Yearly Archives: 2009

Ad Accountability

Ad Accountability

          Being in business for myself, I am painfully aware of the necessity of demanding a return on every expense line in my monthly statements.
          Having said that, I am VERY concerned about the dangerous methodology some media and advertising people are using that underestimate the ROI (return on investment) of advertising and marketing.
          At the RAB recently, I was exposed to an ‘ROI calculator’, which grossly underestimated the power of advertising and basically sets each campaign up to fail if measured by that methodology.
          This calculator only credited advertising for the profit per sale of the advertised items during a campaign window. This methodology requires an ad schedule to generate a profit based upon the sales of the advertised item during the campaign.
          These kinds of misguided ROI calculators create unrealistic advertiser expectations and grossly underestimate the lifetime value of each customer a campaign can attract or influence. 
          There is a long list of what is wrong with immediate gratification calculators. Let me expose just a few of the disastrous shortfalls:
1.) Only a small portion of any market is in the market for a given product or service on any given day.
An ad schedule costs the same whether the message influences the 5% of the market in the market for the advertised product today, or whether it also creates a preference and awareness with the 95% of the market NOT ready to buy during a campaign but who could buy in the future. 
Measuring a campaign by the sales or profits on the advertised items during the campaign window, causes advertisers to resort to high-pressure special offers. These limited-time offers are not relevant to the larger percentage of the population exposed to the ad….the portion of the market not ready to buy today but can be persuaded to think of the advertiser when the need arises. Campaigns which are not meaningful or relevant to those future prospects are quickly forgotten and easily ignored.
2.) Measuring a campaign’s ROI based upon profits of a particular item during the campaign window also fails to recognize the value of additional or spontaneous purchases made by shoppers who were attracted by that campaign.
3.) Some of these ROI calculators grossly underestimate lifetime customer value, and word of mouth advertising. A customer who was introduced to a business by a particular campaign, may be so impressed by their experience during the transaction that they may buy two or three times a year for the next five years. And what about calculating the word-of- mouth generated by every customer a campaign attracts?
 
          If I was to measure my marketing efforts by the instant gratification ROI calculators some stations use, I would conclude that my marketing does not work, even though my business has increased 300% over the last four years.
          When I speak at the RAB, for example, my expenses include air travel, accommodation, promotional materials and time.  If I were to measure those costs against the stations which contract our revenue-generating programs or training services the following week, I’d never speak at the RAB again.
          The truth is, I have had station managers contract our services when the need arises three or four years AFTER seeing me at the RAB or receiving our free ENS on Sales. I do get a realistic return on my investment when I consider word of mouth, lifetime customer value, the credibility, and the awareness and relationships I foster over time.
 
P.S. The ROI calculator we use in our Guided Discovery Selling training, dramatically increases advertising sales peoples’ confidence levels and their understanding of the power of advertising. Their closing ratios and renewal rates increase by creating more realistic and manageable advertiser expectations.
Contact Wayne if you’d like to discuss exposing our powerful Guided Discovery ROI training to your team.

Good News

 

Spread the Good News
 
            Am I the only person out there who’s growing weary of all the bad economic news?
            I believe recession fatigue is about to set in…..and that can be a good thing.
            Eventually we’ll start looking for the silver lining in all of those clouds and things will get brighter.
            It may already be happening. I couldn’t help but notice two commercials last week that jumped out at me with their refreshing perspective.
            The first one wasDaytona Beach Harley Davidson, in Daytona Beach, Florida, talked about how aging boomers are growing tired of seeing their mutual funds shrinking and are opting to invest in their life-long dream, a new Harley Davidson.
            The Harley dealer, Bruce Rossmeyer, was proudly proclaiming they sold a whopping 44 bikes a day during Daytona Bike Week! A world record! Two things captured my attention;
1.) Good news jumped out among all of the doom and gloom. I welcomed it.
2) Bruce talked about relevant economic issues, like shrinking mutual funds, and gave them a positive spin I could relate to.
            As I returned home to Ontario, Canada, I was struck by another commercial for a hot tub store in Barrie. The owner announced having his biggest sales month ever in February. He validated his claim by suggesting that consumers are choosing to ‘cocoon’or spend more time at home. He said they are investing in home leisure activities and increasing the value of their home with his hot tubs.
            Your clients are always looking for a way to make their ads stand out, and these ‘good news’ ads really do stand out.
            Those of you who have been receiving our ENS on Sales, know that I’m not a fan of discounting our product to make a sale. I am, however, in favor of discounting as a service to our audiences.
            We’ve all heard clients and consumers complain about all of the bad news in the media. Your commercials are part of your media content. Bankruptcy sales, desperation clearances and other ‘bad economy’ sales strategies are part of that bad news noise.
            Why not offer a ‘good news discount’ for every advertiser who can legitimately shine a positive light on their business in this economy?
            Can you imagine the impact if every commercial island had a commercial talking about record sales and why it makes sense to buy in this economy?
            My proposed good news discount makes sense for a number of reasons;
1.) The advertisers who are already enjoying sales increases are your best prospects.
2.) Business owners who hear about these successes will reassess their own plight and begin advertising more aggressively.
3.) Audiences will come to realize and appreciate that it’s not all bad news out there.
4.) Your good news advertisers will have a timely, topical and relevant hook to make their message stand out.
5.) Business owners will appreciate your drive to introduce good economic news to your community. 
 
