Advertising Is an Investment, Not an Expense
Advertising is expensive as hell. Here are a few thoughts you can use to make your investment go a little further.
This is my favorite subject because so much can be done to make or break a business by how you present it. I hear many people say that their advertising doesn’t work. When I look at their ads and ask how they track them, it’s no mystery why they feel badly about their advertising. They rarely track which ads in which media generate results. Where did the money go? What did it do?
First of all, let’s look at a point of view: When you invest your money, you expect to get a greater return. When you spend your money, you buy something of value; but the money is gone and is not expected to come back worth more. This is a psychological concept that is useful to consider in a variety of situations, but in the area of marketing most people think of it as a cost of doing business and therefore something to be minimized.
If you look at marketing as a business investment, then you would seek to invest as much as possible in the highest yielding vehicles. (By the way, I recommend changing the words: cost, price, expense, etc., in your promotional literature to “investment” — it will send a subtle message to your customer that they will get more than the price of your product or service back.)
Where Are the Fish Biting?
The first step to maximizing your marketing investment is to determine which vehicles reach the right audience. We started out by placing many one- and two-column-inch classified ads in a number of computer and business magazines to see if people would call. It was cheap enough to have many small ads in as many as 20 publications to test where we should consider expanding our presence.
To make a classified ad work, you can’t just send over some copy and allow your ad to be buried in a sea of text. We used “display” classifieds, which means we sent a fully designed ad (as much as you can in a microscopic classified). Here’s an example:
Business Plan on Diskette
150+ pages of text you can edit.
Pre-written Word / Excel templates
$99 Visa • MC • Ax 1-800-346-5426
These worked fairly well to get us off the ground. The reversed headline helped to grab people’s attention (I just bolded it here). Anyone with a computer who was even considering writing a business plan was sure to call.
Prepare a Script — Leave Nothing to Chance
Because the ad didn’t tell much, people called for more information. At first I just stumbled through my pitch and answers to their questions trying to say something that ultimately made sense. Every time the customer said, “Oh, I get it,” I wrote down what I’d said that worked — exactly as I said it. Pretty soon I had compiled and perfected a bullet-proof script I could use over and over again with about an 80 percent success rate.
People would call as early as 5 a.m. and they’d say, “I saw your ad. Could you tell me more?” (I’m in California and they would call from the East Coast. I trained myself to spring awake sounding happy to hear from them.) Since I had my script on a clipboard along with order forms near my bed, I could just read to them. (If you’re going to wake me up, you’re going to give me your credit card. Four out of five times they did.) Later, the people I hired to answer calls also used this script, and we even incorporated much of the text into our brochures.
How Many Ads Should You Run?
Advertising sales reps tell you that you need to advertise at least three times to effectively test an ad. (Or, “Seven impressions before people will buy …”) That’s nice, but your ad should indicate a degree of success (or failure) on the first run. If you’re not sure, run just one and see what happens. If you’re confident in a particular publication or website, go ahead and sign up for the full 12-month run. If it works, you’ll have saved a lot of money on the rates for the first issues.
If it doesn’t pull, then discontinue your ad schedule as soon as possible and pay the short-rate (the difference between the rate for the number of ads you ran and the rate for the discounted quantity). Here’s why: If you conservatively ran a few ads before jumping in for the 12-issue rate, you’d pay the full rate for a one-time or three-time rate. You wouldn’t save money until you went for the 12-month schedule. If you went for the 12-month schedule right away and your ads worked, you would continue. This way, you get your discount up front and pay the higher price anyway only if it doesn’t work! You don’t want to penalize yourself when you’re successful.
Be sure to discuss this strategy with your ad rep first, to be straight with them in case they may want you to sign an irrevocable 12-month schedule.
Test Your Ads — Make Them Call!
I’m amazed at the number of ads I see that give the advertiser absolutely no indication whether the ad is attracting any interest, either through the publication or in what’s being advertised. Unless you’ve got zillions to spend on ads and don’t care to be efficient, always make an offer to the reader to contact you for something, like a free catalog or more information. Better yet, have them call to place their order. Nevertheless, you need to know if the advertising medium is putting your message in front of customers and the only way to be sure is to ask for some kind of response.
In fact, develop a unique guarantee appropriate to your product or service. Rather than offer a vanilla-flavored, 30-day, money-back guarantee, JIAN uses “Our 60-Day Get-the-Job-Done Guarantee” because people buy our software to handle a specific business project. We want them to succeed using our product rather than fool around looking for another product. Look closely at ads you like and watch your mail for other examples and good ideas.
Turn Your Risks Into Tests
The best way to know if your ad works is to track it. Now that you’ve put something in the ad that will compel people to call, make sure that your ad is tagged with some kind of code number. Don’t expect people to have the magazine in their hand and say, “Oh yeah, I’m reading the June issue of Success magazine.” In case the customer says, “My friend tore your ad out of some magazine,” you’re covered because you’ve put in a code number. By the way, that’s how we learned that Success magazine was a very effective news magazine for JIAN. If we hadn’t tried it and tracked it, we probably never would have known. I wouldn’t have been able to quantify exactly how much business came in.
If I’m going to take the risk to try a publication, I’m going to learn whether or not it’s a fertile place to find customers. Internally, we call it a Sales Source Code, but in your ads, you want to appeal to your customer: Discount Code, VIP Code, Priority Code, etc. You might even use an extension on your phone number. Some people even say, “Ask for Susie.” Susie is the code for the ad. Be careful about playing any kinds of tricks. Customers aren’t stupid, they can handle the fact that you want to track the source of your sales. Today, we use our Affiliate System to track links.
You need to know how much a particular ad pulls and when. I recommend using a different code for each ad, even if the same artwork runs in the same magazine. If you change your artwork or message, you’ll want to track the results. Keep track of your results using a spreadsheet if your ecommerce system doesn’t have this capability built-in. Maybe the ad does nothing the first month, but pulls like crazy a month later. We have some ads that inspire a call as much as a year later. (This is called a “long-tail.”)
Business Black Belt Notes
» You must measure the results of all of your sales and promotional activities to learn what works and what doesn’t.
» In direct response advertising, the priorities are A) the media in which you advertise (for direct mail, it’s the list you mail to); B) the offer of a good deal; and C) creative design and copy — in that order of importance.
» Use copies of your brochures before committing to a large quantity of four-color printed literature.
» Ask for comments and suggestions in real sales situations. Incorporate answers to questions customers ask.
» Track all ads, mailers, promos, etc., with a code number and put them into a spreadsheet that you review monthly.
This article was written by Burke Franklin and published on Noozhawk.
Burke Franklin is the originator of BizPlanBuilder business plan software, founder of JIAN (jee’on), suite of successful business productivity software tools. Burke was elected to the White House Conference on Small Business and nominated for Ernst & Young’s “Entrepreneur of the Year.” His highly praised book, Business Black Belt, draws parallels from the martial arts and is rich in hard-won advice for building and running a business today.
Noozhawk is a news and information Web site owned and operated by Malamute Ventures LLC.