How to Start Your Own Production Company - Part III: Marketing And Selling Your Services

by Don Lawler

I want to say "thank you" for the kind words I've received about the articles. My hope is that some of you will be able to start successful production companies and avoid some of the pitfalls. For those of you who want to continue working for someone else, just bear with me: I plan to have something special for you in my next article.

There was once a young boy who noticed that as golfers would pass a certain point on the golf course, they would look very hot and thirsty. Then one hot summer day, he decided he would set up a stand and sell lemonade to the golfers as they passed. He put up scrap lumber with hammer and nails and attached his sign that simply said, Lemonade, 75 cents.

This was exactly the right product and location for thirsty folks. Business rocked along pretty well for a while until another boy decided that he, too, could sell lemonade to thirsty customers. Both the stands and the lemonade were pretty much the same; however, the second boy's stand was painted in nice bright colors, and had a sign that said, Premium Lemonade - The Lemonade of Discerning Golfers. And for this, he charged twenty percent more.

The golf course, it seems, was part of a very exclusive country club, and "image" was very important to its members. Before you knew it, the golfers had started giving their business to the boy at the second stand. Well, the first little boy was miffed. He was the first to sell in this location, he had a good product, a steady clientele, and his lemonade sold for less. But he could not figure out why the golfers had abandoned him for his competitor.

Then he had an idea. He had noticed that the caddies also looked thirsty, but they never bought the lemonade. Since his lemonade wasn't selling, he decided to give it away to the caddies. While the caddies were enjoying their free sample, the first boy asked why they never bought any of his lemonade. To which they replied, "It costs too much." This gave the boy an idea. He lowered the price of his lemonade so that the caddies could afford it, and he changed his sign to say, Caddy Aid - The Thirst Quencher of Hard Working Caddies." Well, his marketing move was brilliant. His research had led him to the perfect answer for his business...or at least until someone else set up a stand.

In many ways, the real world of business is like this story, except that the market is much larger and more complicated. Sometimes it's hard to know what makes a customer decide to use the product or service of one business over another. More often than not, it's the little things that make the big difference. Most radio production companies seem to offer similar services. Most of these producers have basically the same skills and understanding of the industry. Some may have nicer equipment. But with equipment, skills, and knowledge all being equal, why is it that one producer seems to get more business than another? It probably has something to do with sales and marketing.

Often, sales and marketing are confused with each other. However, sales is only a portion of the marketing mix. Marketing is that total set of things that helps you find your target market, decide on the product or service you'll sell, determine the costs and methods of production, the methods to promote it, the best price to ask, and the way to make delivery. Marketing is concerned with how an organization can get and keep a customer satisfied in a profitable way.

Making sales and making customers are not the same thing. Every business has created something to sell. Creating customers means keeping those customers so they can come back and buy again. Every business has competitors, and mistreating or neglecting customers can only result in sending them to your competitors. Also, the loss of customers is not the only problem: dissatisfied customers grumble to their friends.

Years ago, when I started my first studio, I used a microphone that was better suited for recording strings than voices. It was an affordable mike, and I decided that, for the price, it sounded okay. One day, I had a new client record a voice over session at my studio, and everything seemed to go fine. The client seemed pleased, thanked me for my help, and left.

Business continued to grow; however, it grew slower than I had projected. I didn't understand why many of the prospects that I had talked with would not use my services. It was not until almost six months later that I learned a very valuable lesson. It seems that this client was not pleased with the sound of my microphone. Instead of saying something to me about it, he made blanket statements to potential clients about the "poor quality equipment" at my studio. That was not true. In fact the equipment and amenities in my studio were nicer than most studios in town. But just the same, the wrong word from a client can do a lot of damage! By the time I discovered the problem, it was almost too late.

Make sure that you understand your target market and their needs. And, make sure that you can service them in a way that will keep them coming back and saying nice things about you. In order for your production company to grow, the marketing mix has to be right, and you need a feed back system to find out what the customer wants and is thinking.

A good place to start is with a marketing plan. Just as sales is a part of the marketing mix, the marketing plan is a part of your business plan that we discussed in the last article. Your marketing plan should include: 1) an executive summary which is an overview of your proposed plan, 2) the current marketing situation for your company and competition, 3) an opportunity and issue analysis which summarizes you plans' main opportunities, threats, strengths and weaknesses, 4) objectives in sales volume, market share, and profit, 5) marketing strategies to meet your plans' objectives, 6) action programs that answer what will be done, who will do it, when will it be done, and how much will it cost, 7) a projected "profit and loss statement," and 8) controls which tell how the plan will be monitored.

