Higher Profits Through Testing of Every Variable


zero point three equals two times

Zero point three equals two times

Pretend with me you’ve been conducting a direct mail campaign.

In testing your headline you’ve discovered that changing its focus from greed to fear increases the response rate from 1.5% to 1.85%.

Not bad. Three-tenths of a percent. That’s enough to get marketers excited.

You’re kidding,” I can almost hear you say. “People get excited about a tiny fraction of better response?

Well, yes. Yes, they do. You see, that tiny fraction amounts to a 23.3% improvement in top line sales. It has an even bigger impact on the bottom line.

First, Run the Numbers

For the sake of this example, let’s assume the following:

Your selling price is $74.95, and your gross margin is 65%.

The cost of printing your single-page, one color letter and its envelope, folding, stuffing, and addressing is $0.33 per piece.
The cost of postage (bulk mail) is $0.21 per letter.
You’re paying a list broker $40 per 1,000 names (4 cents each).

Add these individual sums, and the cost of promotion becomes $0.58 per lead.

You mailed 10,000 pieces with the first headline.

1.5% of the recipients of the letter purchased: a total of 150 sales. Each sale produced revenue of $74.95, for a total of $11,243.

You’re working with a 65% margin. Therefore, your gross profit is $7,308.

It cost $5,800 ($0.58 per lead times 10,000 leads) to make those 150 sales, which makes your net profit on this mailing $1,508.

Then You Tested Your New Headline.

You mailed 10,000 more pieces with the second headline.

This time, 1.85% of the recipients of your letter bought: a total of 185 sales.  (This is the three tenths sales lift we mentioned).

Each sale produced revenue of $74.95, for a total of $13,866.

You’re still working with a 65% margin, which makes your gross profit is $9,013.

The cost of promotion is the same $5,800.

Your net profit with the second headline is now $3,213.

When you run the numbers, this new headline has more than doubled your profit.

Wow.

Testing Needs to be Mandatory

This is why you must test at every stage of the persuasion process. (It’s also why you must keep detailed records of your results).

Test your headline, test your offer, test the medium, test the frequency of repetition of your message. Test every variable.

When you find an outcome which works better than what you’ve been doing, make the new way your new standard.  Then start testing against that.

It only makes sense that you use the most attractive bait when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about creating maximum impact through testing of your marketing? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-208-7654.

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The Circle Layout

Originally Published December 7, 2005

Fishing 101

Fishing 101

Marketing consultant George S. Cullinan (1911-1963) was inducted into the Direct Marketing Hall of Fame in 1989 for being “the first to recognize the significance of databases as a foundation for successful direct marketing.”

Today we’re going to look an another George Cullinan creation: the “circle layout.” This concept is an idea of value to everyone who uses words and images to promote business.
 

Artists Don’t Think Like You Do

Cullinan believed that the art department should never be trusted to correctly lay out the advertising, that instead those decisions should always come from the merchandising department.

Since Cullinan didn’t expect his merchandise buyers to become skilled artists, he suggested that they use a simple set of circles of various sizes to communicate with the art department what to include, and the relative placement and space of each element.

In a circle layout, the number of circles is equal to the number of illustrations, headlines, and story elements to be included. Of course, one need not be limited to oval shapes. Rectangles have their uses, too. The key is to use the relative sizes of the shapes to quickly convey the approximate importance of each design element.

Example 1: Newspaper Ad

Let’s assume that my local newspaper has offered to build my new ad. I’ve told the newspaper account executive about my business. He should be able to take this sketch and his notes to his advertising department and bring back an ad proof with no surprises.

 

Example 2: Catalog Page

Were I working with an advertising agency, I’d be providing the agency raw information and this sketch. I’d expect their artists and copywriters to be able to build my catalog page pretty much as I’d imagined it.

 

Example 3: Flyer

If I needed a local printer to make up some flyers for my business, I would provide the photo or line drawing, my logo, and the selling verbiage to be included in the copy. Any local printer should be able to follow this concept and deliver the flyer I’m expecting.

It’s Communication

Why should you provide the circle layout to your commercial artwork provider? Simple. She isn’t you.