            If you like our idea of a good news advertiser discount, I recommend applying three rules for campaigns to qualify;
1.) They must mention sales increases or record sales, and tell the truth.
2.) They must mention WHY people are choosing to buy from them in this economy.
3.) They must have a call to action to keep their sales on the incline.   
 
            Give it a try, and send us the good news you uncover.
 
P.S. If you can talk your news room into airing regular good economic news features, I’ll bet there are sponsors who’d love to jump on board!

Email Popular

 

Too Much Email?

          Do we receive too much email? According to a recent survey; if you ask first, the answer is, ‘no.” Permission marketing works and recipients appreciate receiving your emails if you ask first.
           In an October survey of 1,517 respondents, Epsilon and ROI Research found that 84 percent said they enjoy receiving email from the companies they’ve chosen to give their information to. Even if they don’t always read every message, the respondents said they just like knowing the email is there if they want it.
          Fifty-seven percent of respondents said their impression of a company improves when they get a message, and a full 50 percent said getting permission-based email makes them more likely to buy from that company in the future.
          Your customers and prospects are noticing emails that benefit them in running their businesses. While they may not be ready to advertise immediately, the survey found that 71 percent of recipients recall an e-mail they received when they are ready to purchase.
          Our SoundADvice is the perfect radio e-marketing system, keeping you front and center with your clients and prospects every week, with helpful tips to grow their business

Refusing to Participate Feels Great

Refusing to Participate Feels Great.  

          Last fall the American portion of my business began to shrink.  I let myself fall into a downward spiral of excuses about the economy, like water circling to go down the drain.
          While in this frame of mind, I found myself on a plane beside a building contractor. “I guess things are a little slow for your business right now”, I said.
          “No”, he said, “this economy has created all kinds of new opportunities.”
          I’m on my way to a plant in Arkansas that is doubling its staff and building a huge addition.”
          He went on to explain that the booming business made frozen waffles, pancakes and pastries. He said that people with large families were going to restaurants less often and opting to prepare convenient low cost meals at home. The frozen waffle factory couldn’t keep up with demand!
          After speaking to that contractor, I reflected upon the immortal words of Henry Ford; “Whether you think you can, or think you can’t, you are right.”
          I immediately chose to discontinue participating in the recession.
          That decision alone actually made me feel better! I chose to utilize the extra time I had as a result of a downturn to develop new and innovative services which are now producing amazing results for the stations we work with.
          My business, like the frozen waffle business, is back on track for growth.
          Sir Winston Churchill said, “Sometimes it is not enough to do our best. Sometimes we must do what is required.”
          Just “doing our best” can cause us to blame the economy or other uncontrollable external factors for our failures.
          I invite you to join me. Choose not to participate in the recession. Seek new opportunities to capture your long-term vision. Doing so will re-ignite the passion that makes your job exciting and your company successful.   

Vision vs Panic

Vision versus Panic

“You always have two choices; your commitment versus your fear.”
-Sammy Davis, Jr.-
 
          Experiments on hypothermia at the University of Winnipeg have proven that the choices we make out of fear are often fatal.
          In controlled experiments at the university, two groups of students were immersed in freezing cold tanks of water to study what choices they would make to save their lives.
          Most people believe it only takes two to three minutes for hypothermia to set in. The first group of students was thrown into the freezing water with that belief.
          In reality, it takes 35 to 40 minutes for hypothermia to take its toll. The second group of students was thrown into the freezing water with that knowledge.
          Invariably, the first group made choices out of fear and panic….choices which, under real life scenarios would have cost them their lives.
          The students who understood they had time to think ahead, consistently made better choices than their panicked counterparts.     
          The absence of vision, commitment and long-term goals for your stations can also result in panic choices which can be fatal.
           Are you committed to a long–term plan for your business survival? