Beer And Headaches And That Awful Cramping

Originally published February 24, 2006
Chuck Blore once told of a study he did for CBS. Beer drinkers were surveyed as they entered his testing facility. They each proclaimed a preference, as well as an explanation of why they they had chosen that particular brand of beer.

The participants were then given tasting cups, and were told to help themselves to any of the 20 beers available for comparison tasting.

As they finished and were leaving the testing facility, the participants, all 104 of them, were again surveyed as to their preferences.

Interestingly, not a single participant had changed his or her mind. Each had found validation in the actual testing that the beer he or she had preferred on the way in was indeed more robust, or smoother, or lighter.

Blore never told them that all of the samples were exactly the same.

His conclusion: Advertising makes beer taste better.

What Would You Take For A Headache?

If you were suffering from a headache would you be more likely to take Midol Menstrual Formula® or Excedrin Tension Headache®? If you were suffering from menstrual cramping which would you be more likely to take to relieve your symptoms?

They each have the same active ingredients: acetaminophen and caffeine.* My conclusion: Effective advertising makes pain manageable.

But notice something else at work, here. By limiting themselves to headache relief, or to menstrual pain relief, aren’t the makers of Excedrin™ and Midol™ (McNeil Consumer & Specialty Pharmaceuticals and Bayer Corporation, respectively) limiting the number of sales they could make to people with backaches, toothaches, or sore muscles?

Absolutely they are.

They will probably make no sales to those people. And it doesn’t matter.

Name three other products marketed for the relief of menstrual pain. Go ahead, I’ll wait.

I’m waiting.

OK. Were you able to name three? Two? Most of us named only one.

Why Specialization is Valuable

Now, which would you rather be, one of a dozen products for general pain relief, or the one product that comes to mind when a customer is suffering a particular ailment?

By specializing and becoming the solution to a specific problem, you automatically become the most likely choice of consumers who are experiencing that particular discomfort.

When customers ask for you by name, you’ve succeeded at genuine branding. The lack of branding is the single biggest reason most business advertising isn’t as effective as it should be.

Your first step getting them to ask for you by name is to help shoppers figure out what they get from you that they can’t get from anyone else.

What is it? You sell the same products. You deliver the same services. What differentiates your business from those of your competitors? Why should anyone think of you as the solution to their problem?

Well, why should they?

The perfect solution is also the perfect 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.

Wondering how to articulate your value as a solution? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 760-813-5474.



* The active ingrediants are acetaminophen and caffeine. Midol Menstrual Formula® also includes 15 mg of Pyrilamine maleate, a diuretic to relieve water-weight gain.

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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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Coffee, The Moon Landing, And A Game Of Poker

Poker Hand

A winning poker hand.

I don’t play often, but I appreciate a good game of poker. Poker makes a pretty good analogy for marketing, and for business.

Poker players know what they hold in their hands, they carefully watch what everyone else appears to be doing. They make educated guesses as to the cards the other players hold.

Poker players hoard their resources until they know they hold a winner, then they confidently apply all of their resources to winning that particular hand.

At the end of the game the winner takes the whole pot. The loser loses everything.

The other players pick up a few bucks now and then and manage to stay in the game.

In real life marketing the winning hand is held by the company with the greatest share of mind. Let me give you an example.

Name the First Brand of Coffee You Think of

Now name another.

Can you name a third?

Chances are that you named your first coffee brand rather quickly.  The second came almost as quickly.

Most people take slightly longer to name the third brand.

Most People Purchase the First Brand that Comes to Mind.

Would you like to see how 3,000 other people* answered that question?

Share of Mind for Coffee

Share of Mind for Coffee

People remembered these brands in roughly the same proportion they buy them.

Conclusion #1: Share of mind predicts share of market.
Conclusion #2: The first name that shoppers think of is the one they buy.

How does a company become the first name on the customer’s mental list, and thus hold the face cards in the marketing poker game?

The Easiest Way is to Actually be First.

Who was the first man to fly solo across the Atlantic? The second? How about the first woman to fly solo across the Atlantic?** Charles Lindberg and Amelia Earhart won those hands. You can’t even name the losers.

