Tag Archives: customer

Pricing and forecasting for profit

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How much should you sell it for, and how many will you sell? Did you know that even the largest businesses struggle with this? Unfortunately, we can not give you all the answers, but this guide will explain the principles and help you with the basics to improve your abilities around pricing and forecasting.

Product forecasting is the science of predicting the degree of success a new product will enjoy in the marketplace. The forecasting model must consider product awareness, distribution, price, fulfilling unmet needs and competitive alternatives to do this.
Price is the money that customers must pay for a product or service.

WHY is getting pricing and stock forecasting right important?

Charge too much, and you will sell too few; charge too little, and you may not make any money. The more stock you hold, the more money you have tied up, the more chance the stock will spoil or become obsolete.

Pricing and forecasting work hand in hand but are not always directly linked. 

The basics of pricing and forecasting are to sell enough to make enough money to sustain your business and make a profit. Your product or service has a cost to manufacture or provide; included in this needs to be the cost of running your business and any future customer service you must provide. Some of your costs will be variable, and some will be fixed. 

Assume you are a greengrocer; you have a variable cost of buying apples. That is the cost for each apple, times the number you buy. If you buy 100 apples, you hope to sell 100 apples, so you must price them at a point where you would sell 100 apples. If you price them too cheaply, you will run out of stock and lose out on the many more apples you could have sold. Price them too expensive, and you will not sell your 100 apples and then have spoilt stock that you cannot sell. 

Thus, you are seeing this as a fine balance. If your apple cost was 10 cents and you sold all 100, you would have made $90. Will this $90 cover your fixed costs? Your fixed costs are the cost of your vehicle, your store rent, your wages, etc. If your fixed costs during this time were $100, your net position would be a loss of $10.

WHAT do I need to know about pricing?

To start with the basics, you must set a price if you wish to sell something. That price must cover your costs and enable a profit. If you can get lower costs, you can lower the price. Pricing your offering is an ongoing process and cannot be done once or forgotten.

Suppose you have projected your business’s running costs, including property and equipment leases, loan repayments, inventory, utilities, financing, and wages.

The four most common ways of establishing prices are:

Cost-Plus Pricing – We add all our costs and our desired profit to reach a required sell price. For example,
material cost $50 + labour cost $30 + overhead $40 = total cost $120
total cost $120 + desired profit at 20% of sale price $30   = required selling price of $150

Demand price – This model sets a price based on volume. A wholesaler can buy a large quantity because they can move that quantity. A retailer can only sell a smaller number, so it will pay more from the wholesaler and again, a customer who may only buy one will pay a higher price. Thus, pricing is set on demand.

Competitive pricing – When a product is a commodity or similar to something else being sold, competition determines the price. If you sell petrol, you need to ensure petrol bought from you is competitive to the store down the road. Unless you can differentiate your offering, customers will shop around and pay the best price if they know many others also sell this petrol.

Markup pricing – This is when a fixed markup is applied to the cost of a product. For example, with a $70 cost and selling price of $100, the fixed markup would be $30. If this were expressed as a percentage, the markup would be 30%, which is the markup divided by the selling price.

Some other pricing tactics that you might consider include:
  • Promotional pricing – discounts or sales to generate extra sales or move discontinued stock.
  • Geographic pricing – different pricing based on the location of operation. You might have two shops, one in the city and one in the country. You may find you can charge different prices for the same item in each location. Your costs may also be higher due to transport.
  • Premium pricing – sometimes people are prepared to pay more for a premium brand or product, and indeed, if you sold that item for less, it would not be as sought after, and you would sell less, such as branded clothing.

HOW do I forecast?

Your accounting package or POS solution may have some integrated functionality or an integrated app that you can add to help with forecasting. When we forecast a product for sale, we care about purchases, sales and inventory. Pretend we buy (purchase) 10 units and sell (sales) 6 we are left with four units (inventory). If we believe our sales next period will be seven units, we need to purchase three or more units depending on how much stock we want at the end of that period. If you do not have stock available for people to buy, they may go to a competitor who does.

