his direct support community—people expe-       needed a new outside viewpoint and hired
rienced in the field, with whom he could        him for an audit. Word of Pinchot helping his
brainstorm and learn. As it turned out, three   best example spread widely among corporate
men in Sweden (the Foresight Group) were        executives and helped further expand the
taking a similar approach in helping Swedish    firm’s business.

B. Help Customers Judge                         • A wine store that displays graphically
   for Themselves                                 attractive material telling customers
                                                  how to judge a good wine and then
The best way to let your customers know           gives them a list of ten “good buys”
your business is good is to provide them          and asks them to judge how they
with the information they need to judge for       stack up.
themselves. You can give your customers         • A real estate company that demon-
four broad kinds of measures to accom-            strates with a bar graph that it out-
plish this: Direct, Public, Education and Re-     sells other companies in the area and
ferrals.                                          places this information in the local
                                                  real estate guide and in the office.
                                                • A brake shop that distributes infor-
1. Direct Measures                                mation sheets explaining the various
                                                  types of brake jobs it does and how
At the simplest level, you can tell your cus-     long each should last.
tomers about special features of your           • Rollerblade, an in-line skate manu-
goods or services. Examples of this tech-         facturer, which lays out a course and
nique include:                                    brings a van full of skates to an-


                                             nounced locations so customers can
                                             try before they buy.
                                         These types of direct explanations offer a
                                      concise measurement that your customers
                                      can easily evaluate. Let’s now look at the
                                      specifics of how four businesses accom-
                                      plish this.
                                         Bruce Nelson of Local Color Inc. in Mill
                                      Valley, California, specializes in exterior
                                      paint jobs for older houses. He has devel-
                                      oped a one-page checklist that details the
                                      elements of a quality house-painting job.
                                      He gives this form to all prospective cus-
                                      tomers when he bids for a job. This gives
                                      them a chance to understand all that his
                                      work entails so they can have a sensible
                                      basis on which to compare other painters’
                                      bids. More to the point we are discussing
                                      here, it also provides them with the back-
                                      ground information necessary to evaluate
                                      the quality of Nelson’s work when the job
                                      is complete. Local Color also gives poten-
                                      tial customers a list of buildings it has
                                      painted. Divided into “Driving Tours” of
                                      different neighborhoods and house styles,
                                      this provides a convenient way for anyone
                                      interested to check out Local Color’s work
                                      in advance. In 1994, Local Color painted
                                      two houses on the famous Post Card
                                      Row—a street in San Francisco lined with
                                      historic Victorian homes—and won first
                                      and second place in the “Picture It Painted
                                      Professionally” contest sponsored annually
                                      by Painting and Decorating Contractors of
                    HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS                8/ 9

   The House Cleaners of Memphis, Tennes-         agreement. Needless to say, Barbara is so
see, specializes in cleaning apartments           valued by the people she works for that
when tenants vacate. When its employees           she commands a premium price and has a
finish, they leave a detailed checklist for the   waiting list for her services.
landlord, marking off such items as “cleaned         Written agreements are particularly im-
venetian blinds,” “oiled hinges” and              portant in many consulting and personal
“cleaned refrigerator coils.” Many landlords      service businesses where customers often
who would never think of cleaning some of         don’t know just what it is you do. In addi-
these items still feel very good to learn         tion to defining the specific task to be ac-
about what they see as an extra service.          complished (for example, designing a
   In a similar vein, Barbara, a mother of        computer program to track sales calls), it is
school-aged children, needed to supple-           also important to use a contract to tell the
ment her income and decided to clean              customer exactly how you charge. For ex-
houses so she could control her schedule          ample, many professionals charge for
and be home when her children arrived af-         missed appointments in some circum-
ter school. Barbara has evolved a method          stances. If you do, letting your clients
that makes new customers both knowl-              know in writing as part of your contract
edgeable and satisfied. Initially, Barbara        about the specifics of your billing practices,
comes to a potential customer’s house to          such as the fact that “Travel time is charged
determine, specifically, what is expected of      at one-half the standard hourly rate,” or
her. She then sits down with the customer         “Phone calls of more than five minutes’ du-
and draws up a short contract which spe-          ration are charged for a quarter of an
cifically states what will be cleaned, how        hour,” is a direct and beneficial way to
often, who will provide necessary supplies        both give them necessary information
and how much this will cost. Then, Bar-           about your business and to indicate that
bara comes and cleans everything at the           your time is valuable.
agreed-upon price, even if it takes her a            In the home contracting business it is
little longer than estimated. She then leaves     very common for the home owner to keep
the homeowner a note asking him to call if        adding on to the job without realizing that
he has any problems and suggesting any            the cost is going up with each addition.
adjustments in the arrangement. If she            The savvy contractor anticipates this by ex-
doesn’t hear from the person within a few         plaining verbally and in writing that any-
days, she calls to make absolutely certain        thing not included in the original contract
he is happy with her service and to discuss       requires an extra work order signed by the
whether he wants to add or subtract any-          home owner.
thing from the agreement. From then on,              Typically, a letter of agreement such as
she comes as scheduled and keeps to the           this works well:

Sample Letter of Agreement                      2. Public Measures

 Ms. Nancy Lowell                               Another important way your customers
 Compu-Consultants                              gain knowledge about your business is
 24360 9th Street                               through your creative use of public com-
 Berkeley, CA 94710                             munication. Public communication can in-
                                                clude almost any source of authority, such
 Ms. Jeanne Pierson                             as a trustworthy media outlet or consumer
 Butterfly Boutique                             rating service that your customers know
 1234 Mountain Blvd.                            makes judgments that are reliable, objec-
 Montclair, CA 94725                            tive and, most important, independent of
                                                your control.
 Dear Ms. Pierson,                                 For example, when you offer something
 The object of this consulting project is for   that has been evaluated favorably in Con-
 Compu-Consultants to help you, the             sumer Reports magazine or by any other
 owner of Butterfly Boutique, to set up an      consumer rating organization, it’s good
 operating financial reporting system that      business to post a copy at your place of
 will allow you to travel for periods of up     business. (Consumer Reports discourages
 to six months with confidence that the ac-     use of its ratings in ads, for obvious rea-
 counting and bookkeeping aspect of your        sons, but their use as part of direct market-
 business will be well run while you are        ing efforts by your business is acceptable.)
 gone. This should be accomplished in              Similarly, listing the FDA minimum daily
 three months, using no more than 90            nutrition requirements side by side with
 hours of consulting time.                      the contents of your food products allows
    The technical specifications of all soft-   your customers to intelligently judge your
 ware necessary to accomplish this goal         product. Where relevant, Environmental
 and a detailed statement of what the soft-     Protection Agency (EPA) warnings are cer-
 ware will accomplish are appended to           tainly important for your customers to be
 this agreement. Consulting time shall be       aware of so they can evaluate how you
 billed monthly at $75 per hour. If you         have dealt with any potential health risks.
 agree with these terms and find them sat-      For example, if you run a garden shop and
 isfactory, please sign under my signature      know the EPA has listed several types of
 below on both copies; keep one of them         pesticides as being particularly dangerous,
 for your files and return the other to me.     you would be wise to post a notice to this
    Sincerely,                                  effect along with a list of the substitute
    Nancy Lowell                                products you recommend to accomplish
    President                                   the same pest control purpose.
                    HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS             8/ 1 1

  Here are some other examples:                  ing informative signs on the goods them-
   • “The following is a list of five nega-      selves, consider creating a display where
      tive traits associated with religious      you post the actual reviews and articles
      cults by Time magazine—please              commenting objectively (and ideally, favor-
      judge for yourself if our spiritual cen-   ably) on the products you sell.
      ter has any of them.”                         The Internet has a plethora of sites that
   • “Following are the important charac-        evaluate products and services. If you have
      teristics of a fine woolen sweater as      a website, you can add a page that has
      established by the National Wool Bu-       evaluations of the products you sell. Even
      reau. Notice how our sweaters com-         better, you can provide a page of links to
      pare.”                                     other sites that provide evaluations and
   • “Tennis International magazine has          measurement tools.
      published the following criteria for a        The Industry Standard, a magazine on
      well-strung tennis racket. Please          the Internet economy, has a Secret Shopper
      check to see that we meet or exceed        column that rates websites for accuracy. In
      all of these requirements.”                one instance, the Secret Shopper ordered a
  Similarly, if you are in the insulation        dozen clothing products from online stores
business, you want to let your customers         in order to compare the actual color of the
know about the products you sell that            clothing with the Web graphic examples. If
work as well as asbestos, without the            your company obtained a good rating, it
health risks. One way to do this is to make      would be worth noting publicly.
available the recommendations of a promi-           The Sonoma Land Trust in Santa Rosa,
nent architect associated with the environ-      California has devised a Partners in Nature
mental movement. Besides the educational         program with local business owners. As
value, your customers will appreciate your       part of helping participating businesses
awareness of these matters.                      market their services, the land trust pro-
  Articles in newspapers, magazines or           vides a logo that the businesses can use to
professional journals that evaluate your         show their commitment to land protection
business or products also give the public        and conservation.
readily available measures of quality they          In the May 1996 issue of Money maga-
can use for their own purposes and pass          zine, in the “Wise Up” column, there is an
along to others. It’s important to be aware      article entitled “The Post Office’s Priority
of such articles and make them available         Mail Flunks Our Five-City Test.” The article
on a regular basis. For example, if you sell     is prominently displayed on the counter of
appliances, electronic equipment or hard-        our local mail service that handles Fed Ex
ware, all products that are top rated should     and UPS packages.
be marked accordingly. In addition to plac-

   Don’t assume that providing convenient        products are “scrupulously cleaned and
ways for customers to measure the quality        created without bleaches, formaldehydes,
of your goods and services may work well         dyes or animal cruelty by more than 50
for some types of businesses but not for         ranchers.” Along with other information
yours. For example, even dentists—hardly         about the important attributes of wool they
a group that normally engages in creative        include the results of a study conducted by
marketing—are sometimes evaluated. A             two leading European institutes that con-
San Francisco Bay area publication, Con-         firms wool’s superior comfort (under both
sumer Checkbook, sent a questionnaire to         warm and cool sleeping conditions, wool-
thousands of Bay Area citizens and asked         fill wicks away body moisture better than
them to rate their dentists. Two of the          down, cotton or synthetic fibers) and dem-
questions were: “My dentist explains what        onstrating the lowering of heart rate, de-
he/she is doing,” and “My dentist encour-        crease in humidity and regulation of body
ages patients to look at their own dental        temperature.
files.” The magazine published the tabu-            Offering customers something tangible is
lated results, which contained information       a good marketing strategy and can be an-
on costs, dental specialty and other mat-        other creative way to allow them to mea-
ters. One Palo Alto dentist, Daniel              sure the quality of your goods and
Armistead, who was rated at or near the          services. Pharmacies can provide charts
top in all important categories, displays this   that compare cost and potency of generic
rating in his waiting room, so that the ma-      and branded medicines. This not only al-
jority of his customers who don’t subscribe      lows customers to save money, but also
to Consumer Checkbook will know how he           lets them know that the pharmacy is con-
stacks up.                                       cerned with more than just its own bottom
   A dentist who isn’t in a community            line. For businesses that sell things by
where ratings are published can display ar-      weight, a cardboard slide rule that conve-
ticles and other information explaining          niently allows customers to compare vol-
new and improved techniques for teeth            ume to cost, or distance to weight, can be
and gum care. This gives the patients valu-      a wonderfully helpful device. It is both a
able information about state of the art den-     useful tool and a reminder that the store
tal care and helps them understand that          wants to help customers get a good deal.
they are being cared for by a person who  , the publisher of this book,
prides herself in keeping up with develop-       does an impressive job of giving out infor-
ments in her field.                              mation in a variety of ways, particularly at
   In The Natural Bedroom in San Fran-           its website where an extensive Legal Ency-
cisco, California, mail order catalogue cus-     clopedia offers free legal information for
tomers are informed that their woolen            consumers.
                     HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS                       8/ 1 3

        How Customers Can Evaluate Your Business

        My business provides clear verbal measurements of product/service effectiveness.

                     NEVER               SELDOM           OFTEN                 ALWAYS

        My business provides training classes to new customers and prospects.

                     NEVER               SELDOM           OFTEN                 ALWAYS

        My business provides clear written measurements of product/service effectiveness.

                     NEVER               SELDOM           OFTEN                 ALWAYS

        We offer a

                     Brochure                     Specification sheet
                     Checklist                    Contract
                     Informative label            Questionnaire
                     Instructions                 Evaluation form
                     Worksheet                    Physical measurement
                     Website                      Other online information (survey, newsletter, etc.)
        We have:

                     Displays/models                      Samples/examples
                     Photos of successful work            Other evidence of quality

3. Educational Measures                              opportunity to communicate directly with
                                                     both customers and interested prospective
All the measures discussed in this chapter           customers. And if you teach at a well-
to communicate information to your cus-              known school, it gives both you and, by
tomers and clients are, in a broad sense,            extension, your business a valuable cre-
educational. Here we focus on more tradi-            dential.
tional “educational” avenues: classes and              Most community college and university
workshops.                                           extension course catalogues include a wide
   If you teach popular classes, you have a          array of courses in which businesspeople
great marketing advantage over similar               teach the public about their fields. The
businesses because you have an enormous              courses can generate clients and personal

recommendations based on what the stu-          4. Referrals
dent learned. For example, a college exten-
sion catalogue that recently came our way       The opinion of people in your field—pro-
lists the following evening courses, which      fessional peers, leaders in the field, knowl-
are really just introductions to new busi-      edgeable suppliers, key employees or
ness fields:                                    former students and apprentices—can
    • Graphic Design for the World Wide         make a huge difference to a successful per-
       Web                                      sonal recommendation marketing cam-
    • Computer Ergonomics                       paign.
    • Mediating Business Disputes                  In the small business context, one of the
    • Ocean Kayaking                            best references you can obtain for a service
    • Toxic Waste Safety                        you offer is to send a customer to a re-
    • How to Design Your Own Kitchen            spected peer for a second opinion or criti-
    • Coping With an Alcoholic in the           cal evaluation. For example, an architect
       Family                                   might send a client to a solar expert for
    • Law for the Small Business Person         confirmation that his design is, in fact, solar
    • Creative Divorce                          efficient. A builder working in an area of
   Classes can also directly expose potential   earthquake risks can refer potential cus-
customers to your product. For example,         tomers to a soils expert or structural engi-
auto dealers often lend cars to driver train-   neer to review her plans.
ing classes, and customers are often ex-           The point is that it is extremely impor-
posed to computers, laser printers and          tant, especially in service businesses, that
other high-tech equipment through training      you take the time to know others in your
classes. Indeed, this approach is so suc-       field and related fields. As they come to re-
cessful that the Apple Computer company         spect and trust you (and vice versa), there
bases much of its corporate marketing ef-       will be all sorts of ways you can help each
fort around making gifts and loans of com-      other, one of which is to provide validation
puters and software to schools and              for each other’s goods and services.
nonprofit groups. Similarly, one of the rea-       The Pickle Family Circus of San Fran-
sons that Lincoln and Victor became the         cisco found an ingenious way to involve a
dominant names in the welding business          former colleague. One of the clowns who
was because they supplied trade schools         helped found the circus in the early 1970s
with their equipment.                           moved to New York and became a widely
                                                recognized performer. He even received a
                                                very prestigious MacArthur Foundation
                                                Award. In a well-publicized homecoming
                                                gala fundraiser, the circus was able to re-

mind everyone that it is an important         throughout the years, passing along his ex-
source of theatrical talent and an exciting   pertise and love of fine craftsmanship.
place to be.                                  Now, when Hal’s apprentices have jobs
  Similarly, a good strategy for a dance      that are technically too difficult for them,
school would be to have a top student per-    they refer those customers to their “mas-
form at a party held by a board member of     ter.” If you have been involved with ap-
an important ballet company.                  prentices, let them know if you are
  Whenever we think of apprentices, Hal       available to back them up or help with
Howard comes to mind. Hal, a floor            complicated jobs.
sander, has trained numerous assistants


        My business is:                                     by:

                                               Others in the same business
                                               Locals in the same business
                                               Others in closely related businesses
                                               Leaders in my business
                                               Students and former employees

C. Giving Customers Authority                Chances are you already use some of these
   for Your Claims                           techniques and are familiar with others. For
                                             example, displaying diplomas, awards and
While it can be very effective for you to    certificates of course completion are tradi-
communicate your pride in your work or       tional ways to let clients and customers
product to your customers directly, it is    know that you have the “seal of approval”
usually even more effective to have some-    of the educational or licensing institutions
one else do it for you. There are many       in your field. Similarly, wine bottles often
ways you can provide the authority of oth-   have an “appellation”; marmalades and
ers to help customers realize that your      mustards often tell us they won “First Prize
product or service is of high quality.       in the Cloverdale Fair”; film posters and
                    HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS               8/ 1 7

book jackets tell us about awards won and         display it on the bulletin board along with
display favorable critics’ comments and           information about the speed and precision
electrical products have the “Underwriter’s       of its service. If you adopt this technique,
Labs Seal of Approval.” Web pages may             however, be sure all letters and commen-
note that they’ve been named “One of the          dations are relatively recent and are
top 5 Yahoo sites on the Net.” If you are         changed often. Your regular customers
an author or small publisher, a high rating       won’t be impressed the 37th time they see
by readers on can be useful            the same faded letter. Oh, and one more
in your marketing.                                thing. Take the trouble to display all mate-
  Ways to use third party testimony to tell       rials as nicely as possible. If you simply
your customers that you do a good job are         tape a review or commendation to a win-
almost limitless. Even the smallest business      dow or wall, you tell your customers that
should be able to create a healthy range of       you have little imagination and don’t value
this type of information. For example, in         the accolade highly enough to present it
some businesses such as consulting, graph-        well. A far better approach is to take all
ics, interior design and advertising, it is       you want to display to a local framing shop
customary to list one’s clients in a portfolio.   and have them presented nicely.
This idea can be carried further by not only         Peter Martin, a Santa Cruz, California real
presenting a bare list, but including de-         estate broker, makes extensive use of state-
scriptions of each client, as well as quotes      ments from satisfied customers. When a
from them about your business. It is also a       customer compliments Martin after a job is
good idea to give special potential clients       done, Martin asks her to put the compli-
the phone number of an existing client            ments in writing, on letterhead if possible.
(with permission, of course) to call for          “It’s important to ask clients when the
more information about your work, as long         good service they’ve received is fresh in
as you don’t overdo it. Architects, interior      their minds,” he says. Martin sends pro-
designers, graphic artists and landscapers        spective clients and friends well-designed
are among the businesses that can offer           and attractively printed brochures contain-
portfolios of their work along with pictures      ing excerpts from the letters. The bro-
of happy clients and letters of appreciation.     chures, which are inexpensive to produce,
  Many retail businesses display letters          serve the dual purpose of telling prospec-
from enthusiastic customers, and some en-         tive clients about him and answering
large letters of special interest. For ex-        friends who ask “What can we say about
ample, if a local photocopy store                 you?”
completes a huge rush job for a popular              Some businesses also display photos of
local business or a political figure and re-      local or national celebrities who patronize
ceives a note of thanks, it makes sense to        their business. If you do this, pay particular

attention to both the quality of these pho-       ice cream shop near our office, displays a
tos and what they communicate to the              newspaper article selecting it as the store
viewer. While a photo of a top bike racer         with the best cafe latte in San Francisco.
consulting on the repair of his bike at a lo-     Written on the glass frame is “Chosen
cal bike repair shop would be very effec-         Number 1.” Made to Order, the very suc-
tive, a 15-year-old picture of a former           cessful delicatessen in Berkeley, California
football player eating in a restaurant may        we referred to in the last chapter, let its
subtly tell the customer that the restaurant      customers know that its pesto was chosen
is as out of date as the quarterback.             Number 1 in Northern California by a well-
   Another good approach to validating            known newspaper by enlarging the article,
your expertise is to write a series of articles   framing it with bright colored cardboard
about your specialty or to contact publica-       and putting it in the window with ribbons.
tions and freelance writers to see if they        After a month, the display was taken down
are interested in telling your story for you.     and replaced with a list of new products.
In almost every business or field of special-     Made to Order, which regularly wins prizes
ization, there are newsletters, journals or       and receives favorable reviews and awards,
trade magazines that accept such articles.        turns each into an exciting event, but never
Once a favorable article is published about       tries to milk any particular accolade or
your innovative law practice, lawn repair         prize too long.
service or language school, distribute re-           One of the most ingenious examples of
prints to your customers and have the             giving customers positive information
original enlarged for display. Also, if you       about a business was Zoah’s Free Raffle
can, arrange to be interviewed on a local         Event. This popular Japanese luncheon
radio show, and have a friend photograph          spot in San Francisco opened during the
your appearance and display it at your            late ’70s and lasted into the early 1990s, ca-
business, or use it in your brochure. News-       tering to businesspeople. Zoah’s asked
paper articles about your business are, of        each customer to present a business card
course, an easy thing to display. Again,          to enter its annual raffle. Many hundreds
however, make sure that all material of this      did. Zoah’s then awarded over 60 small but
sort is reasonably up-to-date. People will        nice prizes (a beer mug or Japanese cook-
be a lot more interested in the fact that you     book, for example). The name of each
appeared on the Jay Leno show last month          winner and his business was written care-
than the Merv Griffin Show in 1980.               fully on long sheets of paper underneath
   Awards and displays explaining them can        his prize and posted on the restaurant wall.
often be an authoritative way to tell your        Zoah’s crossed out the winners’ names
customers that others think well of you.          with light-colored ink when they claimed
For example, the Daily Scoop, a coffee and        their prizes. The result, of course, is that all
                     HOW TO LET CUSTOMERS KNOW YOUR BUSINESS IS EXCELLENTS                8/ 1 9

the restaurants’ many customers, and even           but the roster of winners posted on the
many people who work in the neighbor-               wall allowed others to see how many
hood who had never been to the restau-              prominent and interesting people patron-
rant, heard about the winner’s names.               ized their restaurant.
Indeed, several prize winners reported be-            Unfortunately, Zoah’s didn’t do an ad-
ing called by a number of friends telling           equate job of keeping the place clean, and
them of their good fortune. Of course, in           Japanese food is known for its ultra-cleanli-
running this little event, Zoah’s not only          ness. Word got out, and Zoah’s early mar-
provided fun and prizes for its customers,          keting could not overcome the effects.

        Customer Referrals

        I offer new customers the names and phone numbers of other customers.
                     SOMETIMES        USUALLY

        I refer customers to others for second opinions or evaluations.
                     SOMETIMES        USUALLY

        I have available:
                     Printed lists of customer referrals
                     Letters from satisfied customers
                     Evidence of awards or certificates for my product
                     Newsletter with customer comments
        I display:
                     Photos of customers enjoying my product or service
                     Certificates and awards
                     Any other evidence of accomplishments

 Chapter 9

 Helping Customers Find You

A. Finding Your Business .................................................................................... 9/3
B. Convenience of Access .................................................................................. 9/5
C. Signs .............................................................................................................. 9/7
D. Telephone Accessibility ................................................................................. 9/8
    1. Yellow Pages Listings ................................................................................. 9/8
    2. Phone Technology ................................................................................... 9/10
E. Listing Your Services Creatively and Widely ................................................. 9/13
F. Getting Referrals From People in Related Fields ........................................... 9/15
G. Trade Shows and Conferences ..................................................................... 9/17

                   aving the best product or     manuals or with the Chamber of Com-
                   service in your area won’t    merce.
                   do you any good if poten-        At this point, you may be thinking about
tial customers can’t find you. If you run a      skimming or skipping this chapter; after
small animal hospital, how does a person         all, if you have been in business for a
whose cat gets violently ill in the middle       while, you probably believe that you have
of the night find you? If you fix Apple          already dealt with all the obvious accessi-
computers, how does a writer with a balky        bility issues. It is our observation that
Macintosh and an unforgiving editor get          many established and otherwise efficient
your phone number in a hurry? If you op-         businesses have a lot of room to improve
erate a language school to teach English as      in this area. And don’t dismiss concerns
a second language, how do potential cus-         about accessibility because yours isn’t a re-
tomers who may not know enough En-               tail business. Even if you only have a rela-
glish to use traditional listing services such   tively few loyal clients, as is true of many
as the phone book locate you?                    wholesalers and small consulting busi-
   To begin with, ask yourself two ques-         nesses, it is imperative for you to attract
tions. The first is obvious: Do the maxi-        new ones if your business is to thrive. To
mum possible number of potential                 do this, you must make it easy for new
customers know how to find your busi-            people to find you.
ness? Depending on what kind of business            For example, suppose a visitor from an-
you own, the second question can be far          other country reads an article you wrote in
more subtle: Assuming a potential cus-           a trade journal about how to efficiently use
tomer knows where you are, can he actu-          variable speed electric motors in genera-
ally get to your goods and services with         tors, and asks the State Department for an
reasonable ease?                                 introduction. You will never meet the per-
   Answering these important questions           son if you can’t be found fairly easily.
can involve thinking about everything            Similarly, imagine the former spouse of a
from your business name, your product            loyal customer who now has a thriving
packaging, the signs on your building and        business of her own and needs the ser-
vehicles and the wording on your business        vices of your employee benefits consulting
cards and flyers, to deciding to distribute a    business but doesn’t want to communicate
humorous T-shirt or poster to your good          with her ex-spouse—will she be able to
customers. It also involves determining          find you on her own? What if someone
whether or not you are listed in the appro-      from your college hears from a former
priate and logical places—for example, in        professor that you are a hot-shot Web
the Yellow Pages, Internet search engines,       page designer; will he find you easily or
all appropriate professional reference           give up in frustration?
                                                   HELPING CUSTOMERS FIND YOUS           9/ 3

A. Finding Your Business                          times have you looked for someone’s of-
                                                  fice or shop a little longer than you
Particularly for retail businesses, letting po-   wished to? Have you ever quit in disgust?
tential customers know where your busi-           Probably, most of the time you kept
ness is located is extremely important.           searching until you found your elusive
Often, businesses use well-known land-            quarry, but weren’t in the best of moods
marks to help clients find and remember           when you finally arrived. Enough said, we
their location. Such slogans as                   hope. You don’t want new customers to
“Bridgeman’s, across from the main en-            struggle to find you and to pass the word
trance to the University of Minnesota,” or        that you are “really out of the way” or “im-
“Matthews, Top of the Hill, Daly City,” can       possible to find at night.”
be very helpful for the new customer.                Normally, it is fairly easy to eliminate
Think about how landmarks can help you.           problems people have in finding you even
For example, if your knife sharpening             if your location is out of the way. For ex-
shop happens to be at the crest of the hill       ample, Santa Rosa Dodge capitalizes on
on Main Street, your business cards, Yel-         the fact it is difficult to find through its
low Page listing or delivery truck might          Yellow Pages listing, “Hardest Place in
say “Main Street Saw & Knife Shop—Get             Town to Find…But Worth It!” and then
an edge at the Top of the Hill.” This ap-         prints a map so customers can in fact eas-
proach may be corny, but if it’s effective,       ily locate it. It is an excellent practice for
so what?                                          businesses to print maps in the Yellow
   Your business name can also be an im-          Pages as well as on any flyers or bro-
portant tool. The “24-Hour Pet Emergency          chures. If you are hard to find, or if you
Clinic” clearly lets people know that they        draw customers from out of town, it be-
can get help in the middle of the night and       hooves you to do this.
is a far better name than “Miller Veterinary         We like The First Light Cafe, whose
Clinic” when it comes to promoting your           name tells customers that it is open early
business. Similarly, the “Cosmetic Dentistry      and which provides very clear directions,
Clinic” tells potential customers what you        in the Yellow Pages, to its location.
specialize in. Of course, business names             Accessibility includes many obvious
can serve a number of other valuable pur-         things beyond telling people where you
poses, but in choosing or changing a name         are located, such as making sure your
don’t overlook the potential in terms of          working hours are posted at your place of
helping customers find you.                       business and that you keep to those times.
   Never assume that customers will find          Being unpredictable is a rapid way to
you easily—or at all—once they get your           erode customer trust. Imagine how you
address from the phone book. How many             would feel if you got up early on a Satur-

day morning, packed up the car for a long       A number of retail businesses in all sorts
awaited ski trip, and, arriving at the tire   of fields, from books to baby clothes, have
chain rental store promptly at eight, no      found that staying open longer hours, es-
one was there, even though the sign           pecially at times when most people are
clearly says, “Open at 8:00.” You get a cup   not working, results in more than enough
of coffee and return at 8:30, and still no    sales to cover the increased overhead
one is there. You pace around, trying to      costs. Your customers will tell others that
rationalize traveling without chains, when    there is one place in town where you can
finally at 8:45 someone comes to open up.     buy a bridal gown, lawnmower or a guppy
If you have a choice, you probably won’t      on Tuesday evening or Sunday afternoon.
ever again patronize that business and cer-   Many businesses that have profitably ex-
tainly won’t recommend it to fellow ski       tended their hours have done so by hiring
buffs.                                        reasonably priced part-time Sunday and
                                              evening help. Even professionals and oth-
                                              ers who traditionally work 9 to 5 should
                                              consider keeping their businesses open
                                              longer hours, or at least making some ser-
                                              vices available during times when others
                                              in their field are closed.
                                                Using modern communications equip-
                                              ment creatively often makes it possible to
                                              offer extended access to at least some ser-
                                              vices at a reasonable cost. For example,
                                              one attorney we know of put a small ad-
                                              vertisement in the phone book emphasiz-
                                              ing that his office took messages 24 hours
                                              a day from people who had suffered per-
                                              sonal injuries. He signed up over 30 new
                                              cases within a few months. Similarly, some
                                              dentists and many therapists are now tak-
                                              ing evening appointments, and one friend
                                              very successfully offers 24-hour emergency
                                              dental care for his patients.
                                                Having a website can be very helpful in
                                              directing your customers to your business.
                                              A website can provide vivid and accurate
                                              directions, maps, electronic coordinates
                                                  HELPING CUSTOMERS FIND YOUS           9/ 5