You might remember the second man to set foot on the surface of the moon, but can you name the third?

Can you name the third expedition to the North Pole? The third Pope? The third signature on the US Declaration of Independence? (How about the third amendment to the Constitution)?

In share of mind, share of market, and poker, third position is a loser. Winners come in first. Second place sometimes makes a few bucks. Beyond that, money gets very tight.

“But wait a minute, Chuck” (I can hear you saying), “I have a small business in a small town. I’m not the first at anything.”

This is Where Marketing Makes a Difference.

Charles and Frank Duryea built the first gasoline-powered automobile in 1893 – a full ten years before Henry Ford got into the business.*** Henry made the automobile affordable to every household, creating phenomenal word of mouth on the Model T. Henry held the winning poker hand, and became the most famous automobile manufacturer of all time. How many of the losing hands can you even remember?

The best selling MP3 player of all time is the iPod, but Apple didn’t invent the device. Rio did, in 1998, nearly three years before the iPod hit the market. Rio built an expensive toy for people who loved technology. Apple created a toy for people who love music. Apple wins that poker hand. (And, tell the truth, until I mentioned the name, you didn’t even remember the Rio player, did you)?

Your objective is to make your company the one that people automatically think of when they need what you sell. When you’re first on that list, they don’t even think about buying elsewhere.

You see, the first company to make a claim has an 85% chance of being remembered for that claim. The second company has about a 15% chance. The third company less than 5%.

Ford and Apple simply out promoted Duryea and Rio, respectively. Neither was first in the market. Each became first in the minds of their prospective customers.

Can You be First at Something?

Absolutely. In fact, its essential.

To be remembered, to hold top position in share of mind, to hold the winning hand in marketing your business, you must be first at something.

I’d suggest that you choose to be first in the reason your existing customers do business with you now.

Find out what your current customers believe you provide that they can’t get anywhere else. Then, start promoting that. Promote it to the point that you’re now playing in a whole new game, and in this game you hold the winning cards.

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 finding a niche and being first in it? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-208-7654.

 


* BRANDPOLL survey of coffee brands, January-March 2001.

** Charles Lindberg, May 20, 1927; Amelia Earhart, May 20, 1932 on the fifth anniversary of Lindberg’s crossing.

*** Nicholas Joseph Cugnot designed the first steam powered self-propelled vehicle in 1769. The device was so heavy that it had to run on roadways of steel, and evolved into the modern locomotive. Etienne Lenoir patented the first practical gas engine (coal gas) and drove a car powered with one from Paris to Joinville in 1862.


 

 

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Physicists, Piano Tuners, and Market Research

First published May 29, 2005

Enrico Fermi

Enrico Fermi

Don’t expect most scientists to admit it, but a physics technique called the Fermi Question provides a quick and simple way for business people to determine whether a new market is large enough to be profitable.

 

Enrico Fermi was one of most well-rounded physicists of the last century, a Nobel Prize winner who was able to switch from practical to theoretical and back to practical, and make it look easy.

Until his death in 1954, Enrico taught the estimating technique that now bears his name. In the absence of definite knowledge or an exact answer, a Fermi Question’s goal is to obtain an informed estimate by making reasonable assumptions.

Fermi Used Common Sense in Science

Fermi would demand that his students at the University of Chicago explain to him how many grains of sand are on the world’s beaches. How far can a crow fly without stopping? How many atoms of Caesar’s last breath do you inhale with each lungful of air? How many piano tuners are there in Chicago?

Fermi Questions required students to use their understanding of the world, and their everyday experience, to make rough approximations in areas of which they had no knowledge.

But as I said, you and I will find the Fermi Question quite valuable as a business tool.

Fermi’s Classic Piano Tuner Question

Assume that you’re a young piano tuner. You’re about to set off into the world to seek your fortune.

Your favorite uncle lives in Chicago. He says you’re welcome to come stay with him while you get your piano tuning business off the ground. Shall we analyze the market potential before you accept his offer and open a piano tuning business in Chicago?