There are three basic models for forecasting—qualitative techniques, time series analysis and projection, and causal models.

Qualitative uses, for example, expert opinion and information about special events and may or may not consider the past. Such as, “I have been doing this a long time, and my gut feeling is we will sell 10”.

Time series analysis & projection focus entirely on patterns and pattern changes and thus rely entirely on historical data. For example, if you sold ten this week last year, you may forecast to sell ten again.

Casual uses highly refined and specific information about relationships between things and is powerful enough to take special events formally into account. For example, it uses a model that takes last month’s and last year’s data and might take into effect other information like trends and competitor information to forecast sales of 10 units.

HINTS

Selling ten units at a $2 profit gives you a $20 profit, as does selling five units at a $4 profit. Thus, you can get the same result with two different pricing and forecasting tactics.

Here is a simple model you can use to forecast stock purchases :

 JanFebMarchAprilMay
Inventory 4534
Purchases10866 
Sales6785 

How much inventory you should hold depends on how quickly you can get more stock. It would be best always to have more inventory than you would sell.

Sales are actual or what you have forecasted to sell.

Purchases are how much you need to buy, which is the desired next month’s inventory plus the current month’s sales minus the current month’s inventory.

SUMMARY – pricing and forecasting is an ongoing job

Pricing and forecasting will make or break a business. Products and services need to be priced so you can make a profit and that a customer will be prepared to pay it.

Forecasting is about having the right amount of stock at the right time without having too much that you cannot move.

CRM – keeping track of customers

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You may have clicked on this topic because you wanted to know what CRM stands for, or perhaps you know that a better relationship with your customer will help your business. Customers are key to any business; an existing customer is likelier to be loyal and doesn’t need to be convinced to buy as they are already customers. If they are having a good experience, they will tell their friends. Talking to and finding your customers can be expensive, which is exactly what this guide will discuss.

Customer relationship management (CRM) manages a business’s interaction with current and potential customers. It uses data analysis about customers’ history with your business to improve business relationships with customers, specifically focusing on customer retention (keeping them) and ultimately driving sales growth.

WHY do I need CRM?

As a business starts to grow, it is hard to keep track of sales opportunities and ensure anyone in the business can see exactly what is going on with each customer. It is good to know which customers have the greatest opportunity to close a sale and the value of that sale. A CRM solution is a cloud-based software package that helps you sell. Because it is cloud-based, it means that traditionally, only big businesses could afford to buy it; now, small businesses can access the same tools for less. Be sure to read our essential guide on Cloud Solutions.

The benefits of customer relationship management software:
  • Easy access to customer data: A customer relationship management system includes a searchable database that allows users to access client and prospect information, offering them the most up-to-date information on customers from anywhere.
  • Streamlined processes: You can coordinate sales, marketing, and customer support processes. E.g. did this marketing effort result in a sale?
  • Actionable insights on business performance and customer behaviour:  Through customisable dashboards, you can see reports that segment customers, track revenue, and manage marketing campaigns.
    Finding new customers costs far more than keeping the ones you already have.

WHAT are the typical features of customer relationship management software?

  • Contact management: Searchable database of customer and prospect information.
  • Track interactions: Document conversations with customers and prospects on different channels such as phone, email, live chat, or in-person. You might also be able to track the results of marketing campaigns and identify potential cross-selling opportunities.
  • Lead management: Track and manage business opportunities throughout the customer lifecycle.
  • Calendar/reminder system: Create reminders about calls or meetings and synchronise these with the user’s calendar. It can prompt you that it is time for a catch-up and remind you of useful information.
  • Offers: Create special offers for clients who seem to be drifting away or set up and manage events that might increase customer retention.
  • Document storage: Store, share, and manage documentation and paperwork.
  • Segmentation: Divide the customer base into groups based on attributes like age, gender, location, and preferences to create targeted sales and marketing campaigns.

HOW do I choose a customer relationship management software solution?