(for a global positioning system (GPS), a        lines clearly marked. All of these are good
tool that uses satellites to find ground loca-   ideas. The important thing is that you ana-
tions) and details about parking. As the         lyze the parking needs of your customers
Internet becomes increasingly connected          and try to meet them, even if doing so
with mobile phones, more and more                costs you a little extra.
people check a business’s website to find           For example, the Counseling Center in
its geographic location.                         downtown Westwood, California is in a
                                                 neighborhood with very difficult parking,
                                                 including 4 p.m. tow-away zones and half-
B. Convenience of Access                         hour meters. It printed a map showing all
                                                 the various parking zones, including free
You probably know businesses that are            spaces, metered ones and parking garages,
easy to find, but located where parking is       within a four-block radius. It’s been very
such a problem that you rarely go there.         popular with customers.
Indeed, shopping centers, which offer free          The Franz Valley Gardens in Calistoga,
convenient parking, grew in large part be-       California specializes in growing and intro-
cause shoppers got fed up with driving           ducing new and unusual plants. It turned a
around the block. Parking should be seen         huge problem with accessibility into a
as an integral part of access to your busi-      flourishing business. The nursery is small,
ness. Unless you are in a shopping center,       remote and has limited parking, so it insti-
are lucky enough to have plenty of park-         tuted a shop-by-mail program for clients.
ing or depend entirely on walk-by traffic        In addition, it sends out a newsletter listing
(such as a gift shop in a hotel), you should     the local Farmers’ Markets where you can
go to great lengths to see that parking is       purchase its plants; it also has a display
reasonably available.                            garden of ornamental grasses and various
   If parking is a potential problem for         plants which may be seen by appointment.
your customers, you should take affirma-         When the items that you order arrive, the
tive steps to help them locate what is           nursery calls and sets up a mutually agree-
available. The fact that most businesses         able delivery time or a time when you can
don’t bother to do this is even more rea-        pick them up at the nursery if you wish.
son for you to set yourself apart by going          Providing parking information isn’t the
out of your way to help your customers.          only way to get your product and your
   Some creative businesses offer validated      customers together. Indeed, it may make
parking privileges at nearby lots, give out      sense to reverse the normal process and
maps showing where parking spaces in             take the product to the customer. Home
their neighborhood are most likely to be         delivery, of course, is a tradition in a few
found, or print maps with public transit         businesses, such as pizza and Chinese res-

taurants. Other businesses, especially ser-          Curious passers-by, who can see all
vice ones, make house calls but often                the exercise equipment through the
charge a lot to do it. Certainly, many busi-         sparkling window-front, can get
nesses could gain customer trust and ex-             more information instantly without
pand their business by flouting tradition            going in. This is good not only after
and offering free or low-cost deliveries             hours, but also allows people to
and service calls.                                   “browse” without risking a hard sell
   This raises an important point: Providing         (which they wouldn’t get anyway).
accessibility to your customers at their         •   Hansen’s Mill of Kromforsh, Sweden,
homes or businesses should never mean                runs a portable sawmill operation
punishing them by charging outrageously              and serves rural customers by milling
for the service. Take stock of your busi-            logs right on their property. When
ness. If offering low-cost or free home de-          the tree feller finishes his job, Olaf
livery would increase sales, consider                and his brother Torbjorn level a spot,
buying a clean second-hand pickup, hiring            set up their equipment and start to
a retired truck driver at a reasonable rate          work, milling lumber to the
and of course purchasing the necessary in-           customer’s specifications. It’s not
surance. This expense shouldn’t be huge              only convenient for the customer,
and may be more than offset by the im-               but extremely satisfying for her to
provement in sales.                                  build a deck or outbuilding using
   Here are some examples of interesting             lumber from her own land.
solutions to the problem of getting product      •   A masseuse might bring her specially
and customer together:                               designed chair and magic hands to
    • The Fit Lab, a clean, bright, well-            your workplace, offering 15-minute
       staffed exercise facility with branches       neck and shoulder massages for a
       in Albany and Oakland, California,            minimum of four people. What better
       fairly bubbles over with innovative           Friday afternoon bonus?
       marketing without advertising tech-       •   Many small office, auto and hard-
       niques. One of its best is to open at         ware supply stores have found that
       least part of the day on major holi-          they can successfully compete with
       days such as Christmas, Thanksgiving          large discount warehouses by em-
       and Easter. You are just bound to             phasizing fast delivery service.
       brag about a gym that cares enough        •   Many drug stores will make deliver-
       about your well-being to let you ex-          ies when necessary, especially to
       ercise on the days when you eat the           new mothers or the elderly and, in
       most. Fit Lab also has brochures              an emergency, will meet you at the
       available in a rack outside its door.         drug store at any hour.
                                            HELPING CUSTOMERS FIND YOUS          9/ 7

• A young friend of ours has many             • The small business owner who refin-
  auto repair customers who live in              ishes clients’ bathroom fixtures in
  rather remote areas. He customized             their homes is certain to benefit from
  his truck so he could do many re-              personal recommendations. In the
  pairs at their homes, often saving             same vein is the mobile dog groom-
  them costly towing charges and in-             ing and bathing service, which is an
  convenience.                                   especially great boon for owners of
• Bookstores that allow customers to             large dogs.
  order current titles over the phone or      • A lawyer or tax preparer who makes
  online and ship the same day are               house calls at no extra charge to deal
  providing a service to the elderly and         with the problems of the ill and eld-
  handicapped as well as researchers             erly opens up a whole new market
  and other busy customers.                      for herself.
• Tilley Endurables makes the super-          • The Mad Matter in Port Townsend,
  sturdy, squashable, rain and mildew            Washington is a framing business
  resistant, wide-brimmed cotton duck            whose owner brings her mat and
  hat that floats and comes with a for-          frame samples to the clients’ homes
  ever guarantee—”Put it in your will.”          for truly individualized service.
  It also sports a “Brag Tag” in the         A business that operates online offers
  crown of the hat for the owner to        additional accessibility. See Chapter 11.
  give people who inquire about the
                                           C. Signs
                                           Drive down any commercial street in
                                           America and look at the signs. How many
                                           do you like? How many do you hate? If you
                                           are like most people, the ones you are at-
                                           tracted to are probably a distinct minority.
                                              What makes a good sign? There is no
                                           one answer. While many people hate
                                           neon, it can be very effective in some cir-
                                           cumstances. Other materials and styles of
                                           typefaces can be effective or not depend-
                                           ing on how they are used. Our bias is to-
                                           ward signs that are simple, easy to read,
                                           and communicate the essence of the par-
                                           ticular business.

   For example, the Pacific Basin School of     1. Yellow Pages Listings
Textile Design flies an exquisite woven
flag from the front of its building, telling    An independent study done for Pacific
thousands of people who pass on the busy        Telephone determined that 95% of the
road more about the business than a hun-        people interviewed found the Yellow
dred conventional signs ever could. Simi-       Pages helpful and 78% of them had con-
larly, we know of several locksmiths who        tacted a firm located there. One-half of
use large cut-out wooden keys to quickly        those in the study made a purchase or
alert passers-by to the nature of their busi-   used a service as a result of their inquiry.
ness.                                              Some businesses, however, waste their
   The Internet has its own kind of signs.      money having a listing or display ad in the
Businesses that rely on the World Wide          Yellow Pages and similar books. For in-
Web for a good part of their business           stance, while escort services, 24-hour
should invest in domain names (their            plumbers and bail bondsmen depend al-
online addresses) that describe their busi-     most entirely on customers who see their
ness (such as Salli’s       Yellow Pages listing, industrial broom sup-
and are very easy to remember. Other            pliers, nonprofit trade organizations, artists
businesses may, in effect, put up signs         and economic research firms typically get
pointing to your online site; if they think     few if any new customers from this source.
people would be interested in it, they may         Van Entriken is an example of a
link their site to yours, allowing browsers     businessperson who found advertising in
to jump to your site almost instantly. More     the Yellow Pages to be ineffective. The
about this in Marketing on the Internet,        owner of an interior design business in
Chapter 11.                                     Reno, Nevada, he laments that “all that
                                                ever came to me from my Yellow Pages
                                                listing was a knowledge of the street lay-
D. Telephone Accessibility                      out of the city.” This knowledge came
                                                about the hard way, when homeowners
For any small business, the telephone is a      who found his Yellow Pages listing under
very important tool; your number should         Interior Designers invited him over for an
be listed in all places a customer is likely    estimate as an excuse to get a free consul-
to look. This is especially crucial for ser-    tation.
vice businesses and others who do a large          If you question whether the Yellow
part of their business by phone.                Pages are appropriate for your business,
                                                it’s helpful to see what others in your field
                                                have decided. If lots of similar businesses
                                                use listings, it’s probably wise to give it a
                                                  HELPING CUSTOMERS FIND YOUS          9/ 9

try. If you find only a few listings, check      increase your display size next year, or
old directories, which can usually be            even sooner in directories for adjacent
found in public libraries, to see if others in   geographic areas.
the field have tried listing. If you notice        If you do decide that a display ad makes
people trying it at various times and then       sense for your business, keep in mind cer-
dropping it, that’s an important clue that it    tain considerations:
probably won’t work for you.                         • Emphasize your specialties. Describe
   Many businesses fall under more than                goods and services that distinguish
one Yellow Pages category. For example,                you from others in your field. One
a word processing service can be found                 charter boat company we know
under that title as well as under “Secre-              originally omitted the fact that it had
tarial Services” and even “Typing.” When               sailboats for hire, even though it was
you check the Yellow Pages, it is a reason-            the only company in the Yellow
able assumption that if all large displays or          Pages that offered this service (others
boldface listings are in only one category,            were power boat charterers). A
this is where customers look most often.               change in the display ad copy in-
Spending money to appear in a related                  creased business by 20%.
category will probably be a waste unless             • Put in as much access information as
you are in a rapidly changing field featur-            you can. Include credit cards you ac-
ing new terminology. For example, a num-               cept, hours of operation, whether
ber of years ago computer sales and                    you respond to calls at night or on
service were listed under “data process-               weekends (businesses that do so
ing.” The first businesses to escape from              usually do particularly well in the
this category and be listed under “comput-             Yellow Pages), whether you deliver
ers” did very well.                                    (another big plus in this kind of list-
   If you decide that your business will               ing) and, of course, detailed instruc-
benefit from more than a listing and want              tions about how to find you.
to pay for a display ad, the question of ad          • Don’t be cutesy or try to win a
size (and price) is important. The best                graphic design award. Information
guideline is to start at a price level you can         that answers customers’ questions as
afford even if the ad doesn’t generate any             clearly as possible is what counts.
business at all. No response would natu-               Also, if your business has been in ex-
rally be painful, but if you’ve been cau-              istence a long time or has just won
tious it won’t put a financial strain on your          an award, mention it briefly. Custom-
business, forcing you to work longer hours             ers who don’t know you will appre-
or significantly increase your debt. If you            ciate the reassurance provided by
do get a positive response, you can always             this information.

2. Phone Technology                                   Answering Machine and Voice Mail
Because of rapid technological change, it           • Keep your message short. By now
is worthwhile to review your telephone-               everyone knows how to use the
related marketing needs at regular inter-             machines and doesn’t want a long
vals. While staying current isn’t always              explanation before getting a chance
cheap, failing to do so often undermines              to speak. Something like, “Hello,
customer confidence in your business. As              this is Tandy Belew Graphic De-
a general rule, anything that significantly           signs. Please leave a message of any
improves the way your customers can                   length, and I’ll get back to you
reach your business is worth the money.               within 24 hours. Thanks,” is all you
   A back-up telephone answering machine              need.
or voice mail service is essential so you           • If you have an old-fashioned an-
can be accessible even when you aren’t                swering machine that cuts off after a
there. Calling a business and having no               certain number of seconds, throw it
one answer turns customers off. We re-                out and buy one that will let callers
cently called a large drug store in our area          talk as long as they wish.
and the phone just rang and rang. Need-             • If you tell callers when you will be
less to say, the drug store that gave its ad-         back, keep the message current. “I’ll
dress and hours of operation got our                  be out Tuesday afternoon” sounds
business. We are continually surprised at             dumb on Thursday.
businesses that let the phone ring and              • Get the best quality machine and fix
ring, passing up a great opportunity to               it or replace it immediately if it
provide important information to potential            breaks. Answering machines gener-
customers. Letting the phone ring also                ally rank as cost-effective invest-
raises the question in potential customers’           ments.
minds that if you are that remiss about the         • If you have voice mail with multiple
phone, what about the rest of your busi-              mail boxes, say so immediately so
ness?                                                 callers know what to listen for.
   When you use an answering machine or
voice mail service, let people know ap-           Here are a few more useful phone tech-
proximately when you will be returning          niques:
their call. If you are out of town, say so,        • Three-way calling, which allows you
and have some system for dealing with                to connect an incoming customer’s
calls during that time.                              call with someone at another loca-
                                                     tion so that all three of you can talk,
                                                     is available in many parts of the
                                                 HELPING CUSTOMERS FIND YOUS         9/ 1 1

       country. This service is essential for   someone or a department and then hear
       lawyers, consultants, accountants and    nothing but a click, you may not be sure
       others who regularly must communi-       whether you’ve been transferred, put on
       cate with more than one person at a      hold or cut off. Not a great beginning for
       time.                                    your contact with a company.
    • “800” and “888” numbers, which let          The one thing worse is to get trapped in
       your customers call you at no ex-        a telephone branching system, the kind
       pense to them, may be absolutely         that says: “If you want our hours press 1, if
       necessary if you take phone orders.      you want sales press 2” and so on, but
       If you are too small to contract for     never gets you to the place you want or
       your own service, there are “800”        gets you to the wrong place. Nearly every
       residential services.                    American can tell a story about a terrible
    • Credit card billing for telephone sales   telephone branching experience.
       is a growing practice. It offers many
       types of retailers and others the op-
       portunity to send catalogues to their          A good telephone branching requires
       good customers, take orders over the           three vital elements:
       phone and send out the product via           1. Explain the branching system imme-
       UPS or other delivery service the               diately. For example, “You will be
       same day.                                       given four choices, including an in-
    • Worldwide telex services are now                 house directory.”
       available for anyone with a computer         2. Make sure that every branching
       and modem to attach to a telephone.             route will get to a logical place. If
    • Fax machines have become standard                you have five products, and inquir-
       in a wide variety of businesses. A              ies about two of them go to line
       separate line is often a necessity, as          one and two go to line two but
       may be 24-hour high-speed auto-                 there is no line three, you have
       mated transmission.                             made a common mistake.
   For many businesses, the telephone is            3. Always let people talk to a real live
the primary access point people have with              human being if they are confused
you. It’s very irritating to call a business           or can’t find their choice among the
and be transferred by the person who an-               ones you offer.
swers the phone to someone else without           Many imaginative business services are
even a “one moment please.” Even worse          becoming available over the phone. For
is just being put on hold without permis-       example, Michael, one of the authors of
sion. This is especially annoying when you      this book, offers personalized marketing
are calling long distance. If you ask for       consulting over the phone. For details, see
                                                the back of the book.

       Phone Accessibility Checklist

       WE OFFER                                                                      UPDATED YEARLY

           White pages listing in appropriate areas
           Yellow Pages listing under applicable topics and in appropriate geographical areas
           Answering service/system with clear instructions
           “800” numbers
           Numbers listed on cards, receipts, order forms, mailers, vehicles, repair labels
           and publications

        Mail Accessibility Checklist

        WE OFFER

             Clear, stable address
             Return address on everything we distribute
             Mail forwarding up-to-date
             Personal relationship with mail delivery person to avoid mistakes
             Clearly identifiable mailbox, with alternative places to deliver packages and
             postage-due mail
             If in out-of-way location, maps are included in mailings
                                                         HELPING CUSTOMERS FIND YOUS        9/ 1 3

        Walk-In Accessibility Checklist

        WE OFFER

            Clear, distinct signs not blocked by trees
            Neighbors given an invitation to visit so they know where we are and what our
            business involves
            Parking available or clearly designated
            Safe places for bicycles
            Door that opens easily, bell in working order
            Convenient hours
            Convenient parking

E. Listing Your Services                              city directories, locally produced maps,
                                                      tourist publications, international directo-
    Creatively and Widely
                                                      ries and publications of county, state and
As you might guess, there is no one way to            federal government agencies that operate
list information about your business in a             in specialized fields. Online listings on
way everyone will find it; each business is           electronic bulletin boards may also be use-
unique and requires an analysis specific to           ful. Remember also that local training
its needs. Just the same, there are always a          schools (such as a culinary academy), trade
number of sensible steps you can take to              schools and wholesalers commonly publish
make it easier and more pleasant for po-              directories, some of which may be appro-
tential customers to find your business.              priate for your business.
These include the obvious such as listing in             Once the obvious listings are covered,
general phone books, specialized phone                it’s time to be a bit more creative: to think
books (for seniors, disabled, ethnic Yellow           of the kinds of listings that are seen by sig-
Pages, and “green” pages, to name a few),             nificant numbers of people who might
and trade and professional association di-            overlook traditional listing places. As an
rectories. Don’t forget Chamber of Com-               exercise to get your mind focused in the
merce publications, public library listings,          right direction, assume that all of the fol-

lowing people are trying to locate your         “Floor Surgeon,” you may never find him
business. Where are you listed, posted or       unless he notifies you of the change a
known that they are likely to look?             couple of times. In addition, anyone asso-
     • An old school chum whom you last         ciated with your product or service (in-
       saw five years ago before you            voice, label or container suppliers, for
       opened your own business.                instance) should have your up-to-date ad-
   To help this person locate you, inform       dress and phone numbers. People who run
your alumni associations as well as former      neighboring businesses should also be in-
employers and employees of your location.       formed of your new location when you
It’s a good idea to do this more than once.     move and, if possible, you should arrange
This can be done by a friendly letter—be        with your old landlord to display a small
sure to include your business card. Also,       sign giving your new address. You might
when communicating with an alumni orga-         offer to pay a few dollars or provide the
nization, always provide information about      landlord a free service in exchange for dis-
what you are doing in a way that is suit-       playing the sign for an extended period.
able for use in its publication. For example,       • A person who heard about your
if you open a wharf-side retail store featur-          unique skill from a former client and
ing fresh fish, you might include a picture            knows only your last name and city.
of yourself in a wetsuit with a spear gun,         You should be listed in all local profes-
captioned, “Our fish is so fresh, I haven’t     sional and trade association directories, in-
caught it yet,” or some such. Alumni maga-      cluding those of trade groups and schools
zines thrive on this sort of good-natured       related to your work. Others in your city
silliness and will surely run your picture      who do related work should know who
and accompanying information, telling a         you are and where you are located. It’s a
number of old friends (great potential cus-     good practice to periodically bring others
tomers all) where you are.                      up-to-date on your location as well as the
     • One of your first customers, a person    current nature of your business. This is
       you haven’t seen since you moved         true even for a civil engineer, painter or
       your business five years ago.            author working out of his home.
   If you have a customer mailing list, write      Spend a few hours online with this
to old customers informing them of your         chapter open in front of you. Sending e-
move. Do this more than once; people of-        mails to business contacts, associates,
ten don’t focus on this sort of information     friends and acquaintances will help ensure
unless they need your service right then.       that people you know will in fact be able
For example, if you have your wood floors       to find you when they want to.
refinished, you may not need the “Floor            Salli lives in a little-known rural area
Doctor” again for a number of years. If he      60 miles north of San Francisco. Because
has moved and changed his name to the
                                                HELPING CUSTOMERS FIND YOUS        9/ 1 5

she knows being accessible to the media          •   Legal services (legal aid) offices
helps her market her books, she is listed in     •   Battered women’s shelters
the San Francisco phone book so that radio       •   Immigrants’ help organizations
and TV talk show producers and newspa-           •   Law school “pro per” assistance cen-
per reporters who remember she is from               ters
the Bay Area can easily locate her.              •   Law libraries
                                                 •   Community service agencies and di-
                                                 •   Drug treatment centers
F. Getting Referrals From                        •   Marriage counselors and family thera-
   People in Related Fields                          pists
                                                 •   Social services offices
Many people in service businesses, from          •   College student assistance offices
yoga teachers to optometrists to piano           •   Gray Panthers and other senior advo-
teachers, rely on referrals for many of their        cacy organizations
new customers. Listing the availability of       •   Major corporation personnel depart-
your services far and wide is crucial to get-        ments
ting those referrals. For example, if you’re     •   Parents Without Partners and other
an independent paralegal, someone who                singles groups
helps people prepare legal forms for di-         •   Law enforcement (including the
vorces, bankruptcies and adoptions, you              sheriff’s office and county jail)
might want to list your services with the        •   Consumer organizations
following types of groups:                       •   The state Employment Office
                                                 •   Women’s organizations
                                                 •   Collection agencies
                                                 •   Child care centers
                                                 •   Military bases, including Judge Advo-
                                                     cate General offices

       Listing Questionnaire

       We are listed in:
           All appropriate professional journals and directories
           Our alumni organizations’ directories
           Local business organizations’ publications
           Trade associations’ directories
           Appropriate online databases
                                                  HELPING CUSTOMERS FIND YOUS           9/ 1 7

          Unique Marketing                       G. Trade Shows and
        Accessibility Problems                      Conferences
There are, of course, some businesses
                                                 In some industries and for some businesses,
where marketing accessibility is a built-in
                                                 the trade show is the primary marketing
problem. With custom-designed dresses
                                                 event. A customer who can’t buy from you
that are sold through boutiques, for in-
                                                 there probably won’t buy from you at all.
stance, the retailer is likely to allow labels
                                                 Such is the case for many products sold
with only the designer’s name and the
                                                 through gift shops, bookstores, boutiques,
store’s name and not the designer’s or
                                                 small groceries, and for businesses selling to
manufacturer’s address. The same holds
                                                 interior designers, school districts, college
true with some craft items such as cus-
                                                 lecture organizers and many more.
tom-made chairs. The retail stores don’t
                                                    Especially for a new small business, a trade
want the customers to bypass them and
                                                 show offers a unique opportunity. Typically,
go directly to the source.
                                                 retailers, wholesalers, sales reps, industry
   From the specialized manufacturer’s or
                                                 press, importers, exporters and agents are all
craftsperson’s point of view, a good solu-
                                                 under one roof, and business is conducted in
tion to this problem is to include the
                                                 a myriad of ways. If you have a good prod-
name of a city as part of your designer
                                                 uct and display it well, one trade show can
name and logo. Suppose you run Sasha
                                                 put your business on the map.
Designs and are located in San Diego,
                                                    Conferences of people in a particular
California. Your designs are sold all over
                                                 field often offer a similar opportunity. For
the country, but it’s very hard for people,
                                                 example, people who purchase equipment
even other retailers, to locate you di-
                                                 for electronics companies and hospital x-
rectly. An easy solution is to change your
                                                 ray departments might be in one place for
name to Sasha/San Diego or otherwise
                                                 several days, and if you have a product or
work your location into your name. Now
                                                 service of interest to them it behooves you
potential customers can simply call infor-
                                                 to be there too. But before you rent a
mation in San Diego to find Sasha. Even if
                                                 booth and set up a display, take the time
Sasha is located in a neighboring suburb,
                                                 to educate yourself about how the show
you could list the name in the San Diego
                                                 operates and what activities are appropri-
                                                 ate and customary.
                                                    All the marketing advice in this book is
                                                 applicable to trade shows; re-read it with
                                                 your exhibition booth in mind. Especially
                                                 keep in mind the general advice we dis-
                                                 cussed in Chapter 1: Don’t recruit customers
                                                 until you can properly serve them. Often,

sales orders taken at a trade show cannot be        you and what visual, technical or
filled on time, and word spreads to the rest        other complications can arise. At one
of the industry with laser-like speed.              booksellers’ trade fair, for example,
   Here are some trade show tips to keep in         the booth of a publisher of books on
mind:                                               human sexuality was located be-
     • Get to know the old pros in your             tween those of a Bible company and
       business and study what they do. If          a publisher of children’s books.
       possible, get their advice on display,       Clearly, adjustment was in order.
       location and promotional offers.           • Get a list of the trade shows sched-
     • Have enough supplies and back-up             uled for all convention centers near
       personnel, and don’t attempt demon-          you. Consider displaying not only at
       strations unless you are sure it will go     those in your field, but also at those
       smoothly. A sample (whether it’s a           which are in any way connected with
       toy or a bulldozer) that doesn’t work        what you do. For example, an archi-
       will be the topic of far more com-           tect who likes to design kitchens
       ment than will a hundred products            might take a booth at a gourmet food
       that do work.                                trade show, or a lawyer who special-
     • Try to set up your display early, and        izes in employment problems might
       design it to be flexible enough to ad-       set up a small display at a personnel
       just to the surroundings. It’s hard to       executives’ conference.
       know who or what will be next to
                                                 HELPING CUSTOMERS FIND YOUS             9/ 1 9

                    Using Trade Shows to Launch Your Business

Vivien Feyer is a trained psychologist. Sev-    plimentary. I sold enough to pay for the
eral years ago on a trip to Bali she was        show, met a lot of people at all levels of the
struck by the fact that the Balinese are a      business and saw what others were doing.
happy people who view work as a service         Best of all I found out in just a few days that
to the gods. Attracted also to Balinese jew-    my basic business concept was sound.
elry, and knowing that she had a talent for        “In later shows, I improved my display
design, Feyer decided to experiment with        and had many more products. Many of my
the idea of having fine jewelry of silver,      first customers reordered and I met many
gold, shell and other natural materials         more retailers. I also met a lot of charlatans
manufactured in Bali to her design.             who wanted to order but not pay, and
   One of the many questions Feyer had to       learned quickly that if you don’t check
face as part of launching her business          credit references very strictly, you don’t
(which she named Paradiso: Jewels of Bali),     stay in business. Through people I met at
was the basic one that all new                  the shows, I was able to sign up a good
businesspeople must confront. Was there a       crew of regional sales representatives.
genuine demand for the product she wished          “To tell you the truth, despite the fact
to bring to market? To find out, she decided    that as I did more shows I recruited a won-
to attend some trade shows. Here are a few      derful crew of people to help with the
of her comments.                                booth (dropped-out lawyers, many of them)
   “My first show was the International Fash-   and had good business access, I don’t re-
ion and Boutique Show in New York City. I       ally enjoying doing trade shows. It’s all so
was completely naïve, but I knew I needed       overblown, full of hype, and, in the jewelry
to see if I was kidding myself or if my de-     business, a little paranoid, in that you have
signs would work. Even though I had a sad       a lot of valuable goods in a place where se-
little booth, retailers, reps and others were   curity isn’t always so great. These days I do
interested in my jewelry and were very com-     very few.”