Start with the population of Chicago: according to estimates from the most recent U.S. Census, roughly 9,400,000 people live in the greater Chicago metro area.

The Census Bureau also helps us estimate that there are two and a half people per average household. Therefore Chicago is home to 3,760,000 families.

Fifty years ago one home in four had a piano, but since the Beatles burst on the music scene, people don’t gather ‘round the piano to sing, anymore. Shall we assume that only one household in 30 owns a piano today? That would lead us to conclude that there are 125,333 pianos in Chicago.

Some performers with critical ears may demand tuning at each changing of the seasons. Those owners are likely offset by others who own a piano, but never tune it. On the average, a fair assumption might be that each of those 125,333 pianos in Chicago are tuned once per year – 125,333 piano tunings per year.

Allowing for commute time across the greater Chicago metro area, perhaps a fair estimate is that a technician can tune three pianos each day. If he works a five-day, fifty-week year, each tuner could service 750 pianos each year.

Divide 125,333 pianos by 750 tunings, and there appears to be enough work to employ 167 piano tuners.

How Close Did We Come?

A quick look at switchboard.com under “piano servicing and tuning” tells us that 126 businesses in the greater Chicago area offer piano tuning.

How many tuners operate out of each business?

We should perhaps gather some hard data on this one with a few phone calls, but if one third employed two tuners, and the other two thirds employed only one, the average would be one and a third tuners per piano servicing business: 164 piano tuners competing in a market which appears to have enough work to employ 167.

Not bad.

Maybe our next step should be to ask for price quotes from future competitors. Then we could determine whether one could make a living performing 750 piano tunings per year. But regardless of the conclusion, we were able to make an informed decision with a couple of quick Google searches and about ten minutes of “think time.”

Our Goal Isn’t Accuracy

The Fermi Question won’t tell you with absolute accuracy whether a business proposition is feasible, but it can quickly provide a ballpark figure to eliminate those which can’t work.

Using this technique, could you quickly estimate the number of life insurance salespeople that could make a living in Phoenix? The number of profitable convenience stores in Pensacola? The number of brew pubs in Raleigh?

Would application of the Fermi Question help you to determine whether your bedding store should expand into sofas and loveseats?

Could you make a better decision about whether an additional salesperson could generate enough sales to cover his salary?

Might you use estimates like these to help you decide whether it makes sense to approach your primary competitor with a buyout offer?

I’m not suggesting that you don’t need hard data. I’m a major proponent of acquiring as much market data as is available, or that you can afford. You’d agree, though, wouldn’t you, that when the data’s not available, an informed estimate beats an uninformed guess every time?

Tell the physicists to move over. We’re co-opting one of their tools, and using it to 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 estimating your chances of success in a new market? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-208-7654.

 

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Customer Acquisition on Cruise Control – Systemic Marketing™

Cruise Control

Cruise Control

Imagine that you’re driving your car through the countryside. The road becomes slightly inclined, and your car begins to slow. You press a bit more firmly on the accelerator, and the car picks up speed again.

But then, you encounter a rather steep hill, and your car rapidly slows. You mash the pedal down, but the car feels sluggish, and takes a while to respond. Fearing a stall, you downshift to a lower gear. The engine picks up speed, the car begins to accelerate, and you successfully ascend the hill.

What happened to your fuel economy during this hill climbing incident? Can we agree that it suffered?

That’s because human beings are not particularly good at recognizing change. Until that change is obvious, we don’t adjust. Then, in order to restore the optimal conditions, we frequently over adjust.

Sometimes operating at peak performance is more a matter of luck than judgment. If only we had a device which would speed our reactions…

Enter the Cruise Control

The driver clicks the “set” button and a small comparator constantly checks the actual velocity against the desired velocity. The slightest change activates the throttle linkage to maintain the set speed without any intervention from the driver.

A good cruise control system aggressively accelerates without overshooting and maintains constant road speed, regardless of the mass of the vehicle, the weight of the passengers, or the road’s degree of incline.

Is Cruise Control a Convenience?

Yes. Yes it is. Cruise control offers convenience. It offers other benefits, too.

