Differentiation by Specialisation – What You Need to Know

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There are a number of reasons for considering specialisation: the world and life is becoming more complex; it is difficult to be all things to all people ; on balance, a specialist will make more money than a generalist on an per job or hourly basis; the perceived value of your services is heightened; keeping abreast of developments in an area of speciality is easier than over a broad general area; you will develop mastery and expertise you may not have otherwise and in time can charge a premium for your services  which a customer will feel offers him more value for money than a similar service from a generalist.

Be cautious of choosing a specialty that is too narrow. It would have been so much easier to simply be “the best value made to order timber heirloom rocking horse makers in Australia”, but it is not always possible to make a living doing just one thing as the work may be  too seasonal. Rocking horse makers traditionally do sixty percent of their turnover in the last three months of the year and struggle for the other nine months. Restoration work helped smooth out seasonality, but classes effectively eliminated all seasonality issues for us.

In the early to mid “naughties”, our business could have become victim to the cyclical swings created by housing booms with their subsequent interest rate rises and ensuing petrol price rises. These major economic changes decimated discretionary incomes among new yuppie parents who were 50% of our customer base. Fortunately, we relocated to a property which opened the door to being able to offer classes. The classes attracted dominantly baby boomer grandparents whose discretionary income is minimally affected by these factors.

The fact is that the rocking horse market is very small.  If we had taken the track of geographical specialisation in New South Wales alone, we would have starved. Happily our early foray into web marketing in 1998 effectively positioned us for national and international customers for all aspects of the business.

After you have examined the make up of your customers ask yourself, what work do I spend the most time doing? Is this work profitable and how profitable is it compared to other work? What work do I enjoy most doing?

We spent a large amount of time doing restoration work. It was the least profitable aspect of the business – but for a rocking horse specialist, if you make, they expect you to restore as well. A significant part of reputation and word or mouth came from restoration work. How could we remain the specialists in rocking horses if we could and would subcontract out the restoration work?

There were two possible solutions. One was to continue to offer a restoration service. We would still receive, evaluate, price and get paid for the restoration. With the customers knowledge we would  subcontract out the work, pay the contractor, keep a spotters or handling fee and have the horse at our place to be collected by the customer– all while maintaining quality control.

The other solution was to restore only valuable old English rocking horses (5-10) per year and provide a restoration advisory service for Australian rocking horses. We could still provide restoration kits and accessories, but produce an instructional DVD which would include common repairs, preparation, painting and fit out instruction from go to whoa.

We chose the first option which allowed us to spend more time doing the more enjoyable and profitable aspects of: teaching rocking horse making; providing mail order kits, accessories, plans, books and DVD’s and made to order and commissions of rocking horses at a higher price point.

Shoestring Marketing – The 7 P’s

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Shoestring Marketing is the common name for a style of marketing which could also be described as: “More-Brains-than-Bucks” Marketing; “More-Sweat-than-Silver” Marketing; “More-Chutzpah*-than-Cash” Marketing or “More-Drive-than-Dosh” Marketing. You get the idea.

My form of Shoestring Marketing developed from the pressure point of having no cash for marketing and advertising to grow the business. I knew that unless I made our business very successful, I would never be able to reach my goals.

My goals were and are probably much like your own – to give the children the best education we could afford, live in a nice house in a rural region, eliminate commuting and working long hours for someone else; to pass our working lives doing what we love and our winter years in pleasurable pursuits such as travel & culture, enjoying good food, a few decadences and meeting interesting people. In short – the “good life” or as it’s now called a “treechange lifestyle”

I had big dreams and no way to realise them unless I did something radical. The appeal of Shoestring Marketing for the treechanger is that it is based on smart and low cost marketing so that you can realise your goals and sustain the lifestyle that you crave.

*Chutzpah – Yiddish word meaning “cheeky”, “bold” or “audacious. “Ch” sound pronounced “H” rolling and guttural, deep from the throat.

Prerequisites to being a Great Shoestring Marketer

There are seven prerequisites to being a great shoestring marketer and conveniently, they all start with “P”. The following definitions of the seven ”P’s” relate specifically the characteristics of successful shoestring marketers:

Poverty Mentality – means you proactively avoid spending on the traditional marketing avenues – that is: paid for advertising in the press, radio, TV, magazines, commercial trade shows, lavish printed materials, $50,000 websites etc.

 

 

Poise – means self-assurance, self-possession, self-confidence, self-belief, self-reliance, aplomb. Marketing your business is your responsibility. No one else will do it for you. You will need all the “poise” you can muster to move forward and take the inevitable knocks and disappointments – and the aplomb to handle the successes and the self-belief to handle the disappointments appropriately.