  One interesting recent development is        sponse to the growing success of crafts
that trade fairs have become so successful     fairs throughout the country. The invited
for some businesses that they have led to      exhibitors for the showroom are selected
the development of permanent national          from the best craftspeople who have dis-
wholesale showrooms, normally located in       played in regional crafts fairs. These can be
a sales mart devoted to the products of        a very cost-effective way for a small busi-
similar types of businesses. While this sort   ness to display its wares. Obviously, the
of sales center has been popular with fur-     main advantage of this sort of display is
niture, jewelry and gifts for some time, it    that the type of customer who would at-
has now spread to many other areas, in-        tend a trade fair (wholesalers, store buyers,
cluding crafts. National Craft Showroom        sales reps) now has access to your product
opened in New York, primarily as a re-         throughout the year. s
 Chapter 10

 Customer Recourse

A. Elements of a Good Recourse Policy ........................................................... 10/4
B. Designing a Good Recourse Policy .............................................................. 10/5
   1. Consult Advisors ...................................................................................... 10/6
   2. Join an Established Ethical Business Group ............................................. 10/7
   3. Involve Employees ................................................................................... 10/7
   4. Ask for Public Participation ...................................................................... 10/7
C. Telling Customers About Your Recourse Policy ............................................ 10/8
D. Putting Your Recourse Policy in Writing ...................................................... 10/9

                  ow often are you disap-      to customers simply means giving them a
                  pointed with a business      way to get a fair resolution of their com-
                  transaction? Have you        plaints. It’s essential that you make a very
ever bought a shirt that had to be taken       strong recourse statement to your custom-
back because of a flaw? Have you ever re-      ers and back it up with an immediate re-
turned a car to the repair shop because it     sponse to their needs.
wasn’t fixed right? Have you ever ordered         It’s almost essential that a small business
something from a catalogue or the Web          go out of its way to emphasize recourse
only to be told a month later that it won’t    policy, especially in the light of the mis-
be available for many more months? Have        taken public presumption that because
you waited hours or days for someone to        larger businesses have more assets, they
show up to work on your house? Have            are more responsible to their customers.
you spent months trying to have a billing      While most customers appreciate the per-
error corrected, meanwhile getting new         sonalized service they receive from a small
bills that contain the same mistake plus       company, they sometimes worry that,
penalty charges? Have you ever authorized      should something go wrong, their recourse
a business to automatically debit your ac-     is more limited than if they dealt with a
count and months after you have termi-         major corporation. They might assume, for
nated your relationship they are still         example, that a business that does lots of
debiting your account?                         advertising is a substantial company with
   When these sorts of problems occur,         plenty of money behind it, and that if
your reaction probably varies from mild        something serious involving legal liability
annoyance over the minor ones, some of         occurs, it has the resources to make it
which are not even worth the hassle to         good. In fact, small businesses, because
correct, to anxiety and sometimes anger        they are closer to their customers, often of-
over major problems. Chances are you will      fer better recourse than do larger ones.
be reluctant to patronize a business that      Your job is not only to establish an excel-
won’t correct a problem or one that you        lent recourse policy but to make sure your
think will be reluctant to do so and will      customers understand and trust what you
create more hassles for you than the trans-    offer.
action is worth. Certainly, you are unlikely      Although recourse is a potentially diffi-
to recommend such a business to your           cult and unpleasant topic, it is at the heart
friends.                                       of long-term business health because it
   Slip-ups are inevitable in any business.    protects the supportive customers who
To avoid losing customers (and referrals)      make personal recommendations. Rela-
over mistakes, you need to establish an ef-    tively small efforts, well-thought-out from
fective recourse policy. Providing recourse    the customer’s point of view, cost very
                                                          CUSTOMER RECOURSES        10/ 3

little and do much in protecting our total     erous if you feel a good customer deserves
investment in public trust. In fact, when      more attention. But a customer who
you promptly and attentively make sure         doesn’t know that you will try to solve the
the customer is treated right, you can gain    problem if confronted is likely to give up
their loyalty. It feels so good to have the    in disgust and never discuss it with you. If
transaction turn out right that the customer   that happens, you risk losing a valued cus-
naturally tells their friends.                 tomer who is very likely to pass negative
   On the Internet, recourse is equally im-    feelings on to others.
portant—perhaps even more so. A survey            In a retail business, a reputation for
of Internet shoppers found that 85% con-       quick exchanges or refunds is a key ingre-
sidered “product returns” a key to their       dient in customer loyalty. For example,
online shopping decisions. (The Industry       you probably know which retail stores you
Standard, August 14, 2000.)                    deal with allow returns without question,
   The Industry Standard magazine has a        which businesses have complicated proce-
secret shopper who reports on Internet         dures to return an item and which stores
transactions. In May of 2000, the shopper      make it so difficult to return an item that
ordered clothing from ten well-known re-       it’s not worth the hassle. Many good
tailers’ online outlets. Only the products     neighborhood businesses have built a lot
from two of the ten sites—Nordstrom and        of their following based on customers’
Victoria’s Secret—matched the descriptions     confidence that the business will stand be-
and images as presented at the websites.       hind its product or service.
   Much of the difficulty in developing a         In this context, it’s worth remembering
recourse policy is not designing good          that your customer has recourse to public
mechanisms to catch and correct errors,        measures if you don’t handle the dispute
but applying them in a context where your      satisfactorily. In extreme cases, a deter-
customers are mad, disappointed, anxious       mined customer can picket your business
or all three. Unless you set up a recourse     or hold a press conference. More typically,
policy in advance, there is little hope that   customers appeal to local consumer action
you can do this effectively. Unfortunately,    groups, TV reporters or newspaper colum-
many small businesses attempt to handle        nists, put postings on the Web or just tell
individual problems as they arise.             their friends. You may not think of cus-
   We strongly suggest that this is a mis-     tomers spreading negative feelings about
take. It confuses both your customers and      your business to their friends as “going
your employees. For example, you may           public,” but it surely is. Now that many
give the impression you will repair your       people browse the Internet and are part of
product only in limited situations, yet re-    online newsgroups, negative word of
tain the discretion to actually be more gen-   mouth can be sent to literally thousands of

people instantaneously. Consider how            sible. When people feel they are in control
many times you have remarked to a friend        from the start, they are much less likely to
that you plan to try a particular restaurant,   get upset. As you design your recourse
optician or computer store only to be told      policy, ask yourself: What role do my cus-
about a negative experience that your           tomers play in deciding whether my prod-
friend (or maybe even your friend’s friend      uct or service is substandard?
or someone your Aunt Hilda’s neighbor              An example of a situation where a cus-
knows) had with that particular establish-      tomer enjoys a high degree of control is a
ment. Did you still plan to patronize the       fine restaurant where the discovery of a
business? Probably not.                         hair in the salad immediately results in de-
   An extreme but slightly humorous ex-         livery of a new salad, a sincere apology
ample of this aspect of negative word of        and often a free bottle of wine or some
mouth involved an acquaintance who was          other extra. In this situation, the customer
cheated by a 12-hour photo processing           is at least implicitly in control, the assump-
merchant and couldn’t get suitable re-          tion being that when dining in that restau-
course from the manager. His frustration        rant, every effort will be made to provide
was so great that he pounded on the             first-class service and take care of even
counter, inadvertently scattering merchan-      small problems.
dise around the store. The manager called          An example of little customer control is
the police and the customer, while stand-       when you attempt to deal with a mistake
ing around waiting for the police to come,      in your checking account balance at a
gathered support from other customers           bank, where the typical attitude is that you
who thoroughly enjoyed seeing someone           are wrong. Incidentally, in this era of bank
make a business “pay.” When the police          deregulation, treating customers with more
arrived, they listened to both sides and        respect would seem to be a much better
then talked to each party separately. They      strategy than giving free teddy bears to ev-
informed the store owner to mend his            eryone opening a new account (especially
ways or face possible prosecution and           since the majority of accounts acquired
then, smiling the whole time, told our          with a premium offer don’t stay open a
friend not to damage property again.            year). Sadly, most banks are so focused on
                                                their own bottom line that they resist
                                                spending even modest sums to treat their
A. Elements of a Good                           customers decently. This situation appears
   Recourse Policy                              to be getting worse instead of better with
                                                the advent of ATM machines and elec-
The best recourse policies give your cus-       tronic banking; it’s not easy to work things
tomers as much control as possible, as          out with a machine. One of these days
early in the relationship with you as pos-      someone in the banking business will do
                                                          CUSTOMER RECOURSES          10/ 5

the things necessary to give customers         is insolvent. Because most people under-
more control and will revolutionize the        stand these drawbacks, it means that if
business.                                      your business has been sued, or even
   Not many years ago, an even more frus-      threatened with suit, it is a sure sign that
trating recourse problem involved trying to    your recourse policy is seriously deficient.
enforce the provisions of the warranty on
any new American car. Indeed, some cus-
tomers became so frustrated about the lack     B. Designing a Good
of automobile company response when
                                                  Recourse Policy
their cars broke that they painted them
yellow to look like lemons and call atten-     When designing or improving your re-
tion to their plight. It proved to be a very   course system, remember that customers
effective way to get the message across,       care most about:
and eventually a number of states stepped          • Promptness. The amount of time it
in and passed “lemon laws” to force manu-             takes—or your customers think it
facturers to arbitrate the most serious war-          will take—to correct a problem is
ranty disputes. In other words, the need              crucial. Fast resolution of disputes is
for recourse became so great that laws had            not good enough if you can think of
to be passed to take care of it. In the               a way to do it faster.
meantime, of course, close to one-third of         • Responsibility. Is your customer pre-
Americans began purchasing imported                   sumed (even implicitly) to be the
cars, particularly Japanese ones, which had           cause of the problem when a com-
fewer problems in the first place and                 plaint is made? If so, your policy is a
whose makers offered mediation and arbi-              poor one. Clearly, the responsibility
tration to solve customer disputes.                   for dealing with a real or perceived
   Today a similar situation has developed            mistake should be on your business.
in the insurance business, where company          No two businesses are exactly alike. For
after company is canceling the insurance       this reason, we can’t lay out a policy that
of long-time policy holders or raising rates   you can clip out and apply to your situa-
outrageously, with no meaningful opportu-      tion. But whether you are a stonecutter, a
nity for customers to appeal what they be-     storekeeper or a stress-reduction clinic,
lieve is arbitrary treatment.                  there are a number of proven techniques
   The worst instances where customers         to help communicate that your recourse
lack control over recourse result in law-      policy is very responsive to your custom-
suits. Lawsuits are expensive, slow and un-    ers’ needs. Here are several of the best.
predictable. Even if a favorable judgment
is entered in your lifetime, it may be im-
possible to collect if the person you sued

1. Consult Advisors                             nent board members of the TV station
                                                took the time to get together with two of
Invite well-known and respected people to       the film company’s advisors. The film was
serve as a board of advisors to your busi-      re-edited, and the station was charged
ness and get them to help you make your         somewhat less for it. The happy result was
business better—which, of course, in-           that Rolm got paid, no lawsuit was neces-
volves developing a recourse policy. These      sary, the parties are still on good terms
advisors should not be merely names used        and the public got to see a good film.
to impress, but trusted associates. By do-        Small businesses can tell customers
ing this you are borrowing a technique          about a board of advisors in various ways:
that has been used by nonprofit organiza-          • A motorcycle shop could hang pho-
tions for years. As long as you truly run an           tos of the owner together with a few
honest business dedicated to serving your              racing celebrities on the wall. Along-
customers, it will work for you. Be sure to            side the photos would appear the list
list your advisors on your letterhead. (We             of advisors, including the people pic-
discuss the value of this sort of association          tured.
in other contexts in Chapter 11.) When it          • A computer consultant could print a
comes to recourse, associating prominent,              list of business advisors along with a
well-thought-of people with your business              short list of current and former cli-
is a subtle but direct way of assuring your            ents (after getting their approval, of
customers that in the event of a problem,              course) on all brochures and on the
you will make it good. Your customers                  cover sheet for bids.
know that your respected advisors                  • A graphics supply wholesaler might
wouldn’t associate themselves with your                use some examples of design work
business if it weren’t trustworthy. If you             done by prominent local artists in its
can actually involve one or two of your                catalog in addition to listing them as
prominent friends in a formal mediation                advisors.
procedure to deal with occasional serious          • A textile teacher could display his
complaints, so much the better.                        latest fabric design along with photos
   A board of advisors was used effectively            of his finished upholstery in the
by Dick Rolm, an independent film pro-                 homes of his well-known advisors.
ducer working in New England who con-
tracted to make a film for a local public TV
station. The station was dissatisfied with
the results, which led to a very uncomfort-
able situation for both parties. The matter
was resolved when two of the most promi-
                                                            CUSTOMER RECOURSES         10/ 7

2. Join an Established Ethical                   human effort from its customer service
    Business Group                               representatives, it has turned out to be
                                                 well worth it, if for no other reason than
It is also wise to join an organization that     the fact that the reps now waste very little
already handles customer problems.               time dealing with calls asking, “Where is
   If a truly active Better Business Bureau      my book?” Before customers can wonder
exists in your locale, consider joining. Bet-    where their books are, they have them.
ter yet are local Consumer Action organi-
zations and mediation services. Merely
adding your name to their membership             4. Ask for Public Participation
roster is not enough. If you participate in
the group’s activities, you will learn a great   Include as wide a range of community
deal about how to handle recourse prob-          members as possible in the design and de-
lems and solutions at the same time you          cision-making of your recourse policy. A
are doing your bit to promote public trust       good example of this is the Pike Place
in small business and helping to assure          Market in Seattle, which houses many
honest business principles in your commu-        small businesses. This group has wisely
nity. A fringe benefit is that word of your      created a committee of both business op-
involvement in good business groups of-          erators and members of the general public,
ten spreads, which, of course, is good for       which meets periodically to review specific
your business.                                   complaints about consumer problems. This
                                                 is a marvelous process, as it both allows
                                                 many different points of view to be aired
3. Involve Employees                             and creative solutions to be developed.
                                                    You may doubt that your customers re-
Consider forming a customer service com-         ally care enough about your small business
mittee of employees. No one knows what           to participate. This is rarely true. The
your customers need more than the                people who deal with a particular business
people who deal with them daily. And no          on a regular basis, such as professional gar-
one has more incentive to make changes           deners who buy from a particular nursery
in the way the business operates and to          or graphic artists who patronize a particular
avoid complaints before they are made.           typesetter, care a great deal about how the decided to try to get every in-       business operates and probably have all
dividual book and software mail order out        sorts of ideas for improvement, including
the door the same day, or the next day if        how to develop a better or more flexible
the order comes after noon Pacific Time.         recourse policy. If you ask them to share
While this sometimes takes almost super-         their ideas with you, they probably will.

       Good Recourse Policies               C. Telling Customers About
                                               Your Recourse Policy
Here are some examples of businesses
with good recourse policies:                To ensure that your customers are always
 • The Cross Corporation allows cus-        aware that should any problems arise they
    tomers to return a pen for any rea-     will be treated fairly, you must closely ex-
    son, and stores that carry Cross        amine how you present your recourse
    products are provided with a supply     policy.
    of addressed envelopes to give to           • Is your recourse policy clear?
    any customer who wishes a refund            • Is it communicated to your custom-
    or a new pen. In other words, the              ers early and often?
    decision of the Cross Corporation to        • Do your friends, employees and cus-
    guarantee its product is made evi-             tomers perceive your policy in the
    dent to consumers by providing                 way you intended?
    easy and convenience recourse.              • Are customers with small complaints
 • Sears Roebuck & Co., a huge com-                really encouraged to bring them to
    pany selling moderately priced                 your attention?
    goods, has a generally good reputa-        A good recourse policy should be writ-
    tion for customer satisfaction. For     ten and available to all customers and
    example, it has traditionally guaran-   should be posted on your website. As
    teed its Craftsman Tools and re-        noted, if your customers are educated in
    places them years after purchase if     advance as to their rights in any potential
    they are defective. When Sears          situation, there will be far fewer problems
    started selling computers, people       and angry customers. Even customers who
    correctly assumed that the same         are a pain in the neck and enjoy making
    sort of replacement policy applied.     trouble will have a more difficult time if
    This assumption was a key to Sears’     you adopt a fair recourse policy and go
    early success in the computer mar-      out of your way to let them know about it.
    ket. Customers, knowing that there      And, of course, it is even more important
    was little chance of getting good       to reach those customers who are reticent
    service from many computer retail-      about voicing legitimate complaints. It is
    ers, preferred dealing with a store     obviously much better to encourage these
    with a solid reputation for customer    people to tell you about any problem with
    service.                                your goods or services than it is to have
                                            them avoid you in the future because of a
                                            problem you never even knew about.
                                                            CUSTOMER RECOURSES         10/ 9

   A written policy is especially important      DO NOT WANT YOU TO HAVE ANY-
in the mail order business, and the best         THING FROM L.L. BEAN THAT IS NOT
mail order companies all have a guaran-          COMPLETELY SATISFACTORY.” Not only
teed return policy. They do it for a simple      do L.L. Bean customers get assurance that
reason: People are reluctant to buy some-        they will be satisfied, but Bean’s recourse
thing they can’t see and touch, especially       policy also works as an effective marketing
if they think it might be difficult to return.   message, because customers realize that
Thus, phrases such as “Return for any rea-       only companies truly offering quality
son, any time within 30 days” have be-           goods can make this type of promise.
come common and have enabled people
to shop through the mail and online with
more confidence.
   Recreational Equipment Inc., a coopera-       D. Putting Your Recourse
tively owned retail and mail order com-             Policy in Writing
pany headquartered in Seattle that
specializes in outdoor apparel and equip-        Lands’ End sent out its first catalogue in
ment, does even better. Its order form           1964 from a basement along the river in
states: “REI guarantees satisfaction on ev-      Chicago’s old tannery district. In one of the
ery item purchased. If you are unhappy           recent catalogues it printed the business’s
with your purchase for any reason, please        “Principles of Doing Business.” Principle 3
return it for a replacement or full refund.”     states: “We accept any return, for any rea-
(Incidentally, this company is listed in The     son, at any time. Our products are guaran-
100 Best Companies to Work for in                teed. No fine print. No arguments. We
America, discussed in Chapter 5.)                mean exactly what we say. GUARANTEED.
   And the legendary L.L. Bean Co., a small      PERIOD.”
business grown large, which built its repu-        Reassured by this guarantee, Salli over-
tation on quality clothing and outdoor           came her reluctance to buy a swimsuit
equipment as well as excellent customer          through the mail. The swimsuit was
service, backs up its product with this          shipped the same day, and she was very
statement in its catalogue and at its            pleased with the quality and fit. One week
website: “All of our products are guaran-        after it arrived, Salli received a phone call
teed to give 100% satisfaction in every          from Lands’ End asking if she was happy
way. Return anything purchased from us at        with the purchase. Not only was their re-
any time if it proves otherwise. We will re-     course policy clearly stated, they followed
place it, refund your purchase price or          up to make sure they had a happy cus-
credit your credit card, as you wish. WE

        Customer Recourse Policies and Practices

        We have a written customer recourse policy.
          YES    NO

        Our written policy is:
          Given to all customers      Given only upon request      Displayed prominently on the premises
          Our policy identifies and deals with those areas and situations where customers are
          most likely to have problems with our goods or service.
          We have regular communication with our customers to be sure they understand our
          recourse policy and know that we implement it efficiently.
        A customer who complains is:
          Always right           Almost always right      Seldom right        Rarely or never right
        The most common complaints involve: _________________________________________
        When the customer is right, he or she gets:
           Full refund or replacement when: ___________________________________________
           Partial refund when: ______________________________________________________
           We send or give questionnaires to customers to evaluate their satisfaction with our service.
        Our liability insurance covers the following customer problems: ___________________
        When a customer deals with our insurance company, it is:
          Very responsive            Responsive        Slow to respond           Don't know
        When the customer disagrees with our recourse offer, we have available:

           Appeal process              Arbitration              Industry established board of review
           Mediation                   Nothing
           Other __________________________________________________________________
                                                              CUSTOMER RECOURSES         10/ 1 1

tomer. Recourse policies can’t get any bet-        makes agreed-upon modifications in the
ter than that.                                     second coat. If the customer assents to the
   Now, let’s look at several other examples       color choice, the final coat is applied and
of how to put a recourse policy in writing.        after that no free repainting is done for rea-
You will notice that these policies antici-        sons of color. If, however, the customer is
pate typical problem areas and establish a         legitimately dissatisfied with the quality of
procedure to head them off before a dis-           work, the contractor will do any repainting
pute arises. For instance, a painting con-         necessary at any time.
tractor we know prides himself on being               Ruth, who owns a garden and plant
extremely neat and doing quality work.             store, has a replacement policy should any
However, because there is a lot of poten-          plant she sell prove unsatisfactory. How-
tial for paranoia among his customers              ever, to help her customers avoid most
about what their rights are if paint drips on      common problems, she instructs them both
their floors or furniture, he is especially        orally and in writing as to what kind of
clear about the precautions he takes to            care the plant they purchase requires. For
avoid this kind of problem and about what          example, Ruth goes out of her way to ex-
he will do to correct any that should arise.       plain the symptoms of over-watering, let-
He not only promises in writing to correct         ting a plant grow too large for its pot and
the problem, but explains the type of in-          become rootbound, and excess exposure
surance he carries and just what it covers.        to sunlight. Armed with this information,
He also explains provisions made for out-          the customer is in a good position to evalu-
side evaluation and mediation should any           ate and save a drooping or rootbound
dispute ever arise.                                plant. One additional advantage of this
   Another frequent problem for painting           kind of instruction is that Ruth gives her
contractors is that a color a client chooses       customers a reasonable standard against
from a color key looks different than ex-          which to judge whether a problem with the
pected on the wall. All sorts of factors,          plant was caused by their neglect or oc-
from the nature of the surface being               curred because the plant was defective in
painted to lighting, can affect this. In antici-   the first place.
pation of this common problem, this con-              A carpet retailer we know in the Sacra-
tractor puts on a first coat and then              mento Valley of California not only guaran-
encourages his customers to live with it for       tees in writing all carpets sold, but
a few days. He specifies in writing the            encourages customers with complaints to
number of days his client has to decide if         contact him so that problems can be rem-
the color is the correct shade. If the cus-        edied. As part of doing this, he sends every
tomer doesn’t like the color, the contractor       customer a postcard a few weeks after a

carpet purchase, with a reminder of the         ruled for the rug company but
store’s “total satisfaction” policy. In addi-   complimented its honest business practices
tion, he includes a statement of customers’     before a courtroom full of people.
rights every time he communicates with             Kaiser Permanente, a huge health main-
them in writing. An amusing side result of      tenance organization, invites some patients
this policy occurred as part of a Small         to fill out a card about the care they re-
Claims Court procedure initiated by the rug     ceived. “If you’re pleased,” they advise,
store against a customer who hadn’t paid        “Fill out the side of the card that says
her bill. The customer showed up in court       ‘Great!’ If you’re not so happy fill out the
and said she failed to pay because the car-     ‘Not so Great’ side of the card to let us
pet was defective. The store owner was          know how we didn’t meet your expecta-
able to produce the written recourse            tions.” Patients then have an opportunity to
policy, a copy of the postcard and several      talk with the department manager or other
other communications explaining to the          administrator to get the problem resolved.
customer the “total satisfaction” policy. He    If they want they can also receive a refund
then testified that, although a year had        of their copayment, up to $25. Not only
passed, the customer had never com-             does this allow Kaiser to monitor service, it
plained about the quality of the product        gives the patient control over service. s
until that day in court. The judge not only
 Chapter 11

 Marketing on the Internet

A. The Importance of Passive Internet Marketing ............................................ 11/3
B. Yellow Pages Plus ......................................................................................... 11/5
C. What to Put on Your Site ............................................................................. 11/7
    1. Your Schedule of Events ........................................................................... 11/8
    2. Links to Related Sites ............................................................................... 11/8
    3. Accessibility Information ....................................................................... 11/10
    4. Valuable Free Information ...................................................................... 11/10
D. Designing an Internet Site ......................................................................... 11/11
    1. Your Homepage ..................................................................................... 11/11
    2. Your Website’s Structure ......................................................................... 11/13
E. Interactivity and Customer Screening ........................................................ 11/14
F. How to Help People Find You Online ........................................................ 11/16
    1. Get Covered by Search Engines ............................................................. 11/16
    2. Get Recommended on Other Sites ........................................................ 11/17
    3. Distribute Your Web Address ................................................................. 11/17
    4. Pay for Referrals ..................................................................................... 11/17
G. Active Internet Marketing ......................................................................... 11/19

                  he Internet has been the         Our job is to be clear-headed about the
                  subject of intense hope       Internet, maintain our equilibrium as we
                  and speculation, border-      examine it from a business perspective
ing on national hysteria. It is well to re-     and report on successful marketing uses of
member the work of the great American           this new medium. We believe the best way
Thomas Hughes, founder of the field of          to consider the business marketing aspects
the history of technology, whose most fa-       of the Internet is to break it down into two
mous book is Technological Enthusiasm:          approaches: passive Internet marketing
The History of Technology in America. The       and active Internet marketing.
title summarizes Hughes’s vivid observa-           The passive strategy focuses simply on
tions on the subject; as a culture we have      creating a compelling online presence for
always been wildly enthusiastic about new       your business for potential customers to
technology and view our national future as      visit—a site that offers them essential infor-
commingled with its development.                mation about the business and perhaps
   Not only do Americans have a long and        entertains them as well. (When we say
intense history of becoming enamored of         “online presence” it’s simply another way
the latest technology, we also have a pro-      of conceptualizing your website and any
pensity to believe that technology will         features it offers. In other words, your
solve most, if not all, social problems. The    online presence comprises any and all
Internet is touted as the latest technologi-    ways your business exists online.) With a
cal panacea that will welcome in a new          passive marketing approach, the emphasis
era of democracy and social justice while       is to create a website that essentially offers
also improving our sex lives and making         the same types of information as a com-
the children behave. The Internet is per-       prehensive brochure or a very extensive
ceived as having unlimited possibility in       Yellow Pages listing. Of course, unlike
large part because we can’t understand the      brochures or Yellow Pages listings, a
possibilities.                                  website has the following essential quali-
   Just as we are prone to accept that ad-      ties:
vertising works in other media, we are be-          • it can provide many levels of depth
ing seduced (or seducing ourselves) into               for inquiring users;
believing that advertising on the Internet is       • it is interactive, which allows more
the solution to our marketing needs. The               meaningful contact with potential
best advice we can give is to evaluate the             customers.
Internet as you do other media. All of the         Active online marketing, on the other
same issues, including where to be listed,      hand, focuses on engaging in specific mar-
accessibility, being transparent and educat-    keting activities online to generate busi-
ing customers, apply to marketing on the        ness, such as sending out e-mail
                                                   MARKETING ON THE INTERNETS          11/ 3

newsletters, promoting a contest at your            We believe that all businesses need a
website or publishing articles about your        website—no exceptions. Think of it as a
field at other related sites. Active Internet    color brochure that, when people search
marketing is essentially the next step after     for you, they can find out enough about
nailing down your passive marketing strat-       your business to see if it suits their needs.
egy, and is an extra step that not all busi-     In addition, when you meet potential cli-
nesses need to take. While active online         ents at a trade show, chamber meeting or
marketing is useful for some businesses,         a party and let them know about your
it’s not essential for many of them.             business, you can give them your card and
   As we discuss in more detail in the rest      suggest they check out your website. This
of this chapter, we strongly feel that all       reinforces your initial meeting and allows
businesses should engage in passive              them to find out more about you at their
Internet marketing by creating a solid           convenience, if they choose. Having a
website for their business. The majority of      Web presence is also an easy way for oth-
this chapter discusses how to go about do-       ers to refer people to your business. And
ing this. At the end of the chapter, we          it’s a convenient place to list your
briefly describe some active Internet            business’s recourse policy and to cite posi-
markeing strategies for businesses that          tive recommendations.
want (or need) to take the next step.               Keep in mind that the passive strategy of
                                                 maintaining a website should not in itself
                                                 be expected to generate significant online
A. The Importance of Passive                     revenue. For three-quarters of businesses,
   Internet Marketing                            it doesn’t and probably won’t in the
                                                 foreseable future. Regardless, people ex-
As of this publishing date, two-thirds of all    pect an excellent business to have a
American small businesses have a website.        website. If you don’t, customers may won-
(The Industry Standard, July 31, 2000.)          der if you are not up-to-date in other as-
While the Internet does not produce              pects of your business.
miracles for most businesses, it is definitely
a potentially powerful part of the market-
ing mix.

       What Exactly Is a Website?              ”But Do I Really Need a Website?”