Use of such a system:

a) requires less attention of the driver. It requires less intervention by the driver.
b) adds a degree of predictability allowing better planning of rest stops and arrival times.
c) makes the trip less costly by maximizing fuel efficiency in miles per gallon.

Why doesn’t everyone use a cruise control?

Pretty much, we all do. At least when it comes to driving.

It’s advantages are so strong, and so desired by drivers, cruise control systems have become standard on nearly every new automobile.

Why Isn’t Cruise Control Standard in Marketing?

A cruise control for marketing would offer the same advantages to a company.

a) It would necessitate less attention from the “driver” – thus, less of the driver’s intervention.
b) It would allow for greater predictability in planning.
c) It would operate more efficiently, and thus produce higher ROI.

It sounds like a good entrepreneurial idea, doesn’t it – automating customer acquisition, much as an entrepreneur automates every other process in his company?

Cruise Control Flowchart

Cruise Control Flowchart

The answer is a qualified, “yes.”

Seasonal businesses can’t control the seasons. Extravagances will be subject to swings in the economy. Emergent responders can’t predict emergencies. But for a great many businesses, marketing cruise control is a very real possibility.

It has to do with the way potential customers are identified.

Revealed Targets, Non-Revealed Targets

Targeting involves defining and identifying the shoppers who are most likely to purchase. The ultimate identification reveals your potential customers names and addresses. This is possible if your target has, for example, subscribed to a magazine, lives in a particular neighborhood, or must be licensed with a legal entity.

Non-revealed targets are not identified as individuals. Non-revealed targets might include Country music fans, people who like Italian cooking, or parents considering hiring a tutor for their child.

Revealed targets can be contacted directly. Non-revealed targets are best reached through mass media.

Its much easier (and cost effective) for a marketing cruise control system to send offers to additional individual prospects.

What if Your Business Ran At Full Capacity?

Any company which will find an advantage in constantly running at full capacity will benefit from a Cruise Control system for marketing.

  • A pediatric dentist with an empty chair several hours each week.
  • A heating and air contractor with too few maintenance contracts.
  • A furniture store with inventory turning too slowly.
  • A jeweler with unpredictable demand for repairs.

And, of course, any owner preparing his business to be sold in the next few years.

Marketing Cruise Control is part of the Fishing for Customers Systemic MarketingTM system, which we’ll be discussing over the next few weeks. After all, it only makes sense to catch the limit 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 setting up a Marketing Cruise Control system for your company? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-208-7654.

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How Many Pancake Restaurants?

Originally published April 16, 2006

pancakes

A stack of pancakes.

People seem to naturaly rank things. They list things in order. They tend to remember things at the tops of the various lists.

On nearly any list, most people can remember the top three with little effort. It’s generally accepted that seven is the maximum simultaneous number of items that the average person will remember.

In 1980 consultants Al Ries and Jack Trout suggested that as astute marketers we take advantage of this human characteristic, and “position” our products against whomever tops the list.

This creates a new list, with us at the top. That makes it easier to remember.

One of their examples was 7-Up

As a soft drink it was way down the list. As the “Uncola” it was number one, beating out Coke.

As a soft drink, 7-Up needs you to remember Coke, Pepsi, Royal Crown, Dr. Pepper, Mountain Dew, before you’re likely to remember 7-Up.

As the Uncola, 7-Up needs you only to remember 7-Up.

The Uncola is a marketing position. It’s a mental shortcut. It let’s you get your message across in just a few seconds. A marketing position reminds your customers “Here’s why we’re worth recommending. Here’s why your friends and colleagues will be glad you told them about us.”

Let’s apply this concept to an industry familiar to all of us.

Hamburger Restaurants

How many hamburger restaurants can you remember? Four? Six? Most people can remember seven. Did anyone do nine (without peeking)?

Suppose you have a hankerin’ for a double cheeseburger. Does any particular restaurant come to mind?