We can discuss every marketing concept ever taught, but I don't think it can be made any more simple than this: think about your company from the client's point of view, and never lose sight of your client's wants and needs. Your internal goal should be to meet your client's needs with a product or service that achieves a differential advantage over your competition. By that I mean, find something that makes your business stand out as different, but not easily copied by your competition, at least not until you gain top of mind awareness with your market.

Success depends largely on your being able to give the best quality of service for the dollar. Get in the habit of noticing bad service. Henry Ford said, "...the man who has this idea of service in his business will never need to worry about profits. The money is bound to come. This idea of service in business is the biggest guarantee of success that any man can have."

I have asked clients to fill out questionnaires, and I've personally asked a lot of questions about what my clients want, what they don't want, and why they use my services. Here's an observation: when questioned, most customers can't tell you how to fix a problem or what they want, but they can definitely tell you what they didn't like or don't want. Listen closely, because regardless of how they say it, they will define for you "service excellence."

If you are good to your customers, they'll keep coming back because they like you. If they like you, they'll spend more money. If they spend more money, you'll want to treat them better. And if you treat them better, they'll keep coming back, and the circle starts again.

In starting your production company, consider looking for special ingredients that will discourage competitors or give you market dominance for a while. Consider selling secondary items or services to compliment your primary service. For example, a studio that primarily offers editing services to agencies might also offer duplication services. An off shoot of that might be to do custom labeling with original artwork and logo design or special packaging. Find out what your customers need, and use your imagination.

Your marketing effort should center around the four P's: 1) Product, 2) Price, 3) Place, 4) Promotion. Let's look for a moment at these.

First of all, let's look at some services you might want to offer. A good production person can go in many different directions of specialization. If you like handling total projects from start to finish, don't mind sales, and enjoy working with company heads, marketing directors, and agencies, then you might consider opening a full service production company. If you are more comfortable in the studio and can afford the equipment, maybe opening a studio to record and edit spots for ad agencies is a good direction. Other services include copywriting, consultation, voice-overs, sweepers, syndicated programs, audio for video, and jingle production.

Pricing my work has always been one of the toughest things for me to do. Ask friends at agencies and production companies what kind of prices are being charged locally. You may call producers in other comparable markets to find out what they charge. Some producers charge by the hour, and others produce by the job. I find that there are advantages to each method and use both depending on the situation.

While on the subject of money, let's mention sales. Since there are plenty of good books and tapes that can help you build your sales skills, I won't go into detail. But, I believe it is very important for the owner of any business to be a good salesperson. If you can't sell your services to others, then who can?

If you want to concentrate on creative and have someone else selling, that's okay, but everyone likes dealing with the owner of a company when possible, and the owner needs to know how to "get the order" and service the client. You might also find it helpful to develop a "Sales System." It can help you or your sales force stay on track. The system might include: 1) a prospecting checklist, 2) a prospect questionnaire, 3) a sales management checklist for success, 4) planning calendar, and 5) a sales library of educational and motivational books and tapes.

Sales takes a lot of creativity, persistence and hard work. For those of you who don't like sales, consider what John Marriott, founder of the Marriott Hotel chain said: "When you work for yourself, you become an innovator, or you don't eat."

Last month I discussed selecting a good location for your company, but I will reiterate the importance of securing the kind of location and amenities that your clients want. It needs to be convenient and comfortable. If it's too upscale, your client may feel like your charges are excessive, but if it is not nice enough, they may think that the quality of your work is not very good. This may encourage them to pay slowly, give you "dog" projects, or simply not come back again.

Promotion is the final ingredient in the "four P's" and one of my favorite things to do in business. Unfortunately, I can't afford some of my "grand ideas," but the lack of capital does make one think much more creatively. It is also more in keeping with good business practices to watch the bottom line.

When I launched Airborne Radio, I sent out a series of flyers designed to look like radio copy. Each piece was in fact a creative radio ad talking about this brave band of radio rebels ready to drop from the sky and win all of your radio wars. I also sent out a letter with a plastic paratrooper enclosed. Finally, I sent out a very high quality newsletter chock-full of helpful hints, clients' names, pictures, and info about awards that I had received. The total campaign was relatively inexpensive and supported my total position in the market very well. You can come up with good ideas, too.

Some of the marketing tools you should consider are: business cards, stationery, direct mail, post cards, flyers, specialty advertising products, samples of your copywriting, commercials, jingles, or soundtracks.

As an entrepreneur, you're on the front line with the market place. You'll get an immediate measurement of your value and worth, because the market will let you know. There will not be layers of people between you and the market.

Next month, we'll rap up this series by looking at ways that you can increase your income right where you are, as either a "freelancer" or an "intrapreneur."