Types of customer relationship management tools: CRM falls into three areas. Sales automation solutions help users manage inventory, order processing, and sales reporting. Marketing automation solutions help users create and manage marketing campaigns. Customer service software helps track and manage customer queries. Users should assess their customer relationship management system needs and shortlist products that meet their specific needs.
You should evaluate various solutions based on the following:

  • Competitive pricing: Any advantage offered by the CRM software will be wiped out if it’s costing you more than it brings in. Use good quality accounting software to make a few forecasts about how much revenue you might gain. Then shop around.
  • Scalability: Can the software grow and your business grows? Some packages are better for smaller businesses, others for medium businesses.
  • Ease of use: CRM software must be intuitive, or you will never want to use it. Note how many clicks it takes to conduct a basic task and how easy or difficult it is to find the needed features.
  • Support: What support, if any, is included? What hours do they operate? Do they have blogs or best practice examples?
  • Security: With all your customer data in the cloud, you want excellent security. Be careful; you can be fined for customer data breaches in Australia.
  • Integration: How well will this solution integrate with other systems you may have, like accounting, email, calendar, etc.. Be sure to read our essential guides on accounting packages and office productivity.

HINT

A review of what different tools are available can be found here or by doing a Google search. Do your evaluation carefully. Some solutions may offer you too many features. Others have lots of add-on modules with extra functionality, which start adding to the price quickly. Most solutions will offer free trials for you to get a better feel; some even offer the basics for free.

SUMMARY – CRM data quality

Our last call out here is the CRM system is only as good as the data it has, so if it is not used or information is out of date, then it stops being a useful tool.

Social Media to engage customers

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Most people are on social media. Indeed for many Australians, it has become an obsession to the point that downtime should almost be renamed social media time. For this reason, social is a big opportunity for small businesses, and this guide will look at it objectively and advise you on how to make the most of it.

Social media refers to websites and applications that allow people to share content quickly, efficiently, and in real-time. Many people define social media as apps on their smartphones. The most common sites today in Australia include Facebook, YouTube, Instagram, LinkedIn and Snapchat.

When the likes of Facebook started their business, they allowed posting with few restrictions and allowed all followers to see those posts. Social sites need to generate income themselves, so if you are a commercial operation, they want you to spend money to talk to your audience. For example, If 100 people follow your business and you write a post saying you have a big sale this weekend, probably only three people will see that message in their social feed. If you pay $100 to boost your post, 3,000 people would have the post in their feed. So, unfortunately, social media is not a free form of advertising.

An organic post is a post that gets its distribution simply by being on the social platform.
Boosted post refers to when money is paid to reach a larger audience for your post.

WHY should I use Social Media?

The key advantage of social media advertising is targeting a customer. If you use traditional advertising like an advertisement in a local newspaper, you are advertising to everyone who reads that newspaper. With social, you can specifically target an audience. For example, you could target females, 18-30, who drive a car and live in your town.

Social media will help build your brand and provide a link to your website, driving additional traffic.

Social media is more cost-effective in reaching a customer than traditional advertising, but it has a very short attention span. If not engaging, your posts can easily be missed.

WHAT you should know about Social media

When businesses first used social media to reach their customers, there was not much competition. This is very different now, and as it is a bidding-based system, if you have multiple parties bidding for the same audience at the same time, this drives prices up.

Social media is not just about advertising. You can use it to find candidates for your business through sites like LinkedIn and provide video tutorials on using your products like Youtube.

The ideal situation you find yourself in is that after you post some content, your audience is so engaged they repost to their connected audience. If this process goes exceptionally well, it is referred to as a viral post.

Social media is a 2-way platform. Just as you can talk to customers, they can easily talk back. As this is a public medium, everyone will see the comments. Unless the comments are deemed by general society as inappropriate, you cannot delete them. The positive here for your business is you get instant feedback and suggestions. The counter to this is people will speak their mind, especially if they are unhappy with you. You do have the opportunity of turning this around by engaging the customer publically or privately to resolve their issues. The net effect here is if you use social media, you must also monitor it and realise it is not a set and forget medium.