Here are the rankings of hamburger restaurants in the U.S:

  1. McDonald’s
  2. Wendy’s
  3. Burger King
  4. Sonic
  5. Jack In The Box
  6. Dairy Queen
  7. Hardees
  8. Roy Rogers
  9. Carl’s Jr.
  10. Rax
  11. WhatABurger
  12. White Castle
  13. Krystal
  14. Fudrucker’s
  15. A&W
  16. Ralley’s

How many of these names did you remember?

Our question was, “Does any particular restaurant come to mind?”

Did anyone say “IHOP?”

Silly question?

Perhaps. After all, you can get a double cheeseburger at IHOP.

Even though they don’t mention cheeseburgers in their ads, IHOP has them on the menu.

So, why does IHOP not mention cheseburgers in their ads?

Two reasons: the cost of advertising; and the number of names down the list IHOP would find themselves.

Share of mind roughly equates to share of market.

In order to to create a space in your memory and help you to remember that IHOP has burgers, they’d have to beat out all of the hamburger chains listed.

They’d have to help you to remember at least seventeen down on this list. That’s a formidible undertaking. And, since we can predict minimal success, it’s likely to be very expensive when costs are compared to results.

No matter how much they spend, IHOP will never have more than a tiny fraction of the hamburger market.

How many pancake restaurants can you name?

Humm.

So, instead of hoping that you’ll remember at least sixteen other restaurants and still have mental space (and frankly, the willingness) to remember IHOP, they don’t mention burgers at all in their ads.

Instead, they make it easier for you to remember IHOP by becoming the top of a completely different list.

Instead of getting the crumbs of the hamburger market, they get the biggest share of the breakfast market. And in the minds of the public, IHOP pretty much owns the pancake position.

Marketing position = “specialization”

Frequently when I recommend specialization, people think I’m talking about refusing business.

I’m not.

Our objective is to capture a larger share of market. The actual competition for a greater share of awareness happens within shoppers’ minds.

By specializing we create a position at the top of some small list (market) rather than attempt to compete for awareness from way down a much bigger list (market).

Specialists do not refuse customer’s money * at the cash register. Their ads just don’t talk about things that are not likely to be remembered.

Let’s take a test

  1. IHOP is famous for _______?
  2. Waffle House is famous for _______?
  3. Tony Roma’s is famous for ______?
  4. Marie Calender’s is famous for _______?
  5. Spaghetti Warehouse is famous for _______?
  6. Black Angus is famous for ______?
  7. Olive Garden is famous for ______?
  8. Lotus Garden is famous for _______?
  9. Panda Express is famous for _______?
  10. Pizza Hut is famous for ______?
  11. Taco Bell is famous for _______?
  12. Kentucky Fried Chicken is famous for ______?
  13. McDonalds is famous for _______?
  14. Red Lobster is famous for _______?
  15. Hometown Buffet / Old Country Buffet is famous for _______?
  16. Benihana is famous for _______?

Humm. Same number as the list of hamburger restaurants. And yet, you do remember most of these.

Each has created a unique marketing position, and that position places each of them the top of a completely different mental list. Each has stopped trying to get a smaller share of the “dining out” market, and is instead competing for dominance within their speciality.

Your business is not likely to be a restaurant. Regardless, to compete in the minds of shoppers, it needs a position. That position will be a specialty.

What is your business’ position? Owning one is almost a requirement 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.

Have questions about exploiting your own position / marketing niche? Drop Chuck a note at ChuckMcKay@FishingforCustomers.com. Or call him at 760-813-5474.



* Ok. I lied. Specialists do turn away some potential business.

A Chinese restaurant will not maintain its position in the minds of customers by adding Mexican dishes to the menu.

If you found a menu that contained Chinese dishes, and Mexican delicacies, and Italian cooking, as well as burgers, would you believe the food was likely to be good? Or would you assume that these people can’t possibly excell at all different styles of cooking?

 

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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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Data Mining for Better Ad Copy

Data Mining

Examining your customer data may lead to better advertising appeals.

Pretend with me that you run Acme Office Supplies. You’ve just conducted a survey asking your customers why they shop with you. The overwhelming answer: convenience.

Is your research done? Do you tell people how convenient you are in all of your advertising and wait for more folks to say, “Yes. I’ve been hoping to become aware of a convenient office supply store. I shall go there now to purchase supplies?