You’re the person responsible for moving product. You probably already know which advertising elements will capture attention and motivate a purchaser to buy. Who knows better than you do exactly what must be emphasized? Or what could be left out? Whether the photo or the body copy needed more emphasis? Whether or not to include a coupon?

 

How (and What) to Lay Out

Before starting your circle layout, make a checklist for yourself, and include such items as:

  • Headlines
  • Photos / illustrations
  • Body copy
  • Prices
  • Special offers
  • Coupons
  • Logos or other company identification
  • Legal disclaimers

Modify your checklist so that nothing gets overlooked during the planning stages.

It Even Works for Non-Visual Media

Cullinan developed the circle layout for catalog pages and flyers, but I’m sure you can see that this simple communication method can work equally well for other media.

Not only will you find it useful for magazines, newspapers, and billboards, but you’ll find that it helps the copywriter of your television ads or radio ads to better understand the message you need her to deliver. I wouldn’t hesitate to give a copy to a direct response writer who was composing a solicitation letter.

Try it on your next advertising project and see if you don’t agree. I’d love to hear how you implement the circle layout in fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Have questions about communicating your vision to your service providers? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-208-7654.

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Are Your Ads Working? Can You Prove It?

Originally published June 3, 2005

Rosser Reeves

The late Rosser Reeves, former CEO Ted Bates Advertising.

In 1961 Rosser Reeves, the Creative Director of Ted Bates Advertising, Inc., wrote a book titled Reality In Advertising. Although it’s now out of print, you may be able to find a copy at a used bookstore or a library.

Reeves was the man who created “I Like Ike,” “Melts in your mouth, not in your hand,” and the famous Anacin ad with the tiny bubbles carrying relief to boxes in a silhouette head.

Reeves also had a simple method of determining whether an ad was “working.”

Reeves Ad Penetration Test

His staff phoned 1,000 people across the country at random and asked two questions:

Are you familiar with our advertising?

Do you use our product?

He put the tallies into a grid much like this one.

Please appreciate the elegant simplicity of this test.

Some People Will Remember Your Ads

The left side is made up of people who are familiar with your ads.

As a percentage of the total, these people represent your MARKET PENETRATION. The higher your Market Penetration, the better your advertising is working. The lower your score, the greater potential for increased sales with a good advertising campaign.

The top side is made up of people who buy what you have to sell.

If ten percent of the unpenetrated group buys your product, and twenty percent of the penetrated group buys, you may subtract the first group from the second to get what Rosser Reeves called the “Usage Pull” of your advertising. Today it’s better known as the CONVERSION FACTOR.

Sometimes, No Exposure is Better

Thankfully, we don’t see it often, but it is possible to have a negative Conversion Factor. This is evidence that your advertising is actually harming sales. Should you find yourself in this situation, STOP YOUR ADVERTISING IMMEDIATELY and get help.

Reeves techniques are nearly half a century old, but they still work exceptionally well. If you can find a copy, Reality In Advertising deserves a place in your marketing library.  Consider it a guidebook to go fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Have questions about whether your advertising is drawing customers?  Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com.  Or call him at 304-208-7654.

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Will Advertising Sell What People Don’t Want?

Originally Published December 11, 2007

While browsing the web, I came across an article titled, “Why is My Restaurant Not Full Every Monday Night?” (Google search if you’re all that curious. The article doesn’t answer the question, which is why I’m not linking it).

But it does pose a valid question. Why isn’t your restaurant full on Mondays?

Its a common desire in retail to advertise the things which aren’t selling, and let those which will sell easily sell themselves. This is frequently bad strategy. Very bad.

It may well be part of the reason Wal-Mart thrived while K-Mart worked its way through bankruptcy. Of course, their respective advertising policies may only be a reflection of their inventory management. Then again, this all may be only a coincidence.

And for the record, our story is completely fictitious.

Assume that we have one Wal-Mart store and one K-Mart store, each stocked with various sizes of golf shirts in four colors: red, blue, green, and yellow. We’ll further assume that each store stocks ten in each color.

For some reason, the yellow shirts are in hot demand.

Each store sells out of yellow golf shirts.

K-Mart, in the traditional Henry Ford fashion * notes that they still have 30 shirts in stock. No problem.

Wal-Mart however, takes note that they are completely out of yellow golf shirts, and promptly puts ten more in inventory.