HOW can I promote my business using social media?

Before you start, you need a plan or a social media strategy. This plan will outline how you will use social media, your ideal outcome, and what types of content you will produce. Also very important is to have a schedule of how often and who will do the posting. Remember, it is not the most posts that win. Rather, the posts that are most interesting to the customer and shared by the customer. Other considerations for your strategy should include considering seasonal events like Christmas and whether your efforts will generate sales.

To post on social media, we suggest the following steps.
  1. Decide on which platform you will use
    • Facebook – social sharing
    • YouTube – videos
    • Instagram – pictures
    • LinkedIn – business and recruitment
    • Snapchat – users send and receive self-destructing photos and videos
  2. Visit the platform site and learn about their offering and the free tools they provide to assist you.
  3. Establish a business profile on the platform
  4. Write your first post
  5. Decide if you will amplify the distribution by paying money to boost the post to more people. If you do, you will have the option to target by factors like demographics, location, and interests.
  6. Be ready to respond to comments from your post (if you do not, customers quickly form the opinion you do not care)
  7. Post more content and repeat.

HINT

Always include an image.

You must be active every day with interesting content if you want to keep customers engaged. Interesting content is content the customer would find interesting, not what you might find interesting, and it should also be relevant—no point in posting about International Happy Day if it has no relevance to your product.

Social media is bound by advertising rules, and any false or misleading advertising will be subject to consumer law. See our essential guide on consumer law.

SUMMARY – engaging social content

Social media is great for economically building a brand and promoting your business to a targeted audience. You must commit to the media ongoing and create content that engages the end-user. Boosting content will help you reach a greater audience. You should be aware and available to reply to comments.

Customer Wi-Fi network

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If you own a restaurant or café or have suppliers or customers visiting your premises, you have probably considered offering a customer Wi-Fi network.  Is it expensive? How hard is it to do?  This guide will explore why you should have a guest Wi-Fi network and how easy it is to offer and ensure you secure all your data from your guests.

A customer or guest Wi-Fi network is a separately named network (or SSID) from your Wi-Fi router. This guest network will provide access to the internet but not to allow connection to any other devises on your network.

WHY should you offer a guest network?

As the price of Mobile data (internet from your mobile phone carrier) continues to fall, you could conclude that your customers could just as easily use their own data.

Reasons to offer a guest network:

Limited smartphone coverage. Customers can still access the internet if there is poor mobile phone reception.
Encourage people to use their laptops.  It is potentially easier to connect to a permanent Wi-Fi network than to switch on a Wi-Fi hotspot from their phone. Thus, mobile workers may come to your café to work and spend money on a coffee or lunch.
Customer service. Having a supplier or customer regularly visit you is an advantage. Thus, making it easy for them to work from your premises will facilitate this.
More reliable internet connection. Many factors are at play when using a mobile data connection to the internet. Wi-Fi from a high speed fixed NBN connection can be more reliable.
Means to gather customer data. When logging onto a Guest Wi-Fi network, you can request customer contact data and ask permission to communicate with them.  This allows you to build a database of customers to which you can market too.
Customised splash page – When a customer connects to your network, it is possible to display a customised page. Here you can promote your brand, make offers and reassure customers they are on a secure network.
“Free Wi-Fi”. People still feel they are getting something for free.

WHAT do I need to understand about a customer Wi-Fi network?

Each Wi-Fi base station (or effectively an antenna) has a range of between 20 to 40m line of sight. This range will dimmish with each solid item the signal must pass through, like a wall, window, chair, table etc. There is a limit to how many devices Wi-Fi can connect at once based on the number of channels and antenna’s the base station offers. A standard router will support around 30 devices. A device is anything that connects, whether a customer’s smartphone, laptop or your POS cash register.

To add more coverage and more devices, you can add a 2nd or more base stations. Your first base station must be a Wi-Fi router that acts as a policeman. Each subsequent base station offers a new Wi-Fi signal extending the range and the number of devices supported.

