McGraw Hill once commissioned
an extensive study of more than 1,000 companies that comprised
the most well-known companies in their markets. The study revealed
that all of the companies used six primary marketing weapons (newer
studies show there is a 7th, the internet, but here are the original
six):
The study went on to show that advertising
created more product, service, or brand awareness than all of
the other marketing weapons combined. The fact is, we know that
Coke is “The Real Thing” because Coke advertises,
not because it has good salespeople or does great direct mail.
Advertising stays in front of your prospects when you can’t
be there. While a handful of salespeople can only be in front
of perhaps a hundred or so prospects per month, advertising
can reach thousands of potential buyers each and every month,
week, or day. Studies also show that advertising inspires confidence
from your current clients. When current clients see your ad,
it reinforces their belief in you. It makes them feel like they
made the right decision to be your client. But advertising can
also waste money if you don’t use it properly.
Avoid wasting money
To avoid wasting money, keep these three tips in mind.
However: If you don’t have the budget to take a full
advertising schedule, I often recommend that my clients buy
one, well placed ad in the ideal magazine and then use that
piece for years sometimes with a banner that says: “As
Seen In Industry Today.” This ad then works very hard
for you as a direct mail piece, promo piece, or even a hand
out at a trade show.
Another important point along the lines of advertising smart
is that cable TV today can virtually change your life in a week.
I know a fellow who has an electronic repair business. He would
fix VCR’s, TV’s, Toasters, etc… and he also
would come to your home to hook up your entire entertainment
system if you needed him to do that. The name of the business
was Mr. Tim’s Home Electronic Repair and Installation
Service. First, on my advice, he took an insert in the newspaper.
(An “insert” is a flyer that is printed separately
and “inserted” into the newspaper as a loose piece
of paper). This is generally a very good way to go with B2B
in a trade journal or B2C in a newspaper.
These are good because they fall out of the magazine or newspaper
onto your desk or kitchen table and they are less expensive
to buy than printing your ad right in the vehicle of choice.
When I ran magazines and newspapers, we discouraged them because
we NEEDED ads in the magazine/newspaper, but when we had a client
we were going to lose over lack of response, we ALWAYS recommended
the insert because they almost always worked.
So Mr. Tim’s Home Electronic Repair and Installation
Service took the newspaper insert in the local newspaper and
bought, specifically, the major neighborhoods where he felt
they have more time than money. That’s the other beauty
of newspaper inserts is that you can generally buy a small piece
of the circulation to test the idea or to concentrate geographically.
This worked for months for Mr. Tim, as people kept the insert
around until they needed him.
But one of the people that spotted that insert was the local
cable salesperson who told him he could make him famous. Mr.
Tim thought TV would be WAY too expensive, but, as it turns
out, in some markets, you can buy just a neighborhood. You can
buy by zip code. So for $200 per week, Mr. Tim was on TV like
60 times per week, spread all over 50 different cable channels.
It was amazing. You’d be watching re-runs of Seinfeld
and there would come this Mr. Tim’s Home Electronic Repair
and Installation Service ad and his phone would ring. It worked
great. Then one day he walks into a bike shop and someone recognized
him from his TV ad. He was becoming famous from this mere $200
per week.
Not for everyone, but if you sell B2C, look into local cable
and concentrate with a lot of spots.
Cost Justification
Every business action requires some kind
of cost justification. Does the effort justify the cost? Company
X advertised its professional educational materials. When it
seemed as though the advertising was not working, the company
was going to cancel its ad campaign. Then it discovered a startling
correlation between its advertising and its direct-mail efforts:
Its direct-mail response went up by 30% in the months it advertised
to the same audience.
This is typical. The more penetration you can get to the same
audience, the better the possibility that you will get
noticed. In the ’90s, getting
noticed is everything. In today’s commercial clutter,
you get noticed only by continually reaching the same potential
customer with a consistent theme, message, look, and feel. If
you advertise in a print medium (magazine, newspaper, etc.),
you will find that most publications will rent you their mailing
lists. This means you can direct mail to the same
audience to which you are advertising! This is a very
smart usage of marketing dollars.
Look at the lifetime value
If you have an inexpensive product, your advertising has to
deliver a high number of leads, or every lead has to turn into
a repeat customer. For example, say your average customer spends
$25 with you. If you are spending $1,000 per month on advertising,
you will need to attract 40 new customers per month to break
even on the ad, not counting any of your other costs, such as
product costs and overhead. If those customers are one-time
buyers, then you have to find a way to make your advertising
more effective or less expensive. If they become regular buyers,
then you can accept lower response rates.
