Most of reports about why businesses fail are wrong.

They say: Poor financial control, lack of capital, poor leadership, poor location, poor economy, etc. These are the reasons we usually hear for business failure.

Statistics usually measure business failure by how long they operated before closing.  However, businesses that are struggling to survive or not meeting the owner’s business goals are also failures.

Although there are many reasons business fail, by far the number one reason they fail, has to do with the quality of their marketing.  And by the way, this is not a discussion about businesses that think they don’t need marketing at all, because these businesses are already dead and they just don’t know it yet. 

Here are 8 of the most common mistakes small businesses make:

1)      Treating marketing like an expense rather than the business you are in. Marketing should be the driving force of your business because you are NOT in the business of being butcher, baker or candlestick maker…you are in the business of marketing your business. When you look at your marketing as a line item expense instead of a necessary investment, you’re looking to fail. Peter Drucker said  “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

Marketing your business correctly is your path to becoming the dominant business in your community or category. And when you become the dominant business, you’ll be more profitable, secure, and have more freedom.

2)      Not knowing what it costs to gain a new customer and what the average lifetime customer value is. If you don’t know what it costs to acquire a new customer, it’s impossible to set a marketing budget. And if you don’t know the lifetime value of a customer, how can you determine how much to invest in your marketing to gain one?

Before you invest large sums of money into marketing, determine how much it costs to acquire a new customer and what your average Life Value of a Customer is. It’s important to note that when you know the Life Value of a Customer, you can spend more to acquire a new customer because it’ll be worth it on the back end. For example, if you know the Life Value of a Customer is $5000, spending $100 to acquire that customer is worth it. However, if the Life Value of a Customer is $100 then spending that same amount would be foolish.

3)      No system in place for attracting your ideal customer and building a database.  Your biggest asset is your database. Yet many businesses, such as retailers and restaurants, make no attempts to build a list of ideal customers to market to.

If you want to survive, you must figure out how to attract your ideal customer and build a list so you can market to them again and again.

4)      No follow-up marketing system. Once you attract an ideal prospect, you must stay in touch with them until “They buy or die.” Businesses often have hundreds of people visiting their website or walking into their establishment that leave without buying and without collecting any information on how to follow up with them.

And most businesses fail to have a follow-up system in place for people who have purchased from them in the first place.

In both cases, you are leaving thousands of dollars on the table. Follow up with prospects and you’ll get a percentage of them to buy. Follow up with your buyers and they will often buy from you again and again.

5)      They have no Innovations or Unique Selling Propositions in place. As a business, if you do not have anything unique about you in terms of unique offers or innovations that set you apart, you are destined to be subject to market forces and your success will rise and fall like a ship without a rudder lost at sea.  You need to be unique in a way that makes your business the only clear choice for customers and prospects to do business with.  I often hear from business owners that “There is enough business out there for everyone, so we are just satisfied with our slice of the pie”.  These businesses are satisfied with looking like everyone else.  Now I want to be gentle here and say, when you find these businesses that have this philosophy… it is like an invitation to rape and pillage everything that they have and put them out of business as soon as possible.  And it will be easy to do as well. To quote Ash Ambirge  Nobody ever made any money by being the same, and they certainly never got any awards.  The only thing they got was IGNORED. -

 There are a lot of competitors out there selling exactly what you sell.

Spending time on refining your Message and Innovations to make your business stand out is a huge game-changer for businesses.

6)     Not communicating your unique message or innovations correctly.  Although you may have created a unique message and innovations for your business, it could all be a waste of time if you do not communicate it correctly in your marketing and advertising.  We explain this problem by saying Your inside reality does not match your outside perception. Simply stated, no matter how great or different your business is, if your marketing and advertising does not correctly show this uniqueness to your prospect,  your uniqueness will go unnoticed and you will still be perceived as the same as your competition.  How great your company is needs to match what your prospects actually believe about your company, otherwise you are wasting your marketing budget.  The only way to do this is by using hot button loaded headlines and content that emotionally connects with your prospect causing them to want more information that draws them closer to the sale. According to Scott Cook  "A brand is no longer what we tell the consumer it is... it is what consumers tell each other it is." -

7)      Not focused on the right market or haven’t defined a market. Your marketing message has to be to the right market, with the right message, in the right medium. It doesn’t matter how great your message is if you are sending it to the wrong target market, or in the wrong medium, success is getting this right.  The idea of anyone, anywhere, at any time will bleed your budget and profits quickly.

Create a list with laser-like precision and you’ll stop wasting money on marketing and advertising that isn’t working.

8)      Not using direct-response advertising. The agenda of advertising for big businesses is much different than the agenda for small businesses. Big businesses look to build their brand, look good, win awards, and maybe sell something whereas the small business owner wants  and needs to sell something.  The problem is because many small business owners don’t know a lot about marketing or where to start, so they copy advertising that won’t ever work for their business, which cost them time, money and sometimes their business.

To succeed, you must incorporate marketing techniques that attract prospects… sell something…cause your prospects and customers to take a desired action. This is accomplished by using direct response marketing.

That’s it “The top 8 marketing mistakes that cause businesses to fail”  If you would like learn more about this process go ahead and contact us and ask for a copy of our Total Dominance Marketing System and learn how to dominate, because  “If you continue to do what you’ve always done, you’ll get what you’ve always gotten.”  I’m Eric Engle, Have a great day.