I previously mentioned a great book on small business marketing called Duct Tape Marketing by John Jantsch.  In it, he introduces a great concept called the marketing hourglass.  In marketing, we often hear about the marketing funnel.  where businesses “attempt to generate leads on a broad scale and then funnel them toward becoming a client with increased contact and content”.  Though useful, it leaves out a critical part, namely, what to do with clients once they have made a purchase.

What many new businesses don’t realize is that the majority of their growth will most likely come from:  (1) selling premium products and services to existing clients and (2)  the referrals generated by theses same clients.  I was talking to my programmer recently and asked him about how he markets his business and generates leads.  He told me he doesn’t do any marketing.  All his business comes from word of mouth or referrals.  I asked another friend of mine who operates a successful translation company with several employees.  He told me the exact same thing.    In both instances, I was expecting to hear about marketing strategies related to advertising, cold calling, B2B marketing, or today’s catch word, social networking.To take into account the power of repeat business and referrals, the author of DTM introduces the concept of themarketing hourglass.  Similar to the marketing funnel, it exposes your potential clients or suspects to your marketing program.  In addition, it offers additional products and services once they become clients (i.e. make a purchase), thus the idea of the hourglass.

For example, lets say you have have a flower shop.  To new clients, flowers for personal use  may be your only product offering.  To repeat clients, however (with whom you have established rapport and trust), you can start offering premium products (e.g. premium priced flowers, decorations for wedding, special events, etc.).  This is where the bulk of your profits will be generated in the future.  Not only does it diversify your product lines, it also employs what I like to call the ‘poker mentality’.  Poker players will often show strength (by being cocky or trying to intimidate others) when in fact, they have a very weak hand.  Likewise, they will pretend to have a weak hand when in fact, they have cards that will send everyone home early.  The lesson here is deception and it can be used to your advantage.  To your competitors, you’re just a ‘mom and pop’ flower shop selling pots of flowers.  In reality, however, you have an arsenal of products and services up your sleeve that you mostly market to your repeat clients.

Start employing an ‘hourglass marketing strategy’ rather a ‘funnel marketing strategy’.  The latter is a short term model used to generate quick profits.  The former is a long term model that ensures the continued profitability of your business.

• Open Office:  A great software suite for word processing, spreadsheets, presentations, graphics, and databases.  It is basically an alternative to Microsoft Office, but without the $500 price tag.  As the name suggests, it is open source, meaning it is free to download and use for any purpose.  It is also compatible with Microsoft Office so you can open all your old Word and Excel files.
• Google Apps:  Outsource your email management to Google.  The great thing about Google Apps is that you can apply it directly to your existing domain and it works in the backend without anyone knowing.  So you can create an email account related to your website (e.g. john@ilovedogs.com) and use Google to manage your inbox. The free version allows up to 50 users and 25 gigabytes of storage per user.   You can also use a third party client like Outlook or Thunderbird if you don’t want to use Google’s web interface.  Other Google Apps functions besides email include  Google Calendar, Google Sites (e.g. can use to create an internal website for  employees), Google Docs (think free online version of Microsoft Office), and Google Video.
• Sugar CRM:  Customer Relationship Management (CRM) allows you to capture all your customers’ information and store it centrally in one location.  You can also record any interactions and update customer files.  A commercial CRM system like Salesforce will cost you between $100 and $780 per user every year (standard or professional version).  Enter Sugar CRM, the open source (i.e. free) alternative.   Though there are different editions, the free or Community edition has about 85% of the functionality of the Professional and Enterprise editions.  You can integrate it directly into your website so it can be accessed anywhere where there is an Internet connection.
• Intelligent Office:  Dont’ want to commit to a 5 year lease for a commercial office?  How about a virtual office?  With Intelligent Office, you can rent commercial office space and conference rooms by the hour.  The company also provides  remote and on-site receptionist services and admin support services.
• Amazon S3:  I like the idea of an online backup since it is more secure than leaving an external hard drive lying around the house.  There are tons of companies out there that provide online backup of your data, but they usually want a monthly subscription.  There free versions offer a ridiculously small amount of storage space.  With Amazon S3, you only pay for what you use and for $0.15 per gigabyte, you don’t pay much.  Encryption is also top of the line from what I read.
• PowerFolder:  This one took me a while to find, but it was well worth the effort.  The problem I have with Windows FolderShare (which is free) is that every person you share a file with has to register first for the service.  This is very annoying if you don’t already have an id (e.g. hotmail address) and all you want to do is use the folder sharing function.  PowerFolder is the open source alternative.  There is no need to sign up.  Just download the program, install, and you’re ready to go.  You can can send out invitations by email or even save the invitation file on a USB and give access to computers of your choice.
• XMind:  I’m a big fan of mindmapping.   I use it for everything from brainstorming to summarizing key areas of my startup.  The problem is that mindmapping software can be very pricy (e.g. $350 for MindManager).  I recently discovered XMind and after using it for about 5 minutes, I was completely sold.  I find it a lot more user friendly than FreeMind, the other free alternative.  There is a professional version available for a low cost of $49 per year (subscription based).