Having a website (often known as a Web         Two business friends of ours are not on
page) simply means having a computer file      the Internet and don’t want to be. One is
that is publicly accessible through the glo-   Al Pietsch, a master of the art of using a
                                               special old-fashioned multilith (an offset
bal computer network known as the
                                               printing press) machine. To appreciate
Internet. The files that comprise your
                                               and use his work, designers and graphic
website are stored on servers, high-pow-       artists need to see and touch it. In addi-
ered computers that are connected to the       tion, Pietsch works alone and already has
Internet 24 hours a day. Companies that        more work than he can handle. For his
run and maintain servers are often called      business, marketing on the Internet would
Web hosts, or hosting services. Once you       appear to be irrelevant.
provide a hosting service with your files,        Bob G. is a brilliant class-action lawyer
                                               with more major victories than anyone in
they will put them on their servers and
                                               his field. He occasionally has room for a
make sure that the servers are constantly
                                               new client but doesn’t dare to be listed on
running and connected to the Internet.         the Internet for fear he won’t have time to
Other companies, known as Internet ser-        answer his mail or screen the prospects.
vice providers (ISPs), allow their customers   He feels that getting referrals from the few
to connect to the Internet by dialing in or    other lawyers who know his work and the
through other technologies such as DSL.        kind of clients he is looking for is sufficient
Often, ISPs offer hosting services as well.    and efficient. His listing in the Yellow
  Website files can include text, graphics,    Pages, under Attorneys, is plain vanilla—
                                               just his name, so old friends can find him.
video and sound. It can be in color, ani-
                                                  In our opinion, both of our friends need
mated and can automatically connect the
                                               a website. Why? Al, the printer, needs one
viewer to other websites. The Web uses         because customers want to recommend
technology called hypertext markup lan-        him and describe his work to their friends
guage (HTML) that makes it easy to send        and associates. And most important, in the
images, photos and sound on the Internet.      long run Al will need replacement clients.
                                               By that time, the Internet will be taken for
                                               granted and he will be seen as difficult to
                                               work with if he doesn’t have a website.
                                               Bob G., the lawyer, needs a site because
                                               he needs to get a few highly specific cli-
                                               ents. A website is a perfect place to ex-
                                               plain the focus of his practice and his
                                               outstanding record, as well as screen po-
                                               tential clients. His site can also explain
                                               how busy he is (which in itself will reflect
                                               favorably upon his business), and make
                                               clear that he can’t respond to every e-mail.
                                                    MARKETING ON THE INTERNETS          11/ 5

       Don’t Neglect Customers Who Aren’t         firm, gender, etc.—become vitally impor-
       Online. Because Internet access isn’t      tant when you join the cyberspace busi-
free, and because the Internet isn‘t easy to      ness community. Potential clients need to
use for some people, many of your                 know what makes you unique and desir-
present customers don’t use the Internet,         able. When you’re ready to compose and
and they probably won’t for a long time.          design your site, imagine yourself trying to
This means that you should provide the            make it into the Guinness Book of World
same services and information to non-             Records: What feats would be appealing to
Internet users that you provide online,           prospective clients?
where possible. As an example of what                Second, geographical proximity may be
not to do, a local bookstore we know has          a drawback or a bonus. If your business is
an online directory of its inventory, but no      geographically limited, describe those lim-
computer in the store for customers.              its clearly. Even better, offer a map of your
                                                     For example, Jim Davis’s sewer repair
B. Yellow Pages Plus                              business is located in Seattle. On his
                                                  website, a map shows that his office is in
At the risk of oversimplifying things a bit,      the University district about four miles
the Internet is much like the Yellow Pages        from downtown. To increase the range of
of the phone book. It is a directory that         possible customers, he also shows the en-
can be accessed by users at their conve-          tire city of Seattle and four suburbs and
nience and is used for seeking business in-       color codes them as “immediate service
formation. But unlike traditional Yellow          area for emergency service.” The larger
Pages, the Internet is not geographically         area of King and Snohomish counties is
limited; it has millions of listings covering     marked “by appointment.” The site also
many parts of the planet.                         details that in the “immediate service area,”
  Because of the huge number of listings,         Davis offers to give customers an exact ap-
you’ll need to keep in mind two key mar-          pointment time, and if the service is late
keting facts: First, your business listing will   by more than one half-hour, the customer
be part of a much larger universe than is         gets 20% off the bill, “except during earth-
found in the Yellow Pages. If you are one         quakes, snow, Super Bowl parades or
of 30 patent lawyers listed in your local         other acts of God.” Davis lists the names
printed Yellow Pages, you may find your-          of 51 neighborhoods, suburbs and small
self among 9,000 patent lawyers listed            towns in his list of service areas, just in
online. The elements that distinguish you         case someone is searching the Internet for
from all these other patent lawyers and           sites that contain the name of his or her
might attract particular clients—years of         own tiny local area.
experience, law school attended, size of

   Geography is not a serious limit for Lief      For Denise Armomot’s classic sheet mu-
Gunderssen, who sells accounting systems       sic reproduction business, the Internet’s
to credit unions, except that credit unions    worldwide coverage is a bonus. She has a
have different legal structures in different   list of more than 2,000 titles that she pro-
parts of the world, and his package is de-     vides. The list is available in seven lan-
signed in English. Gunderssen sells his ac-    guages, and Armomot is adding more as
counting system, which is part software,       quickly as she can find people to help her
part paper and part files, all over the U.S.   with the translations.
and occasionally outside the country. With
the Internet, the whole world is a potential
market, but Gunderssen needs to think
carefully about his approach.
                                                         The Internet Frontier
   For prospects in the U.S. and Canada,
the laws are appropriate for his accounting     Uses of technology keep evolving long
package so he emphasizes this fact online       after the technology itself stabilizes. For
and lists his toll-free phone number. For       example, the telephone was first used by
eight other countries where a modified ver-     businesses for short messages, inter-busi-
sion of his package can be used, he has         ness orders and confirmation of meeting
separate pages on his site explaining the       times. Doctors and pharmacies were also
modifications necessary for each. He also       among the first to have phones, largely for
addresses the most commonly asked ques-         emergency service. Idle chatter and per-
tions relative to that country. On his main     sonal conversations did not become com-
Web page, Gunderssen has a large banner         mon on the phone for nearly 30 years
explaining that his program is based in En-     after its introduction. Widespread residen-
glish. The banner is there to make sure that    tial use of the phone (in two-thirds of U.S.
he doesn’t have to waste anyone’s time an-      homes) did not occur for 70 years.
swering questions about other languages.           Internet technology is far from stable,
Last, he has a separate page for overseas       and we should not expect long-term pat-
credit unions that are part of American and     terns of usage to emerge for business or
Canadian corporations where he answers          individuals for at least 15 more years. In
commonly asked questions. The use of            the meantime, accept the volatility of this
multiple pages gives quick answers to           new medium and be innovative in your
people just glancing and detailed answers       marketing. Our advice is to get online and
to people who need details (see Designing       get a feel for what others are doing—it’s a
an Internet Site, below).                       challenge at first, but can be lots of fun.
                                                   MARKETING ON THE INTERNETS           11/ 7

C. What to Put on Your Site                      or do you want to have customers call you
                                                 by telephone? Do you need to explain
Lots of businesses, big and small, have          what your cutting-edge business does? Do
been bitten by the Internet bug. They’re         you want to tell potential customers where
sure they need a site, mostly because ev-        to find your product in their city? It’s
eryone else seems to have one, but when          amazing how many websites suffer from a
it comes to what information to actually         lack of clear purpose.
post on the site, they’re stumped. It is im-        For instance, a magazine might want to
portant to keep in mind that a simple site       create a simple website with just a couple
full of fresh and interactive content will at-   pages as a passive marketing tool. They’ve
tract loyal customers. For the vast majority     decided against putting the whole maga-
of online businesses, using lots of gim-         zine online, which would be too much
micks is just a waste of time. As Evan I.        work each week. In a hurry, the magazine
Schwartz put it in the February, 1996 issue      decides to put the cover of the current is-
of Wired magazine, “a website that attracts      sue on the site each week along with its
just a few thousand loyal consumers will         table of contents so that visitors to the site
ultimately be more valuable than one in          can see what’s in the issue, which will
which a million new people visit each            hopefully prompt them to go buy it. What
month and never return.” His words are           the magazine owners fail to consider is
just as true now as they were five years         that interested readers will want to know
ago: Today, an estimated 80% of people           how to subscribe and where to buy the
who visit a site never return.                   magazine. Without that crucial info, visi-
   When deciding what content to include         tors to the site might think the magazine
at your site, the important questions to ask     looks interesting but won’t have any spe-
yourself are:                                    cific, simple information on how to pur-
    • what your goals are for your site,         chase it. By posting only the cover and
       and                                       table of conents, the magazine also is fail-
    • what kind of investment are you            ing to give crucial information to advertis-
       willing and able to make.                 ers about ad rates and deadlines. In short,
   Deciding what you want out of your site       just a little planning can go a long way in
is a crucial first step in building it. Many     making your website as effective as it can
businesses seem to skip this first step,         be.
thinking that the obvious answer is “to             Freshness is another major issue in de-
generate more business.” But in order to         ciding what to put at your site. Don’t put
create a truly effective website, you need       anything on your website that will rapidly
to be more specific in your goals: Do you        go out-of-date unless you have the re-
want to sell product directly from the site,     sources to update it faithfully. While the

cost of buying the computer hardware and        your site. Keep in mind that with the huge
software necessary to set up a website is       range of different kinds of businesses,
usually fairly low, the cost of maintenance     there’s no magic formula for good content.
can be high for a small business. No ifs,       As discussed above, be sure to examine
ands or buts—someone has to keep the            your goals for your site and choose con-
site fresh and check it often. Almost noth-     tent accordingly.
ing makes a worse impression than out-of-
date information or images. It is a clear
sign of poor management, the online             1. Your Schedule of Events
equivalent of a dirty place of business, and
will destroy positive word of mouth rec-        The Internet can be a great place to post
ommendations.                                   your calendar of marketing events. There
   If you decide you don’t have the time to     are two reasons for this. First, online list-
continually monitor and update your site,       ings can be continually updated and con-
one option is to hire someone to keep           stantly available in a way that no other
your site fresh. This may be more com-          medium allows. Newspaper calendars, for
plex—and more expensive—if your site            example, are prepared many days in ad-
provides highly specialized information         vance and customarily appear only
and needs to be updated by an expert in         weekly. Second, the potential for personal-
the field. Oftentimes, however, the job can     ized sorting exists only on the Internet.
be done by people with good generalized         That means that people interested in
knowledge such as freelance writers or          events, displays and meetings about over-
editors. Of course, if you’ve hired some-       weight dogs in Duluth can have a tickler
one to create your site in the first place it   notice that tells them when anything on
would make sense to have them monitor           the subject pops up online.
and update it as well.                            Holding creative marketing events is vi-
   If you decide to take on updating duties     tal to create positive recommendations for
yourself, there are several software pro-       your business. (Chapter 13 is devoted to
grams available that make the job easier        this subject.) Listing these events at your
than you might think. Michael uses Adobe        website is just as important.
Go Live, software that creates fairly com-
plex websites and is easty to update with-
out knowing Web language. Other                 2. Links to Related Sites
popular and user-friendly programs in-
clude Macromedia Dreamweaver, Netscape          We assume that you understand the nature
Composer and Microsoft Frontpage.               and benefits of cooperation in business,
   Let’s take a look at some ideas for what     discussed in several chapters of this book.
kinds of information might be effective at      An additional advantage for a business that
                                                     MARKETING ON THE INTERNETS           11/ 9

views itself as a constructive, cooperative        from other businesses and nonprofits that
member of society is that the Internet can         recognized a cooperative peer.
provide automatic referrals to you from              We recommend putting your links to-
other cooperative businesses. And you can          gether on a page that is easily found at
do the same for them with links to their           your site. But don’t put links on your
websites. Linking sites on the Web is a            homepage—your homepage is your
great service to customers and potential           business’s “front door,” and you don’t
customers. (Links are also commonly re-            want to usher customers out just as they’re
ferred to as hot links or hyperlinks.)             walking in. (Designing your website is dis-
   Payment for links is common on the              cussed further in Section D.)
Internet, and you should consider every
such potential source (see Pay for Refer-
rals, below), but the fact that you are a co-
                                                        Putting a Community Online
operative business needs to be
communicated to all potential sources of            Steve Killey ( is
links. Businesses with active websites un-          growing a successful business by offering
derstand that offering links to other sites         a unique and cooperative service in his
enhances their reputation. And just as in           rural community.
any marketing, you must have a well-run,               Bodeganet acts like a referral for other
trustworthy business to continue to be rec-         small businesses in the Bodega, Califor-
ommended as an interesting and informa-             nia, area. On this site you will find links
tive site.                                          to Rasberry’s website, Eschenbach Con-
   It’s a good idea, when you want to link          struction (discussed later in this chapter)
to someone else’s website, to ask permis-           and several other small businesses. One
sion first—it’s also an easy way to make            of these is Northern Light Surf Shop
people you would like to be associated              which, in addition to T-shirts and surf-
with aware of your site.                            boards, offers real-time satellite ocean
   Next Century, a third-world develop-             data that are continually updated and
ment consulting firm in Washington, D.C.,           show the exact heights of waves and
reports that it is listed as a cross-referral at    wind speeds at nearby beaches.
more than 100 Internet sites, all on the ba-           Killey designed and maintains these
sis of mutual reciprocal benefit (coopera-          websites at a very reasonable price. As
tion). Forty of them were generated from            part of his service to his community, he
the original list of potential referrals that       also maintains the sites of two candidates
Next Century developed when it launched             running for supervisor and a nonprofit
its website. The next 60 came in at the rate        land trust, all of which are listed on the
of one or two a week, spontaneously,                primary referral page.

3. Accessibility Information                    4. Valuable Free Information

Your website is a perfect place to clearly      The Internet began as a computer network
explain how to get to your business. When       linking educational and government enti-
you describe your location, be sure to use      ties; its commercial aspects are relatively
maps and other graphics, particularly if        new. People still go to the Internet prima-
your business is hard to find. Be sure to       rily for free information, and expect to find
mention major streets nearby, well-known        it; if you’re smart, you’ll include a lot of
points of interest and landmarks. For ex-       helpful, free information on your site. In
ample, a quick print shop in Berkeley,          addition to satisfying users’ expectations, it
California, marks its location on its map       lets potential customers see for themselves
and also lists nearby points of interest: the   that you are an expert.
Berkeley Marina, the 4th Street shopping           You don’t necessarily have to supply the
area and the Ecology Center. For land-          information yourself; take advantage of the
marks it lists some other well-known busi-      Web’s capacity to link sites to each other
nesses nearby: the Fantasy Records              instantly. For example, a real estate
company office, Orchard Supply Hardware         broker’s website might include links to the
and Takagawa Nursery. Also, remember to         local Chamber of Commerce site, which
include information about parking.              offers more information about the commu-
  Information about your location and di-       nity; sites that offer good material on mort-
rections to your business at your website       gage rates and financing; and to sites that
will become even more important as mo-          discuss the local school system. People
bile Internet service becomes more widely       who are looking for a house in the com-
used. Internet access is already possible on    munity will be grateful for the leads.
regular cell phones, allowing users to ob-, publisher of this book, oper-
tain information such as addresses and          ates a Self-Help Law Center on the Web
phone numbers, directions, business hours       ( The site features plenty
and even movie times on their cell              of information about Nolo books and soft-
phones. As this becomes more standard, it       ware, but it also offers loads of free legal
will become essential that your site offers     information on common topics such as
basic information about your business so        debts, wills and trusts, small businesses
that everyone who wants to find you can         and real estate.
easily do so.
                                                   MARKETING ON THE INTERNETS        11/ 1 1

D. Designing an Internet Site                    likely evolve in website structure. Already
                                                 there are some standards in website design
The Internet is so new that the format of        such as homepages and “return home”
websites has not yet fully stabilized. But as    buttons on other Web pages at the site.
it does, it is fair to guess that many of the    The following sections describe simple
structures of a book, which have evolved         ways to make your website clear and easy
over 500 years, will be involved. These el-      to navigate.
ements include a cover, with an image,
title and subtitle; a back page with short
reviews and recommendations; often, a            1. Your Homepage
jacket that contains a 300-word summary
and a description of the author; and in-         A well-designed site starts with an unclut-
side, standard locations for a table of con-     tered main Web page (a “homepage”) that
tents, an introduction, a bibliography, a list   has its key message easily readable on the
of other books by the author, and an in-         screen. It’s also best to present any other
dex.                                             crucial information at the homepage so
   In books, all of these elements help po-      that it’s completely readable without using
tential readers know what the contents of        a bottom or side scroll bar.
the book are and enable them to find what
they need quickly. Similar elements will

                                Should You Do It Yourself?

                                                  case, a massage pagoda, an antique
Few small businesses have the expertise and
                                                  dishrack and a custom house. His site in-
time to design and maintain their websites.
                                                  cludes an e-mail link and his phone number
Fortunately, many individuals and compa-
                                                  so potential clients can just click on the link
nies offer this service, at a cost that ranges
                                                  and e-mail him or pick up the phone and
from minimal to expensive. As in any tech-
                                                  give him a call if they like what they see.
nology, the first questions to ask yourself
                                                     During the rainy season when business
are what you need and want from your
                                                  slacks off, he plans on adding free informa-
website, and how much you want to spend.
                                                  tion about various aspects of construction.
You absolutely do not need a lot of bells
                                                  These articles will be useful over a long
and whistles—in some businesses, such
                                                  time period, so he won’t have to update
things can be inappropriate and distracting.
                                                  them often and can add to them when he
As in all business marketing, you have to
                                                  has time. At this point, for his kind of busi-
look at what others in your industry offer
                                                  ness, a simple low-maintenance site is ap-
and what customers expect. One last warn-
ing: Don’t put up your site until it’s ready.
                                                     As industry norms change and more
It’s very off-putting to visit a site that says
                                                  people look to the Web for contractors, he
“under construction.”
                                                  will have to change his approach. He might
   Michael Eschenbach, for example, runs a
                                                  add a FAQ (Frequently Asked Questions)
construction and cabinetmaking business.
                                                  section to help educate customers while
His geographical business area is limited
                                                  keeping his e-mail traffic down, more infor-
(50 miles), and for the most part, people
                                                  mation about changes in his field, the latest
looking for local contractors don’t use the
                                                  trends in home building and tips on remod-
Web for this purpose. However, a few
                                                  eling. He might include links to subcontrac-
people have inquired about whether he had
                                                  tors and vendors he recommends and spend
a website, so he had a friend help him de-
                                                  a lot more time maintaining and keeping his
sign a simple site with a few photographs
                                                  site fresh and informative to customers.
showing samples of his work: a spiral stair-
                                                    MARKETING ON THE INTERNETS          11/ 1 3

   In the Yellow Pages, your listing must            Since your homepage should clearly re-
present, all at once, all the key elements        flect what the rest of your site has to offer,
your customers need: hours, credit cards,         you’ll need to decide what else your site
location. The Yellow Pages are also in al-        will offer before you can finalize your
phabetical order by category. Neither of          homepage. Let’s take a look at some prin-
these things is true of the Web. Most pro-        ciples for designing your site as a whole.
spective customers will find your listing by
using online search engines, which search
for sites that contain words a user enters.       2. Your Website’s Structure
A user may search for several words at a
time, assigning equal weight to each or           The homepage offers a central place from
giving some a higher priority.                    which users can branch out to all the other
   In designing your homepage for your            material at your site. In designing your
site, you need to keep in mind that a pros-       site, you’ll need to decide which pages are
pect delivered to your homepage may be            accessible from which—in other words,
looking for something that is on another          you need to establish the branching struc-
one of your pages. The homepage should            ture by linking certain pages to others.
therefore clearly indicate what other mate-       When designing your branching system,
rial is available at the site. In essence, your   keep these guidelines in mind:
homepage needs to provide a sort of                   1. Always show what is ahead. Let
Table of Contents for the site as a whole.               prospects know what tables, charts,
   Also keep in mind that it’s important for             inventories and gold nuggets are still
your site to be clear and useful to all types            ahead of them.
of visitors. Recall from Chapter 7 that cus-          2. Always allow them to go back to
tomers and potential customers range from                your homepage with one click. Each
the naïve to the expert. Your introductory               page should have an easy-to-find
page should tell both the naïve user and                 “home” or “main menu” button that
the expert what the site offers and where                takes the user back to your
to go to find specific information—without               homepage. It’s crucial that visitors
scaring a naïve prospect with the expert                 constantly feel oriented and know
material, or insulting or boring an expert               how to find their way around the
with the simpler material. It’s often a good             site. Reassure them that they can al-
idea to show a sample of your primary                    ways go back to the main menu
page to a cross-section of friends and cus-              whenever they want to and provide
tomers to make sure it appeals to a range                an easy-to-understand mechanism to
of different people.                                     do so.

   The overarching idea is to have the          can search for their information at their
viewer feel comfortable and in control          own pace and with their own logic.
when they’re at your site so they stay             The interactive potential allows an
there, rather than getting frustrated and       online business to sort customers who visit
clicking off to a new site. To this end, be     the website, directing amateurs to pages
sure to design a branching structure that’s     that will educate them, and experts to
clear and easy to navigate.                     pages appropriate for their knowledge
   Encourage the visitor to bookmark your       level. For example, on an acupuncture
page for future reference. Web browsers         clinic’s online site, naïve non-users can see
such as Netscape Communicator and               a short video segment of a patient being
Microsoft’s Internet Explorer allow users to    treated, as well as a graphic dictionary of
create a list of their favorite pages so they   terms, a brief history of this ancient medi-
can revisit them without having to enter        cal art and testimony from successfully
the Web address (also called a URL, for         treated patients. Experienced patients and
Uniform Resource Locator).                      practitioners could be directed to pages
   It’s very helpful in designing your          with information about the latest studies
website to search for businesses similar to     and developments in the field, and to
yours online and study what works and           pages where patients could schedule ap-
what doesn’t, using the criteria above.         pointments.
                                                   The most important and beneficial use
                                                of interactive branching is to bring new
                                                prospects exactly to the right door of your
E. Interactivity and                            business. With the right branching system,
                                                an architect will, someday soon, answer a
    Customer Screening
                                                phone line and already know that the per-
One of the most interesting marketing at-       son on the other end wants to schedule a
tributes of the Internet is that it allows      meeting on Thursday afternoon at 3 p.m.
businesses to screen their interaction with     for a half-hour discussion of a 1,000-foot
customers and prospects. Before the             addition to her house at $120 a square
Internet, the voice-mail branching systems      foot, and that the prospect knows the
that many of us hate were the best tool for     architect’s qualifications. When the two
this purpose. We all recognize the voice        meet, the sale would be 90% complete.
that says, “If you want to talk to a sales-        One mechanism for weeding out brows-
person, press 1; if you want to discuss a       ers that is rarely used in American busi-
billing problem, press 2; ...if you want to     ness is to be purposefully obtuse and
speak to an operator, press 9.” The same        obscure. In Japan, it is common to find
thing can be done on your website—with-         that a master craftperson or a respected
out antagonizing the customer. Customers        antique dealer has a storefront that is old,
                                                 MARKETING ON THE INTERNETS         11/ 1 5

dilapidated and unobtrusive. Only the          spond to. He himself takes the clients who
most sophisticated customers know where        pick conservative fabrics for traditional
to go, so the masters don’t waste time or      “English gentlemen’s” suits.
get involved in the unpleasantness of turn-       Experience. Sorting by experience is
ing the wrong people away.                     used by a marketing research firm seeking
   The same approach can be used online.       sophisticated clients for a technical meth-
Irv Thomas, who sells books and newslet-       odology that it has perfected. Its Internet
ters about simple living to people who are     offering includes a wide range of political
already leading simple lives, uses it on his   survey data, election results and statistical
primary page by alerting prospects that        analysis programs. Users of two of its most
they are facing a screening. If they get       sophisticated statistical analysis programs,
through they will probably like the prod-      a chi-square and queue-sort, are clearly
uct. He then lists the names of five famous    the highly experienced type of people
and five obscure people and asks which         they want to offer their most sophisticated
ones have values that the prospect ad-         “key issues” methodology to. Users of
mires. Picking any of the right three names    those two programs are offered wide-open
leads directly to Thomas’s core material,      access to databases not known to others
and you get an explanation of why those        and a direct toll-free phone number for
three people are important to Thomas.          free assistance on their projects. Many of
Picking another three names that are close     these experienced users of the secret data-
in values leads to a page that gives clues     bases have become regular customers of
as to what is appealing about these three      the key issues methodology.
names and about the values that would             Understanding. A good example of sort-
lead the prospect to the core pages. Pick      ing by understanding is found at the
any of the four remaining names, and you       online site of the University of Chicago’s
are politely told that you would probably      Committee on Social Thought. This reclu-
find Thomas’s material inexplicable and        sive institute holds occasional seminars for
dull.                                          a very small number of invited cognoscenti
   You can separate window-shoppers            and for the rare person who visits its
from serious prospective clients based on      Internet site and follows the branching
several attributes, including taste, experi-   lines all the way to the end of a Ph.D. the-
ence and understanding.                        sis by one of the Committee’s alumnae. At
   Taste. A tailor in Hong Kong shows a        the end of each thesis is a flashing invita-
large sample of fabrics; you pick the ones     tion to the next seminar, with an phone
you like, and he recommends the tailor         number at which people can obtain the
whose work you are most likely to re-          time and location.

F. How to Help People                          did not get prospects to zero in on her
   Find You Online                             company. There were literally hundreds of
                                               thousands of other businesses using these
People will find you on the Internet in        words. She needed more specific words
many ways. Here are some ways to get the       such as “workbook,” “alternative medical
word out.                                      advice” and “estrogen replacement.”
                                                 Here are some ideas to stimulate your
1. Get Covered by Search Engines                   • Location: where you are located,
                                                     towns you serve, nearby landmarks.
A primary method that potential customers          • Skills, talents, experience, awards
use to locate businesses online is through           and degrees.
search engines such as Google (http://             • Past and present associations and or-, Lycos (http://                      ganizations you belong to that are and Alta Vista (http://               relevant to your business., and with indexes or            • Trade goods, services and products.
directories such as Yahoo! (http://                • Employees’ names, for example, if a Search engine informa-               customer might want a specific per-
tion is accessed by words or phrases; in-            son to cut her hair or drive him to
dexes use subjects and categories. To list           the airport. Betty Sue’s Airport Van
your site with search engines, you need to           Service, for example, lists the year
submit your website address to them along            and model of the vans in her fleet
with other information about your busi-              among her key words, along with
ness. Dozens of businesses now exist                 the names of her drivers, in case
online that submit your website address to           someone wants a specific driver
“thousands” of search engines for a mod-             whose name they remember.
est fee (though, since most people use one         • Relevant numbers: the number of
of about ten popular search engines, sub-            years you’ve been in business, your
mitting your site to thousands of them is of         birthdate, your address and zip code,
questionable value).                                 your phone number with area code
   Because search engines use key words              and your business hours if relevant.
to find you, you need to make a list of key      Use a thesaurus to find synonyms to all
words and keep adding to it as you think       the words you conventionally use to de-
of new ones. One friend who sells a            scribe your business. Synonyms for “en-
menopause product used very general            ergy,” for example, are power, force,
words, such as “women,” “health” and “fit-     vigor, propulsion and thrust.
ness.” These words were too vague and
                                               MARKETING ON THE INTERNETS          11/ 1 7

2. Get Recommended on                        your Web address is printed or posted,
   Other Sites                               and if it changes, make updates quickly.
                                             We highly recommend registering a do-
Other websites may link to your business.    main name in order to avoid any problems
For example, publishers of vegetarian        with having to change your Web address.
cookbooks sometimes list vegetarian retail   If, instead, your address is provided to you
markets by location. So Green Pastures       by your Internet access provider—for ex-
market in Boulder, Colorado, is listed and   ample, your business called Cactus Cre-
gets automatic referrals from people who     ations has a website hosted by Mindspring,
select the listing for Boulder. Green Pas-   so its URL is
tures, which carries a unique line of        cactuscreations—you run the risk of hav-
French homeopathic remedies, also has an     ing to change your Web address if you
automatic referral from the page of the      leave that access provider or if it goes out
French Wholesale Company, listed under       of business. Address forwarding programs
Boulder.                                     are still too unreliable to be wholly effec-
                                             tive; it’s better to take care of it yourself.
                                             This is also something to keep in mind
        The Old Ways Are Still the Good      when choosing an access provider: Pick
        Ways. People find out about          one that seems as if it will be around for a
websites the same way they hear about        while.
other things—through personal recom-
mendations. According to Business Week
magazine (July, 19, 1996), word of mouth     4. Pay for Referrals
is what gets most people to check out a
site. “With 90,000 [websites] to choose      The Internet has many people and busi-
from, a lot [of people] use good old-fash-   nesses offering to link to your site for a
ioned word of mouth,” concluded the          fee. When should you pay for referrals?
magazine.                                    Analyze it the same way you analyze your
                                             listing in the Yellow Pages: See what simi-
                                             lar people in your business are doing, how
3. Distribute Your Web Address               long they use it, and what messages they
                                             present to the public. If you decide to try
Include your Web address on all printed,     it, start with a limited-time arrangement so
published and public material, even your     you can see what type of customers you
outdoor sign if you have one—it’s at least   get and whether you have the facilities to
as important as your phone number and        handle their inquiries.
mailing address. Keep a list of the places

  Most important, see what company you           ers of new technology, before government
would be keeping. To be in a referral cat-       regulation is established, often include a
egory offered by less than desirable             large volume of snake oil peddlers. Extra
people can be very harmful. The early us-        caution is needed.

