Advertising as Evidence of Wealth?

An 1890s advertisement showing model Hilda Clark in formal 19th century attire. The ad is titled Drink Coca-Cola 5¢. (US) (Photo credit: Wikipedia)

Our society is awash in advertising.  It reaches us through all forms of media, old and new, and constantly in public space and discourse.  Advertising even intrudes on our private space via our growing dependence on personal technology, like our phones and computers.  But I wonder how often we stop to think about what this advertising means at a sort of socio-economic level.

I am thinking of it this way.  Let’s roll back time a couple hundred years.  Imagine a feudal society or even the early capitalist systems of mercantilism.  Who thinks a feudal serf or the new urban poor of the early industrial age had much need for advertising?  Or perhaps more to the point, who would think advertising would have much need for the impoverished masses?

It is hard to imagine an advertising industry scheming to promote one product’s advantages over another to people who simply struggled to survive from day to day.  One did not need advertising to tell him what he needed and why.  My guess is the poor pretty much understood this instinctively, just as we all would if we were put into a daily struggle for survival, well-being, and maybe a taste a rare leisure.

So what does that say about us, especially a society that markets so much to rich and poor alike?  For starters, we are not as poor as we were centuries ago.  And that is a good thing.  We still have vast differences in wealth and poverty, however, and that perhaps is not a good thing, especially if we begin to back pedal from more egalitarian economic prosperity, reversing trends of shared socio-economic growth.

Nevertheless, things are different today– life is more prosperous and generous– and this difference exists because of overall economic growth.  Advanced economic societies show signs of prosperity, even among the poor, and life comes with some basic assumptions and expectations about what is just and humane.  An higher economic standard exits for all, a baseline of sorts.

This isn’t uniform throughout the world, of course.  While we seem to be entering an era when literally billions of the world’s poor are now breaking into the middle class, wealthy societies — those that support an increased level of increased and shared wealth — do not reach everyone.   Large parts of the world remain left behind.

I haven’t much more to say about it.  However it seems to me that a very simple way to judge where wealth is becoming a kind of shared prosperity is to follow the money, specifically the money spent on advertising.  The United States in particular has perhaps the longest relationship with a nexus between affluence and advertising.

If there isn’t already, there must be some economic index that follows advertising dollars and reach.  If not, a dissertation might exist here.  What does advertising tell us about our wealth and economic prosperity?

Just thinking out loud again.

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A Note From The Field: Selling to your neighborhood business…lessons for all.

What most business owners look like to salesmen...

I do not like to sell to businesses in my neighborhood because more often than not I don’t like the results.  It isn’t necessarily the “no” that often occurs in sales, but getting to that no that’s the problem.

I prefer to think of my local business owner as a sincere and sharper invidual than most, but a short sales call can turn around that impression in a hurry.

Sadly, most business owners would do much better if they were a little less sure of themself, a little less close minded, and this is as true as it is of your local grocery store owner as it is of the dentist across town.  Your favorite business is likely run by someone no different than most.  So when working on sales I mostly avoid my local business owner and almost always regret it whenever I don’t.

Today, for example, contacting a business facing new competition in my neighborhood is an ideal candidate for a local marketing campaign that includes a mix of direct mail, loyalty promotions, and internet marketing.  Plus we are offering
incentives to new advertisers that make this program especially attractive to a small business owner, including complimentary add ons to even a small marketing campaign.

But the business owner never learned about the promos.  He stubbornly refused to accept any information and when I explained some of the features, he mocked them.  We have, for example, QR links to custom websites we offer at no charge on direct mail pieces.  He said he had never seen a direct mail that included a website, telling me that he only sees websites on the internet.  “I have no time for you.  Sorry.”  And that ended it.

First off, I’m not going to waste my time on the stubbornly naive and unwilling to be informed business owner.  Secondly, I didn’t want to sour my impression of this business any further.  True, what he chooses to do with his business is indeed his business.  I understand that.  And I understand that business succeeds without me.