Humm. People will buy what they want, when its available to them. The won’t necessarily buy what’s being advertised. So, while K-Mart is advertising golf shirts in various colors, Wal-Mart advertises that they have yellow golf shirts, and they have them in stock. (Again, this story is of my own invention. It has only a passing relationship to any reality).

Can advertising sell them things they don’t want?

The bitter experience of K-Mart would indicate that people will purchase only what appeals to them, rather than what’s being advertised.

But our question wasn’t about golf shirts, was it? The question was “Why is My Restaurant Not Full Every Monday Night?”

The reason is simple.

Its not lack of advertising. (Rookie media salespeople will assure you that it is. They are wrong. It has nothing to do with advertising.)

It is because people customarily don’t go out to dinner on Monday evening.

They just don’t want to.

They tend to go out to dinner on Friday nites, on Saturday, even on Sunday. By the time Monday rolls around, they’re feeling as if they should stop being so extravagant.

On Mondays they plan to eat at home.

Is there a Monday appeal?

Is there a way to attract a relational customer to your restaurant on a Monday? Sadly, if Monday isn’t Valentine’s Day, Mother’s Day, or a spouse’s birthday, there is not. You could maybe get a transactional customer into your restaurant on a Monday if you offered a discount, but transactional customers tend to stay home on Mondays too.

OK, make it a BIG discount. That will insure two things:

1. bad turnout, and
2. no profit from those rare few who do show up. 

Humm. Advertising a restaurant is very much like duck hunting. You shoot when there are ducks to shoot at.

So what can you do about those Monday nights in your restaurant?

You can cut back on your staffing on Monday and hold your costs to a minimum. Then advertise your great Friday night specials, or your Saturday dinners, or even your Sunday brunch.

Wait for them to be inclined to dine away from home, then remind them to pick you. Cater to what your customers want – and do so on their timetable, and you’ll start boosting attendance as you fish for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about allocating and scheduling your advertising dollars? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-523-0163.


* Henry Ford is rumored to have said about the available colors of his Model T automobile, “You can have any color you want, as long as that color is black.


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Is a Radio Remote Broadcast a Good Investment?

Originally published October 4, 2009

One of the advantages electronic news has over print is the capability to deliver information in real time “live from the scene.” As you might imagine it didn’t take long for this proficiency to migrate from the news department to the sales department, giving birth to the radio “remote broadcast.”

Remotes are traditionally expensive. But as advertising sales remain weak in this economy, advertisers are being offered discounted rates on almost all advertising, including remote broadcasts. And that prompts a critical question: is a radio remote a good investment of advertising dollars?

Like everything else in business, the correct answer is “possibly.”

The problem is there are at least four different people involved in the decisions effecting such a broadcast. Most of the time each has a different objective. Those four people are:

  1. the Manager/Owner of the business,
  2. the Radio Sales Person,
  3. the Radio Program Director, and
  4. the Disc Jockey.

What do each of these people want?

The Manager/Owner wants buyers.

His objective is to sell merchandise in such quantity that he can pay for the advertising and still show additional profit for his efforts.

He believes his store offers value. He believes when large numbers of people hear about his offers, they’ll flock to the store to buy. This is usually expressed as “you get people in the door, and we’ll sell ‘em.

The Radio Sales Person translates this instruction.

Get them in the door” becomes, in her mind, “your job is to attract a crowd.”

She will arrange all of the crowd drawing techniques at her disposal. These will include a clearly identified station vehicle in front of the store as an attention-getting device. It will be augmented with banners and sound system.

She’ll provide tee shirts emblazoned with the station logo and other station paraphernalia to give away to listeners who come to the event.

She’ll try to arrange to have clowns, balloons, and face-painting to attract kids, free food to attract their parents, and the ever-popular “register to win” entry box. (The prize will, of course, be provided by the customer).

The Radio Program Director will coordinate.

After determining there are no conflicts on the proposed broadcast date, the Program Director will assign a Disc Jockey as “talent.”

The Program Director’s job is to keep listenership high. She hates remotes, considering them to be interruptions to the programming (music), and potentially harmful to ratings. The Program Director will thus limit the number of reports from the scene, limit the length of each report, and do her best to disguise the reports by running instrumental music under the Disc Jockey’s voice.