                           Marketing Manners on the Internet

 It is a big negative to send unwanted elec-        People are very wary of having their Web
 tronic mail. Doing a mass mailing is called     use patterns followed on the Internet or
 spamming and is the Internet version of         their e-mail addresses given out. Anything
 sending junk mail. You will quickly be-         you can say on your site to reassure them
 come hugely unpopular among online folks        that your business does not engage in such
 if you do it.                                   practices is a plus. Many businesses have a
    Don’t assume that someone who checked        policy statement on their website.
 out your website wants to hear from you—           Here is an example of a good privacy
 ask before you send. When you get a             policy from Book Passage in Corte Madera,
 person‘s name and e-mail address, clearly       California:
 explain that you might e-mail something, or        “We never sell, rent, or give away any in-
 ask permission to send something such as        formation about our customers.
 an e-mail newsletter. When you do send             “We use the least intrusive methods pos-
 something, get permission to send more.         sible to gather from our customers the infor-
 Don’t treat your list like a traditional mar-   mation we need to operate our business.
 keting mailing list, to which you might do a       (And we probably should add a third
 mailing four times a year. Never do the         point:)
 negative option of sending and then requir-        “If you show up with a subpoena looking
 ing the recipient to request that you remove    for a customer’s buying history, be pre-
 his or her name.                                pared for a battle.”
                                                  MARKETING ON THE INTERNETS          11/ 1 9

            Internet Pricing                    G. Active Internet Marketing
Fixed pricing, the kind we are most famil-      Actively marketing your business online
iar with, where the seller has a posted         can include a wide range of activities from
price and that is the only price the seller     doing an online newsletter with feedback
will accept, was developed in department        from subscribers to participating in online
stores in the 1850s. It replaced haggling       discussions to running online games with
about price and allowed store owners to
                                                thousands of simultaneous participators.
hire employees who were not family
                                                The main point is that active online mar-
members. The owners kept their eyes on
                                                keting strategy looks for opportunities and
the cash register to make sure the em-
ployees weren’t cheating. We now accept         reaches out to potential customers in an
fixed pricing; it has been important in cre-    endless variety of ways. Basically, this type
ating an industrial society.                    of marketing is above and beyond simply
   Among the major industries that first de-    maintaining a site (as wonderful as that
viated from fixed pricing were the airlines.    site may be). Still, there are many simple
Now, no one on a single airplane has nec-       ways of doing so.
essarily paid the same price as anyone             Participating in discussion groups and
else. Early bookers and groups get low          bulletin boards online is a great way to get
prices and late bookers get high prices.        the word out about your business. Of
There are also frequent flyer upgrades and      course, it’s essential that you participate in
other perks. This deviation is called mar-
                                                the spirit of the discussion group and not
ginal pricing or dynamic pricing.
                                                treat the group as purely a marketing op-
   The Internet has already seen a propen-
                                                portunity. People participating in online
sity for dynamic pricing. You may be
tempted to use dynamic pricing, especially      discussion groups on subjects related to
for sale goods, time-sensitive goods and        your business constantly ask questions and
services for loyal customers; in these cases,   ask for recommendations about products
dynamic pricing can make a lot of sense.        and services. For example, a novice skier
But be very careful that your dynamic pric-     looking for equipment might ask others
ing also makes sense to your customers.         taking part in an online discussion for the
The Internet is a miracle machine for           name of a helpful ski shop in the Boston
spreading negative evaluations. If your         area. To get such referrals, you, a friend, a
low-priced product is inferior, word            satisfied customer or an employee must be
spreads fast. If you charge some customers      an active participant in the discussion
higher prices based on their prior habits at
your site, consumers can’t be expected to
                                                   If you have an active website of your
understand your pricing policies. The
                                                own, it’s a good idea to join an online
negative word of mouth that will likely en-
sue can spread rapidly—as it already has        newsgroup or two and participate in ongo-
for several major Internet sellers.

ing discussions about topics that relate to     of DNA typing, got an invitation to be an
your business. A newsgroup is an online         expert witness in a trial in Hawaii when
community of people who are interested          the trial attorney found out about him
in a specific topic. They tend to have a        from a colleague’s referral in an online dis-
narrow focus and can be very useful in          cussion group among lawyers about the
certain fields. Your knowledgeable contri-      Hawaii case. The attorney knew of Billings
butions will help you become known as           because he is a lawyer who participates in
an expert in your field. These newsgroups       online discussions about genetic issues, in-
(there are thousands) are linked together;      cluding problems with DNA typing, where
you can find ones you may be interested         Billings is a highly respected contributor.
in through an online network known as
   When you’re ready to post a message or            Content-Sharing as an Active
question on a newsgroup, check out its                   Marketing Strategy
FAQs (Frequently Asked Questions) before
                                                 One of the active marketing strategies
jumping in. It’s bad form to advertise your
                                        uses is to license its content to
goods or services, but if you just wrote a
                                                 other carefully selected companies. This
new program for cabinetmakers, a one-
                                                 arrangement sometimes includes off-line
time post is fine because the other people
                                                 content licensing as well. Obtaining con-
in your cabinetmaker newsgroup would
                                                 tent (through a license, generally) from a
be interested.
                                                 trusted name such as Nolo is a huge ben-
   Subscribing to a listserver, a kind of
                                                 efit to any business, whose customers will
electronic newsletter dedicated to a certain
                                                 appreciate the inclusion of high-quality
topic and delivered via e-mail, is another
                                                 content, which builds trust for the entire
way to let people know you are around.
                                                 website. Nolo has been in business for 30
Subscriptions are usually free.
                                                 years and its reputation is based on being
   Tom Hargadon, who runs a multimedia
                                                 trustworthy and offering consistently reli-
newsletter and consulting business, regu-
                                                 able content.
larly gets new subscribers and clients from
                                                    Nolo also has an arangement with Ya-
people who know about him from the hun-
                                                 hoo!. Nolo allows Yahoo! to use certain
dreds of cogent and valuable comments he
                                                 Nolo content, and Yahoo! attributes the
makes in online discussion groups.
                                                 content to Nolo and links back to the
   The better you are known, the more rec-
                                                 Nolo site, which enjoys increased traffic.
ommendations you will get. And online,
                                        has 12,000 users a day, and
recommendations travel with lightning
                                                 generates one-third of its revenue online.
speed across the country. For example,
Paul Billings, a Palo Alto, California physi-
cian and an expert on the social problems
 Chapter 12

 Designing and Implementing
 Your Marketing Plan

A. Your Marketing List: The “Who” of Your Marketing Plan ............................. 12/2
B. How to Evaluate Your List ............................................................................ 12/3
C. Marketing Actions and Events: The “What” of Your Marketing Plan ............ 12/5
D. Direct Marketing Actions ............................................................................ 12/7
    1. Sampling as a Direct Marketing Technique .............................................. 12/8
    2. Giving Customers a Little Extra ................................................................ 12/9
    3. Product Demonstrations as a Direct Marketing Technique .................... 12/12
    4. Classes as a Direct Marketing Technique ............................................... 12/13
    5. Follow-Up as a Direct Marketing Technique .......................................... 12/14
E. Parallel Marketing Actions ......................................................................... 12/15
    1. Samples and Offers as Parallel Marketing .............................................. 12/17
    2. Demonstrations as Parallel Marketing .................................................... 12/18
    3. Follow-Up as Parallel Marketing ............................................................ 12/19
F. Peer-Based Marketing Actions .................................................................... 12/21

                 marketing action plan for         wants to expand is an up-to-date master
                 your business should include      list of customers, prospects, suppliers,
                 three basic elements. The first   friends and people in the community who
is the statement describing your business,         can help spread the word. To create such
which you completed in Chapter 7. Now it’s         a list, start by gathering all the names on
time for you to design the next two, which         your invoices, ledger cards, mailing lists, e-
we call the who and what of your market-           mail messages, personal checks you have
ing effort. Let’s start by briefly defining the    accepted, customer sign-up sheets, Palm
rather shorthand terms “who” and “what”:           Pilot, etc. Some businesses add to their
    • The who of your action plan is sim-          lists by offering a prize and holding a
       ply a list of the people you already        drawing; the entry forms include the
       know who are in a good position to          customer’s phone, e-mail and postal ad-
       recommend your business to their            dresses. This technique is particularly ef-
       friends and acquaintances.                  fective at trade shows, malls and other
    • The what of your action plan is the          locations where a large number of inter-
       list of marketing actions and events        ested people are gathered. We feel it is im-
       that will stimulate the people on           portant to make it clear when you add
       your list to actually make recommen-        new people to your list, that they will from
       dations.                                    time to time receive e-mails and mailings.
   Before we get into specifics, be aware          There is no benefit in spending postage
that your general objective in designing a         and adding to junk e-mail by sending in-
good marketing plan is to give your cus-           formation to people who aren’t interested.
tomers, associates and prospects a sense              Your marketing list should include
of participation in your business. When            names, e-mail and postal addresses, phone
done well, this allows you to share your           numbers, and what, if any, goods and ser-
sense of excitement at the same time that          vices the customers received, along with
you enhance trust in your business. If you         appropriate dates. Where possible, and de-
can accomplish this you can significantly          pending on your business, include person-
increase the desire and willingness of a           alized comments and notes as to who
large number of people to recommend                referred the people or how they heard
your business to their friends.                    about you. The general rule is that if you
                                                   deal with a few important customers you
                                                   should go out of your way to be personal,
A. Your Marketing List: The                        but if you sell a lot of goods and services
   “Who” of Your Marketing Plan                    in small units, collecting extensive per-
                                                   sonal information isn’t feasible.
One of the most important marketing tools
available to the small businessperson who
                        DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS           12/ 3

   Whatever method you currently use for            Throw a Rolodex Party. One of the
storing your list, we recommend transfer-             most ingenious ways we’ve encoun-
ring relatively small lists—fewer than 300    tered to add names to a list was a “rolodex
names—to index cards and alphabetizing        party.” Developed by Joan McIntosh for
them with one name per card, even if do-      Dean Sautner, who designs and builds cus-
ing this duplicates a computer list. The      tomized shelves and desks for computers,
physical presence of this box of cards is a   she invited her trusted friends to a party
powerful reminder to use it. However, if      and asked each to bring their rolodex. At
your list is over 300 names, then a com-      the party, she provided envelopes contain-
puter database will be necessary.             ing brochures describing Sautner’s prod-
   Here is a sample index card that has       ucts. Joan asked her friends to address at
worked for businesses we advise:              least six envelopes to people who might
                                              be interested in the furniture and to write
                                                           a short personal note on the
SAMPLE INDEX CARD                                front     flyer. A good percentage of
121098765432109876543210987654321                          the people contacted this way
121098765432109876543210987654321                          responded favorably.
121098765432109876543210987654321   PROSPECT [ ]
  OTHER [ ]
121098765432109876543210987654321                         B. How to Evaluate
121098765432109876543210987654321                         Your List
121098765432109876543210987654321                         The purpose of this checklist
121098765432109876543210987654321                         is to determine how much, if
121098765432109876543210987654321                         any, work is needed for your
                                                          list to be usable.
121098765432109876543210987654321               back

       Your Marketing List

       Your marketing list was last updated:

                                                                                                           NEEDS MORE WORK
         6 months ago        1 year ago          2 years ago     3 or more years ago

       A complete list of your customers, suppliers, prospects, and business
       associates, relevant aquaintances and peers is available for an immediate
       mailing, phone invitation or e-mail contact.      YES    NO

       If Yes, how current are your addresses?       customers
                                                     business associates
       How current are your phone numbers?           customers
                                                     business associates
       How current are your e-mail addresses?        customers
                                                     business associates
       If No, how long would it take you             customers                  _______            hours
       to make a list?                               suppliers                  _______            hours
                                                     prospects                  _______            hours
                                                     business associates        _______            hours
                                                     acquaintances              _______            hours
                                                     peers                      _______            hours
       Starting now you are compiling                   checks
       these records from…                              customer records
                                                        form letters
                                                        supplier records
                                                        organization membership lists
                                                        your personal address book
                                                        e-mail messages
                                                        personal organizers (Palm Pilots, etc.)
                                                        other _______________________________
                         DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS              12/ 5

C. Marketing Actions and                           • Parallel Marketing: The dance school
   Events: The “What” of Your                         selects people from its marketing list
                                                      and invites them to be guests at a lo-
   Marketing Plan                                     cal performance by a touring dance
                                                      company known to do innovative
Once you generate a list of your marketing
community, the next step is to plan mar-
                                                   • Peer-Based Marketing: The dance
keting actions. These actions should gener-
                                                      school gives a reception for a visiting
ally fall into three categories:
                                                      out-of-town artist/performer and in-
    • Direct,                                         vites the people on its list, including
    • Parallel, and                                   a wide cross-section of the local
    • Peer-based.                                     dance and arts community.
   Together, these make up the “what” of          All businesses should carefully consider
your marketing plan. Let’s first define these   each of these broad community-based
terms by looking at how a small school of       marketing approaches. Of course, depend-
modern dance might use each to mount a          ing on your business, there are many—of-
good marketing effort designed to stimu-        ten hundreds—of possibilities in each of
late personal recommendations. (The next        the three categories. Often, particularly
chapter gives several examples from each        good ones become annual events that cus-
of these categories to show how year-long       tomers and friends look forward to. Christ-
marketing plans are actually planned.)          mas parties and business open houses are
    • Direct Marketing: For a dance             a popular version of this type of market-
      school, a good illustration of direct     ing. So are free ice cream cones for
      marketing is holding a performance        children’s birthdays from the local ice
      by advanced students at the school.       cream shop. But because they are so com-
      All students would be encouraged to       mon, and because they are not designed
      invite their friends and family, and      with intentional information content, they
      the school would send a notice to         are not nearly as effective.
      school alumni and friends and ar-
      range for appropriate publicity in the
      dance community.

                Marketing for Wholesalers Who Use Middlepersons
Many businesses have no direct contact            part by softer, higher quality imports. In-
with their final buyers. If you use represen-     stead of closing down, as many other
tatives (reps) or sell through distributors and   woolen mills have done, it reversed its de-
retailers, you will probably want to direct       cline by eliminating all of its reps and rely-
most of your marketing activity at the            ing solely on one salesperson plus an
people who actually buy from you. How-            innovative marketing strategy. Part of this
ever, if an opportunity ever comes up to          strategy consisted of inviting customers to
deal directly with the final buyer, we advise     visit the factory and to stay in a local 300-
you to take it. This doesn’t mean that you        year-old inn. People loved the idea and
should ignore your reps, just that you            came from as far away as Japan and
should try to develop alternative marketing       Canada.
strategies.                                          The owners of the mill introduced each
   If your business must use reps because         customer to the women on the production
that system is built into the industry, try to    line, allowing time for informal interaction
help your distributors sell more of your          as well as in-depth discussion of the pro-
product. One example is a jeweler we              cess of turning wool into fabric. The cus-
know who sells primarily through sales reps       tomers found that the factory could create a
but still regularly sends the buyers at all her   far wider range of custom fabrics than they
major store accounts a newsletter. The            had realized. Several customers who used
newsletter is primarily graphic; one issue        the fabric in the upholstery business were
showed some unusual contemporary fash-            able to redesign some of the material to
ions and how her jewelry is worn with             better fit their needs. And by changing
them, and another highlighted interesting         some procedures, new markets were cre-
window and counter displays featuring her         ated in the sporting goods field. This in-
jewelry. In one issue, she included a small       crease in business could not have
card with a chart that converted millimeter       happened had the mill worked exclusively
measurements to the 1/16-inch measure-            through middlepersons.
ments used in the jewelry business. Because          We believe this lesson is valuable to al-
the newsletter complemented the activities        most every business. Your customers, espe-
of the reps and didn’t threaten them, the         cially since they are in business themselves,
reps were happy to have the supplier ac-          know what they need better than any rep
tively helping in the sales process.              (who is, after all, in the “rep” business), and
   You may decide, however, that you can          often better than you do.
do better without reps. For example, a               Sometimes the problem of middlepersons
woolen mill in western England faced a di-        is difficult to avoid. Frances Peavey pub-
sastrous decline in its business, caused in       lished a book, Heart Politics (New Society
                         DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS              12/ 7

 Marketing for Wholesalers . . . cont’d        D. Direct Marketing Actions
 Press, 1985), about community organiz-        Once you have a list of clients, suppliers,
 ing for social change. This is the kind of    friends and prospects in front of you, you
 book that rarely gets widely reviewed. In     may feel the urge to pick up the phone,
 other words, book reviewers—the               send a note or visit each one to tell them
 middlepersons of the book world—              more about your business. For most busi-
 weren’t likely to be of much help if she      nesses, following that impulse would be a
 simply mailed out review copies. Frances      primitive and impractical form of direct
 circumvented this bottleneck by doing         marketing. The task of this section is to get
 her own publicity and direct selling to       you to refine this idea so that you can con-
 churches and peace groups. In addition,       tact the people on your list to tell them
 however, Frances also put some thought        about an event, action, product or service
 into how she could get the middlepersons      that they will welcome hearing about.
 to pay attention to her product.                 Where appropriate, the most direct and
    During the annual American Booksell-       effective marketing stimulus is to contact
 ers’ Association convention, which most       the persons on your list by telephone or in
 major book reviewers from all over the        person to inform them of some new offer-
 country and close to 20,000 book indus-       ing. If your information is genuinely useful,
 try people attend, Frances got a part-time    this approach is usually appreciated. An
 job as a taxi driver. She kept her cab in     example is a fancy clothing boutique that
 front of the convention hall during the en-   calls the people on its list to tell them
 tire week of the convention, making it a      about a luncheon fashion show.
 point to get into conversations with pas-        Many businesspeople are understandably
 sengers about her books. A few of these       uncomfortable phoning or otherwise di-
 were reviewers, and many others knew          rectly contacting customers. They feel that
 reviewers and were so struck by the cre-      if they offer a good service or product,
 ativity of her approach that they provided    people should appreciate them so much
 introductions. Frances met more than a        that they will seek them out. Often too,
 dozen book reviewers, representing major      there is the fear of being rejected. The real-
 newspapers as well as a few key maga-         ity, of course, is that any business is only a
 zines. They all promised to review her        small item in the busy life of its customers
 book. Most of them did.                       and can easily be overlooked.
                                                  You can test this on a small scale for
                                               yourself; call ten of your customers and tell
  Let’s now look at each of the categories     them about something that is of benefit to
in more detail to help inspire you when        them. Chances are they will be happy to
you create your own list of actions.           hear from you and will tell you so.

1. Sampling as a Direct Marketing                 customers to nibble. To reach large
    Technique                                     numbers of new customers, regularly
                                                  contribute your special concoctions at
If you offer a quality product or service,        community events. Bill’s Farm Basket
one of the best marketing strategies con-         in Sebastopol, California, offers a
sists of offering a potential customer a          wide assortment of fruit, veggies and
sample. We have all found samples of              other goodies. This popular roadside
toothpaste, shampoo and soap in our mail-         market recently added a deli, and as
boxes. If the sample works to our satisfac-       customers wait at the check-out
tion, we may well buy the product, even if        counter they tempt them with
this means switching brands.                      hummus and crackers, salsa and
   This sort of large-scale sample distribu-      bread or whatever new item they
tion can often be a very effective marketing      have decided to add to their selec-
tool, but it is obviously way over the bud-       tion. And you don’t have to feel shy
get of the ordinary small businessperson.         about seconds and thirds; they en-
With a little imagination, however, you can       courage their customers to really en-
come up with smaller-scale, targeted sam-         joy their products. No wonder Bill’s is
pling ideas to let people on your action list     a favorite roadside stand of Tom Pe-
know what you have to offer, and do it at         ters, author of The Management Ex-
a very reasonable cost. For example, we           pert.
have a friend, Clark Herz, who offers free      • A catering business can invite its cus-
foot massages at the county fair. Tired           tomers to drop by for a food tasting.
tootsies are soon rejuvenated, and a whole        It might offer five variations on a des-
new group of people are introduced to             sert it is contemplating serving as part
Clark’s massage business.                         of its dinner menu and take a vote as
   Here are a few illustrations of how to         to customer preference. Presumably,
creatively use sampling techniques at a           if the desserts are good, a number of
modest cost:                                      the people who attend will call the
    • If you are in the landscaping busi-         caterer for future events and feel con-
       ness, offer to demonstrate how your        fident recommending it to friends.
       new weed-whip can spiff up a yard        • In Japan, department stores generally,
       in short order as part of clean-up         and cosmetic sections always, include
       duty at a local church or community        a small sample as a gift for customers
       center.                                    with each purchase. All sorts of small
    • The retail food business is a natural       businesses can use this technique to
       for samples; it’s wise to have small       introduce customers to new products
       bits of food regularly available for       at relatively low cost. Indeed, if you
                          DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS               12/ 9

      can get the cooperation of your sup-        selling them a jar of her face cream (which,
      pliers (who, after all, are interested in   incidentally, was made in a converted
      increasing sales of their products),        stable by her Uncle John).
      you may even be able to provide                Picking the best sample from your busi-
      your customers with small quantities        ness is often an act of creative inspiration.
      of a new product at no cost to you.         It requires matching the customers’ inter-
   • A tapestry weaver might send out a           ests with something you have to offer.
      sample of a new “rough-knotty” yarn         Think about what aspect of your business
      that he is incorporating in new de-         you can share with others at a reasonable
      signs.                                      cost that is likely to entice people to want
   • An educational game and curriculum           more. Converse Shoes, an athletic shoe
      designer could send a quiz based on         manufacturer, for example, often provides
      one of her new products with the of-        “test” shoes in popular running areas. It of-
      fer of a prize to anyone who answers        fers a one-hour “sample,” which is a great
      it correctly.                               attention-getter and a real service. What
   • Welcome Wagon-type groups can be             better way to see if a pair of shoes is right
      a good, relatively low-cost marketing       for you than to actually run in them? If you
      tool to reach people new to your            like the Converse shoe, you get a discount
      area. Offering a free sample or intro-      coupon redeemable at local stores.
      ductory discount this way is appro-
      priate if new residents are particularly
      likely to need your product or ser-         2. Giving Customers a Little Extra
   • America Online does mass mailings            Not so many years ago, when you pur-
      of free, easy-to-use software and of-       chased a dozen rolls or pastries at a bak-
      fers free access time to encourage          ery, you got one free. In some places,
      potential customers to use its service.     smart bakeries still give their customers a
  Unfortunately, some businesspeople tend         baker’s dozen. Similarly, See’s Candy, an
to dismiss sampling as a marketing tool be-       old-line West Coast firm that sells wonder-
cause they don’t think it’s sufficiently so-      ful candy at a fair price, always gives a
phisticated. Consider the story of Estee          purchaser a free piece of candy on the
Lauder, founder of the largest family-            spot.
owned cosmetics company in the world.               In both instances, the point is the same:
When Lauder was starting her business in          a good customer gets a tangible thank you.
the 1930s, she stopped people on New              Being generous is a wonderful way to say,
York City streets and offered to make them        “We appreciate your business. Please come
up then and there. She usually ended up           back.”

   Another form of giving a little extra is          • A lawyer who specializes in helping
looking upon your business as part of a                 small businesses sends a letter to her
community. Every business has a commu-                  network of clients and friends saying
nity, but in some businesses customers are              that, in September, she plans to con-
encouraged to be part of that community                 centrate on incorporations because
and feel almost part of an extended family.             her new computer program allows
For example, nowadays coffee houses                     her to achieve substantial efficiencies
abound. The reason why some of these es-                by pre-programming the standard
tablishments have an incredibly loyal clien-            (“boilerplate”) language. As part of
tele is that customers trust the business for           “incorporation month,” she not only
all of the reasons we have discussed in this            offers a free (or low-cost), one-day
book and they have decided to “adopt” it.               seminar on the pros and cons of in-
Customers proudly invite their friends as if            corporating, but also reduces her nor-
they were inviting them into their own                  mal incorporation fee by $100 to pass
kitchen and feel almost proprietary about               along the savings a volume approach
the business.                                           allows.
   A good example of business as extended            • A plumber gives every customer a
family is Caffe Trieste, a flourishing busi-            bottle of liquid drain cleaner as part
ness tucked away on a corner in North                   of house calls.
Beach, the old Italian neighborhood of San           • A shoemaker includes a sample size
Francisco. One thing that sets it apart from            tin of shoe polish with every major
other (often fancier) cafes in the neighbor-            repair job.
hood is its friendly, “family” atmosphere.           • A one-hour film developer sells film
On Saturday afternoons Caffe Trieste is                 to customers at a wholesale rate.
jammed with customers who come to hear               • A tire service sends customers a
some of the regulars—friends and family of              simple tool designed to measure
the owners—sing everything from Italian                 tread wear, along with an announce-
folk songs to Broadway hits. Audience par-              ment of a sale on new tires.
ticipation is encouraged, and it’s more like         • An accountant sends out an inexpen-
going to a party than to a restaurant.                  sive financial record-keeping book to
   Giving a little extra to good customers              all his clients.
can build customer trust very quickly. Ev-         This list could be nearly endless. With a
eryone likes a good deal, and many will         little creative thinking, every small
pass on the good news to their friends. If      businessperson can use discounts, small
you don’t run a retail business, you may be     gifts or extra services to make good cus-
saying “Sure, but this sort of technique        tomers feel appreciated. One good way
won’t work for me.” Nonsense. Let’s look        many businesses do this is through the use
at a few examples:
                        DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS              12/ 1 1

of punch cards or tickets allowing custom-        Of course, punch cards and coupons
ers to get one item free whenever they         work better in some businesses than oth-
buy ten. We are very loyal to a video          ers, and are clearly inappropriate in a fancy
rental shop and a take-out pizza place that    restaurant where people expect to pay well
do this, and one of our editors brags about    for exquisite food and service. However,
a children’s shoe store that has the same      even in the most expensive gourmet res-
policy, but with the nice little twist that    taurant where diners don’t worry about the
they also keep the records of purchases        number of zeros on the bill, a little extra is
for you. And we know a nice little Japa-       appreciated. For example, a friend reports
nese restaurant in San Francisco that gives    having a dinner at Masa’s, one of San
customers a Japanese coin good for a free      Francisco’s loveliest and most expensive
order of sake at the next visit.               restaurants. This party was hosted by an-
  Osmosis, the enzyme bath and massage         other friend who was treating the entire
business mentioned in Chapter 7, gives a       group to celebrate his big promotion. The
birthday card that you present within 30       left side of the menu contained a number
days of your birthday for you and your         of wonderful entrees as part of a complete
guests to receive 20% off all treatments.      dinner. As mouth-watering as this list was,
And Pastorale, the retail store with a focus   however, the “grass is always greener”
on natural fibers (also mentioned in Chap-     phenomenon of human nature inevitably
ter 7) sends a card at Christmas to the ap-    caused some of the party to begin fantasiz-
proximately 13,000 people on its list          ing about how scrumptious some of the à
inviting them to come in for a free orna-      la carte items on the other side of the
ment. About 600 people bring in the card       menu were sure to be.
each year; the ornaments are of the high-         Finally, the host beckoned the waiter and
est quality and have become a tradition in     asked if substitutions were allowed, fully
the community.                                 expecting that the answer would be no, as
                                               it usually is. Much to everyone’s surprise,
                                               the waiter said it was Masa’s policy to offer
                                               its customers the best eating experience
                                               possible, and that almost anything on the
                                               menu could be substituted for anything
                                               else. From then on, our friend reports the
                                               meal was a terrific success, with one of ev-
                                               erything ordered, bites shared, and every-
                                               one getting a taste of his or her favorites.
                                               When the last bite was eaten, sip of wine

drunk and the bill paid, everyone felt that      as would be the case if a tax accountant re-
they had been treated wonderfully.               ferred his clients to a reliable computerized
   One of the most ingenious of all fair         bookkeeping service that offered them a
price techniques we have encountered             slightly discounted hourly rate.
comes from Tokyo Hands, a store in Tokyo
that sells hobbies, crafts, art supplies, gar-
dening tools, auto supplies and office and       3. Product Demonstrations as
bathroom goods, each on a separate floor.            a Direct Marketing Technique
A customer who buys office supplies on
the fifth floor is given a 20% discount cou-     Product demonstrations can make the dif-
pon good for that day for any art supplies       ference between success and failure for
on the third floor. If he takes advantage of     many small businesses. For some, this mar-
the offer, he is given another discount cou-     keting technique offers the only cost-effec-
pon good that day in a related department.       tive way to make people aware of what
In short, each department gives a discount       they have to offer. Here are a few ex-
coupon for another department that a per-        amples of successful demonstrations:
son who patronized the first would likely            • An interior decorator, Tony Torrice,
be interested in.                                      invited his list of builders, architects
   Of course, one reason why this is such a            and developers to a house where he
brilliant marketing idea is that the customer          had just installed a specially
is already in the store. Money spent to en-            equipped bathroom for a handi-
courage customers to buy more when they                capped client. No amount of words
are already on the premises is, of course,             (whether in the form of an article or
far more cost-effective than is money spent            even a direct conversation) could
to get them there in the first place.                  have demonstrated the unique fea-
   Incidentally, use of this sort of discount          tures of this room as well as seeing it
coupon technique need not be limited to                first-hand.
stores with many departments. Any group              • A contractor had a wine-tasting event
of retail businesses located in a relatively           at an office where he had designed a
small area which appeal to similar types of            skylight in conjunction with mirrors
customers can use it effectively. For ex-              to bring light to a particularly dark
ample, a plant nursery might give its cus-             area of the room. Actually experienc-
tomers a 20% discount coupon good that                 ing the space allowed many of the
day at a neighboring lawn furniture store,             people present to see how this kind
and vice versa. And the same principle,                of skylight could improve their living
with perhaps a little extension of the time            and working spaces.
factor, can be used by service businesses,
                        DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS            12/ 1 3