What most salesmen look like to business owners.

However that does not mean that I might not bring value to a business.

Let me suggest, however, that if you’re going to spend time — even as little as five minutes — you might as well spend that time wisely.  LISTEN!  When people listen, the often learn.  At the very least you can determine whether the offer has merit or not.  It always amazes me when people won’t listen to a salesman.  What do you have to lose?  Do people think they are so weak that a salesman might trick them into making bad decisions?

Have confidence, be bold, and listen to a salesman!  Have some backbone.  All we ask for in return is a bit of civility and professionalism.  In the end you might come out ahead…and maintain a good impression, too.  How you treat clients — and many sales people are also clients — reflects on your business.  Keep that in mind.

 

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Starting the Sales Day

Impressive Charts!

We haven’t posted any information about the start of a sales day.  Let’s change that!

Today’s start is a good model.  I work for managers who see starting early as an almost ethical or moral imperative.  It doesn’t really matter if business people want to hear from a salesman at 7:30 in the morning, if you’re not trying you’re not cut from the right cloth for sales work. 

Well, I couldn’t disagree more.  I am working from home this morning and I have accomplished more in my first hour than I would have if I had been dragged to some early meeting.  My reports are all in order, I have sifted through the dozens of email that arrive overnight, and I am rested, relaxed, and happy, three qualities that make a huge difference in sales. 

Let me tell you a little about my reports.  I carry a small laptop for all meetings and it is loaded with information that I can use when meeting clients.  However, I worry that we might be tempted to overwhelm business owners with studies, testimonials, and pie charts.  So I use these things sparingly and on an as-needed basis.  I don’t presume that my audience knows all the facts, but I don’t presume that they don’t either.  Fact finding never stops during the sales process.  You should always be checking in with your client and making sure they are still with you.  A good salesman is attentive and flexible.

You need to present your information clearly and the most important information you present is your product or service.  I follow a format I learned from high school debate.  I find out what my clients concerns and goals are and then answer each of those concerns and goals with a feature and benefit from my service.  Very simple.  And for me the most simple way to accomplish this clearly and with good order is to lay out a simple summary on a sheet of paper and just walk through it with the client. 

An Example:  “You mentioned that you would like to increase revenues at your St. Cloud office by 10% next year.  Here I have included this that helps you achieve that next year.” 

You do two things with this approach.  You show that you have listened to your client and you have answered his concern with a solution.  You would be surprised at how impressed people are when they discover that you have listened!

Most of these summaries are two columns.  I put the product or service in a column and list the benefit of the feature in the next.  I make it clean and casual.  Simple. 

So my proposal outlines are all good to go along with any supporting information I want to include with it.  Even with powerful computers, I insist that it is important to have hard copies of key supporting information ready for your clients. 

 So I am ready to go and it is 9:00.  Of course much of what I did this morning I could have done last night — and some of it I did prepare last night — but I find it beneficial to pull my prep together in the morning.  It gives me an opportunity to mentally go through my day and think ahead.  It is a good rehearsal.

Personally, starting now rather than at 7:30  is better for me.  I am not an early rise-and-shine kind of guy and nothing will change that.   I still get up and get started early in the morning, but ramp it up with my preparations.  I am in a much better mood, my thoughts are clearer, and I have wisely used my time to set up my day rather than feel pushed and rushed.

In my work I cannot always start my days like this.  Early meetings are inevitable.  I have made sales as early as 6:00 a.m. (once) and frequently I am starting earlier in order to get to an early meeting.  This is the reality of the business world.  This suprises no one, does it?  If I had my choice, however, today would be the best way to start all of my days.  It optimizes what I am.

No time for delays, however!  Time to go make something out of this day…

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I Have Said This Before…

Computer Directory.

In a recent post I caution against judging traditional print-on-paper phone directories to be dead.  This post is a timely complement to that post.  Briefly, be cautious of people who want to be paid convincing you that phone directories are dead.  If I can say this again and help someone be a smarter, better decision maker, I will say it again.