The Disc Jockey will be expected to attract a crowd.

Feeling pressure from the Manager/Owner and Radio Salesperson, the Disc Jockey will attempt to bribe listeners. He’ll repeatedly emphasize “C’mon down. We’re having a great time,” and will list all of the free items they could win just for showing up.

A few listeners will be impressed by being close to a celebrity. He’ll be tempted to talk to those people who come to him, rather than introducing himself to other potential customers. Part of this, believe it or not, is shyness.

The results are entirely too predictable.

In order they will be:

  1. Reacting to the offers made during the broadcast, people will come to the event for the free food, the clowns, the balloons. They will register for the prizes. They will then leave without buying anything.
  2. Frustrated by the lack of sales, the Manager/Owner will accuse the Radio Sales Person of bringing the wrong people to his event.
  3. The Sales Person will explain to the Manager/Owner the benefits of branding and name recognition. She’ll explain the positive effects of today’s high-profile advertising might not be immediate, but will definitely impact future sales.Back in the privacy of the radio station she will find fault with the Disc Jockey who spent too much time socializing with fans and not enough persuading them to buy.
  4. Of the four people involved, the Disc Jockey will take the majority of the heat when the outcome is disappointing. He’s not a seller. He’s an entertainer. And even though he feared it might end this way when he agreed to accept the talent fee, he will bitterly resent being held accountable for lack of sales, which he believes are beyond his control.
  5. Oddly, the Program Director has the best grasp of the situation. After listening to the Sales Person’s criticism, will resolve to discourage future remotes as too much hassle. “Next time sell ‘em a schedule of ads” will be her recommendation.By doing her best to hide the event from her own listeners, she’s created a self-fulfilling prediction of failure.

Unfortunately, the Disc Jockey did attract the wrong people. When listeners hear words like “fun” and “free” instead of compelling reasons to purchase right now, they react accordingly.

Equally unfortunate is the Sales Person’s claim that future sales will benefit from today’s advertising of an event. Although branding and image building ads do take a while to affect customers, and do frequently work better over time, event advertising is quickly forgotten.

No immediate sales. No future sales. Conclusion? Most remote broadcasts are a waste of money.

Which is why, in general, I don’t recommend them.

However. . .

When done correctly they are powerful marketing tools that provide opportunity for greater sales. And at some of the prices we’re now seeing, this may be an excellent time to consider adding one, or more, to your marketing plan.

In our example the four people involved had mutually contradictory objectives. To have a successful event all four must embrace the same purpose: greater sales during the event. That goal must guide every decision effecting the broadcast.

Here’s how to assure higher remote broadcast ROI.

Mr. Manager/Owner,

… take a step back. Recognize that you are more excited about the things you sell than the public will ever be. Expect them to be less excited about your remote broadcast, too.

Think of it this way: a remote broadcast is not an event. Much like a newscast, it is only coverage of an something newsworthy which is already happening. People want to know the news.

A strong concept works well if promoted in the newspaper, on television, or through direct mail. It doesn’t require creativity of the medium to make up for lack of customer interest. If your event that exciting, continue planning the remote. If not, abandon the idea. There’s no sin in passing up an inexpensive opportunity which won’t benefit your company.

OK. You have a strong concept. Good. Don’t use the station as your only source of publicity. We’re not trying to prove this station can draw a crowd. We’re focused on attracting as many buyers as possible. Buy a newspaper ad or two. Keep those ads customer focused.

The headline should address the primary benefit you’re offering. The body copy should say the things your best salespeople say to customers on your sales floor. Put your logo, as well as that of the station, at the bottom of the ad. If your headline catches people’s attention, and your body copy offers strong reasons to buy, only then will they care who’s making the offer.

Miss Radio Sales Person,

… give your client’s business the benefit of your experience. “Great savings throughout the store” is much too generic and won’t persuade anyone. Make sure all of the parties agree on a message which is both specific and highly beneficial.

Is the proposed remote broadcast the best use of your client’s money? As you know, grocery stores make dozens of offers in a “double truck” two-page newspaper layout. They focus so many reasons to buy into a single space every week because it works. If you believe you could create more sales impact with an intense, highly-focused schedule of recorded ads packed into a single time period, do that instead of the remote. The cost to the advertiser is the same either way. Give him the choice with less risk.