Passion – My personal favourite of the seven ‘P’s  means fervor, excitement, enthusiasm and zeal. I can’t teach you this one, you either feel this way about your business and your dreams or you don’t. If you don’t, change your business or find a new dream you can be passionate about.

 

Professionalism – means to be dedicated, committed, savvy on how to approach customers, suppliers and media in a way they respond to, expert on every aspect of your business, thorough in your approach and follow up and emotionally appropriate when dealing with them all.

 

Persistence –  means to be determined, dogged, diligent and just a teensy bit pushy but in a nice way..

 

 

 

A Powerful Pitch – This means you’ve done your homework and you know the hot buttons and appeal of your business to your target market  and can put the correct spin on it to interest different media on the different angles.

 

 

Persuasiveness – expressive and articulate in getting your ideas across. The natural result of the successful application of the above six “P’s”  is that you will in fact be very persuasive.

The Perils of ‘Oily Rag’ Thinking

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Positive Marketing Momentum

It is largely unknown or not understood by the new small business person that marketing momentum used positively means that over time you will need to spend less and less on your marketing program.

Marketing has its own momentum. If you stop marketing for two, three or six months, you will have a corresponding soft patch or trough in business sales and enquiries further down the track. How much further down the track and how much effect is largely to do with the location and type of business you have. But ultimately your business will die a slow and agonising death. There is no such thing as a business staying the same – same is death. A business is either growing or it is dying.

Negative Marketing Momentum

For the rocking horse business a stop of all marketing activity for a period of 2-3 weeks would result in a noticeable downturn in business in 2-3 month’s time. Telephone and web enquiries dropped off gradually to a trickle.  Reduced enquiries, reduced business, reduced income and so it goes.

When times get tough, it is instinctive for many small businesses, (and many large businesses) who rely exclusively on paying for their promotion and marketing, to radically curtail or stop spending on marketing and substitute it with  – you guessed it –  nothing. They then wonder why business continues to slow. Their attitude is “Whew! We survived that month with no marketing expenditure, maybe I can get through the next month.” It continues until you are flattened financially with no hope of regaining any momentum because your own and/or your staff’s morale is in tatters on the floor. One of the most important prerequisites to being a good Shoestring Marketer and business person is self-belief – see the 7 P’s of Shoestring Marketing and Poise, so morale is big deal.

When there is an economic downturn, do not assume that “better” economic times are around the corner and you can run the business on the smell of an oily rag until it picks up. In the last few years the economy has slowed, and slowed, and slowed. It slows, then it slows some more and you’re still in “oily rag” mode, working impossible hours making less money. You don’t have the energy, time or inclination to work “on” the business because you’re so buried “in” the business. It’s a recipe for self-destruction.

Managing Supply & Demand through Marketing Momentum

Rule 1 – Never stop marketing. If you have a business, you should always be doing some from of marketing. You may wish to vary the type and intensity of marketing when your  efforts have been so effective that demand outstrips your ability supply and you risk disappointing or annoying potential customers with long waiting periods or inferior product.

Waiting lists or back orders can be great for your entrepreneurial ego, but no good for your business long term as they threaten your business credibility. Part of being a good shoestring marketer and business person is about matching demand and supply in an acceptable time frame to your customers. When we had more demand than we could supply, we slowed things with a careful combination of price increase and reduction in marketing activity, but we continued to take up and pursue any free exposure opportunities that presented themselves on our laps.

Tell Me You Love Me in Words and Pictures

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word and picturesTestimonials from satisfied customers, put your prospective customers at ease. They give reassurance that your work has pleased others. When your customers pass on your name to others as in “word of mouth” this is a verbal testimonial. A written testimonial from a happy customer costs nothing other than your time asking for it.

Testimonials can be used in a portfolio of information about your product to prospective customers, they can used as support material, framed in the reception area of your business and excerpts can be used in your marketing collateral and as call outs on your website or blog.

Online, LinkedIn calls testimonials ‘recommendations’. As a matter of routine, you should ask connections you have done business for to provide you with a recommendation.

A testimonial letter can be on the customers letter head; can be short or long, hand written, typed, a You Tube clip, an online entry. As long as it makes prospective customers feel good about using your product or service, it’s a testimonial. Some organisations call these “praise or love letters”.

A bed and breakfast would keep a guest book with provision for comments from guests and this becomes their “brag book”. The comments that showcase the elements of their serivce that they are most proud of and best illustrate their unique offerings can be used as call outs on each page of their website or blog.