Too many store owners would. I’m here to suggest a more effective use for your advertising dollars. This technique is derived from RFM Analysis, a tool I frequently use with new clients.

Today We’re Going to Concentrate on the “F”

The “F” in RFM stands for Frequency. Sort and rank your active customer base by the number of purchases they made from you last year, with the higher numbers at the top. Some numbers will be the odd loner. Others will cluster to form groups. I predict you’ll see patterns which can provide a great deal of marketing information.

I’ve chosen three clusters for illustration. Customers who bought 50 times in the last year, those who made 12 purchases, and those who only came in twice. These numbers correspond with weekly, monthly, and a couple of random purchases of office supplies.

What Motivates These Purchasing Patterns?

Wouldn’t you suspect that anyone purchasing weekly is experiencing cash flow issues? He needs the profit from this week’s sales to fund the supplies he needs to conduct business next week.

The monthly buyer likely values his time. Because of that, he keeps a well-stocked supply closet and doesn’t make unplanned trips to the store.

Twice a year? This guy is not one of your regular customers. He has his own preferred supplier, but found himself on your side of town just before closing time and needed something before he could get back to his regular store.

Here’s the Interesting Part

All three of these clusters of customers may very well tell you their prime motivation is “convenience.”

  • Convenience to the weekly shopper picking up getting exactly what he needs, only as he needs it.
  • Convenience to the monthly shopper is never running out of supplies before he’s ready to make his monthly shopping trip.
  • Convenience to the occasional shopper is not having to drive to his favorite store when its really out of the way.

The message which resonates with each will be somewhat similar to the others, and yet, not quite right for any other business. Our second customer, for instance, doesn’t share the first’s concern about cash flow. Our third never considers stocking up.

So, is a single advertising message the way to go? We both know it’s not. However, there is a similarity that can be summarized by the “convenience” answer on your survey. We can still use that similarity.

Build a Campaign

Give examples of each under the “we’re convenient” umbrella. How about, “What does convenience mean to….

What does convenience mean to Robert Smith?” followed by Robert’s explanation that in this economy, he makes every dollar work it’s hardest, and Acme Office Supplies keeps in stock everything he needs. The ad could end with “Acme is convenient… whatever that means to you.”

What does convenience mean to Jack Johnson?” Jack’s story centers around the value of his time, and again closes with “Acme is convenient… whatever that means to you.”

And convenience to Debbie English? Debbie could tell about Acme’s location, or its hours of operation, or that it’s open weekends. Regardless of the specifics of Debby’s hot button, the closing will tie back to the campaign. “Acme is convenient… whatever that means to you.”

Dig a little deeper and you’ll find Neil, and Sally, and Rick. Each has a story that can help to build Acme’s image, and tie the overall campaign into one memorable whole.

Rotate the ads if they run on TV, on Radio, or in the Newspaper. Send the individual ads as postcards to customers in the appropriate clusters.

One Additional Step

With your new understanding of customer group motivation, can you offer inexpensive customization of your services?

Could you create an order form for Robert that let’s him check off the supplies he needs this week, or perhaps list his usual purchases but leave blanks so he can fill in the amounts? Robert could fax the order to you, and you could deliver it first thing in the morning.

Could you send someone to Jack’s office with his custom order form – one that you and he developed together to determine his optimum level of supplies? You could schedule that appointment weeks in advance, survey his stockroom, and just like you do for Robert, deliver tomorrow morning. Because of his time sensitivity, Jack would find this service exceptionally valuable.

Customize once. Re-use indefinitely. And customized bait usually works better 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 uncovering strong customer motivations?  Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call Chuck at 304-523-0163.

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Purchase a Database for Database Marketing

What happens when a person gets parched? The obvious answer is that they will automatically search for the nearest store (or refrigerator) to look for a nice beverage to quench their thirst. This is of course basic human nature as just about every person on this planet will feel this way at frequent times during the day.

Now the question here is; what happens when a business gets parched?