These additional base stations are known as Wi-Fi Extenders. Suppose your guest network extends over more than one base station. In that case, you will have different network names for your customers to connect to the network. This can be overcome with a mesh network that seamlessly roams between base stations using the same network name (SSID). A mesh network will provide a more stable and faster internet speed for users.

A Guest Wi-Fi network is a way to offer your customers easy access to the internet without also giving them access to your LAN, computers, printers, cameras etc. You do not want anyone gaining access to your accounts or using your printer for free. This means your customers will be securely partitioned from your business or home network.

Let us assume you are running a restaurant and 30 of under 16 netball competition turn up for dinner. Your guest network suddenly becomes very popular.  Let us also believe that you have a POS ordering system running off Wi-Fi tablets, Wi-Fi printers in the kitchen, A Wi-Fi cloud-based cash register and your children out the back being entertained by a Netflix movie. If everyone can access bandwidth, chances are your staff will have trouble getting internet access to take the food orders.

This can be overcome by restricting the bandwidth on the guest network.  Better still, if you could set up different networks (SSID) such as one for customers (guests), one for the staff POS tablets, one for the back office and one for staff’s personal use, this would be ideal.  Then having the ability to adjust bandwidth between each network allows you to ensure your business is always running as it should.  A home-based Wi-Fi router is unlikely to have more than two SSID’s that you can set up.  A business-based router solution will enable you to have multiple SSID’s.

HOW do I choose and set up the right Wi-Fi router?

A simple guide on purchasing and setting up a router can be found here.

Your customers will want free, fast and easy-to-access Wi-Fi, so you should consider this when making your purchase decision and setting up.

Choosing a business Wi-Fi router solution:

When making your decision, you should take the following into account.

Look for an internet Wi-Fi router that is specifically designed for small businesses. This will generally mean it will have the capability to handle more devices than home and offer security features to protect your business.

Wi-Fi 6 is the latest version of the Wi-Fi standard that is available.  Although most devices do no support it yet, they will moving forward, so this helps to future proof your network.  Wi-Fi 6 brings several new smarts, including speed, stability and security enhancements.

Triband mesh is a technology that allows a third Wi-Fi channel to provide a dedicated backhaul for a router base station and its satellite base station to communicate.  This ensures there will be no interferes with the satellite extender getting the internet bandwidth it needs.  Mesh technology allows you to have a single network name across your base stations delivering Wi-Fi attached devices a more reliable and quicker connection.

The number of antennas will determine the maximum number of devices that can connect to your Wi-Fi router.  The more employees and the larger the number of devices you attach to a router starts to compete for resources.

Most routers will have an App for your smartphone that will allow some control. Most of you will want set and forget functionality. Still, it is useful to have an App that offers a user-friendly interface to assess current conditions. It is also handy to deny access to a device like an ex-employee’s smartphone from your network without resetting passwords.  Some routers also allow you to prioritise some devices and restrict others, which is especially useful when you prioritise your POS system for ordering or sales.

Having enough internet bandwidth is important for any business. Although not really a buying decision for your router, you should take it into account.  For those businesses with very high-speed requirements such as the transfer of video. You should also ensure your Wi-Fi router can support your internet connection speeds (speeds greater than 1Gbps).

On the rear of a router, you will find several Ethernet ports.  These allow cable connection to your modem (internet into your business) and devices only supporting a wired ethernet connection. Devises such a streaming TV, a fixed connection will deliver better results. Consider how many ethernet ports your router has.  An ethernet switch can always be purchased to add additional ethernet ports to your setup.

Look for a router that will allow a printer or hard drive to be directly plugged into a USB port.  This will give you the option to share a non-network printer and or turn a hard drive into a shared storage devise.

A Wi-Fi router designed for business is normally quite a complicated solution requiring professional setup and selection of components. However, some out-of-the-box solutions are available (we discuss one below) that are easy to set up administer and will meet most small business needs.