Letters from industry peers or celebrity endorsement can be useful in the right circumstances. I never forget receiving an information kit to exhibit at a Baby Boomer Expo which had a letter of Prime Ministerial endorsement from our Prime Minister of teh time, John Howard! Can you get Prime Ministerial endorsement for what you do?

I organised endorsement of my parent’s 50th wedding anniversary milestone from the Governor General, the Prime Minister, the State Premier and Local Member’s offices. I hate to admit it, but it’s not too difficult to organise – it just takes a little planning…and were my parents, family members and the guests impressed? You bet!

Positive publicity which you receive in the form of a radio or TV interview, write up in the local or metro newspapers, profile or interview for a magazine is great exposure for leads and your credibility, but the benefits are relatively short lived. You need to preserve it and incorporate it into your online and offline marketing efforts.

I kept a running list in reverse chronological order of all the media exposure our small business received since 1989 on the news page of our website.  I  laminated originals of the story for my permanent file, I photocopied or did colour reprints of selected pieces for prospective customers depending on what part of the business I was trying to pitch and to whom.

When Huey came to cook at Rocking Horse Lodge for our Open Weekend – he accidently dropped a wooden spoon in the grass which my daughter later found. At the end of the sojourn as is the custom,  Mr Moon, Huey’s culinary assistant, presented me with ‘the blue tea towel’. (Washed of course!) I was then able to have suitably mounted  – the spoon, the cover story in the local paper and the tea towel in a box frame and hung in the workshop in a high profile location. This provided mountains of credibility when the tour groups visited.

Across how many mediums can you promote how and why your customers love you and the feathers in your credibility cap?

The Good Old Bad Days

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In the good old bad days at Windsor Road, we had some tough times. We had roadworks obstructing vehicular access either in front of us, south or north of us the whole 5 years we lived there. My partner would sit by the roadside whittling Noah’s ark animals. We sold a complete Noah’s ark with animals worth $800 for $200 and I intermittently taught marketing at Hawkesbury Community College for a little extra income. We ate a lot of rice.

In those early days the rocking horses were made from truck loads of undressed scrap box timber from the box factory in Wilberforce which would be dumped in our yard. We evolved to buying $2000 slings of kiln-dried NZ radiata pine milled to the correct sizes.

Also from Wilberforce were cow tails from the abattoirs which we would collect and tan ourselves. It was a filthy job and you could not think about food at all on tanning day. We evolved to importing bespoke horse tails in a variety of colours from China – the world capital for horse hair.

Our original stirrups were made from hand bent aluminium bar and pop rivets and were replaced by importing sand cast and hand polished solid brass stirrups along with the brackets and snaffle bits from India. The swing irons which were cut, bent and threaded ourselves evolved to being done piece work by a retired engineer with the correct machinery at one-fifth the price of an engineering shop.

The nail-on pad saddles responsible for my weak wrists were replaced by miniature English riding saddles made in various colours and sizes and imported from India by piggy-backing on the container orders of a major horse accessories importer.

Simply because we did not have the capital, we focussed on incremental change and growth. The first incremental changes involved improving the perceived value of the horses to get the retail price up from $695.00.

Originally there was not a maker’s mark on the horses, so we set to work to design a brass nail-on plaque for the stand. The plaque maker traded a kit rocking horse for the cost of the initial engraving/set up and individual plaques were only $2.00 a piece. We later introduced a “Certificate of Authenticity “ and a “Certificate of Restoration” which were both hand signed by the maker and presented with the horses.

We improved the finish of the stands by routering the edges and sourcing a commercial turner to make the uprights.We turned the pillar uprights for the stands ourselves, which was ridiculously time-comsuming and relied on turning them exactly the same by eye!

Plastic Amber Crystal Eyes were replaced with German Glass Teddy Bear eyes with hand glued lashes – something which other makers have since copied.

During our growth phase it was very important to treat our suppliers well and pay them on time. As soon as we knew there would be a delay in payment, I was on the phone explaining the situation and nutting out an installment plan. At that time even our annual volumes were not large enough to be able to order from some suppliers.

As the improvements kicked in, we increased the retail price of the horses about $100 per year to $1695 for a standard and $3750 for a large horse. These prices were still well below backyard operators and other specialist retailer’s prices of anywhere between $2000 and $6000. So we offered a beautiful product of  excellent value for a great price, what more could a customer want?

Evolution of a Shoestring Marketer – A Funny Thing Happened on the Way to Where I am Now…

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My shoestring marketer days must have all started when I was invited to attend a Hawkesbury Council Focus Breakfast designed to develop relations between council and local business. I must have stood out by being a little vocal about tourism issues and tourism marketing and as a result was asked to participate as a mentor with our council sponsored Youth Achievers Program.