Make sure you’re doing business with a reputable internet marketing company.  Make sure you’re doing business with a reputable advertising professional.  Can’t say it enough.

In particular, beware of  people who offer savings as the reason to dump advertising or shift investments as their key benefit. 

Advertising opportunities — and risks — are very confusing today and a class of “experts” ready to prey upon the uninformed or the gullible lurks out there.  They look for businesses owners who might not know exactly what their advertising does for their business.  They also look for people lured by the appeal of being trend-forward  Perhaps they will capitalize on business owners ready to outsource some of their management responsibilities.  Most often they use savings as the key incentive for doing business. 

If savings cut profits, they’re not really savings.

These cutters and slashers promise businesses access to the riches being made on internet…kind of.  They often offer access to the internet, but they really sell savings.  Instead of paying X, pay one-half of X and get internet advertising, for example.

First of all, if you’re currently buying “old media” chances are good that your old media service also offers “new media” options for your business.  Take advantage of your existing relationship.  Your current advertising professional already knows something about your business.  They have the same incentives for your success whether you invest in existing services or expand into new ones.

Second, check your “expert.”  With all due respect to SEO and SEM professionals, look at proliferation of internet marketing professionals out there, especially in a down economy.  There are many people eager to stretch their experience a bit into an expertise in now-vogue areas of social media, mobile search, and good old fashioned search engine marketing and website optimization.  Just look at profiles on Facebook, Twitter, or the like.  It can feel like everyone is an internet guru today.

In my opinion, you should pass on anyone who comes to you offering you savings and only asks for a percentage of the savings as compensation.  (“You pay nothing unless I can save you money.”)   They will look at your current advertising contracts and offer to negotiate a better program.  It sounds good, but…Ask yourself, do you think they will look to maximize savings to serve your best interests or to increase their commission?

Of course you need to be cautious of anyone selling on commission and ask yourself the same question about whose interests are best being served.  Most of these cutter services, however, operate on a single contract and move on.  Perhaps they will ask for a two-year contract.  In other words, they have no long term interest in your business.  Unlike an advertising professional selling services based on results versus savings, they have a short-term incentive — your savings — and not the long-term incentive of selling services that will generate revenue and profits.

Likewise be careful with new media programs that offer to find you savings in your current advertising contracts and transfer those savings to cover new advertising programs.  Many people are ready to find “savings” for you in one media only if they can transfer it to another program. 

Make sure you are working with someone who wants your business, not just your cash.  Test them.  Tell them you’re happy with your current advertising media; tell them you think it is earning a profit for you.  If the primary reason given for doing business with them is to shift “wasted” money to “better” advertising, make them work more for the sale.  If you’re making a profit on one form of advertising, they should not try to cut your advertising.  They can offer to diversify by adding to your opportunities, but why should you cut something that is already profitable?

I learn everyday that many new media reps don’t understand their old media competition.  Even well-qualified new media advertising professionals don’t always understand the old media they claim to be replacing.  Unfortunately this shortcoming isn’t easy to spot and isn’t likely to be less common in years to come.  This is a red flag that business owners might not ever see . 

When choosing an advertising professional, maybe it helps to think about another major purchase that has changed over the years.  Think of the automobile industry.  Cars have changed dramatically over the years, but people often buy cars from the same dealer even as auto technology changes.  Experienced advertising professionals are not that much different.  Experience and relationships matter.

And I still contend that some of the best values today are in old media.  A phone directory might not be what it was twenty years ago, but it still works and can be more cost-effective now than it was then.  Don’t sacrifice this standby prematurely and if you’re not taking advantage of it, talk to a reputable ad professional and see if it should be in your advertising mix.

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Why It Gets Frustrating

http://www.yellowbook.com

Let me give you an example of why my work can be frustrating. 