   • A rug manufacturer invited his cus-      their cameras. Stores that don’t provide
     tomers to observe one of his master      these instruction classes are missing an ob-
     weavers at work on a huge loom so        vious marketing technique.
     people could gain an insight into the      Because business benefits from selling all
     rug-making process. He also dis-         sorts of new product developments, our
     played his finished rugs.                society leaves much of the job of educating
   • The late Kaisek Wong, a woman’s          consumers up to these businesses. Busi-
     clothing designer, had two models        nesses that do a good job at education sell
     wearing his stunning clothes accom-      more. Here are some examples of how
     pany him to nearly every party, din-     businesses can use classes to enhance their
     ner and opening to which he was          marketing efforts.
     invited. Most people loved to invite        • A weight-lifting gym offers introduc-
     him, especially the circle of women            tory instruction to its customers.
     who bought his clothing.                    • A women’s clothing store offers color
   • A foreign language school sent its             analysis and wardrobe design classes
     alumni, donor and prospect list a              for its clientele.
     one-page flyer of common phrases            • An outdoor equipment store offers to
     for a dozen different languages and            teach people how to use the equip-
     offered a free 15-minute telephone             ment it sells.
     lesson to accompany it.                     • A word processing firm teaches its
                                                    techniques for high-speed mailing list
                                                    input and for doing statistical tables.
4. Classes as a Direct                           • A school for children with learning
    Marketing Technique                             disabilities teaches parents and
                                                    grandparents of students about recent
It’s often hard to remember that many               developments in this rapidly chang-
products and services that are common-              ing field.
place for us are complete novelties to oth-      • A locksmith teaches businesspersons
ers. The media lets us know a little about          the elements that go into creating a
many new developments but rarely teaches            tight security system.
us enough to make us willing to break old        • Fireplace manufacturers have a spe-
patterns and make new products part of              cial opportunity to teach classes to
our lives. For example, TV may tell you             architects and decorators on the
about the latest digital camcorder, but it          mathematical calculations necessary
won’t teach you how to operate all the set-         to design a fireplace that works.
tings on one. Most people learn through         In addition, classes are a particularly ef-
classes offered free when they purchase       fective marketing technique for service pro-

viders such as lawyers, accountants, doc-           This technique is followed by Bernard
tors, designers and all sorts of consultants     Kamoroff, author of the best-selling small
to keep their clients up-to-date on new de-      business guidebook Small Time Operator
velopments in their fields.                      (Bell Springs, 1996). Bernard (Bear to his
   Should you charge for these classes? It’s a   friends) schedules classes and workshops
tough question. Banks often offer free           for small businesspersons, sometimes un-
classes for their target clients, such as me-    der his own auspices and sometimes
dium-size businesses. One of our favorite        through existing educational programs
local banks hosts a free breakfast meeting       such as local college extension programs.
twice a year for their business customers        As part of the course, he distributes his
and invites a knowledgeable speaker to talk      book to the students so that they can refer
to the group for an hour. Free also seems to     to various charts and other information as
be the rule when it comes to classes and         he goes along. He asks only that the books
lectures taught by large accounting firms        be handled carefully and returned at the
and pharmaceutical companies, where              end of the lecture.
prices are comparable from company to               Because our friend Bear’s class is so
company, and mark-ups are high. In many          good, one or more students always inquire
small business situations, however, modest       if they can purchase the book. When the
fees—often below the cost of providing the       class learns that not only can they buy the
class—are prevalent and accepted.                book, but that they get a 10% discount if
   We have found that the key to classes is      they do, as many as 75% purchase it, and
not how much you charge, but how much            most ask to have their copies autographed.
real value they provide your customers. For
example, if you run a woodworking or in-
terior decorating business and offer classes     5. Follow-Up as a Direct Marketing
(free or not) that are little more than a            Technique
sales pitch, the classes will not be well re-
ceived and may even generate negative            One of the gut responses of a business-
comments about your business. A far better       person with good marketing skills is to fol-
approach is to charge a modest fee for           low up with important customers to find
classes that provide excellent information       out how things worked out. The simplest
and training and hardly mention the ser-         way to do this is to call and ask customers
vices or products your business provides. If     if they are happy with the product or ser-
your classes are good, people will demand        vice they received. Some people new to
to know more about your business. When           business are reluctant to ask either because
they do, offer them a small discount and         they are afraid of the answer or feel shy.
you will have created a very satisfied cus-      But if you don’t ask you will never know—
                          DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS               12/ 1 5

and, as we discussed earlier, an unhappy             • A computer-based information re-
customer probably won’t tell you but will               trieval service calls a day after a re-
tell his or her friends. Usually a customer             quested research report is sent to the
with a small complaint will be delighted for            client to see if additional material
the opportunity to tell you and will remain             needs to be generated.
a loyal customer.                                   This is your chance to be your own busi-
  You should follow up if at all possible,        ness consultant and design your own direct
especially following a marketing event. The       marketing plan. These worksheets are very
questions you want answered are:                  important. Use every creative technique
    • Did your customer like your goods or        you know of to write down your ideas. Eat
       services?                                  chocolate if that will help, stand on your
    • Did it meet her expectations?               head if that works for you, have a brain-
    • Is there anything you can do now to         storming session with your associates, go
       increase your customer’s satisfaction?     running, take a vacation—whatever it
  There are many ways to follow up in ad-         takes—do it!
dition or instead of calling. We suggest a
few here, but you will, of course, want to
use your own creativity to find an ap-            E. Parallel Marketing Actions
proach that is appropriate for your busi-
ness:                                             In addition to direct marketing, your mar-
    • A friend who manufactures hand-             keting action plan should include parallel
       made chairs sends a letter to custom-      marketing techniques. Parallel marketing is
       ers inquiring about their satisfaction     aimed at promoting your business area in
       with his product. He also recom-           general, not just your business. Think of
       mends a special, hard-to-get finishing     products and services closely related to
       oil he uses and offers to sell it to the   yours or which are in some way comple-
       customers at a substantial discount.       mentary, that you wholeheartedly recom-
    • A knife manufacturer offers a free          mend. By telling your customers about
       sharpening training session to clients.    these products or services, you provide a
    • An illumination consultant comes by         valuable service at the same time you give
       a few weeks after a lighting job is        them a better perspective about your busi-
       completed to see if any slight adjust-     ness. It is a strong form of teaching: subtle,
       ments might be helpful.                    clear and participatory. By helping your
    • A humane society worker calls a             customers, you make it far more likely that
       week after a pet is adopted to see if      they will make positive personal recom-
       there are any unexpected problems.         mendations about your business.
                                                    Moon Travel Handbooks in Chico, Califor-
                                                  nia, sells state-by-state travel guides for

        Designing Direct Marketing Events

        SAMPLES: (items or reference guides your customers would find useful)




        CLASSES: (re-examine your business definition in Chapter 7 to broaden
                  the range of topics your customers and prospects are interested in)

        FOLLOW-UPS:     (what related product or service delivered by mail, phone, e-mail,
                        questionnaire or visit could make your past and present customers
                        more satisfied with your work?)
                         DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS               12/ 1 7

popular tourist and camping destinations. Its    cial offers:
marketing is largely parallel in the form of a       • A Texas dentist sends out tooth-
quarterly newsletter with articles written by           brushes for patients to use without
travel experts and a website                            water or toothpaste while driving.
( One issue con-               • A lawyer with a new practice sends
tained articles on wineries in Texas, fashions          his small business clients a copy of a
in Montana and how to avoid or treat ques-              booklet explaining partnership laws.
tionable drinking water by a Ph.D. in inter-         • The partners in an events organizing
national health. On the website are great               company alert all their clients and
links to travel resources and some of the               prospects to a wine-tasting at a local
best online information that we have seen               vineyard.
about staying healthy in other countries.            • A Spanish restaurant has regular
   A different approach to parallel market-             drawings among customer entries for
ing is provided by the Stanford University              tickets to local flamenco dance per-
Business School, which occasionally makes               formances.
available guest lecturers for alumni in ma-          • A stable that boards and rents horses
jor cities around the country. This is, of              sends out flyers to the people on its
course, a very traditional marketing ap-                mailing list describing a non-toxic fly
proach. Stanford is marketing itself to its             control system offered by a local
alumni, to whom it will surely appeal for               company.
contributions at one time or another. But            • A small publisher producing books
it’s important to understand that there is no           for craftspeople includes materials in
direct pitch at the lectures, which provide             its mailings describing useful books
alumni with a service at the same time that             and resources published by other
Stanford’s value as an educational institu-             companies.
tion is underlined.                                  • A florist gives a customer who buys
   It is helpful, in developing your list of            cut flowers a sample package of a
parallel marketing actions, to make distinc-            substance that extends the life of the
tions between sampling, demonstrations                  flowers.
and classes if only to stimulate your imagi-        Each of these parallel marketing efforts
nation to generate more ideas.                   provides useful information for customers
                                                 that adds to their general expertise in the
                                                 field. The dentist who sends out tooth-
1. Samples and Offers as Parallel                brushes is clearly broadening the knowl-
    Marketing                                    edge of his patients. They learn that using
                                                 a dry toothbrush is good for the gums and
Here are some examples of parallel mar-          can be done while driving to work, a sig-
keting techniques using samples and spe-         nificant departure from the “brush after ev-

ery meal” advice which they probably dis-         member the two key rules to a successful
regard as too inconvenient.                       demonstration:
   The partnership booklet gives the                  • Make your demonstrations fun, and
lawyer’s customers, in a convenient form, a           • Give real value.
better perspective on the legal issues in-           Here are some examples of demonstra-
volved in their business organization. This       tions that work as parallel marketing tech-
booklet is also a way to alert them to many       niques:
issues (for example, what happens to the              • A white-water river rafting company
partnership if one partner becomes dis-                  holds a demonstration of ocean
abled) that they might never have recog-                 kayaking at a local beach.
nized as concerns for which they might                • A wind generator manufacturer spon-
want to consult a lawyer.                                sors a one-day show displaying the
   Similarly, by inviting people to a wine               most recent battery storage systems.
tasting, the event’s organizers are able to           • A sports club invites someone who
contact potential customers in a way that is             restrings racquets to demonstrate his
far more effective than the standard ap-                 technique in the lobby.
proach of sending them a fancy brochure               • A hair salon in Copenhagen offers its
in the mail.                                             customers smocks to wear during
   The publisher is being particularly cre-              their visit that are hand designed by a
ative by recommending books published                    neighboring clothing designer.
by someone else in a related field. By do-            • A community foundation in Portland,
ing this, the publisher is saying, “I am will-           Oregon, puts on a fair to which it in-
ing to take your interests seriously.”                   vites all the local accountants, law-
                                                         yers and management consultants
                                                         who offer special services to non-
2. Demonstrations as                                     profit organizations.
   Parallel Marketing                                In some businesses, a demonstration is
                                                  much the same as a sample or a class. The
Demonstrations are among the more inter-          ocean kayaking business is an example. It
esting parallel marketing events a business       normally takes a beginner about three
can offer. The color and flair they add to a      hours of instruction to feel confident pad-
business is often beneficial in itself. People,   dling alone. When Sea Trek of Sausalito,
including your employees, like businesses         California, was a relatively new business in
with vitality. And of course, customers re-       a new field, to entice potential customers
spond positively to demonstrations that           into giving kayaking a try it offered one-
provide them real value.                          and-a-half-hour “samplers” at a nominal
   Depending on your particular business,         fee. This demo time was credited toward
it’s usually worth exploring a wide range of      the minimum three hours of instruction re-
demonstration techniques. But always re-          quired before customers could rent a
                          DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS               12/ 1 9

kayak. After the first hour, most people             • A grocery store invites a produce
were eager to sign up for the remaining                grower to give brief talks explaining
two hours of low-cost introductory class.              how best to determine when certain
Many people who completed the course                   types of fruit are ripe.
became enthusiasts who rented or bought              • A prepaid health plan offers regular
kayaks from Sea Trek. In addition, Sea                 classes by outsiders to patients on doz-
Trek also invited people in the media to try           ens on health issues from “Pediatric
out kayaking. If they liked their experience           Emergencies” to “Oh, My Aching Back.”
(which they all did) they would of course
write an enthusiastic article or give them
television coverage. Sea Trek did an excel-       3. Follow-Up as Parallel Marketing
lent job of offering demonstrations as well
as educating customers. It no longer offers       Follow-up as a parallel marketing method
demonstrations, as the business has be-           takes a little extra thought. In direct mar-
come extremely popular. Sea Trek helped           keting follow-up, you check on how the
educate customers to the point where              customer has reacted to your product or
kayaking is now on the cover of major             service; in parallel marketing, you keep
magazines and is often recommended as a           him up-to-date on an issue that is related
way to relieve stress.                            to your business. This allows you to dem-
  The concept underlying parallel market-         onstrate your genuine concern about your
ing is especially clear in the case of classes.   customers’ needs. Parallel follow-up mar-
The benefits to the business owner are            keting can be as personal as a dry cleaner
twofold. First, classes increase the level of     asking a customer, who had an elegant op-
expertise of valued customers, who in turn        era costume cleaned, how his opera per-
are better able and more confident in mak-        formance went.
ing personal referrals to their friends. Sec-        By this point, you are probably con-
ond, they help customers better appreciate        vinced that a well-planned and thought-out
the subtleties and nuances that make your         parallel marketing action or event can help
business unique.                                  you establish extra credibility in your field.
  Here are some examples of classes as a          When you play the role of an expert bro-
parallel marketing technique:                     ker of related activities, your customers and
    • A consulting firm in the field of           potential customers see you as creative,
       policy analysis sponsors a class in a      competent and caring.
       specialized area of agriculture where         When you fill out the worksheet below,
       policy analysis had been effectively       try to think of at least five parallel market-
       used.                                      ing events and actions for each category.
    • A sailboat sales company sends its
       customers free coupons for a course
       in boat racing.

        Designing Parallel Marketing Events

        SAMPLES: (items or reference guides your customers would find useful)




        CLASSES: (re-examine your business definition in Chapter 7 to broaden
                  the range of topics your customers and prospects are interested in)

        FOLLOW-UPS:     (what related product or service delivered by mail, phone, e-mail,
                        questionnaire or visit could make your past and present customers
                        more satisfied with your work?)
                         DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS               12/ 2 1

F. Peer-Based Marketing                          when the case calls for surgery, so you can
    Actions                                      help and get help from others in your field.
                                                    It is often surprising to find that friends
One of the most important things propri-         and peers we know well through business
etors of small businesses can do is get to-      and consider just ordinary folks are ad-
gether, informally and regularly, with           mired or even held in awe by others.
peers. It not only provides a great source       Think about peers whom you know well
of both moral support and tangible assis-        who qualify as special in your community.
tance, but is also a superior way to explain     Don’t be afraid to define the concept of
your business to people who can refer cus-       community creatively. For example, if you
tomers to you. Paul Terry, a small-business      run a motorcycle shop and are friendly
consultant, has a number of peers whom           with several dirt bike racing champs, these
he takes to breakfast or lunch on a regular      people should top your list. They may not
basis to stay in touch and to make sure that     be well known at the local Presbyterian
they know what direction his business is         church, but they are important in the com-
taking. Paul understands that these busi-        munity that you care about.
ness friends are an important part of his re-       The key to peer-based marketing is hav-
ferral base.                                     ing these well-known people participate
  If you are a graphic designer, for ex-         constructively in your business. If you can
ample, with a new business, you need to          do this, you will reinforce all of the ele-
meet others working in your field, espe-         ments of trust we have discussed in this
cially those with established businesses, to     book and, as a result, stimulate personal
tell them who you are and where you              recommendations. Often your friends will
work. If they get overloaded, you want           be happy to help you, whether or not
them to know exactly how to refer people         there is some possibility that they will ben-
to you. In the real estate business it is com-   efit as a result of their participation. How-
mon practice to visit multiple listing homes     ever, on occasion, it is appropriate to pay
with other real estate agents. This              an honorarium or otherwise compensate
caravanning is usually done once a week          friends if their participation will involve
and enables agents in an area to keep in         considerable time or trouble, or if that is
contact.                                         how they make their living. Always re-
  The essence of peer-based marketing is         member that while you may wish to use
for you to understand your role as part of a     your friendship network to help your cus-
group of peers in your field and to make         tomers, you don’t want to make unfair de-
effective use of it. All of us have unique       mands on others.
contributions to make. Just as one doctor,          Inviting your respected friends to recep-
say an internist, can make use of a surgeon      tions, coffee events, demonstrations, brief

classes, book signings and other events can      • A massage table manufacturer hosted
be the grounds for a whole array of mar-           a late afternoon reception for the fac-
keting events which need only be tangen-           tory employees, suppliers and retail-
tial to the business. For example, we know         ers in the area, with a well-known
of events where:                                   sports doctor as the guest.
    • The author of a well-known personal        • A scuba diving store and school in-
       finance book attended a “Getting            vited a marine biologist friend to
       Thin” class reception.                      brief its class at dive sites.
    • Several football stars attended a          • A commercial insurance broker with
       church bazaar to raise funds for the        a good consumer advocacy reputa-
       church’s athletic programs.                 tion had a reception for his friends
    • A business consultant for graphic de-        and clients to meet Ralph Nader be-
       signers invited a famous architect to       fore a talk Nader gave.
       an after-dinner reception for her cli-    • A Japanese advertising firm invited
       ents.                                       many of its client representatives to
    • A lawyer who specializes in immigra-         meet and hear a brief private talk by
       tion law invited clients and friends to     an American marketing expert on the
       an office reception for the Governor-       subject of Silicon Valley electronics
       General of Hong Kong.                       firms.
                         DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS                 12/ 2 3

                                   Profile: Fritz Maytag
It was a perfect, beautiful day in July, and     that if they came and bought it on its own
we had taken a walk around the neighbor-         right that I would feel better.
hood to settle our lunch. We returned to            “I just sort of had a natural instinct for a
the office full of energy. There working at      way to market the beer, which was first to
the computer with our friend Wayne was           make a wonderful beer that we were sure
an honest-to-God hero—Fritz Maytag.              was just superb and well made, with a true
   Fritz is a successful entrepreneur who        story. I used to say I wanted a beer that
heads the York Creek Vineyards, which            would please people here (pointing) on the
produces some of the world’s finest grapes,      taste buds, but also up here in the head, you
as well as the family cheese company and         know. I felt instinctively that the way to
the renowned Anchor Steam Brewery.               market it was slowly and gently, and let it
   In 1969, when Fritz bought the brewery,       trickle around to get some word of mouth
it was near bankruptcy. He improved the          going, tell our story to as many people as
product rapidly, using only the best ingre-      we possibly could, show them the brewery.
dients. He created nostalgic old-fashioned       Not to advertise.... I felt that we would
bottle labels and beautiful hand-painted         stand out by not doing that....
delivery trucks. The company, considered            “What we did was we opened the brew-
one of the finest beer-makers in America by      ery night and day to anyone who would
gourmets and drinkers alike, does not ad-        come and look. We had art exhibits. We
vertise. Instead of costly ads, Maytag uses      had sculpture exhibits, where we turned the
ten master distributors.                         whole brewery over to a remarkable man,
   In the June 30, 1985, issue of the San        Ron Boise, who was notorious, well infa-
Francisco Examiner is Jim Wood’s fascinat-       mous, for having done a little thing called a
ing interview with Fritz Maytag. We have         ‘Kama Sutra’ series in copper. (Lawrence)
excerpted, with the newspaper’s kind per-        Ferlinghetti exhibited it, and the police
mission, his philosophy and strategies re-       came down.
garding marketing.                                  “Anyway, we weren’t dumb. We turned
   “Like so many liberal art students, young     the whole brewery over to him and we put
people interested in philosophy and ideas        this huge sculpture of a naked man and
and religion and all that stuff, I had thought   woman up on the roof where you could see
that business was dumb and ugly and dis-         it from the freeway. We made the front page
honest and just a lot of money-grubbing          of the Chronicle and the Examiner. The dis-
people running around fooling each other         trict attorney, or whoever it was, called up
and talking people into buying their dumb        and said ‘Hello, is this the Anchor Brew-
products. That may be one reason I’ve            ery?’ ‘Yes,’ I said. They said, ‘We want to
never advertised very much. I always felt

                                                   Before you turn to Chapter 13 and begin
  Profile: Fritz Maytag, continued
                                                to design your marketing plan, we would
know about that sculpture on the roof.’ I       like to tell you about Book Passage in
said, ‘What do you want to know about           Corte Madera, California, which is one of
it?’ ‘We want to know whether it is ob-         our favorite independent booksellers. At a
scene or not.’ I said ‘No, it’s not obscene.’   time when many independents are going
He said, ‘Oh. Thank you.’ And he hung           out of business, it appears to be thriving.
up.                                             Here is a sampling of some of its superb
   “We had a balloon ascension on               marketing, which demonstrates how one
Fisherman’s Wharf in 1966, before hot air       business incorporates direct, peer-based
balloons had even been heard of, and we         and parallel into its marketing mix. Book
made the paper again. The point being—          Passages offers excellent news and reviews
Anchor Steam Beer was here. We were             in both hard copy and on its Web page
local, we were continuing and we did our        ( It has
packaging, labels and things, trucks, all       over 50 knowledgeable booksellers to help
those things, we did with as much care          you, along with a “passion and exuberance
and sort of flair for expressing our attitude   for books and writers.”
toward the beer as we possibly could. We           This commitment to writers and readers
purposely (made) them sort of naive and         shows in the 200 or so author events the
sincere. We put a long story on the neck        bookstore hosts every year in addition to
label. I always said, even if people don’t      its classes, book groups and conferences.
read it, they’ll get the message there is a     Each Christmas, Book Passages sponsors
long story here and someday they will           the Giving Tree, which provides children
read it.”                                       from infancy to 18 years old with beauti-
                                                fully gift-wrapped books delivered by the
                       DESIGNING AND IMPLEMENTING YOUR MARKETING PLANS                12/ 2 5

                       Creating Community for Your Business

Most people consider a business that they      which focuses on adventure travel, features
appreciate and respect as part of their com-   online contributions of photographs and
munity. You are part of their community;       commentary by recent travelers to exotic
they are part of yours. Together you can       travel destinations.
help make the community vital.                    Mistrail restaurant in Santa Rosa Califor-’s business is built on providing   nia builds community in a variety of ways
trustworthy legal information, and a major     including online methods. Owner Michael
aspect of the business involves building a     Hirschberg teaches a class at the local jun-
community. Nolo carefully develops rela-       ior college on food and wine pairing, hosts
tionships with other online businesses. For    a special scholarship dinner called “Class
example, they license their content to         in a Glass,” offers a wine seminar series, a company Nolo respects         and manages many other special events all
and whose website exudes integrity and         featuring Sonoma County products. As
community spirit.                              Michael describes it, “We are in the hospi-
   Several Internet sites have been pioneers   tality business and we want people to feel
in creating communities of travelers. Lonely   comfortable, accepted and part of the fam-
Planet Books, a series of guidebooks for       ily. We have a mailing list of over 6,000
low-budget travelers, was quick to establish   people and we send them a newsletter of
a website to keep all of its lodging, dining   upcoming events, which helps them feel
and transportation reviews up-to-date with     connected to the restaurant.”
feedback from recent visitors.,

Chapter 13

The Last Step: Creating a Calendar of Events

A. Marketing Calendar for an Interior Design Firm ......................................... 13/2
B. Marketing Calendar for Jerry and Jess’s New Chiropractic Clinic ............... 13/4

                     e have seen many good      of all the important deadlines on a large
                     marketing plans written—   twelve-month calendar, with big blocks to
                     but very few executed.     write in important details. An oversize cal-
Hardworking, sincere businesspeople need        endar that you can hang on the wall is a
to be assured that the extra boost of en-       great way to remind yourself to keep at
ergy needed to implement a marketing ac-        your marketing efforts.
tion plan based on the techniques
discussed in this book is well worth the ef-
fort, even though:
                                                     Help People Feel Comfortable
    • Each action and event takes time to
       plan and get going, and                   At all of the events you schedule where
    • Good people with wonderful busi-           members of your business community
       nesses often forget them when busi-       have the opportuanity to meet each other,
       ness gets busy.                           it is important that you help them get to-
   Because we tend to really focus on            gether. Introduce people to each other,
marketing only when business slows               have designated hosts to help people
down, it often takes a long time to get a        mingle, use name tags if appropriate and
good marketing plan activated, which             do everthing else you know to create a
doesn’t do a lagging business much good.         convivial atmosphere.
We can’t emphasize this point often
enough: The best time to market is when
you don’t need the business. If you don’t         The following detailed examples may
heed this advice and wait until business is     help you envision a marketing plan that
slow, it might be too late.                     will work for your business.
   The way around this all-too-human di-
lemma is obviously to plan ahead and
spend time and effort doing creative mar-
keting on a regularly scheduled basis. One      A. Marketing Calendar for
way to do this is to schedule events on a          an Interior Design Firm
year’s calendar, allowing ample time be-
tween events so they remain fun instead of         1. March: Open House at Greenfield
a burden. Keep in mind your busiest sea-              home. (Direct Marketing)
sons and schedule major events well in ad-         2. June: Evening class on patio lighting.
vance of these times.                                 (Parallel Marketing)
   First, fill out a worksheet, like the           3. October: Demonstration at office fur-
samples on the following pages, for each              niture store of efficient desk lamp.
event you are planning. Then make a note              (Parallel Marketing)
                                  THE LAST STEP: CREATING A CALENDAR OF EVENTSS                 13/ 3

4. December: Reception for Martha                          5. May of next year: Mailing about Un-
   Stewart’s Living’s chief graphic de-                       derwriters Lab approval of outdoor
   signer. (Peer-Based Marketing)                             lamp design. (Parallel Marketing)

     Marketing Event Worksheet
                 #4: Afternoon reception for Bernard Mallen, chief graphic designer
     Event ______________________________________________________________________
                 for Martha Stewart’s Living magazine
               Dec. 16
     Date ______________________________________________________________________
     Objective To introduce the clients and friends on my mailing list to a college friend who
         has interesting ideas about design.

