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THE BUSINESS RESEARCHER NEWSLETTER ARCHIVES

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January 31, 2003 Volume 6, Number 2

CONTENTS

*
Introduction - Editor's Comments

* What's New at www.gdsourcing.com

* Statistics Canada releases

* Direct Marketing Should be Direct

* Survey Basics

* Small Business Stats Facts

For data table spacing, this newsletter is best viewed in Courier 10

 

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INTRODUCTION - EDITOR'S COMMENTS

Hello,

As a typical Canadian, when there is nothing else to say, I'll talk about
the weather. Boy has it been cold!

I hope you find this issue helpful.

Sincerely,
John White
Editor

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WHAT'S NEW AT www.GDSOURCING.COM - SALARIES, GDPS & COMPLAINTS

SALARY EXPERT
Site: http://www.salaryexpert.com/
Site Summary: https://www.gdsourcing.ca/works/SalaryExpert.htm
Current average salary ranges by occupation for Canadian & U.S. cities.
Includes bonuses and benefits.


CANADIAN ECONOMY ONLINE
Site: http://www.canadianeconomy.gc.ca/english/economy/
Site Summary: https://www.gdsourcing.ca/works/CdnEconomy.htm
Current economic conditions in Canada.


CANADIAN COUNCIL OF BETTER BUSINESS BUREAUS
Site: http://www.canadiancouncilbbb.ca/
Site Summary: https://www.gdsourcing.ca/works/CCBBB.htm
Top Ten Inquiries and Complaints for the Better Business Bureau
 


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STATISTICS CANADA RELEASES

The following statistics were released by Statistics Canada over the last
three weeks. We have listed those releases we feel are of the most interest
to
Canadian entrepreneurs.

Very few of these statistics are available on-line. The URL listed is a
direct link to the press release associated with the data. It provides
contact and ordering information.

If you want to purchase any publication related to these releases please see
our web site: http://www.gdsourcing.com/works/StatCan.htm

We offer a 20% discount on most Stats Can publications and a 10% discount on
Stats Can electronic products. For more information you can reach us at
[email protected] mailto:[email protected]. Put "StatsCan" in the
subject line of your e-mail.


AGRICULTURE

Agriculture value added account 1999, 2000 and 2001 (revised)
http://www.statcan.ca/Daily/English/030116/d030116e.htm

Balance sheet of the agricultural sector at December 31
1999, 2000 and 2001 (revised)
http://www.statcan.ca/Daily/English/030116/d030116f.htm

Canadian potato production 2002 (revised)
http://www.statcan.ca/Daily/English/030117/d030117d.htm

Farm business cash flows 1999, 2000 and 2001 (revised)
http://www.statcan.ca/Daily/English/030116/d030116g.htm

Livestock Feed Requirements Study, 1999, 2000 and 2001
http://www.statcan.ca/Daily/English/030113/d030113a.htm



BUSINESS SERVICES

Profiling RRSP contributors 1998
http://www.statcan.ca/Daily/English/030124/d030124c.htm



COMPUTER

Annual Survey of Software Development and Computer Services 2001
http://www.statcan.ca/Daily/English/030116/d030116c.htm



INTERNET

Annual survey of Internet service providers and related services 2001
http://www.statcan.ca/Daily/English/030116/d030116d.htm



MANUFACTURING

Survey of Innovation: Statistical tables, manufacturing industries, Canada
http://www.statcan.ca/Daily/English/030113/d030113e.htm



MARKET

Census of Population: Immigration, birthplace and birthplace of parents,
citizenship, ethnic origin, visible minorities and Aboriginal peoples
http://www.statcan.ca/Daily/English/030121/td030121.htm

Year-end labour market review 2002
http://www.statcan.ca/Daily/English/030124/d030124a.htm



TRANSPORTATION
Domestic and international shipping
2001 (preliminary)
http://www.statcan.ca/Daily/English/030117/d030117e.htm

For-hire motor carriers of freight, annual supplement - Financial statistics
2001
http://www.statcan.ca/Daily/English/030124/d030124b.htm


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DIRECT MARKETING SHOULD BE DIRECT


Direct marketing can be an effective way to reach new clients and sell to
existing customers. It can also be futile, expensive and damaging.