Ideally, you want a set and forget network that will not detract from you running your business. Look for a solution that does not require an IT expert to set it up, maintain it, and will send you alerts only when something has gone wrong. Thus you are already fixing an issue before your staff start complaining. E.g. notification that your router has lost internet connection or has been turned off.

The cost of a Wi-Fi router solution will be determined by the quality and the features. Remember that a few extra dollars spent on getting the right product the first time will save you many headaches down the track. A home network Wi-Fi router that supports a guest network can be bought for as little as $200. However, if you expect to professionally support an office or hospitality venue, you should spend $500 to $1500 the first time around.

How to set up a Guest/ customer Wi-Fi network?

Each router will have its specific setup instructions. Once you have connected the Wi-Fi router to the modem and powered up, it will set up a default network. We suggest you make the following adjustments for a business environment that can be completed through a smartphone app or an internet browser on the same network.

Separate employee and customer network names or SSID’s. This allows the quarantining of devices on different networks in your business so customers can never access your business devices, and priority can be given to network and internet resources. E.g. you might want your POS tablets to have unlimited resources but limit your customers to 1 Mbps download speeds.
An ideal situation would be to have a separate network for staff, business and customers.

Passwords. Set up unique passwords for each SSID, ensuring that your customer-facing ones are easy to remember and related to your business

Limit data or time. There is a fine balance between encouraging people into your café with free Wi-Fi and what is called Wi-Fi or Internet squatters.  If a customer orders a coffee, that’s great. Still, if that same customer occupies a table for 3 hours with no further purchases, that is not great. A good router should limit guests to a set time (e.g. 1hr) for free Wi-Fi and put a cap on how much data they can download.

Security. To protect your business and your customers, you should ensure that only secure logins are possible.  A minimum level of encryption called WPA-2 should be enabled. This will ensure customers will not be able to see other customers network traffic.

HINTS

To improve your internet, see this guide in our sister publication GadgetGuy.

A good quality router will allow you to set up a Virtual Private Network (VPN), enabling you to access resources on your network from a remote location.  E.g. access files saved on network-attached storage devise at your business from your home.

If everything discussed above is becoming a bit complicated and you feel that this is beyond you? There is a purpose-built out of the box solution that Small Business Answers has tested.  The orbi PRO AX6000 from Netgear RRP $1,499 is a simple business solution that will cover up to 550 square metre premises. This latest generation Wi-Fi 6 Mesh triband router can also be expanded with additional base station satellites, all with a dedicated Wi-Fi backhaul channel. The orbi Pro will support 90 concurrent devices across four SSID’s. This means you have four business-grade secure networks for the back office, staff, IoT devices (e.gPOS) and guests. The router and the satellite each have a 1 x 2.5Gbps internet port and 4 GbE ports allowing up to 8 devices connected by ethernet cable.  The Orbi Pro supports the latest security protocols, including WPA3, which means people will be safe on your network. As seen in this image, we especially like the ability to control the guest network with a splash entry page, guest SSID bandwidth control, and time limit.

The Orbi PRO uses the NETGEAR insight app to allow easy setup and management of your router. This app will alert you if the router goes offline or the internet is lost. If you are more technical and want further control and management. The orbi PRO comes with a 1-year insight subscription, which will help you manage other network devices if your network goes beyond the orbi.

Also, see our guide on IT support getting help with technology.

SUMMARY – Customer Wi-Fi network

A customer or guest Wi-Fi network is a great way to improve customer or supplier relations. If set up correctly, it will be an easy-to-use and secure internet access solution without impacting your business key network-attached business devices.

Networking a business can be a daunting proposition. Still, out of the box solutions mean the whole process can be painless. Understanding what is involved and how to make minor setting changes will ensure your business gets the most out of this technology.

Privacy and Protecting Personal Data

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It may seem harmless that in the process of doing business you collect customer data to transact business or communicate with them.  However, if that data is used without the user’s permission, or worse stolen, you may find yourself breaking the law. This guide will help you understand Privacy and Protecting Personal Data and what you should or must do.