Thirsty For Leads

A business cannot literally get thirsty. However, it can crave for an extra number of sales leads. The main reason behind this is because these sales leads are the key to the business’ survival and its eventful growth in their industry. There are times when a business can run dry of business leads. When this happens, their growth is stunted and the flow of income will be capped.

When the business is thirsty for leads, they turn to reliable sources like a credible business sales leads provider. These sales leads providers can offer them a dependable business contact database so that their thirst can be quenched.

What Does a Database Offer?

A business database holds a list of contacts of potential clients or business prospects in a specific market. For instance, business owners can get a business database that holds sales leads that are in a particular industry, profession, or even country. Therefore, they can acquire a number of sales leads just with a drop of a hat.

Aside from this, there are a number of other benefits that the business can get from acquiring this business contact database and mailing list from a reliable provider.

Let’s Look At These Advantages

Enhancing the range of the business’ target market – For many businesses, the expansion of their market range is put into top priority. The database allows their market to be expanded as it enables the business to contact potential clients that may have escaped them in some way or another. When they achieve this great benefit, they are not in the first step into increasing their return of capital.

Acquisition of fresh sales leads – Businesses, in most industries, always needs sales leads that are fresh and targeted. These are the leads where other companies within a related industry have not yet made any kind of deal with these potential clients. Now imagine when these business contact these prospects first, the chances for procuring a closed transaction out of them will be very high.

Lower down the completion time for the marketing campaign – With the sales leads in hand; the business no longer has to search for them thus negating the first few phases of their marketing campaign. Therefore, they can immediately focus on a more important matter at hand with these leads; namely qualifying them to become respected clients of the business.

Training costs will be minimized significantly – Business owners no longer have to worry about training their staff in trying to search for the sales leads as the contact database already holds them. The business owner can then train a lesser amount of tasks for their sales representatives. As an example, they can then train their representatives to qualify more leads and turn them into quality clients for their business.

Obtain a more stress free environment – This last benefit can be seen as an added bonus to the whole package. Since these other benefits are attained with the acquisition of the business database, then business owners and their staff will eventually notice that their assigned tasks has become less of a hassle to deliver. The end result will be that the business achieves a more relaxed workspace which helps a lot in keeping the peace within the establishment.

With this business database at the business owner’s fingertips, their organization will always be full of leads and enable them to acquire these benefits and more. Outsourcing to business database providers will help your business keep going and surely your ROI will be more than what you expect.

About the Author

Alice Clark is a sales and marketing consultant specializing in business contact database management. Alice invites you to visit http://www.contactdb.com/ to learn more about business contact lists and databases.

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Is There Money in Accommodating Early-Stage Shoppers?

Palm Trio

Palm Trio Cellular Telephone

You carry a cellular telephone. You’re reasonably happy with the service, the rate, even with the quality of your phone calls. Still, the phone you purchased two years ago was already proven technology by those standards, and is now considered old. Plus, you’re seeing the ads on TV for the newer touch screen phones, and you’re getting curious.

You’re vaguely aware that your two year commitment to your current carrier is drawing to a close, and you keep seeing all those ads for the newer touch screens. You head out to the mall. It seems a good idea to quiz a couple of salespeople at the cell phone kiosks.

You’ve just become an early-stage buyer.

Salespeople have names for early-stage shoppers: “lookie loos,” “tire kickers,” “time wasters.” Early-stage shoppers, very aware of their own ignorance, would feel much more comfortable at this point if salespeople were removed from their buying process. Early-stage shoppers say things like, “I’m just looking.”

Shoppers identify themselves by the questions they ask.

  • Early-stage shoppers don’t know what they don’t know. They are are becoming aware of an itch, but don’t know yet how (or where) to scratch. Early-stage shoppers tend to ask questions about the process.Current early-stage questions in the cellular industry are along the lines of “What’s Wireless-N,” “Are you telling me I can use my phone to connect my laptop?” and “What exactly is a 4G Network?”
  • Whether conscious of it, or not, mid-stage shoppers have eliminated the offers which don’t solve their problem, and are honing in on the solution which is exactly right for them. Mid-stage shoppers ask questions about specific equipment and its implementation.Middle-stage questions sound like, “How good is reception on this phone?” or “What’s the battery life on the Model 22XJ?”
  • Late-stage shoppers are ready to buy. If they’re talking to you, there’s an excellent probability that you’ll get the sale. Late-stage shoppers ask questions about pricing and purchase terms.Late-stage questions might be “What’s the total price including the upgraded memory chip and sales tax?” or “Can you give me a better price on the hardware if I accept a longer service commitment?”