Direct marketing does not refer to the "means" by which an advertising
message is delivered to people's homes or businesses. Rather it is about the
intent of reaching your target market directly whether that be via mail, fax
or e-mail.

Often I get asked what are the typical response rates for a DM campaign.
Generally they fall under 5% and can often be in the 2% range. However these
numbers are next to meaningless when you come to your own campaign. Just
because you purchase a mailing list of 10,000 names does not mean you will
get 500 orders. Success does not rely on the "odds". It is the result of
many different factors including the nature and quality of the list
purchased and the strategy and design behind your campaign.

The most important factor however is the very fundamental of successful
direct marketing: matching your message to your target.

Many entrepreneurs write wonderfully detailed business plans which identify
market size and opportunity. They are careful to describe in detail the
demographics and psychographics of their best customers and business
clients. Then once the business is launched and they turn to marketing, the
business plan is put on the shelf and the CIP principle kicks in: "Creative
Intuition & Price".

Focus is placed on creating a piece that will be "irresistible to ignore"
and/or on reaching the largest number of households/businesses in the most
cost-effective bulk purchase. The target market is all but forgotten.

No matter how creative your envelope or e-mail header is, even if you get
the recipient to open it, the second they realize the product or service is
irrelevant they will hit delete or throw your glossy brochure in the
garbage.

In an ideal world you would like to be able to buy a mailing list of all
your best prospects. In the real world such lists rarely exists, however you
can still focus to a certain degree. Nearly ever mailing list allows some
form of segmentation. If your list broker cannot provide any segmentation,
maybe you should look to other companies. The money you are saving is likely
resulting in wasted direct marketing costs and lost sales! Basic
segmentation usually includes industry, business size, household type,
income level, and age.

Use the research in your business plan to then narrow your target to key
geographical centres. Paring down your prospect list not only saves money
but also increases response rates. List size is not important in DM. List
focus is.

Another tool to target your campaign is the GeoPost Plus Demographic &
Lifestyle database which provides household segmentation by postal walk (the
route a letter carrier takes). If you use the Canada Post Unaddressed Admail
service you get free access to it.

http://www.canadapost.ca/business/offerings/unaddressed_admail/pdf/geopost-e
.pdf

For more information on Unaddressed Admail see:
http://www.canadapost.ca/business/offerings/unaddressed_admail/can/default-e
.asp

For the names of reputable Canadian list brokers, contact the Canadian
Marketing Association [email protected]

As a small business we received a great deal of direct marketing materials.
I am amazed at how much of it is completely unrelated to my needs. We are a
small Canadian research firm. Any useful list will identify us as such. The
question then arises why do we get a catalogue for material handling
products (forklift and all). I admit the emergency eyewash station was
interesting but on reflection we decided it was not necessary for us at this
time! The 67 page catalogue does have two pages of storage bins that could
be of some value to us but the fact that they were buried among pages of
absolutely irrelevant products made it highly unlikely I would even see
them. The only reason I found them was I was looking for silly examples for
this article. Even then I am reluctant to purchase from this company because
I am unsure whether their products would really be appropriate.

The best campaign in DM is usually the "smaller" one. If this company wants
to expand its office market I suggest they make two catalogues. One that
only has products that are of interest to an office environment, the other
for hardcore material handlers. In other words: make it relevant to me and I
will consider it.

Another catalogue I got this month was promoting transit bus advertising.
The cover had a picture of numerous U.S. landmarks with a bus in the
foreground that had a Nike ad on it. Why a small Canadian research firm
would be interested in this type of promotion is beyond me! Does any
research company promote themselves on the sides of buses? It is a fairly
expensive catalogue, cerlox bound with colour graphics. A map of the U.S.
with the company's bus shelter and transit advertising coverage as well as a
Manhattan Transit Map is also included.