     STEPS                                                                          DEADLINE

      1. Set up exact date, time and location for reception.
      ______________________________________________________                        Aug. 31
      2. Prepare draft of invitation and description of
      ______________________________________________________                        ______________
         Bernard’s recent work for review by Bernard.
      ______________________________________________________                        ______________
         Send to him and get response.
      ______________________________________________________                        Sept. 30.
      3. Arrange final details on event location, order catering
      ______________________________________________________                        ______________
         from Nancy with approximate number and price per person.
      ______________________________________________________                        Oct. 30
      4. Print invitation, envelopes and RSVP card.
      ______________________________________________________                        Nov. 14
      5. Confirm all details with Bernard. Send out mailing.
      ______________________________________________________                        Dec. 1
      6. Estimate final number of guests for catering. Invite by
      ______________________________________________________                        ______________
         phone four special guests to dinner afterward.
      ______________________________________________________                        ______________
         Make dinner reservations.
      ______________________________________________________                        Dec. 10
      7. Event. Bring name cards.
      ______________________________________________________                        ______________
      8. Follow up by calling or e-mailing people on list to see if they enjoyed.
      ______________________________________________________                        Dec. 15
      ______________________________________________________                        ______________
      ______________________________________________________                        ______________
      ______________________________________________________                        ______________
      ______________________________________________________                        ______________

B. Marketing Calendar for                        7. May: Evening demonstration at clinic
   Jerry and Jess’s New                        for automobile back supports. (Parallel
   Chiropractic Clinic                           8. July: Evening demonstration at clinic
                                               on posture and watching TV. (Parallel Mar-
   1. January: Open House for neighbor-
hood. (Direct Marketing)
                                                 9. August: Participate in SR sports fair.
   2. January: Open House for businesses
                                               (Parallel Marketing)
within 1/4-mile radius. (Direct Marketing)
                                                 10. September: Evening demonstration
   3. February: Reception at boathouse for
                                               and panel discussion on posture and com-
friends of the clinic. (Direct Marketing)
                                               puters. Two guest lecturers. (Peer-Based
   4. March: Jerry give talk at Rotary Club.
(Parallel Marketing)
                                                 11. October: Jerry and Jess speak about
   5. April: Jerry give talk at SR Community
                                               small business marketing to Chamber of
College. (Parallel Marketing)
                                               Commerce. (Parallel Marketing)
   6. April: Jess on panel with sports ex-
                                                 12. November: Evening demonstration
perts at Women’s Service Club. (Parallel
                                               and panel discussion on posture and cook-
                                               ing. Guest lecturer. (Peer-Based Marketing)

        Marketing Event Worksheet

               #1: Open House for neighborhood
        Event ______________________________________________________________________
               Saturday January 20
        Date ______________________________________________________________________
                     To let all the neighbors within 1/4 mile know where the new
        Objective __________________________________________________________________
                     chiropractic clinic is located and that we are good neighbors.

        STEPS                                                         DEADLINE
           1. Design fliers and find promotional item to attach.
         ______________________________________________________         Nov. 30
           2. Print fliers, have banners painted.
         ______________________________________________________         Dec. 20
           3. Hire three students to deliver fliers to every home     ______________
              and attach promotional item.                            ______________
                                                                        Jan. 6
           4. Order 2 extra video players for display in side         ______________
              rooms. Order flowers and catering.                      ______________
                                                                        Jan. 7
           5. Get help cleaning office and putting up signs for       ______________
              event. Arrange for kid care.                            ______________
                                                                        Jan. 20
                             THE LAST STEP: CREATING A CALENDAR OF EVENTSS                      13/ 5

Marketing Event Worksheet

Event ______________________________________________________________________
          #2: Open House for businesses.
Date ______________________________________________________________________
          Saturday January 27
Objective __________________________________________________________________
              To meet the business people in the neighborhood (within 1/4 mile radius) who can make
  referrals. Actual event is secondary—an excuse to meet neighboring business people.
STEPS                                                                           DEADLINE
  1. Design fliers and walk neighborhood to identify
 ______________________________________________________                         ______________
     key businesses to visit.
 ______________________________________________________                          Nov. 30
  2. Print fliers.
 ______________________________________________________                          Dec. 20
  3. Schedule ten two-hour segments of time for Jerry
 ______________________________________________________                         ______________
     and Jess to distribute flier/invitation and talk to                        ______________
     neighboring businesses.                                                    ______________
                                                                                 Jan. 6
  4. Order flowers and catering.                                                ______________
                                                                                 Jan. 7
  5. Get help cleaning office and putting up signs for event.                   ______________
                                                                                 Jan. 27

       Marketing Event Worksheet

       Event ______________________________________________________________________
               #3: Reception at boat house for friends, past clients, fellow students from chiro-
               practic school and suppliers.
       Date ______________________________________________________________________
               February 19
       Objective __________________________________________________________________
                      To let a wide range of current supporters know that we are opening a new joint
               practice, and let each partner’s friends meet the other’s friends and associates.
       STEPS                                                                      DEADLINE
           1. Set up exact date, time and location for reception.
        ______________________________________________________                       Oct. 31
           2. Complete first draft of invitation. Prepare mailing
        ______________________________________________________                    ______________
              list from all combined sources.
        ______________________________________________________                       Nov. 30
           3. Arrange final details on event location; order                      ______________
              catering with approximate number and price per person.              ______________
                                                                                     Dec. 10
           4. Print invitation, envelopes and RSVP card.                          ______________
                                                                                     Jan. 15
           5. Phone key dozen people for verbal invitation.                       ______________
              Send out mailing.                                                   ______________
                                                                                     Jan. 31
           6. Estimate final number of guests for catering. Invite                ______________
              by phone four special guests to dinner afterward.                   ______________
                                                                                     Feb. 10
           7. Decorate room.                                                      ______________
                                                                                     Feb. 18
           8. Event. Bring name cards.                                            ______________
                      THE LAST STEP: CREATING A CALENDAR OF EVENTSS       13/ 7

Marketing Event Worksheet

      #4: Jerry give talk to Rotary Club
Event ______________________________________________________________________
       Sometime in March
Date ______________________________________________________________________
Objective To establish Jerry as a knowledgeable health practitioner.
STEPS                                                        DEADLINE
  1. Phone chair of speaker’s committee of Rotary to
 ______________________________________________________      ______________
      arrange luncheon talk.
 ______________________________________________________       Jan. 30
  2. Prepare and send out press release to local press
 ______________________________________________________      ______________
     about Rotary talk.
 ______________________________________________________       Feb. 28
  3. Prepare display materials for talk and hand-out
 ______________________________________________________      ______________
     flyer for audience.
 ______________________________________________________       Mar. 4
  4. Phone friends who are members of Rotary to
 ______________________________________________________       March, 2 weeks
     invite them to luncheon talk.
 ______________________________________________________       before talk
  5. Event. Have materials to demonstrate and fliers to
 ______________________________________________________      ______________
     hand out.
 ______________________________________________________      ______________

Marketing Event Worksheet

         5: Jerry to give talk to SR Community College
Event ______________________________________________________________________
        April Open
Date ______________________________________________________________________
           To establish Jerry as a knowledgeable health practitioner.
Objective __________________________________________________________________
STEPS                                                        DEADLINE

 1. Phone provost for name of the organizer of guest         ______________
    lectures to arrange talk.                                ______________
                                                             Jan. 30
 2. Prepare and send out press release to local press        ______________
    about Community College talk.                            ______________
                                                             Mar. 20
 3. Prepare display materials for talk and hand-out          ______________
    flier for audience.                                      ______________
                                                             Mar. 21
 4. Event. Have materials to demonstrate and fliers to       ______________
    hand out.                                                ______________

       Marketing Event Worksheet

       Event ______________________________________________________________________
                #6: Jess on panel with sports experts at Women’s Service Club.
       Date ______________________________________________________________________
       Objective __________________________________________________________________
                       To establish Jess as a knowledgeable health practitioner with
           community ties.
       STEPS                                                                  DEADLINE
        1. Phone chair of speaker’s committee of Women’s service
        ______________________________________________________                ______________
           Club to arrange luncheon talk. Offer to get other panel
        ______________________________________________________                ______________
        ______________________________________________________                Jan. 30
        2. Find other panel members and notify Club speaker’s chair.
        ______________________________________________________                Feb. 15
        3. Prepare display materials for talk and hand-out flier
        ______________________________________________________                ______________
           for audience.
        ______________________________________________________                Mar. 24
        4. Phone friends who are members of the Club to invite them           ______________
                                                                              April, one week
           to talk.                                                           ______________
                                                                              before talk
        5. Event. Have materials to demonstrate and fliers to hand out.       ______________

       Marketing Event Worksheet
              #7: Demonstration at the clinic of automobile back supports.
       Event ______________________________________________________________________
               May 25
       Date ______________________________________________________________________
                   To make potential clients conscious of spine-related issues and to associate
       Objective __________________________________________________________________
            spine problems with the clinic.
       STEPS                                                                  DEADLINE
         1. Schedule time for demonstration.
        ______________________________________________________                 Feb. 28
         2. Complete final draft of flier with graphics.
        ______________________________________________________                 Mar. 30
         3. Print and mail flier.
        ______________________________________________________                 May. 10
         4. Design and print flier and reading list on subject matter.
        ______________________________________________________                ______________
            Order samples for display.
        ______________________________________________________                 May 14
         5. Clean and organize clinic.
        ______________________________________________________                 May 24
         6. Event. Have name cards. Have fliers to hand out.
        ______________________________________________________                ______________
                               THE LAST STEP: CREATING A CALENDAR OF EVENTSS             13/ 9

Marketing Event Worksheet

Event ______________________________________________________________________
          #8: Evening demonstration at clinic on posture and watching TV; suggest relevance
     of issue to parents of growing children.
Date ______________________________________________________________________
          July 14
Objective __________________________________________________________________
              To make potential clients conscious of spine-related issues and to associate
     spine problems in their minds with the clinic.
STEPS                                                                     DEADLINE
  1. Schedule time for demonstration.
 ______________________________________________________                    Mar. 30
  2. Complete final draft of flier with graphics.
 ______________________________________________________                    Apr. 15
  3. Print and mail flier.
 ______________________________________________________                    June 30
  4. Design and print flier and reading list on subject matter.
 ______________________________________________________                   ______________
     Order samples for display.
 ______________________________________________________                    July 1
  5. Clean and organize clinic.                                           ______________
                                                                           July 1
  6. Event. Have name cards. Have fliers to hand out.                     ______________
 ______________________________________________________                   ______________

Marketing Event Worksheet

Event ______________________________________________________________________
          #9: Participate in SR annual sports fair.
Date ______________________________________________________________________
          August 8 and 9
Objective __________________________________________________________________
           To associate Jerry, Jess and the clinic with sports and health in
     the community.
STEPS                                                                     DEADLINE
  1. Call fair organizer to make arrangements for talk and                ______________
     booth.                                                               ______________
                                                                           Jan. 30
  2. Complete design of booth and sports fliers.                          ______________
                                                                           May 30
  3. Print fliers, paint banners and booth display.                       ______________
                                                                           July 15
  4. Prepare gallons of lemonade to give out at sports fair.              ______________
                                                                           Aug. 8
  5. Event. Make sure booth has either Jerry or Jess at                   ______________
        all times both days.                                              Aug. 8-9

        Marketing Event Worksheet

                #10: Evening demonstration and panel discussion on posture and computers. With
        Event ______________________________________________________________________
              two guest lecturers in computer field.
                 Sept. 4
        Date ______________________________________________________________________
                       To let clients and prospective clients know that Jerry and Jess are current
        Objective __________________________________________________________________
              and up-to-date about health issues.
        STEPS                                                                    DEADLINE
          1. Schedule time for demonstration. Invite two friends to
         ______________________________________________________                  ______________
             be on panel.
         ______________________________________________________                   Jul. 20
          2. Complete final draft of flier with graphics.
         ______________________________________________________                   Aug. 15
          3. Print and mail flier.
         ______________________________________________________                   Aug. 22
          4. Design and print flier and reading list on subject matter.
         ______________________________________________________                  ______________
             Organize details of display. Confirm with other panelists.
         ______________________________________________________                   Aug. 28
          5. Clean clinic.
         ______________________________________________________                   Sept. 3
          6. Event. Have name cards. Have fliers to hand out.
         ______________________________________________________                  ______________

        Marketing Event Worksheet
               #11: Jerry and Jess speak about small business marketing to the Chamber of Com-
        Event ______________________________________________________________________
        Date ______________________________________________________________________
        Objective To establish Jerry and Jess as knowledgeable health practitioners.
        STEPS                                                                    DEADLINE
         1. Phone chair of speaker’s committee of Chamber of
         ______________________________________________________                  ______________
            Commerce to arrange luncheon talk.
         ______________________________________________________                  Mar. 30
         2. Prepare display materials for talk and hand-out fliers
         ______________________________________________________                  ______________
            for audience.
         ______________________________________________________                  Sept. 25
         3. Phone friends who are members of the Chamber of
         ______________________________________________________                  Oct. one week
            Commerce to invite them to the luncheon talk.
         ______________________________________________________                   before talk
         4. Event. Have sample materials to demonstrate and fliers
         ______________________________________________________                  ______________
                to hand out.
                         THE LAST STEP: CREATING A CALENDAR OF EVENTSS           13/ 1 1

Marketing Event Worksheet

Event ______________________________________________________________________
       #12: Evening demonstration and panel discussion on posture and cooking. Guest
   lecturer, Ramon Giardia, well-known local chef.
Date ______________________________________________________________________
       Nov. 12
Objective __________________________________________________________________
             To establish Jerry and Jess as knowledgeable health practitioners with
   special knowledge about spine problems.
STEPS                                                               DEADLINE

1. Schedule time for demonstration. Confirm with Ramon.            ______________
                                                                   Sept. 30
2. Complete final draft of flier with graphics.                    ______________
                                                                   Oct. 30
3. Print and mail flier                                            ______________
                                                                   Nov. 2
4. Design and print handout and reading list on subject matter.    ______________
   Confirm with Ramon and find out what samples he needs           ______________
   for display.                                                    ______________
                                                                   Nov. 10
5. Clean and organize clinic.                                      ______________
                                                                   Nov. 11
6. Event. Have name cards. Have fliers to hand out.                ______________


                                  RECOMMENDED READING


1001 Ways to Market Your Services, by Rick         Getting Business to Come to You, by Paul and
Crandall (Editor), (NTC/Contemporary Publish-      Sarah Edwards and Laura Clampitt Douglas
ing, 2000).                                        (Tarcher/Putnam Trade Paperback, 1998).

Getting Publicity, by T. Fletcher and Julia        Making Money in Cyberspace, by Paul and
Rockler (Self-Counsel Press, 2000).                Sarah Edwards and Linda Rohrbough (Tarcher
                                                   Trade Paperback, 1998).
Small Time Operator, by Bernard Kamoroff
(Bell Springs Publishing, 2000).                   Guerrilla Marketing Online Weapons: 100
                                                   Low-Cost, High-Impact Weapons for Online
Financial Troubleshooting: An Action Plan for      Profits and Prosperity, by Jay Conrad Levinson
Money Management in Small and Growing              and Charles Rubin (Houghton Mifflin, 1996).
Business, by Michael Pellecchia (Editor), David
H. Bangs, Jr. (Editor) (Inc. Business Resources,   How to Really Create a Successful Marketing
1999).                                             Plan, by David Gumpert (Inc. Publishing,
Mastering Guerrilla Marketing, by Jay Conrad
Levinson (Houghton Mifflin, 1999).                 Running a One-Person Business, by Claude
                                                   Whitmyer and Salli Rasberry (Ten Speed
Permission Marketing: Turning Strangers into       Press, 1994).
Friends, and Friends into Customers, by Seth
Godin (Simon & Schuster, 1999).                    Relationship Marketing, by Regis McKenna
                                                   (Perseus Publishing, 1993).
Principles of Internet Marketing, by Ward
Hanson (South-Western College Publishing,          Finding Your Niche: Marketing Your Profes-
1999).                                             sional Service, by B. Brodsky and J. Geis
                                                   (Community Resource Inst., 1992).
The World’s Best Known Marketing Secret:
Building Your Business With Word-of-Mouth
Marketing, by Ivan Misner et al. (Bard Press,
                          RECOMMENDED READING, CONTINUED

                                                 Marketing Ink
Note that several of the resources listed are    $8/issue
published both in print and on the Web,          3024 South Glencoe St.
while some are available only online. Sub-       Denver, CO 80222
scription rates are for print editions; online   (800) 749-5409
publications are usually free.         
American Demographics                            Quirk’s Marketing Research Review
$69/year (12 issues) for subscriptions entered   $70/year (11 issues)
on Website:                                      P.O. Box 23536
P.O. Box 10580                                   Minneapolis, MN 55423
Riverton, NJ 08076-0580                          (612) 854-8191
(800) 529-7502                         
                                                 Web Marketing Today
Guerilla Marketing                     
                                                 Working Woman
Home Office Computing                            $9.97/year (10 issues)
$14.97/year (12 issues)                          P.O. Box 3276
P.O. Box 53561                                   Harlan, IA 51593-2456
Boulder, CO 80322-3561                           (800) 234-9675
(800) 288-7812                         
                                                 Working Mother Magazine
The Industry Standard                            $9.97/year (10 issues)
$49.97/year (48 issues)                          P.O. Box 5240                      Harlan, IA 51593-2740
                                                 (800) 627-0690
                                 HELP BEYOND THIS BOOK

After reading this book, filling in the           •   a description of your business, including
worksheets, applying what you’ve learned to           number of employees, range of inven-
your business and thinking about the whole            tory, years in business, location or facili-
matter for a while, you may still have ques-          ties and a photo of your product, where
tions. Author Michael Phillips will consult           appropriate
with you for $180 per half hour, $360 per
hour. Phone (415) 695-1591 and leave a            •   a brief summary of the questions you are
message on the tape with the following                asking, and
information:                                      •   a check for the amount of the consulta-
•   the name and the type of business you             tion.
    own and operate, and                          That’s it. Michael Phillips has consulted with
•   the exact time you can be called back         over 800 clients in a 30-year career. If he can
    over the next several days.                   help, he will. If he can’t, he’ll say so. If you
                                                  are not satisfied that the consultation was
Michael will call you collect, listen to your     worth the expense, send Michael a letter
questions and discuss whether it makes sense      within a week of the consultation, explaining
to do a consulting session by phone. If the       why. Half of your consulting fee will be
answer is yes, you’ll be asked to pick a time     refunded, no questions asked. If you still
for the phone consultation (about two weeks       believe that you haven’t received your
after the first phone call); and you’ll be told   money’s worth, you can ask to have the
the cost of the consultation. In the meantime,    matter reviewed by independent business
you’ll need to send Michael:                      consultants Claude Whitmyer or Paul Terry of
                                                  San Francisco (or anyone else you and
•   a copy of your answers to the                 Michael agree on) for a $50 fee, half to be
    worksheets in this book                       paid by you and half by Michael. If, after
•   your business’s most recent financial         reviewing two-page letters submitted by you
    statement, including a Balance Sheet and      and by Michael, the consultant agrees with
    Income/Expense, regardless of the condi-      you, the rest of your money will be cheer-
    tion they’re in                               fully refunded. (Incidentally, here’s an ex-
                                                  ample of marketing without advertising!)

Physical Appearance That Develops Trust
Evaluating Your Pricing Policy
Employee Questionnaire
Questionnaire for Suppliers
How Open Is Your Business?
What My Business Does
The Domains in Which Your Business Operates
Do People Know What You Do?
Do You “Tell Them Yourself”?
How Customers Can Evaluate Your Business
Customer Referrals
Phone Accessibility Checklist
Mail Accessibility Checklist
Walk-In Accessibility Checklist
Listing Questionnaire
Customer Recourse Policies and Practices
Your Marketing List
Designing Direct Marketing Events
Designing Parallel Marketing Events
Marketing Event Worksheet
Physical Appearance That Develops Trust

 Outside        Inside                 Sales Staff    Sales Materials   Product          Mail Order/Online
 signage        cleanliness            clothes        neatness          protected        answers key questions
 display        clutter                breath         clutter           well marked      clear meaning
 architecture   lighting               teeth          understandable    return address   exciting
 cleanliness    smell                  car clean      standard sizing   design           consistent style
 neighborhood   spacing, general       identifiable   completeness      dated            convincing
                spacing, merchandise   prompt                           labels
                amount of stock


Your Business                          Comments
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
 __________________________             ___________________________________________
Evaluating Your Pricing Policy


         Some customers complain about prices.
         Some of the trivial but necessary things I offer with my basic product or service
         (for example, keys, base stands, containers, refills, etc.) are priced at an
         amount that is more than people expect.
         My product or service is offered in enough different measures that by and large
         my customers can buy what they need.
         My product(s) can be bought in more than one unit of measure
         (bunches, pounds, bags, lugs, liters, cartons, gross, boxes).
         My services can be bought in time increments convenient to my customers
         (days, half-days, hours, minutes, etc.).
         My pricing practices are written down on: (flyer, price sheet, website, the
         Any exceptions from my standard pricing practices are well explained
         (e.g., senior citizen discounts are stated on a sign with large type).
         I estimate that approximately ____% of my customers pay for more of my
         product or service than they really need or want, because:
       I estimate that approximately _____% don't buy all of my product or service
       that they really need because:
       My volume discounts are:
       My volume discounts are available to:
Employee Questionnaire


The working conditions here are generally…
The working conditions, compared to other jobs I've had, are…
Handling of serious employee problems that are brought to managers is…
When most employees describe the business management they say…
I know the established policy for handling employee problems and grievances.
            YES     NO    THERE ISN'T ONE                           It is…
I know the established policy for handling employee wage disputes.
            YES     NO    THERE ISN'T ONE                           It is…
I know the established policy for handling conflicts between employees.
            YES     NO    THERE ISN'T ONE                           It is…
When someone is fired most fellow workers know the circumstances
in which the employee can appeal the decision within the company.
            YES     NO    THERE ISN'T ONE       The appeal process is…
                                                                                      YES         NO

I am paid fairly.
I know what others are paid.
Most employees know their jobs.
Most employees understand the direction, policies and goals of the business.
Comments and suggestions for improving working conditions:
Questionnaire for Suppliers

I have found in my dealing with ______________________________________________
                                            NAME OF YOUR BUSINESS

that you and your key employees are generally:


Accessible when I need you…
Reliable in your payments and financial projections…

Polite in your general business dealings…

Reliable in doing what you promise on time…

Able to handle any problems with your product and services satisfactorily…

Careful and neat when it comes to recordkeeping…

Generally trustworthy in all dealings…


How Open Is Your Business?

                                                                                                         SOME CUSTOMERS

                                                                                                                          ALL CUSTOMERS

We are willing to answer the following specific

questions about our business to:

         cost of goods...
         source of supplies...
         financial problems...
         profits and losses...
         specific techniques...
I personally will show or explain in detail:
         How I do what I do...
         How my equipment works...
         How I price a product or service...
         How I keep track of time...
         How I keep track of costs...
My financial statements are available to anyone                                                 YES                           NO

who wishes to see them...
What My Business Does

The following is a definition of what my business does, in about 35 words:

The Domains in Which Your Business Operates

The major domains in which I operate (taken from my payables) are:

The major domains in which I operate (from looking at checks paid to my consultants) are:

The general functions I fulfill (the major domains in which I operate)
from a customer’s perspective are:

Do People Know What You Do?

At a party, ____% of the people who hear the name and a very brief description of my
business will know a little about the details of what I really do. [For instance, 100%
would know what a barber does, but only 3% would know that an oncologist studies
At a meeting of business people generally (for example, the Chamber of Commerce),
about _____% of the people who hear the name and a very brief description of my
business will know a lot about it.
When a potential new customer approaches, how much does he or she really know
about what I do?
  Doesn't know anything        Knows a little      Knows quite a bit and is very confident
Among new customers, _____% have used someone else in my field (or a similar prod-
uct) before.
Are there experts in my field (or closely related fields) who have had little or no experi-
ence with my goods or services?
  YES    NO

List by category: ___________________________________________________________
Are there specific categories of people who would have less than an average level of
knowledge about my field who might use my business if they knew more about it, such
as people who seldom travel (about the travel business), landlords, commuters, etc.?

Do You “Tell Them Yourself”?

Do you give verbal assurance to customers about the quality of your goods or service?

            NEVER                 SELDOM            OFTEN                ALWAYS

How? What kinds of things do you tell customers?
Is specific evidence given to customers to back up this assessment?
[Examples: “Call me back if you don't see a result in three days.”
“Measure it before and after you put it in a cold wash to make sure it doesn't shrink.”]

            YES                   NO

Who usually tells the customer?
            I TELL THEM                             SOME EMPLOYEES TELL THEM


Is follow-up done to check new customer satisfaction?
            NEVER                 SELDOM            OFTEN                ALWAYS

Is follow-up done to check regular customer satisfaction?
            NEVER                 SELDOM            OFTEN                ALWAYS
How Customers Can Evaluate Your Business

My business provides clear verbal measurements of product/service effectiveness.

             NEVER               SELDOM              OFTEN               ALWAYS

My business provides training classes to new customers and prospects.

             NEVER               SELDOM              OFTEN               ALWAYS

My business provides clear written measurements of product/service effectiveness.