Miss Program Director,

… stop compromising. Either refuse to interrupt your music with talk, or commit to making the talk segments so compelling that your music listeners don’t want to be left out.

Would you refuse to interview the top artists in your format? Of course not. Listeners don’t resent talk. They resent people blathering on about topics that don’t interest them. You, Miss Program Director are uniquely qualified to find the exciting appeals that your listeners will want to learn more about.

Your presentation skills can turn this potentially dull and boring jabber into the most exciting information available on the day of the broadcast. Hype won’t work. You’ve got to dig for genuine value, and then make sure it’s presented in a way that helps your listeners imagine themselves owning what the advertiser sells.

Schedule three reports per hour during the broadcast. Have the Disc Jockey announce his location during the FCC required legal ID. Require your studio talent to plug the event during each music segment. That works out to acknowledging the remote seven times per hour. Just as you wouldn’t allow your station to go a quarter hour without reminding listeners to whom they’re listening, this proposed broadcast will also need that frequency of repetition.

Give your Disc Jockey the latitude to react with his own personality from the scene, but make sure each key point is included in each remote break by scripting a standard beginning and ending.

Here’s the part you’re going to hate: kill the music bed during reports from the scene. We want people to take note that something unusual is going on. Play a quick attention-getting intro (think fanfare) as he’s introduced, and then, other than the Disc Jockey’s voice, let the natural ambiance of the event be the only sound.

Can you commit to promoting this event for maximum advertiser impact? If not, do both the client and your listeners a favor and offer to help create a persuasive advertising campaign for him instead.

Mr. Disc Jockey,

… your role needs to change. You’re no longer being asked to host this broadcast because you’re popular and have fans who are likely to come see you. You’re being asked to use all of the presentation skills you’ve acquired in your career to introduce your listeners to the advertiser’s business.

Why would you do that? Because they will benefit from the resulting relationship. Believe it, or recommend another talent. Use that conviction every time you open the microphone.

Get rid of every cliché in your vocabulary – especially those things which you’ve grown used to saying on similar occasions. Repeating the same old verbiage will only produce the same old results.

Watch for customers leaving the store. People who’ve purchased something are sold on the value of their purchase. If they’re reasonably articulate, invite them to briefly answer a couple of questions during your next break. Tell them what you’ll be asking, and help them to quickly express their reasons for buying. These people have exceptional credibility with other folks listening to your broadcast.

And don’t worry about what the station provides for you to give away. We’re now looking for different responses from different people than you’ve invited to past events. Truthfully, you’ll make more money persuading people to visit the store who don’t care so much about meeting you as they are interested in the client’s offer.

By the way, shaking hands with everyone in the crowd and personally welcoming them builds listener loyalty in a way nothing else can.

Finally, Mr. Manager/Owner . . .

The question was, are remote broadcasts good investments? Normally, no. But with the prices now being offered, maybe.

If you decide to try it, don’t choose a station as your promotional partner because of ratings, or even because of price. Instead, choose a partner committed to getting qualified buyers to your event. You’ll know whether you have the right radio station early in the planning process.

Get the station’s Sales Person, Program Director, and Disc Jockey into a planning meeting. Bluntly ask if the station will commit to the three breaks per hour, plus the legal ID, plus three more mentions by the on-air host. Ask if the station will eliminate any music during reports from the scene. Ask if they are willing to make your broadcast the single most important event on the air.

If they are not willing, call a meeting with a different radio station. If they are, commit your resources and schedule the event.

And remember that media partners who put your needs first have earned a significant part of your non-event advertising budget, too. A willing partner can multiply your impact when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about remote broadcasts or other event marketing? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-523-0163.

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Why I Don’t Care For Co-Op Advertising

Fishing 101

Fishing 101

Sounds like such a great idea, doesn’t it? You’re a retailer – say a hardware store owner. Your store carries Ajax Widgets. You want to advertise in your local market to get customers into your store, but the cost is high. Ajax wants people to buy Ajax brand widgets, but the cost of advertising in every local market is exceptionally high.