What makes this an even more bizarre marketing ploy is that someone hand
highlighted the marketing rates for London, ON, Montreal QC and Toronto, ON.
They knew they were targeting a Canadian company and took the time to
"personalize". Even if a research company was inclined to advertising on a
bus why would I choose a company that demonstrates a clear New York City
expertise? "Do they really know about the Canadian market?" is the questions
that immediately pop's to mind.

Do not leave it up to your consumers to determine why your service is
relevant to them. A separate catalogue or brochure would have been a better
strategy for the transit advertisers. Even better would have been some
information indicating why a Research Company or even a Business to Business
marketing campaign is appropriate choice for this medium. All the glossy
pictures of buses with Nike on the side only serve to reinforce that this
service is entirely useless to my company. If you are going to try and
expand into untraditional markets you need to educate the new markets in why
they will want your product/service.

One of the most successful DM of January I received was via a FAX. (Which is
remarkable for I detest FAX ads. ) Whenever one comes in all I can think of
is the FAX ink cartridge costs I am incurring. It is the most basic one page
ad you can imagine - no graphics or logos - just easy to read text with
scanable headings. The headline however is what caught my attention and
perhaps a portion of my marketing budget in the future: "Are you so busy
running your business that you feel you have little or no time for
marketing?"

There is probably a catchier way to say the same thing but the
straightforward and meaningful message is what counts. It is someone who
understands small business concerns and proves it in one sentence. I have
since pinned the fax on the bulletin board until I "get the time" to follow
up. (Actually I have already requested further information!).

For DM to be successful the recipient has to believe the message is
meaningful. The fact that the message is addressed to me personally or is
combined with stunning graphics has limited impact if the product or service
being sold is irrelevant. Consumers aren't stupid. Just because a letter has
their name on it doesn't make it personal and relevant.

When you are contacting a customer for the first time, the worst thing that
can go wrong is your ad is deleted or thrown out in an instant. If you are
contacting an established customer however the results can be far worse. I
become very annoyed when certain companies assume that because I have
purchased one product from them I am interested in every type of product or
service they offer. One company sends me an envelope full of one-page
brochures for a variety of unrelated products. I guess they expect I will
sift through the stack and sort out what is of interest. I do not even
bother to look at any of them and proceed to curse the company's stupidity
for the rest of the day.

Your customers should be treated with respect. Just because they have
purchased before does not mean they will purchase again. And it especially
does not mean they want to purchase anything and everything you have to
offer. If you are using an internal marketing list you should be able to
target extremely specifically. Offer people services/products that are
related or will enhance past purchases. Spell out the connection to what
they purchased before and explain why they might be interested. If a direct
marketing customer has to pause and think about why they might want your
product, you have lost the sale. If they recognize your company name and
feel harassed or forgotten you may have lost a customer.

This month we received an amazing direct marketing letter from a company we
purchase data from. It was announcing new and updated stats. It described
the features of the data and reminded me how it could be applied. Contact
detail was also prominently provided for further information. What made the
package exceptional was a fax order form included which priced out the cost
to update my previous custom order. They actually "remembered" who I was!
Although I chose not to update my previous data this time, I was still
extremely impressed with the company and promptly ordered a new catalogue
for future ordering.

Target your mail and your message to demonstrate how much you value your
customer. Even if you do not make the sale you will let the customer know
that you are aware of their preferences and needs and that you care. Your
direct marketing campaign will have lasting effects well beyond your latest
promotion.

Whether you are a new small business or an established one don't leave the
success of your DM campaign to intuition and "bargains". Your business plan
is not a manuscript. It is a blue print. Take it off the shelf and use your
market research data to focus your direct marketing campaign. Do not be
seduced by "list sales". Purchase lists that are targeted. You will save
money on mailings and get more robust response rates.

