By: Rich Harshaw
Get ready to fire your ad agency after reading this article! You’ll be furious that they never told you what you’re about to read. And if you don’t use an ad agency—or even if you don’t do very much advertising—you will find out how to get literally 10 times more return for your advertising dollars than you do now. It doesn’t matter if you do radio, yellow pages, magazines, newspaper, faxing, Internet, billboards or whatever. There are a couple of things you need to know (that agencies don’t know) to dramatically increase your return on investment.
How to Reach All Potential Buyers, Not Just ‘Now’ Buyers
A ‘now’ buyer is one that hears/sees an advertisement, needs what is being sold on an immediate basis, and buys it based on that ad. If you’re thinking about buying a new computer, you start noticing the ads in the paper, call around, and buy a computer. But what about the other 17,233 people who saw those ads but didn’t have an immediate need? Will they ever be in the market to buy in the future? You bet. But the retailer has done noting to capture those people.
Make Your Advertising Capture ALL Potential Buyers
This sounds pretty obvious; still, show me one ad agency that knows how to do it. You need to realize, first of all, that some of the people who don’t buy now will buy in the future. They do have an interest. They want information. They want to be prepared to make an intelligent buying decision. The problem is that 99% of all advertising and marketing contains no useful, case-building, confidence-invoking information. And it doesn’t lead the buyer to the next logical step. An example will illustrate what I mean by ‘the next step.’
Sell the Next Step… and Capture All Future Buyers
An upscale furniture andstore in north Dallas ran radio ads that tried to drive in new business, but failed to produce any measurable results. We took the same ad and changed it just a little. Instead of the announcer, we had the owner read the ad. Then, instead of making the listener come to the store, we gave an option to call in to be put on the update list. You see, at this store, because the merchandise is consigned and since it is sold so quickly, they always have new and different items in the store.
So we let the radio ad listener know he/she could find out what was in the store without even showing up. The results? Over 10 new walk-in customers a day—and more than 25 new call-ins per day requesting to be mailed the bi-monthly listing. Compare that to the previous ads they were running: No measurable results.
Another client is a rather huge residential roofing company. They run billboards around the Dallas-Ft. Worth metroplex with this simple phrase, “Largest Roofing Company in Texas.” Results? Non-measurable. But when you’re spending a couple thousand bucks each month, you would kind of like to know if it’s working.
We helped them develop what’s known as a “Code of Ethics and Competency” for contractors and then advertised on the billboard to call in for a copy of the “Code of Ethics” and a checklist they can use to judge any roofing contractor. Results? People call in and get the free stuff… even if they’re not a ‘now’ buyer. This allows us to market directly to those people from now on.
How about a newsletter? Another client is the world’s largest manufacturer of coin-operated air hockey tables, pool tables, and foosball tables. They send a four-page, oversized, full-color newsletter to the subscriber list of the leading industry magazine. The first issue went out to 5000 people and they received 4 calls from their buddies in the industry, telling them how cool the newsletter looked. It only cost them $13,000 with graphic layout, printing, list rental, and mailing costs. That’s $3250 per compliment.
We changed the whole concept of the newsletter (even though it looks the same) to giving specific information about the profitability of the tables and gave the readers to call, fax, or mail in for 5 different free offers. This time we only mailed 3800 at a cost of $9200 (there were some non-prospects on the list) and to date, have generated 136 inquiries for free offers. And counting. That’s about a 3 1/2% response, or about $67.65 per inquiry. Which would you rather get?
Spend Your Money Where It will Make You Money
So here’s why advertising guys really hate this way of marketing: I’d rather spend my money bombarding those 136 people who inquired than the 3664 who didn’t. Or for the furniture store—I’d rather spend my money bombarding those 10 people who come into the store and 25 who call in every day than trying to convince the other zillion people who heard but didn’t respond.
But you see, when you advertise to capture leads, you don’t have to run your ads as much. You don’t have to spend so much money on non-measurable results any more. Of course the ad sales rep makes less money, as do the agency execs. They hate that. But what are you in business for? To make some ad guy rich or to make yourself rich?
Spend the Money on the People Who Are Interested
Let’s take the example of the furniture store: Let’s say they generate 200 leads a week for 8 weeks on the radio. That’s 1600 new leads. These are people who we know have some level of interest in what we’re selling. So what do we do with them? Send them the update list every two weeks. Send them special offers on merchandise. Send the gift certificates for free stuff when they come into the store. Send them testimonial letters from other satisfied shoppers. Send them offers for other stores that sell complementary (not competitive) things they might want.
Become the Fountain from Whence All Knowledge Flows
You market like this and you’ll soon find that you’ll either have all the loyal customers you can stand… or you’ll have to expand your business and start the process over again. Either way, you’ll spend infinitely less money on media advertising. You’ll spend your money where it counts… selling to qualified prospects.
Who can this apply to? Just retail-based businesses? No, it applies to all businesses. Retail, wholesale, professional, service or whatever. All businesses should generate leads and then market to those people. This is what we call ‘Monopolizing Your Marketplace.’ Think about it: If you do this and none of your competitors do (trust me, they don’t), you’ll eventually capture a huge percentage of all the possible buyers on your own database. Then you can quietly and consistently market to all these people… and your competitors won’t even know you’re doing it. Warning: You must be willing to live with the guilt of knowing that you put a competitor out of business.
About the Author
Rich Harshaw is CEO of Y2Marketing.