Data protection is to secure data against unauthorised access. Data privacy is about authorised access — who has it and what you can do with it. Data protection is essentially a technical issue, whereas data privacy is a legal one.

WHY should I protect my customers’ personal data?

Apart from the fact that a customer will not be very happy with you, it is the law. You must comply with the Australian government Privacy Act 1988 if your annual turnover exceeds $3 million.

You are responsible for protecting your customers’ personal information from:
  • theft
  • loss
  • unauthorised access
  • modification
  • interference
  • misuse
  • disclosure
If your small business turns over less than $3 million you must comply with the act if you are a:
  • private-sector health service provider
  • business that sells or purchases personal information
  • contractor providing services under a contract with the Australian Government
  • credit provider/credit reporting body
  • residential tenancy database operator

All other small business operators are exempt from the Act however protecting your customer’s data is good business practice.

WHAT types of information are considered private?

Any information that can identify a person and could include:

  • name
  • signature
  • address
  • email
  • telephone number
  • date of birth
  • medical records
  • bank account details
  • place of work
  • photos
  • videos
  • information about their opinions

If you do have a breach of personal information you need to notify both the person it has affected and the Office of the Australian Information Commissioner (OAIC).

HOW do I protect customers personal information?

The following actions will assist with your compliance of the Privacy Act:

  1. Do not collect personal information you do not need
  2. Develop an internal policy to handle and process personal information
  3. Take ownership yourself or delegate to a senior member of staff
  4. Do not share this data with anyone else
  5. Sensitive information like race, religion, health etc can only be collected with individual consent
  6. Ensure unauthorised staff members do not have access
  7. Take reasonable steps to protect personal information from unauthorised access, modification, or disclosure and against misuse, interference, and loss
  8. Destroy or de-identify personal information when it is no longer needed
  9. Develop a plan for a data breach

HINTS

If processing credit card transactions by EFTPOS or e-commerce store you should ensure your network/equipment is secure and encrypted. You should restrict who has access to that data and preferably do not store the card information. A security assessment of cardholder data can be done here.

If you plan to contact customers via direct marketing like an email, phone call or text, post, social media or web advertising you should enable a customer to opt-out (request not to be communicated with).  If the Privacy Act covers your organisation (> $3m turnover) legally you are required to allow a customer to opt-out.

Australian privacy law gives a consumer the right to access their personal information. This includes their health information. This right does not extend to commercial information.

Be sure to read our guide on internet security.

Additional information on privacy and protecting personal data can be found here.

SUMMARY – Privacy and Protecting Personal Data

If your small business has a turnover less than $3 million it is unlikely you will have a legal requirement however for both your customer and your sake it is good practice. If possible don’t keep personal data like credit card details but if you do, ensure it is protected from theft or abuse. It is worth familiarising yourself with the intent of the Privacy Act and taking the necessary actions in your business.

Marketing to grow your business

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There is a very good chance you are already doing marketing because a lot of it is common sense. For a small business, it lets people know you are in business and gives customers reasons why they should do business with you. In this guide, we will look at the basics of marketing and give you an action plan to develop some further plans.

Marketing refers to activities a business undertakes to sell more of a product or service. Marketing includes researching, advertising, selling, and delivering products to consumers or other businesses.

The simplest form of marketing is how you answer the phone or what you wear through to a complex integrated plan across newer mediums like the internet or older like radio advertising.

WHY do I need to do marketing?

For any small business to succeed you need customers who know or can find that your product exists and who trust your business enough to buy your product.

Marketing helps by looking at your business and adjusting how customers perceive your business.

Assume you are starting a new small business to paint people’s houses.  You are a very good painter and plan to charge competitive rates.  Imagine if you did not return phone calls, turned up to do a quote in dirty clothes and quoted by writing a price on a scrap of paper.  The customer does not know if you are a good painter and interprets you as unreliable with poor attention to detail and therefore they don’t trust you to paint their house.  Thus marketing is key to present your business the right way.

WHAT are the 4 Ps?