Ajax problem: spreading the word to people who can’t purchase from them (those who live in a community without a store which carries the Ajax brand, for instance) is a waste of money.

Ajax solution? They will team up with you to share the cost of advertising to your market, as long as you promote Ajax Widgets in those ads, too. You’re trying to reach the same people, aren’t you? Why not share the cost? What a great deal for both of you.

You simply use the Ajax Widget pre-approved script, and submit the appropriate media documentation to Ajax. They will reimburse you for part of the cost of the ads.

Fifty percent is the most common plan, but I’ve seen ‘em go up as high as one hundred percent. And all cooperative advertising programs “cap” the amount of advertising dollars you’re allowed to spend at a percentage of dollar volume of the product you’ve purchased from the manufacturer.

A great deal. Or is it?

You’re trying to build an image for your hardware store. Every ad you run should re-enforce that image. Perhaps your desired image is “The store that has everything you need in stock.”

What’s Ajax’ image? “The most dependable widget money can buy.”

How does it benefit your hardware store’s image to have a fifty-second message about Ajax dependable widgets, followed by an effectively different message: “Ajax Widgets are available at fine retailers like Your Hardware Store?” (Don’t kid your self. It’s not a continuation of the same ad. It is a completely different message).

The equity issue

Ajax dictates the radio or television script, fifty seconds of which is dedicated to Ajax and their widgets. You get the ten second “tag” at the end. They provide the newspaper or magazine layout. You get the small white space at the bottom to drop in your logo and location.

At the end of the advertising schedule the medium sends you the invoice, and a notarized “affidavit of performance.” You pay for the ad. You send the required documentation to Ajax, who reimburses you for half the cost.

Let me repeat: you got only ten of the sixty seconds. You got only three of the 15 column inches. And yet, you paid for half.

Anyway you look at it, you’re paying way too much for ads, and worse yet, those ads deliver the wrong message.

I don’t care for co-op advertising. At least, most of the time.

The Exception

Some co-op programs will let you write you own ad and still claim reimbursement under the terms of their co-op program, provided that you mention their brand and product a minimum number of times.

One of my clients has an annual sale one time each year. For fifty weeks a year his store advertising reinforces the benefits of purchasing from him. For those fifty weeks co-op doesn’t help him to meet his goals.

But for the two weeks of the sale, he uses every accrued co-op dollar to fund the promotion of an event. It’s a completely different message presented in a completely different style. The sale event message is delivered with enough frequency to effectively reach most of the community. For those two weeks you can’t turn a radio to a local station or open a local newspaper without being exposed to his ads.

Then, event over, it’s back to business as usual.

If you’re going to use cooperative advertising in the promotion of your business, plan it’s use carefully. Don’t kid yourself, though, that co-op funds can replace any portion of your ad budget for the year. Run co-op ads IN ADDITION to your regular ads, not in place of any of them.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Wondering if you can get real value from your available co-op advertising funds? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or pick up the phone and call him 304-208-7654.

 
This article was first published August 6, 2006

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The Ad Copy Paradox – the More You Include, the Fewer Are Included

Fishing 101

Fishing 101

Q: I keep reading that narrower focused ads are more effective, but I don’t have a very big advertising budget. I can’t afford to pass up anyone who might be interested in what I sell. Shouldn’t my ads include everyone?

A: Short answer, “no.”

Here’s why: Unless you’re a recording engineer, or perhaps a recording musician, you’re probably not interested in advertising for a new Pro-Tools plug-in. If you’re exposed to such an ad, you probably won’t even notice it. You definitely won’t remember it.

You do the same thing with all of those other products and services in which you have no interest: sumo wrestling, cheeses of the world, the position of the guy running for school board in some other district, crosspoint stitching, 18th century English poetry, building a wind-powered electrical generator, tourism guides to Toronto, and the genealogical history of your brother-in-law’s family.

What happened when you were “exposed?”

Did you consciously consider, then choose to ignore these offerings as they competed for your attention? Nope. You didn’t recognize any value to you, and stopped further consideration. Gone. Poof. No longer exists in your universe. Maybe never did.

All of those people you’ve been attempting to “woo” to your business react in much the same way. Either they are interested in your advertisement, and will allow more information to enter their “What’s In It For Me” filter, or they aren’t, and relegate your ad to “ignore” status.