Suppose a client has two advertising options.  I have tracking results for both options.  In one option an advertiser pays less for his ads, but he gets fewer leads.  That might seem to be ok for a business on a budget, right?  Perhaps the business isn’t willing to risk much at this point and they just want to ease into a program to see what results they will get. 

It might make sense for this business to start with a conservative advertising program.  Maybe.  First let’s look at another business considering the same two ad plans.

Let’s the second business has been advertising for years and they decide they need to reduce costs so they have decided it makes sense to reduce ad save money.  I have the same tracking and results to share.  It would seem to make sense that a smaller advertisement would result in savings, right?

Wrong.  Or I should say not necessarily.

You’re only going to save money with advertising cuts if you are losing it by having the advertising in the first place.  In that case you need to think long and hard about whether you shouldn’t just cut it all.  If you’re spending a furtine trying to selll bikini’s in Nome, you might have something other than poor advertising to blame…you have a poor advertising decision.

Or perhaps you’re spending more than you need to spend.  If you’re the only bikini dealer in Nome, you might not need a billboard on every street corner and an ad on every page in the newspaper.  If your advertising costs exceed your potential revenues, your wasting money.  If you spend a million dollars advertising in a half million dollar market, you’re going to be disappointed.  You have to look out for redundancy, too.  A million dollars in sales on a $500,000 budget isn’t as good as a million dollars in sales on a $250,000 budget.

So what do you?  You get a ad exec or rep you can trust…and maybe this is where I am losing the game!  Let me explain my example from the yellow pages phone directory advertising world.

I have two ad plans that we have tracked.  For the sale of simplicity let’s say that Plan A costs $100 and results in an average of 5 leads per month.  Plan B costs $400 a month but results in an average of 100 leads per month.  Which is going to “save” you money?

If you’re the new advertiser and you want to start slow, perhaps you’re willing to pay $20/lead and your business opportunities can justify that.  Let’s say your closing ration is very high on a product that has a profit margin high enough to get a return on your investment.  There are scenarios where you want to play these odds with an untested advertising product.  However…

Let’s say you’re the existing advertiser and you’re already the hypothetical $400/month getting 100 leads.  How does reducing your investment help you?  How does moving from $4/lead to $20/lead make any sense?  If you are not closing enough deals at the $4/lead rate to justify the $400/month plan, how does going down to the $100 plan improve your odds?

Buying down is a common mistake people make in yellow page directory advertising.  Leads are like commodities.  If you can get them at a lower cost, go for the lower cost.  Often that happens in a phone directory simply because you invest smarter.  If you need gas and you see on one corner a station offering gasoline for $2.00 a gallon and across the street another station offering the same gasoline for $2.50 a gallon…where are you going to go? 

This example is a simplified situation that exists in many larger phone directories that contain a lot of competition.  If you open a directory for a major US city, for example, you’ll see dozens of pages of ads for auto services, attorneys, home improvement contractors, dentists, etc.  In these situations the smaller ads often pay the most for their leads compared to bigger ads. 

It isn’t always the case that smaller ads are mistake, however.  And my example here — while being very close to an actual example — is unusual for how clear the cost-per-lead comparison breaks down, but these comparisons are typical.  However, if you’re a small business you might not be able to handle all the business you would need so you could pay for and profit from a larger ad plan.  So you need to be honest with yourself and your potential.  A good rep will help you sort out your opportunities and your costs.  Take your time and do it right.

Also take your time and do it right when comparing companies you might want to advertise with…especially yellow pages.  They are not all the same.  Lower cost doesn’t always mean best value.  On the other hand, the “incumbent” or the “utility” directory might not be the best value either.  Often they charge high rates based on reputation…everyone mistakenly thinks they are the “real” phone book and they charge accordingly.  Today this simply is not a sound way to make a value judgement.  Most consumers have no clue about the distinction between one book and another … and they don’t care.  They use the books with the most information.  More on that later.  But briefly now…you can do the same sort of comparison…reversed.  If one book charges $1000 for an ad and the other charges $500, don’t presume the $1000 is better.   If you get 50 leads for $500 and 75 for $1000, which is a better value?