I must have appeared sufficiently knowledgeable during the course of that program to be asked by the council’s Commercial Director to do a key note address on “Doing Business in the Hawkesbury – A Small Business Perspective” at a Mayoral Reception for welcoming new businesses.

 

From here I was invited by the then newly formed Windsor Business Group (a not for profit progress association), to be on their committee and help them put forward proposals to council for assistance funding. One of these was a series of Workshops for Marketing Small Business on a Shoestring Budget.

After conducting eight of the twenty shoestring marketing workshops contracted for, I was struck with the huge gap in the market place for tried and true marketing and pr generating techniques for those with tiny or no marketing budgets or know-how. The information had to be presented in bite-size chunks with a gradual progression of aggression, as most small business people need to “do” long before they can afford to outsource. Also, Australian’s are still hung up about blowing their own horns. Luckily I dont have this problem having spent 5 formative years in California learning the mechanics of how to do it with style and grace.

In the past I had responsibility for marketing budgets of $1M in one corporate arena; shoestring budgets from which miracles were expected in other corporate arenas and a nil budget when I started a small business.

I found after a while that I enjoyed the challenge and thrill of getting as much publicity and marketing done for as little money as possible. If I could run a household, family of four and a small business on a shoestring, surely I could do the same with my small business marketing program.

 

 

 

I calculated over a two year period, I got the equivalent of $250,000 worth of exposure in and on Radio, TV, Magazines, Newspapers, Trade Shows and local community for nothing. It got our business to the point where our classes were booked out 12 months in advance.  I actually had to stop shoestring marketing for a time in order to avoid frustrating prospective rocking horse making students with 12 month waiting lists.

In these blogs I will share with you how to do for your embryonic or established business what I have done for mine – Marketing PR  (Free Editorial in the Press) and Business Social Media exposure on a shoestring budget
in bite size chunks
for the 50 something brain
with an aggression progression.

 

Strap in –  should be a fun ride, cos I’m still learning too!

 

 

 

Extreme Makeover – 42% More of My Life to Live

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9c313-extreme_makeover-showSome years ago, at 40 something I read an interesting statistic that was the trigger for my personal reinvention. It was that “the average Australian woman at 50 years old today still has 42% of her life to live.”

At that time I was 100kgs, always working,always dressing in black, never making time for me.

But perhaps I should step back in time to 1999 when I was stressed out strategic marketer for the largest private hospital in the state. I never imagined that I would be earning a living making and marketing wooden rocking horses to baby boomers.

I had enjoyed nearly 3 years of managing events large and small for Specialists, GP’s, doctor’s secretaries and staff . However, the job was demanding more and more hours and I was newly single with a 4 year old son and there were 25 year olds with the qualifications and no children who would happily put in the hours. So I set about to find my replacement from among those ranks and did so by early 1999.

On a 5 acre property with busy Windsor Road frontage near to Windsor with two, fifty year old houses, a shed and a huge pool, my then partner and I lived in the smaller house, rented out the larger house and made rocking horses in the shed.

By the June of that same year we were making enough money from the rocking horses for me to risk resigning my job at the hospital. In the space of a week I had surrendered my title, my hard won salary and sold my BMW.  After 6 weeks of adrenalin withdrawal migraines and a small identity crisis, I set out to make and market rocking horses full time.

After many years thinking I would never have another child, I had a beautiful daughter in October 2000.  She turned out to be a copy book baby and child, who today loves many of the things her parents do—antiques, rural living, farm animals, all things French, people and making things.

Christmas 2000 in the workshop, she was 3 months old in a front baby pouch on my chest asleep while I was putting the finishing touches on Christmas rocking horse orders.  To her the workshop was just another room of the house.

I was 12 weeks pregnant with her when we did our first 16-day Royal Easter Show. She was 6 months when we did our second Royal Show and 18 months when we did our last. She did the Adelaide Royal Show with us at 3 and has done many Timber and Working with Wood Shows.

 

My Little Pathological Marketer

To say she is socially adept and a pathological marketer would be an understatement. At one Timber Show in Canberra she boldly informed the Renapur Leather Dressing demonstrator polishing her shoes that she “could make a rocking horse at our place and stay at our B & B and have scrambled eggs, egg in the shell, omelette or flat eggs for breakfast.”

 

I have shown my porcelain doll and pram collection to many tour groups over the years and had my developed patter which rolled swiftly off my tongue without too much brain-effort. One day when she was about 6, I overheard her explaining the prams and dolls to a school friend – my patter verbatim!

It’s was good to know that when my marketing mouth got tired she could step into the breech.