For more information on design and implementing a Direct Marketing campaign
look at the free guides available at the Canada Post web site:

5 Steps to Direct Mail Success

http://www.canadapost.ca/business/offerings/addressed_admail/can/tools_5-e.a
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SURVEY BASICS

Anyone who has attended one my research seminars knows I do not encourage
new entrepreneurs to rush out and conduct surveys. This has nothing to do
with any intrinsic hate of surveys or of any underhanded desire to sell
surveying services. Instead it stems from years of experience helping new
entrepreneurs research their new business ventures.

Time and time again we see poorly constructed surveys that seriously distort
an entrepreneur's understanding of their market or industry. The problem can
usually be traced to either the questions asked (e.g. Would you use my
service?) or the nature (e.g. only the in-laws were interviewed) and size
(e.g. only 10 people spoken to) of the survey sample.

These problems are then compounded by the fact that entrepreneurs tend to
consider the results of their own survey as superior to all other data
because they compiled it. They dismiss contradictory sources as ill informed
or irrelevant before they even consider them in context.

Even more serious is the fact that many entrepreneurs use surveys to avoid
talking to people. It is much easier to run through a list of questions or
better yet have someone else ask the questions you wrote. However you lose
out on qualitative information. Statistics on their own can be very
difficult to interpret. By speaking directly to people in your market or
industry you draw on the insights and experiences of individuals involved in
your business environment. Successful entrepreneurs are not shy!

Among marketing professionals there is an on-going debate between
qualitative and quantitative research and which is better. Both are
certainly vital to understanding one's marketplace. However from an
entrepreneur's point of view face-to-face qualitative research (talking to
people!) has the added benefit of developing a business network. Contacts
and the consequent referrals are vital for small business success. They are
the cheapest and most successful forms of advertising. Therefore I always
strongly advise new entrepreneurs to conduct extensive qualitative research
and forego conducting a survey if they are unwilling or unable to do both
types of research. Secondary sources and existing studies can be used to
collect hard data numbers.

If an entrepreneur is prepared to both talk to contacts and conduct survey,
then my advice is ensure your survey is sound and that it will provide you
with the insight you require.

Fortunately Statistics Canada has launched a new feature on their web site
called: Statistics: Power from Data! It is primarily published for high
school math students but it is useful for anyone undertaking a survey for
the first time. It includes definitions, examples and exercises. It explains
how to craft useful questions, types of data collection available and
processing options. See:
http://www.statcan.ca/english/edu/power/toc/contents.htm

The American Statistical Association also has some helpful brochures. They
cover: What Is a Survey? , How to Plan a Survey, How to Collect Survey Data

http://www.stat.ncsu.edu/info/srms/survwhat.html

Make sure your business' success is not undercut by shoddy research. Take
time to collect relevant data. And if you are going to conduct a survey do
it right!

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SMALL BUSINESS STATS FACTS

Each Business Researcher Newsletter ends with a collection of five
statistics that every entrepreneur should be aware of.


1. What share of the small business debt market (authorizations of less than
$50,000) do domestic banks hold?

                    48.8%

Source: Statistics Canada (Jan 29, 2003)



2. What share of the small business leasing market (authorizations of less
than $50,000) do finance companies hold?

                    59.6%

Source: Statistics Canada (Jan 29, 2003)



3. What is the top non-financial contributions that Angel Investors bring to
a company?

                    Advice

Source: Industry Canada, Equinox Management Consultants Ltd.(March 31 2001)



4. Where do Canadian entrepreneurs turn for advice on marketing?

                    1. Hired Staff
                    2. Self

Source: Industry Canada, Equinox Management Consultants Ltd. (March 31,
2001)


5. What is the most common full-time occupation of Angel Investors?

                    Entrepreneur (followed by Consultants)

Source: Industry Canada, Equinox Management Consultants Ltd. (Mar 31, 2001)

 

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URL: https://www.gdsourcing.ca/newsletter/newsletter6-2.htm
UPDATED: 08/06/03
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