Now, when it comes time to compose an ad for your business, people will not see “office supply store” and immediately think, “Hey, they probably have flash drives, too. I could go there and compare prices with the computer store.” Instead, they’ll see “office supply store” and immediately think, “I don’t need office supplies.”

You’ve already been dismissed.

Its not that people are too lazy to figure out what you’ve got for them. They made the decision to ignore what you’re saying long before such a puzzle might even occur to them.

This is why you must create your advertising from the perspective of a potential buyer. Potential buyers, by the way, don’t think of what they want in terms of “all their (blank) needs.” And as long as your ads say that, or “fast, friendly, courteous service,” you can count on being ignored.

But, what if instead, you’d created an ad that said, “We’re a modern office supply store. We recognize that in addition to paper, toner, and desk calendars, today’s office may need blank DVDs, hub adapters, and hard drive upgrades. Come visit our computer supply department, and while you’re there, pick up a 16-gig USB flash drive for only $17.95?”

Would someone who needed a flash drive react to that ad? Highly likely.

But you have more things for sale than flash drives, don’t you?  A whole store full of other things.   Hummm.  I guess you’ll need to create other ads for those items.

There is no universal bait. You must choose the fish you wish to catch when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKay

Chuck McKay

Your Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

If you have more questions about copy strategies to sell more of what you offer, Chuck welcomes your email, or call him at 304-523-0163.

 

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Should I give stuff away?

Fishing 101

Fishing 101

Q: People keep telling me I should give stuff away to get more customers in my store. But doesn’t that just draw people who want free stuff?

A: It stands to reason, doesn’t it, that not everyone will buy from you? The majority of people don’t need what you’re selling. Many won’t need it for some time. Of those who are current prospects, some aren’t willing to pay your price. Some just don’t trust you.

Getting people in your store (or in your sales funnel) who eventually will need what you sell, should help them to become familiar with you. That familiarity should lead to trust, and sales. The free stuff you give away is the price you pay to “buy” customers. Other businesses pay for advertising. Some pay to have more people on staff, providing superior customer service, and resulting in outrageous word-of-mouth.

One way or the other, we all purchase our new business.

But your question is more specific: does giving away “stuff” train your pool of prospects to come to you when they want something for free? The unwritten question is, are you wasting your money by training them to come to you ONLY when they want free stuff? Yes, and no. Yes, in the case of some folks, its likely they will only show up for the free stuff. No, you’re not (necessarily) wasting your money.

Flash back with me to 1713 and Jacob Bernoulli’s Law of Large Numbers, sometimes called the “Law of Averages,” which guarantees stable, long-term results for random events. A casino may lose money on any given spin of their roulette wheel, for example, but always wins over a large number of spins.

Your “free stuff” works like the roulette wheel. A lot of people step up to spin.

How much will you win when the ball lands on red?

To calculate whether you’re wasting money, or have a valid marketing expense, you need three numbers. Fortunately, this is simply a matter of record keeping.

First, how much are you spending to get each prospect in the door?
Second, how much does each spend when they buy from you?
Finally, what percentage of the people attracted by your free stuff promotion, buy?

Let’s say you spend $100 and get 50 people to show up. Your cost per prospect is $20.

When one of those 50 people buys, she spends, on average, $300.

And through experience, we know roughly 4 percent will buy. That makes two sales of $300 ($600 gross), from your $100 investment.

Is this a good investment? Spend $100, get back $600? That depends on your profit margin, doesn’t it? At a standard “keystone” mark-up, your profit is $300, and this promotion is a good one.

Are you training people to come in for the free stuff?

Most of us expect “fairness,” and are disappointed when people get rewarded for behavior we don’t approve of. Yeah, that’s to be expected.

But good marketers, like successful casinos, concentrate more on the sales, and less on the non-buyers.

Run the numbers. Is the overall promotion profitable? Does it produce new customers? Then don’t stop doing it because you resent the freeloaders who only show up for the stuff. The Law of Averages will work to your favor when you’re fishing for customers. And your calculations will make the decision for you.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Questions about buying your customers be directed to ChuckMcKay@FishingforCustomers.com. Or call Chuck at 304-208-7654.

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