The key here is to look at the “lifetime value”
of a customer. A customer who spends $25 a month and comes to
your store only once is only worth $25 to you. But if you can
get that customer to be a repeat customer, then that customer
is worth $300 a year, or $1,500 over five years! Most business
people do not understand the power of advertising; they do not
realize that each new $25 customer is potentially a $1,500 customer!
Advertising brings in the customers, but it is your job to
keep them buying from you.
Advertising promotes word-of-mouth
Often, a loyal customer will see your ad while with a friend
or business associate. Your customer will show your ad to the
friend and say, “Hey Joe, now this is a really great company/product/service.”
Joe will come into your business, and you will ask him how he
heard of you. He will say that his friend referred him and never
think to mention that it was your advertising
that prompted the friend to open his mouth in the first place.
Rules for effective advertising
I headed up a Neilson study that tracked hundreds of ads and
the response rate each ad generated. Each month, a computer
printout listed the ads and how much response each had generated.
The first printout came and it looked like this:
In the midst of all the other ads generating responses in the
low 20’s, one ad was generated more than 200 responses!
Turning to the ad, we expected to find some totally new or unique
offer, product or service. Instead, we found that the product
advertised was nearly identical in price and features to four
or five other products in the same publication. Thus, it wasn’t
the product that made the response jump so significantly, it
was the ad!
After a year of tracking the highest response generating ads,
we learned that, for the most part, the ads that pulled the
greatest response followed four primary rules:
Rule No 1: Is it distinctive?
You must design advertising that is so distinctive looking (or
sounding, if you’re on the radio) that it pops out of
the clutter. In print, the first goal of high-response-oriented
advertising is that it be visually distinctive. On radio, the
audio must be distinctive. Naturally, TV has both visual and
audio possibilities.
I’m running a TV spot right now advertising a free seminar
I’m doing with Jay Abraham. Among other images we used
in the spot, I put a shot of me throwing a double side kick
to the head of a business owner. What’s the point of that?
One point. It makes you want to find out “what the heck
is going on there?” Today, 70% of TV watchers are muting
out the commercials. But if you see something really intriguing,
you will UN-mute just to see what the heck is happening there.
There’s a spot running right now where this kid sprays
his mother with a squirt gun and she pulls the hose out of the
sink and nails the kid with it. I saw that spot several times
and it finally got my goat. I wanted to see what they were advertising.
So make your ad distinctive. Something that makes it STAND
OUT.
Rule No. 2: Tell me what you want
to tell me. If you page through a magazine, you will
quickly notice that you do not read the ads that make it difficult
for you to figure out what they are selling. “Clever”
is only better if it is “super clever.” Clever headlines
that do not tell you what they are trying to sell are simply
not effective. Most ads in most publications today don’t
have headlines that tell you what they are trying to sell. In
the information age, don’t hint around; say what you want
to say, right in the headline.
The headline is the ad for the ad. If the headline isn’t
good, no one will read the rest of the ad. Responses to ads
have jumped ten fold by simply changing the headlines.
Rule No. 3: The body copy should…
Rule No. 4: Ask for the order.
Too many ads do not give explicit instructions as to what action
you would like the customer to take: “Order today and
save,” or “Call us today and receive this free….”.
You must always ask for the order!
Summary
Advertising is a powerful tool for becoming a well-known player
in any market. Even if you take a small schedule and a small
ad, by consistently letting it run in an appropriately targeted
vehicle, over time that ad will have an impact. People will
see your logo and it will
register.
Advertising supports everything else you do in your business.
But it is only part of a total package. You must have other
marketing, and you must make sure, ultimately, that you are
treating the customer like gold. Happy customers will spread
the word faster, and advertising will help facilitate that.
Happy advertising!
Chet Holmes is President and CEO of
Jordan Productions, an international marketing and sales consulting
firm that specializes in helping companies find faster, smarter
ways to grow their revenues, sales, profits and improve their
management. He has conducted training sessions at more than
60 Fortune 500 and other prestigious companies, and is the author
of The Mega Marketing & Sales Training Program as well as
the Business Growth Master’s Series. For more information
about Chet, you can go to www.chetholmes.com
