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How You Can Make Advertising Pay Big Dividends (source:
www.chetholmes.com)
McGraw Hill once commissioned an extensive study to
determine what marketing weapons make a company famous in it’s market or
community. The study went on to show that advertising created more product,
service, or brand awareness than all 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. To
avoid wasting money, keep these three tips in mind. Don’t spend money on an
advertising vehicle if the majority of its listeners/viewer/readers will never
buy your type of product or services. 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 business people. 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 may easily show you that a high
percentage of their listeners or readers are not business people, yet you will
have to pay to reach all of them. Conversely, there are more specialized
advertising vehicles that target a far greater percentage of your potential
buyers. A business radio program or a business publication will 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 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. 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 the 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. 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. 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. 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:
- X Company…………22 responses
- Y Company……...….20 responses
- Z Company………….23 responses
- K Company………..223 responses
- J Company……….….26 responses
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 ran a TV spot
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 (I have 23
years of karate training) to the head of a business owner (we’re both in
suits). 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 have jumped ten fold by
simply changing the headlines.
Rule No. 3: The body copy should…
Be curiosity driven, unfolding the story you want to tell. By highly
benefit oriented. So many ads talk about features, when it is benefits that
motivate buying. Give you a reason to take action now! Can you offer
something for free that will help you engage the potential customer? 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 training firm that
helps companies accelerate growth using Chet’s proprietary techniques. See
www.chetholmes.com to attend a webinar about Chet’s concepts.
About The Author
Chet Holmes is author and creator of the popular business series Guerrilla
Marketing Meets Karate Master with Jay Conrad Levinson, Business Growth
Masters, and Zero to $100 Million. Chet charges $5,000 an hour and has
been paid fees up to $1 million dollars from a single client. He's
personally had 50 Fortune 500 clients and has 60 products selling in 19
countries. |