The 4 P’s describe how important it is to present a complete package to entice a customer. You cannot do just one of these and consider it is marketing instead you must do all 4 in some form, all working in harmony to drive the optimum result.

Product

To be successful in business you need a product or service that is needed or wanted by the end-user.  You ideally find an opportunity or problem that needs a solution and has a market large enough to sustain providing a product or service.  You cannot always design or build your product or service from scratch but you can pick the best product or solution to sell that best meets that need. The better your product or service is compared to competitors as seen by the consumer will give you an advantage.

Price

Many people work on the principle that the cheapest price wins the sale.  Whilst this is often the case, it is not always and indeed you can easily under-price a product making people think it is not high enough quality or an uncool purchase. Make sure you do your homework to ensure you price correctly.

Place

Place refers to how you get your product to market. Where is it sold?  A retail shop, a direct visit to the customer, or perhaps an eCommerce store.  It is important to consider the best place or places to sell to be most successful. It is important to actually have what you sell available and understand the effect of selling in different places can have on one another.  Having a product that you want to sell in a supermarket is no good if you can’t supply it or the supermarket will not put it on the shelves. Also, imagine what the supermarket would say if they found you selling the same item cheaper on your eCommerce store.

Promotion

Many confuse promotion or advertising as the only function of marketing. Without the other 3 P’s your likelihood of success is very slim. This starts with how you present your business from your website to business branding, your work vehicle, how you dress, and the way the staff answer the phone.  Next is how you create awareness of your business which could be advertising, public relations, social media, and the content (words) you create to reinforce this. Last is understanding if the promotion you are doing is working and looking for ways to improve it.

HOW do I create a marketing plan?

A marketing plan is a systematic approach to work through developing products and services to fulfil customers’ needs. 

A marketing plan should include the following elements:
  1. Business Summary – Apart from an overview of your business the most important aspect of this section is to do a SWOT.  See our full guide on developing a SWOT. In summary, SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.  It is an excellent method to analyse your competitive position and get a clear roadmap of how to help you get to your marketing destination.
  2. Marketing Objectives – This is a clear list of marketing objectives (not business objectives) that outline the strategic steps you will need to follow to reach the goal you hope to achieve.
  3. Target Audience or market – Ideally, you will have the aid of some sort of research that will help you define the industry you are selling to. An analysis of your competitors, and a description of your ideal customer.  Age, location, income, or interests can segment the customer.
  4. Market Strategy – It is now time to take what we have collected in the first 3 points including the SWOT, objectives, and target market and using the 4 P’s we discussed above to build out the practical plan.
  5. Budget – This is not only your plan about how much money you will spend but also how many resources you will allocate to making it happen.  Your most important resource may actually be people’s time. Could marketing effort help you sell more than having that same person just concentrate on sales?
  6. Marketing Levers – Last but not least, you know what you want to do and how much money you have, but with all the possible marketing levels you can pull which one will get you the best result. Marketing levers here refers to what marketing channels you select. Some of the more common include:
  • Traditional Advertising
    • Newspaper
    • Radio
    • TV
  • Public relations
  • Social media
  • Digital Advertising
    • Keywords
    • Display ads
  • Organic assets. Includes your website or word of mouth
  • Philanthropic – giving back to the community
  • Direct mail
  • Catalogues

A comprehensive template from the Australian government can be downloaded here  https://www.business.gov.au/Planning/Business-plans/How-to-write-your-marketing-plan

HINTS

Use as much customer feedback as you can to improve your offer to them.

Set clear objectives around what you want to achieve and how you can achieve them.

Be realistic around how much you can afford to spend on marketing and how many people are in your potential audience.

A mentor or coach may be of value here especially if you have no marketing experience.

A marketing consultant or agency for a fee can provide marketing services to you.

SUMMARY – Marketing to sell more

Marketing is about looking at how a business presents itself and working out how it can improve on that to gain additional sales. The process involves understanding an opportunity, finding a solution, understanding competitors, identifying your market and finally realising your marketing plan.