             NEVER               SELDOM              OFTEN               ALWAYS

We offer a

             Brochure                     Specification sheet
             Checklist                    Contract
             Informative label            Questionnaire
             Instructions                 Evaluation form
             Worksheet                    Physical measurement
             Website                      Other online information (survey, newsletter, etc.)
We have:

             Displays/models                         Samples/examples
             Photos of successful work               Other evidence of quality

My business is:                        by:

                                       Others in the same business
                                       Locals in the same business
                                       Others in closely related businesses
                                       Leaders in my business
                                       Students and former employees
Customer Referrals

I offer new customers the names and phone numbers of other customers.
             SOMETIMES           USUALLY

I refer customers to others for second opinions or evaluations.
             SOMETIMES           USUALLY

I have available:
             Printed lists of customer referrals
             Letters from satisfied customers
             Evidence of awards or certificates for my product
             Newsletter with customer comments
I display:
             Photos of customers enjoying my product or service
             Certificates and awards
             Any other evidence of accomplishments
Phone Accessibility Checklist

WE OFFER                                                                      UPDATED YEARLY

    White pages listing in appropriate areas
    Yellow Pages listing under applicable topics and in appropriate geographical areas
    Answering service/system with clear instructions
    “800” numbers
    Numbers listed on cards, receipts, order forms, mailers, vehicles, repair labels
    and publications

Mail Accessibility Checklist


    Clear, stable address
    Return address on everything we distribute
    Mail forwarding up-o-date
    Personal relationship with mail delivery person to avoid mistakes
    Clearly identifiable mailbox, with alternative places to deliver packages and
    postage-due mail
    If in out-of-way location, maps are included in mailings
Walk-In Accessibility Checklist


    Clear, distinct signs not blocked by trees
    Neighbors given an invitation to visit so they know where we are and what our
    business involves
    Parking available or clearly designated
    Safe places for bicycles
    Door that opens easily, bell in working order
    Convenient hours
    Convenient parking
Listing Questionnaire

We are listed in:
    All appropriate professional journals and directories
    Our alumni organizations’ directories
    Local business organizations’ publications
    Trade associations’ directories
    Appropriate online databases
Customer Recourse Policies and Practices

We have a written customer recourse policy.
  YES    NO

Our written policy is:
  Given to all customers        Given only upon request      Displayed prominently
                                                            on the premises
  Our policy identifies and deals with those areas and situations where customers are
  most likely to have problems with our goods or service.
  We have regular communication with our customers to be sure they understand our
  recourse policy and know that we implement it efficiently.
A customer who complains is:
  Always right           Almost always right     Seldom right     Rarely or never right
The most common complaints involve: _____________________________________
When the customer is right, he or she gets:
   Full refund or replacement when: _______________________________________
   Partial refund when: __________________________________________________
   We send or give questionnaires to customers to evaluate their satisfaction
with our service. _____________________________________________________
Our liability insurance covers the following customer problems: _______________
When a customer deals with our insurance company, it is:
  Very responsive            Responsive        Slow to respond      Don't know
When the customer disagrees with our recourse offer, we have available:
  Appeal process        Arbitration        Industry established board of review
  Mediation             Nothing
  Other _______________________________________________________________
Your Marketing List

Your marketing list was last updated:

                                                                                                    NEEDS MORE WORK
  6 months ago        1 year ago          2 years ago     3 or more years ago
A complete list of your customers, suppliers, prospects, and business

associates, relevant aquaintances and peers is available for an immediate
mailing, phone invitation or e-mail contact.      YES    NO

If Yes, how current are your addresses?       customers
                                              business associates
How current are your phone numbers?           customers
                                              business associates
How current are your e-mail addresses?        customers
                                              business associates
If No, how long would it take you             customers                  _______           hours
to make a list?                               suppliers                  _______           hours
                                              prospects                  _______           hours
                                              business associates        _______           hours
                                              acquaintances              _______           hours
                                              peers                      _______           hours
Starting now you are compiling                   checks
these records from…                              customer records
                                                 form letters
                                                 supplier records
                                                 organization membership lists
                                                 your personal address book
                                                 e-mail messages
                                                 personal organizers (Palm Pilots, etc.)
                                                 other _______________________________
Designing Direct Marketing Events

SAMPLES: (items or reference guides your customers would find useful)




CLASSES: (re-examine your business definition in Chapter 7 to broaden
          the range of topics your customers and prospects are interested in)

FOLLOW-UPS:     (what related product or service delivered by mail, phone, e-mail,
                questionnaire or visit could make your past and present customers
                more satisfied with your work?)
Designing Parallel Marketing Events

SAMPLES: (items or reference guides your customers would find useful)




CLASSES: (re-examine your business definition in Chapter 7 to broaden
          the range of topics your customers and prospects are interested in)

FOLLOW-UPS:     (what related product or service delivered by mail, phone, e-mail,
                questionnaire or visit could make your past and present customers
                more satisfied with your work?)
Marketing Event Worksheet

Event __________________________________________________________________
Date __________________________________________________________________
Objective ______________________________________________________________
STEPS                                                        DEADLINE
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________
 ______________________________________________________      ______________

                                                Apple Computer, 8/14
A                                               Apprentices and referrals, 8/15
Accessibility and your business, 9/3–4          Arbitrariness of management, 5/8
   checklists for, 9/12–13                      Archer Daniels Midland, 1/7
   convenience of access, 9/5–7                 Armistead, Daniel, 8/12
   location described on website, 11/10         Armomot, Denise, 11/6
   telephone accessibility, 9/8–12              Articles about your business, 8/18
Action Industries, openness program, 6/4        A Step Ahead, 6/5
Adcult (Twitchell), 1/3                         Authority for claims of excellence, 8/16–19
ADM. See Archer Daniels Midland                 Auto industry
Advanced Micro Devices, 5/5                        lemon laws and, 10/5
Advertising                                        pricing policies, 4/4
   backfires, 1/7                               Awards for your business, displaying, 8/18
   branding, 1/14–15                  , 12/25
   dependence on, 1/8–9
   dishonest ads, 1/9–12
   disloyal customers attracted by, 1/8
   honest ads, 1/12–14                          Banking
   inappropriateness of, 1/23                      customer control often missing, 10/4–5
   increasing budgets, 1/3–4                       unique services, 7/11–12
   listing distinguished from, 1/2              Bell Labs, 5/5
   myths about effectiveness of, 1/3–8          Berkeley Design Shop, 7/10–11
   statistics on usefulness of, 1/2             Berkeley Fish, 6/5
Advice by email, 6/9                            Best Companies to Work For in America
Advisors, board of, 10/6                          (Moskowitz, Levering, and Katz), 5/4–5
Agreements, written agreements, 8/9–10          Better Business Bureau, joining, 10/7
Allen/Vanness, 7/20                             Bice, Jennifer, 7/14
Alta Vista, 11/16                               Bidding on jobs, 4/5
Alumni association listings, 9/14               Billings, Paul, 11/20, 5/15                                Bill’s Farm Basket, 12/8
Ambica, 7/14                                    Blank, Joanie, 7/15
America Online, 12/9                            Board of advisors, 10/6
Anchor Steam Brewing Co.                        Bodeganet, 11/9
   advertising not used by, 1/4                 Book Passage, 11/18
   marketing strategies of, 12/23–24               marketing strategies of, 12/24, 12/26
Anderson, Charmian, 7/2–3                       Book publishing industry
Anderson, Chris, 6/3–4                             cash flow problems of small publishers, 5/14–15
Andreeson, Marc, 6/11, 6/12                        personal recommendations and, 2/4
Answering machines, 9/10                        Boutique hotels, 3/6
Antonowsky, Marvin, 2/4                         Branding, 1/14–15
Aoyagi, Akiko, 7/13                             British Airways, 3/4
Appearance of your business. See Physical ap-   Burgers’ Smokehouse, 8/3
  pearance of your business                     Business friends and acquaintances, 5/17–19

Business names, 9/3                                    Customers
Byerly’s, 7/19                                           communicating with, 8/3–5
                                                         control over pricing, 4/6–8
C                                                        educating potential customers, 7/2–23
                                                         evaluation of business by, 8/13
C&W Ford, 3/10                                           providing information to, 8/2–20
Caffe Trieste, 12/10                                     questionnaire about communicating with, 8/5
Calendar. See Marketing calendar                         testimonials from, 8/17–18
California Raisin Advisory Board, dancing raisins      Customer service
  campaign, 1/4                                          employees and, 10/7
Campus Shoe Repair, 3/4                                  See also Recourse policy
Caravan Traveling Theatre Company, 2/3, 12/25                                   D
Cash flow problems, of small publishers, 5/14–15
Catalogs. See Direct-mail catalogs                     Daily Scoop, 8/18
Celestial Seasonings, 5/4                              Davis, Jim, 11/5
Center for Traditional Medicine, 6/9                   Delivery options, 9/5–6
Checklists. See Worksheets and checklists              Demonstrations
Chiropractic clinic, marketing calendar for, 13/4–11      as direct marketing, 12/12–13
City Lights Bookstore, 3/10                               as parallel marketing, 12/18–19
Classes and workshops                                  Dentists, rating of, 8/12
   as marketing, 12/13–14                              Describing your business, 7/2–6
   offering, 8/13–14                                      worksheets, 7/22–23
Cleanliness of business space, 3/7–8                   Direct communication, 8/7–10
A Clean Well-Lighted Place for Books, 3/10             Direct-mail catalogs, fantasies and sales, 3/5
Clients, openness with, 6/6                            Direct marketing, 12/5, 12/7–15, 12/16
Clutter and your business space, 3/9–10                   classes as marketing, 12/13–14
Cody’s Bookstore, 5/5                                     follow-up as marketing, 12/14–15
Common Ground directory, 1/16, 1/17                       giving customers something extra, 12/9–12
Communication                                             product demonstrations, 12/12–13
   with customers, 8/3–5                                  samples, offering, 12/8–9
   direct measures, 8/7–10                                worksheet for, 12/16
   educational measures, 8/13–14                       Discounts, offering, 12/10–11
   public measures, 8/10–12                            Discussion groups (online), for marketing, 11/19–20
   referrals and, 8/14–16                              Dishonest advertising, 1/9–12
Complaint handling. See Recourse policy                Display of merchandise, 3/3
Conferences and trade shows, 9/17–20                   Dispute resolution. See Recourse policy
Construction company, domains of business op-          Domain names, 9/8, 11/17
  eration, 7/8                                         Domains of business operation, 7/7–9
Consumer Action organizations, joining, 10/7           DoubleClick, 1/8
Consumer Checkbook, 8/12                     , 2/7–8
Consumer Reports, 8/10                                 Dutch Philips, 6/11
Content sharing, 11/20                                 DuVall, Sam, 2/2–3
Control Data, 5/5
Convenience of access, 9/5–7                           E
Converse Shoes, 12/9
Coors, union boycott against, 1/7, 5/4                 EBay, 4/8
Costco, advertising not used by, 1/4                     personal recommendations (feedback), 2/3
Counseling Center, 9/5                                 Educating potential customers, 7/2–23
Credit card billing, 9/11                                businesses in established fields, 7/10–13
Cross Corporation, 10/8                                  businesses in new or obscure fields, 7/13–15
Cummings Engine, 5/5                                     categories of potential customers, 7/16–17
Customer recourse. See Recourse policy                   domains of business operation, 7/7–9
                                     ADVERTISING: THE LAST CHOICE IN MARKETINGS              1/ 3

   what does your business do, 7/2–6             Friends and acquaintances, 5/17–19
   whom to educate, 7/15–21
Educational means of communication, 8/13–14      G
E.F. Hutton, 1/7
                                                 Goat dairy, 7/14
800/888 numbers, 9/11
                                                 “Going postal,” 5/9–10
                                                 Good Guys, 7/17
   complaint handling, 5/9–11
                                                 Good Vibrations, 7/15
   complaints of, 5/7–9
                                                 Google, 3/10, 11/16
   customer service committee of, 10/7
                                                 Grievance procedure, for employees, 5/10–11
   find out what they think, 5/11–12
                                                 Grocery stores, 7/4–5
   grievance procedure for, 5/10–11
                                                 Gunderssen, Lief, 11/6
   hiring process, 5/7
   management openness, 6/6–8
   questionnaire for, 5/12                       H
   retaining, 5/5                                Hallmark Cards, 5/5
   spread the word about your business, 5/3–7    Halpren, Steve, 7/14
Entriken, Van, 9/8                               Hansen’s Mill, 9/6
Enzyme bath marketing, 7/18–19                   Hargadon, Tom, 11/20
Eschenbach, Michael, 11/12                       Hiring, good practices for, 5/7
Eschenbach Construction, 11/9                    Hirschberg, Michael, 12/25
Established buying habits, overcoming, 2/4–5     Hohenstein, Nan, 7/20
Ethical business groups, joining, 10/7           Home delivery, 9/5–6
EToys, 1/4                                       Homepage design, 11/11, 11/13
European Sleep Works, 7/11                          See also Websites
Event scheduling. See Marketing calendar         Honest advertising, 1/12–14
Exchanges. See Recourse policy                   Honest Business (Phillips and Rasberry), 6/3
Expansion of business, handling, 2/8–9           Hospice Thrift Store, 5/3
Exploitation, by management, 4/8–9               Hotels, pricing policies, 4/4
Extras. See Special services and extras          Hours of operation, 9/3–4, 9/6
                                                 House Cleaners, 8/9
F                                                House of Tyrol, 8/3–4
                                                 Hughes, Thomas, 11/2
Fantasies and sales, 3/5–7
                                                 100 Best Companies to Work For in America
Fax machines, 9/11
                                                  (Moskowitz, Levering, and Katz), 5/4–5
Federal Express, 5/5
Ferlinghetti, Lawrence, 3/10
Feuerstein, Aaron, 5/6                           I
Feyer, Vivien, 9/19
Filene’s, 4/6                                    Ideas, openness with, 6/11–13
Financial openness, 6/3–4, 6/7                   Incomplete prices, 4/3–4
Finding your business, 9/3–5                     Index cards, for your list, 12/3
    signs, 9/7–8                                 Industry norms for physical appearance of busi-
    Yellow Pages listings, 9/8–9                   ness, 3/2–4
Fine Design, 3/9                                 Industry Standard, 8/11
First Light Cafe, 9/3, 9/4                       Information
Fit Lab, 9/6                                        openness with, 6/8–9
Fluegelman, Andrew, 6/12                            and personal recommendations, 2/6
Follow-up                                           See also Communication
    as direct marketing, 12/14–15                Intellectual property
    as parallel marketing, 12/19                    licensing and marketing, 11/20
Franz Valley Gardens, 9/5                           openness with, 6/11–13
Freeware, 6/12                                   Interconnectedness of people, 5/2–3
French Laundry, 2/3                              Interior design firm, marketing calendar for, 13/2–3
Friday’s (TGIFriday’s), 2/3                      Internet marketing, 11/2–20

   active marketing, 11/19–20                              forms of, 1/17–18
   active strategy described, 11/2–3                       Internet as Yellow Pages Plus, 11/5–6
   content sharing, 11/20                                  questionnaire for, 9/16
   licensing of intellectual property, 6/11–12, 11/20      successful use of, 1/15–18
   manners, 11/18                                          Yellow Pages, 9/8–9
   passive strategy described, 11/2                     Lists. See Mailing list for customers
   pricing strategies, 4/9, 11/19                       L.L. Bean Co., 10/9
   product returns policies, 10/3                       Local Color Inc., 8/8
   See also Websites                                    Lonely Planet Books, 12/25
Internet service providers (ISPs), pricing policies,    Lycos, 11/16
Intrapreneuring (Pinchot), 8/6                          M
ISPs, pricing policies, 4/4–5
                                                        Made to Order, 7/19, 8/18
                                                        Mad Matter, 9/7
J                                                       Mail accessibility, 9/12
                                                        Mailing list for customers, 9/14
                                                           developing, 12/2–3
   auto industry pricing policies, 4/4
                                                           evaluating, 12/3–4
   fantasy and a retail store, 3/6
                                                        Malden Mills, 5/6
   honest advertising in, 1/14
                                                        Ma Maison, 2/3
   No Brand store, 6/4
                                                        Management openness, 6/6–8
Johnson Wax, 5/5
                                                        Maps to your business, 9/3, 9/4
Joseph’s Sewer Rooter, 7/10
                                                        Marketing, defined, 1/2
                                                        Marketing calendar
K                                                          for chiropractic clinic, 13/4–11
Kaiser Permanente, 10/12                                   for interior design firm, 13/2–3
Kamoroff, Bernard (Bear), 12, 14                        Marketing plans, 12/2–25
Katz, Michael, 5/4–5                                       categories of marketing, 12/5
Killey, Steve, 11/9                                        direct marketing, 12/5, 12/7–15, 12/16
Kimpton, Bill, 3/6                                         list development, 12/2–3
Koop, C. Everett, 2/7–8                                    list evaluation, 12/3–4
                                                           parallel marketing, 12/5, 12/15, 12/17–20
                                                           peer-based marketing, 12/5, 12/21–26
L                                                          for wholesalers, 12/6–7
La Blue’s Cleaners, 5/18–19                             Martin, Peter, 8/17
Lande, John, 8/4                                        Mary’s Flowers, 8/4
Landmarks for finding your business, 9/3                Masa’s, 12/11–12
Lands’ End, 10/9                                        Matsushita, Beta system, 6/11
LaRocca, Sylvana, 7/19                                  Maytag, Fritz, 12/23–24
   See also Made to Order                               McDonald’s, and cleanliness, 3/8
Lauder, Estee, 12/9                                     McIntosh, Joan, 12/3
Lavin, Michael, 7/10                                    McKenna, Regis, 1/10
Letter of agreement, sample, 8/10                       Mediation, for negative word of mouth, 5/19
Levering, Robert, 5/4–5                                 Merchandise display, 3/3
Levi Strauss, 5/5                                       Midas Mufflers, and cleanliness, 3/8
Levy, Sidney, 2/5–6                                     Miller, Terry, 3/6–7
Licensing strategies, 6/11–13, 11/20                    Misleading pricing, 4/2–3
Lincoln and Victor, 8/14                                Mistrail, 12/25
Linux, 6/11–12                                          Moon Travel Handbooks, 12/15, 12/17
Listings                                                Moskowitz, Milton, 5/4–5
   advertising distinguished from, 1/2                  Movie industry, personal recommendations and,
   creative sources for, 9/13–15                         2/3–4
                                       ADVERTISING: THE LAST CHOICE IN MARKETINGS              1/ 5

Multiple Choice Consultation, 6/9                  Payment systems for online transactions, 4/9
                                                   PayPal, 4/9
N                                                  “PC Talk” (software), 6/12
                                                   Peavey, Frances, 12/6–7
National Bank of the Redwoods, 7/11–12, 7/21
                                                   Peck, Laura, 1/8
Natural Bedroom, 8/12
                                                   Peck, M. Scott, 2/4
Negative word of mouth, 5/19–20
                                                   Peer-based marketing, 12/5, 12/21–26
Nelson, Bruce, 8/8
                                                   Peet’s Coffee, 3/8–9
Netscape, 6/11, 6/12
                                                   Personal recommendations, 2/2–10
New Balance, 8/2
                                                      bad news and, 2/7–9
New ideas, encouraging the development of, 8/6
                                                      cost-effectiveness, 2/2–4
New or obscure fields, educating potential cus-
                                                      customer referral worksheet, 8/20
 tomers about, 7/13–15
                                                      established buying habits, overcoming, 2/4–5
Newsgroups for marketing, 11/19–20
                                                      marketing plans based on, 2/5–7
Next Century, 11/9
                                                      negative word of mouth, 5/19–20
No Brand store, 6/4
                                                      referrals, 8/14–16, 4/9, 8/12, 10/7, 11/10, 11/20, 12/25
                                                      referrals from people in related fields, 9/15
Nordstrom, 5/5, 10/3
                                                      referral worksheet, 8/16
Northern Light Surf Shop, 11/9
                                                      sample referral letter, 8/15
                                                      testimonials from customers, 8/17–18
O                                                  Photos of celebrity patrons, 8/17–18
Obscure or new fields, educating potential cus-    Physical appearance of your business, 3/2–12
 tomers about, 7/13–15                                cleanliness, 3/7–8
Odetics, 5/4                                          clutter, 3/9–10
Office waiting areas, 3/3–5                           evaluating, 3/11–12
100 Best Companies to Work For in America             fantasies and sales, 3/5–7
 (Moskowitz, Levering, and Katz), 5/4–5               goals for, 3/2
Online auctions, 4/8                                  industry norms for, 3/2–4
Online presence. See Website                          openness of, 6/5
Openness in business                                  sloppiness, 3/2
   benefits of, 6/2–3                                 smell, 3/8–9
   employee relations and, 5/7                        worksheet for evaluating, 3/12
   financial openness, 6/3–4, 6/7                  Pickle Family Circus, 8/14–15
   with ideas, 6/11–13                             Pietsch, Al, 11/4
   with information, 6/8–9                         Pike Place Market, 10/7
   management openness, 6/6–8                      Pinchot, Giffor, 8/6
   physical openness, 6/5                          Polaroid, 5/5
   questionnaire about, 6/10                       Postcard Question Service, 6/9
Osmosis, 7/18, 7/19, 12/11                         Pricing, 4/2–10
                                                      completeness of, 4/3–6
P                                                     customer control over, 4/6–8
                                                      evaluation worksheet, 4/10
Pacific Basin School of Textile Design, 9/8           Internet, 4/9, 11/19
Palmer, Mary, 1/9                                     straightforward policy for, 4/2–3
Paradiso: Jewels of Bali, 9/19                     Product demonstrations. See Demonstrations
Parallel marketing, 12/5, 12/15, 12/17–20          Product samples, offering, 12/8–9
   demonstrations, 12/18–19                        Professional association listings, 9/14
   follow-up, 12/19                                Professional office waiting areas, 3/3–5
   samples and special offers, 12/17–18            Promptness and problem correction, 10/5
   worksheet for, 12/20                            Public behavior, guidelines for, 5/20–21
Parking, dealing with, 9/5                         Public communication, 8/10–12
Partners in Nature program, 8/11                   Public participation, and recourse policy design,
Pastorale, 7/21, 12/11                               10/7

                                                    Search engines, getting listed with, 11/16
Q                                                   Sears Roebuck & Co., 10/8
Questionnaires. See Worksheets and checklists       Sea Trek, 12/18–19
Quick-Stop stores, 3/9                              See’s Candy, 12/9
                                                    Service businesses
R                                                      bidding on jobs, 4/5
                                                       describing the business, 7/5
Raisins, dancing raisins campaign, 1/4                 pricing policy, 4/3
RCA, video disc, 6/11                                  written agreements, 8/9–10
Recourse policy, 10/2–12                            7-11 stores, 3/9
   designing, 10/5–8                                Signs, 9/7–8
   elements of, 10/4–5                              Simon, Julian L, 1/5
   examples of, 10/8                                Simons, Virginia, 5/20
   informing customers about, 10/8–9                Slogans for finding your business, 9/3
   reasons for having, 10/2–4                       Smell of business space, 3/8–9
   worksheet for, 10/10                             Software for website development, 11/8
   written policy, 10/9, 10/11–12                   Sonoma Compost, 4/7
Recreational Equipment Inc., 10/9                   Sonoma Land Trust, 8/11
Redwood Funeral Society, 8/4                        Sony, VHS system, 6/11
Redwood Hill Farm, 7/14                             Special services and extras
Referrals. See Personal recommendations                for businesses in established fields, 7/10–13
Refunds. See Recourse policy                           as direct marketing, 12/9–12
REI, 10/9                                              as parallel marketing, 12/17–18
Replacement policy                                  Stanford University Business School, 12/17
   Sears, 10/8                                      Starbucks, Peet’s Coffee as model for, 3/9
   See also Recourse policy                         Stusser, Michael, 7/18
Reputation tracking, 5/2–3                          Sullivan, Jim, 6/6
Responsibility, personal recommendations and, 2/7   Supercuts, and cleanliness, 3/8
Responsibility for problems, 10/5                   Suppliers
Richardson, Charmoon, 7/14–15                          questionnaire for, 5/16
Richardson, Linda, 2/6                                 relations with, 5/13–15
Road Less Travelled (Peck), 2/4                     Sweden, honest advertising in, 1/14
Rollerblade, 8/7–8
Rolm, Dick, 10/6                                    T
“Rolodex party,” 12/3
Ross, Andy, 5/5                                     Tarrytown Conference Center, 7/9
Rousseau, Randy and Diana, 8/7                          School for Intrapreneurs, 8/6
Rowinsky, Larry and Nancy, 7/21                     Teaching, 8/13–14
                                                    Technological Enthusiasm (Hughes), 11/2
S                                                   Telephone accessibility, 9/8–13
                                                    Telephone branching (menu) tips, 8/11
Samples, offering                                   Telex services, 9/11
   as direct marketing, 12/8–9                      Terry, Paul, 12/21
   as parallel marketing, 12/17–18                  Terry McHugh store, 3/7
Santa Rosa Dodge, 9/3                               Testimonials from customers, 8/17–18
Sautner, Dean, 12/3                                 TGIFriday’s, 2/3
Scandinavian Airlines (SAS), 6/7–8                  Thomas, Irv, 11/15
Schack, Steven, 7/14                                Three-way calling, 9/10–11
School for Intrapreneurs, 8/6                       Tilley Endurables, 9/7
Schurtleif, Bill, 7/13                              Tinseltown Studios, 3/5
Schwartz, Bob, 7/9                                  Tofu business, 7/13
Schwartz, Evan I., 11/7                             Tokyo. See Japan
Screening customers, websites and, 11/14–15         Tokyo Hands, 12/12
                                       ADVERTISING: THE LAST CHOICE IN MARKETINGS              1/ 7

Toll-free numbers, 9/11                               software for development, 11/8
Torrice, Tony, 12/12                                  See also Internet marketing
Toys ‘R’ Us, 1/4–5                                  Welcome Wagon, offering samples to, 12/9
Trade association listings, 9/14                    What does your business do, 7/2–6
Trade shows and conferences, 9/17–20                Whole Foods, 5/4
Triton (hotel), 3/6                                 Wholesalers, marketing tips for, 12/6–7
Trust, and personal recommendations, 2/5–6          Wild About Mushrooms, 7/14–15
TWA, 5/4                                            Wong, Kaisek, 12/13
Twitchell, James B., 1/3                            Woodbridge, Gail, 1/9
                                                    Word of mouth. See Personal recommendations
U                                                   Working hours. See Hours of operation
                                                    Worksheets and checklists
Unequal treatment, of employees, 5/7–8                customer evaluation of business, 8/13
United States Postal Service, employee relations,     customer referrals, 8/20
 5/9–10                                               describing your business, 7/22–23
University of Chicago Committee on Social             direct marketing, 12/16
 Thought, 11/15                                       domains of business operation, 7/8
Urasenke Tea School, 3/9                              employee questionnaire, 5/12
                                                      listing questionnaire, 9/16
V                                                     mail accessibility, 9/12
                                                      marketing event (chiropractic clinic), 13/4–11
Victoria’s Secret, 3/5, 5/5, 10/3                     marketing event (interior design firm), 13/3
Voice mail, 9/10                                      marketing list evaluation, 12/4
                                                      marketing without advertising, 2/9–10
W                                                     openness in business questionnaire, 6/10
                                                      parallel marketing, 12/20
Walk-in accessibility, 9/13                           physical appearance of your business, 3/12
Water sports equipment business, domains of           pricing policy, 4/10
 business operation, 7/8                              recourse policy, 10/10
Websites                                              referrals, 8/16
  accessibility information on, 11/10                 suppliers questionnaire, 5/16
  content to include on, 11/7–10                      telephone accessibility, 9/12
  described, 11/4                                     verbal communication with customers, 8/5
  designing, 11/11–14                                 walk-in accessibility, 9/13
  domain names, 9/8, 11/17                            What My Business Does, 7/6
  free information on, 11/10                        Workshops and classes, offering, 8/13–14
  freshness of content, 11/7–8                      Written agreements, 8/9–10
  geographic location of business on, 9/4–5
  hiring a designer, 11/12                          Y
  importance of, 11/2–5
  interactivity and customer screening, 11/14–15    Yahoo!, 11/16
  links from other sites, 11/17                     Yellow Pages listings, 1/16, 9/8–9
  links to other sites, 11/8–9
  paying for referrals, 11/17–18                    Z
  schedule of events on, 11/8
  search engines, 11/16                             Zoah’s Free Raffle Event, 8/18–19 s
                                   m o r e                     f r o m
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                                About the Authors
                                  By the Publisher, Ralph Warner

MICHAEL PHILLIPS I met Michael Phillips in              workbook, that not only provided the intellectual
1979, when he was coordinating the Briarpatch, a        foundation for why marketing without advertising
network of small businesses that share common           works, but also a lot of detailed “how-to” specifics.
values of openness and honesty, and providing
help for each other. Nolo had just gone through a       SALLI RASBERRY Enter Salli Rasberry, who has
growth spurt which had strained our personal re-        successfully run a dozen small businesses in fields
lationships. Michael helped us set up a series of       as varied as book fairs (the first San Francisco In-
meetings that got things back in synch. Over the        ternational), to publishing companies (New Glide
next few years, Michael became a good friend and        Publications and Clear Glass Press), documentary
trusted advisor, and I frequently drew on his ex-       films, business consulting, writing (co-author with
tensive business experience (including a major          Michael Phillips of The Seven Laws of Money and
role in developing the Mastercharge (now                Honest Business, among others). Currently she is
MasterCard) interbank credit card and doing con-        vice-president of the Sonoma Land Trust, a private
sulting for over 600 businesses.                        nonprofit that preserves and protects the land for-
    After a few years our relationship led to my        ever through conservation easements or outright
teaching at the Noren Institute, a pioneering small     ownership. A pioneer in the fields of education
business school run by Michael and several others       and values-based living, Rasberry is involved in
in San Francisco. I also became more familiar with      the design and development of an innovative
Michael’s innovative thinking about small business      model for a rural home care center for the elderly
success by reading both of his books, Honest            in northern California. An artist and avid gardener,
Business and The Seven Laws of Money, which I           she initiated the Coffin Garden Project, where art-
routinely recommend to everyone who runs, or is         ists, gardeners and others are invited to express
thinking of starting, a business.                       their feelings about death in a setting of natural
    One of the courses I helped teach at Noren In-      beauty and serenity.
stitute was Marketing Without Advertising, a con-          Sally’s job was to add a few pounds of order
cept that I learned the hard way here at Nolo. The      and a bushel of passion to Michael's manuscript.
result of helping Michael teach this course was a       She did this brilliantly, at the same time that her
series of freewheeling conversations, ranging from      honesty, compassion and general niceness made
Michael’s small business teaching and consulting        the always difficult task of turning a good manu-
experiences in Tokyo, Stockholm and Paris, to my        script into an excellent book a real pleasure.
own more mundane experiments with various
ways of communicating the Nolo message to large         Other Books by Phillips and Rasberry
numbers of people without the expense of adver-         The Seven Laws of Money
tising. The results were a real sense of excitement     (Pocket Classics, Shambhala Publications)
that the concept of marketing without advertising       Honest Business
was one of genuine interest to the small business       (Pocket Classics, Shambhala Publications)
community, and the decision to produce this             The Briarpatch Book (ed.) (New Glide)
book. I know now it was an excellent decision
because we have experimented with a number of           By Phillips
Michael’s marketing without advertising concepts        Simple Living Investments (Clear Glass)
here at Nolo. Without exception, they have been         Citizen Legislature, with Ernest Callenbach
extremely successful.                                   (Banyan Tree/Clear Glass)
    When Michael Phillips showed us the first draft
of this book, it was long on brilliant concepts, but    By Rasberry
a little short on specifics and organization. What to   Living Your Life Out Loud: How to Unlock Your
do? Although it might have made sense to publish        Creativity and Unleash Your Joy, with Padi Selwyn
Michael’s manuscript under a title such as The Zen      (Pocket Books)
of Small Business Marketing, we had already an-         Running a One-Person Business, with Claude
nounced that we were publishing a Nolo-style            Whitmyer (Ten Speed Press, Second Edition)

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