Don’t be one of the many business owners making poor investment decisions when buying yellow pages advertising.

It Pays to Listen

Business Transactions Happen Everywhere

Good listening is essential to sales success.  If you don’t listen well, you’re likely going to struggle.  But I am not going to spend a lot of time writing about that today.  I want to point out to business owners that it pays for them to listen, too.  A lot of opportunity is squandered when you refuse to listen.  My argument here is simple.  Take time to hear a sales pitch.  You might learn something.

After years of working with mostly small businesses, I am amazed at how many of them are run by people who do not have even a basic grasp of small business fundamentals.  They don’t understand assets versus expenses or when an expense operates as an investment.  They wouldn’t be able to read a spreadsheet anyway.  And return on investment?  Forget it.  If a check is being written for anything, it is a loss. 

These business owners, but not only these business owners, would be in better shape, maybe even much better shape, if they listened.  It isn’t just a matter of listening to sales people, either; however I have to believe that if they don’t listen to me, they probably don’t listen to a lot of people with ideas for their business.  Even successful businesses can gain from listening.  And keep in mind that if you listen to someone it doesn’t mean you have to be swayed by what they tell you.  But let me say it again…you still might learn something.

Hell…when listening to a salesman you might get some competitive information about your market and your competition.  You might see what your competitor is doing to market his business, for example.  You might get an idea of what he is investing for that marketing exposure.  Knowledge is key, is it not?

But I am dealing with a lot of people who possess something like an eighth grade education.  They might have graduated from high school, but somewhere along the line the learning process shut down.  You see these people in college for that matter!  Now this is a slur and it isn’t meant to describe everyone, but you do have a lot of small business owners who are in business because either they inherited the business or they couldn’t find anything else to do.  I often question if these are the best ways to become involved in a business.  Even the kid who inherits the family business needs to care, right?  There are a lot of knuckle-dragging, mouth breathers with little or no passion about their business and that’s a problem from the get go.

I am going to pick on beauty salons again.  (Sorry.)  If I had a dime for every time a beauty salon owner told me he couldn’t afford advertising because times are tough but then told me he didn’t need to advertise because all of his customers came to him by referral, I wouldn’t be writing a blog about sales, I would be writing a blog about investing. 

Sometimes you just need to call people out on these logical inconsistencies, but you need to be careful about it.  For my part, I am not that good at it.  I tend to come across as condescending or as a know-it-all.  Truthfully, guys that more of jerk get this done better.  You kind of have to be able to tactfully say:  “Are fucking stupid or what?  Don’t make me come over there and hit you!  Christ!  Now shut up and look at this again.  Tell me, what about fucking advertising don’t you get you pea-brained moron!”  If you can find away to say that in a professional and polished way, you can win with these fools.  I tend to sound like this:  “You’re stupid.”  I’m missing the more insulting and crass part of the art.

But it shouldn’t be this way.  Why wouldn’t a customer see this for herself?  Well, there’s the rub.  In reality you are not addressing the business owners’ real objection.  They are afraid that they will lose even more money.  (Most of these knuckleheads are losing money because they couldn’t manage a paper route.)  But the problem starts before any objection is raised IF the business owner will not listen.

So here is the point — I’m growing tired of my condescending negative tone — there is something to be gained by listening.  Who is going to disagree with that?  Listening is different from answering.  You can always tell someone no.  But it is important to remember that we all don’t know everything about everything and there are many things yet to be learned.  Am I right or am I wrong?

Perhaps I am just growing weary of dealing with bumbling unsophisticated intellects.  But I do get to go on nice drives and visit nice parks!  Oh, boy…yesterday was a good one.  Many wonderful stops.  Perhaps I’ll write about that next in the Random Asides page.

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