- Personal contact (salespeople),
- Public relations,
- Market education (seminars and trade shows),
- Direct mail,
- Sales literatures (brochures/promotional/literature/media kits),
- Advertising
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 in a given month, advertising can reach thousands of potential buyers 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 beliefs 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
1. Don't spend money on an advertising vehicle if the majority of its listeners/viewers/readers will never buy your type of product or service.
For example, let's say that you own a commercial real estate company or a business bank. In both cases, you are only interested in businesspeople. Broad-reaching television or radio stations or general-interest daily newspapers base their rates on how many consumers they reach. An examination of their audiences would reveal that a high percentage are not business people, yet you would have to pay to reach all of them. Use a specialized advertising vehicle that targets a far greater percentage of your potential buyers. A business radio program or a business publication would offer you an audience comprised mostly of your potential buyers.
If you do advertise, do not expect that a single ad, or even a few ads, constitute effective advertising. Effective advertising needs to be consistent and steady. However, if you don't have the budget to take on 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.
2. Don't spread your advertising too thin. Some years ago, a corporate training company launched its services by buying a few spots per week on seven different radio stations. Since it was not on any one station long enough to give its message a chance to take root, the advertising was a total failure. The company should have taken its entire budget and sunk it into one or (at most) two primary vehicles.
Each advertising vehicle has a loyal audience. You are far better off having a heavy schedule in one vehicle, where you have a chance to break through the clutter and get noticed, than to take a few spots in a half-dozen vehicles in which you get lost in the commercial clutter. Today, repetition and concentration are the keys to successful advertising.
3. Cable TV today can virtually change your life in a week. I know a fellow who has an electronic repair business. He would fix VCRs, TVs, toasters, etc., and he would also come to your home and hook up your entire entertainment system. 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.
Inserts 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 the consumers had more time than money. That's the other beauty of newspaper inserts — you can concentrate geographically, and you can generally buy a small piece of the circulation to test the idea first. This approach worked for months for Mr. Tim, as people kept the insert around until they needed him.
But one of the people who 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. In between re-runs of Seinfeld, Mr. Tim's Home Electronic Repair and Installation Service ad would appear, and then his phone would ring.
It worked great. Then one day, he walked into a bike shop, and someone recognized him from his TV ad. He was becoming famous from the mere $200 per week. It's 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 a consistent audience.
This is typical. The more you permeate into a specific audience, the better the possibility that you will get noticed. In the 90s, getting noticed was 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 out 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 worth only $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, but he will 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 Nielsen study that tracked hundreds of ads and the response rate that each ad generated. Each month a computer printout listed the ads and how much response each had generated. The first printout looked like this:
X Company ........... 22 responsesIn the midst of all the other ads generating responses in the low 20s, one ad generated more than 200 responses! Turning to the ad, we expected to find some totally new or unique offer, product, or service.
Y Company ........... 20 responses
Z Company ........... 23 responses
K Company .......... 223 responses
J Company ........... 26 responses
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 that I'm doing with Jay Abraham. Among other images we used in the spot, I put in 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.
A good headline follows these four criteria:
- It tells you what the product or service is.
- It starts with the word you or your (not always, but mostly).
- It contains a benefit to the reader. Most companies brag about themselves rather than talk about the benefit to the reader (prospect).
- High-response-oriented advertising focuses like a laser beam on the benefit to the customer. It makes the consumer want to read on. 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 jump tenfold just by simply improving the headlines.
- Be curiosity driven, unfolding the story you want to tell.
- Be highly benefit-oriented. So many ads talk about features, when it is benefits that motivate buying.
- Give them a reason to take action now! Can you offer something for free that will help you engage the potential customer?
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!
About the Author
Chet Holmes is author of The Ultimate Sales Machine and founder of www.howtodoublesales.com.