Salespeople pray for late-stage shoppers.

To most salespeople, selling will always be a numbers game. “Pitch” the offer to a large number of people and a few will purchase. If those few spend enough money, salespeople are rewarded for all of the time they spent with those who didn’t buy.

If you show signs of buying, salespeople will pay close attention to you. Show the opposite signs and they will move on to better prospects. They call this process “qualifying the lead.”

But, suppose you’re one of those ideal customers the cellular companies lust over. You buy expensive phones which lead to expensive add-on services, you buy the additional warranty, and you never invoke early termination. You’re not a tire kicker or a time waster. You’re a highly-qualified early-stage buyer who has very real questions about changes in technology and services since you last upgraded.

Wouldn’t you be more likely to trust someone who helps you understand the alternatives rather than pushing you to make an immediate purchase? Isn’t this the basis of relational selling?

Nurturing shoppers through the stages.

Put yourself into the mindset of an early-stage shopper for anything. If you found a reliable source of information, wouldn’t you automatically be more inclined to buy from that source when you’ve decided to purchase?

So far, the best side-by-side comparison I’ve seen for cellular service and phones is offered by c/net. The sad part of this analysis is that c/net doesn’t sell telephones or cellular service.  Any cell company could publish this information.  It is widely available.

Of course, the danger of inviting side-by-side comparisons between your company and your competitors is the risk of not being competitive. Maybe that’s why the cellular providers not only hide this information, they all bundle services differently which makes comparisons even more difficult.

But some businesses understand how to grow new customers.

Distinctive Kitchens Culinary Arts Center in Pensacola, Florida is a family business that for 80 years has sold premium appliances, and more recently wines and culinary accessories. Distinctive Kitchens offers demonstrations, classes, and in-store experts. Shoppers new to gourmet cooking or experienced cooks brushing up on new technique will find the answers they need, and a great source of product, too.

Sweet Maria’s Coffee in Oakland, California offers all of the information any coffee drinker could possibly want, from reviews of various equipment, to articles, to instructional videos, to selections of green coffees from all around the world. Plus, Sweet Maria’s hosts a community forum in which members discuss their opinions of coffees, roasting, brewing methods, blending, storing, and the selections of green coffees. Care to bet they have very little customer turnover?

Home Depot has a series of in-store workshops designed to give customers hands-on experience using materials, tools, and supplies in their Home Improver Club.

Think about the number of gallons of premium paints, glazes, and other supplies you can sell over the customer’s lifetime once you teach a homeowner how to apply a faux painting technique.

Can your business offer early-stage information while competing for late-stage shoppers?

Why not?

  • Could your insurance agency create a checklist for homeowners, listing all of the common furnishings, and leaving space for the homeowner to estimate the replacement cost of each?
  • Could your photography store set up “good, better, best” packages of cameras, lenses, flash attachments, and instructional videos?
  • Could your HVAC company produce a chart that shows how quickly a new furnace or air conditioner will pay for its self in savings due to higher efficiency?
  • Could your furniture store create a layout grid with scale pictures of common furnishings and help shoppers envision their home with new sofas, beds, and entertainment centers?
  • Could your music store create posters which explain the advantages of specific guitars in the performance of specific genres of music?

Of course you could. It only takes a little planning, and a little time. When you give early-stage shoppers the basic information they need, those shoppers will come to you now, and are likely to return as they move through the buying stages.  And when we’re fishing for customers, don’t we all want them to return?

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.

Questions about focusing your messages on specific stages of shopping may be directed to ChuckMcKay@FishingforCustomers.com. Or call Chuck at 304-208-7654.

 

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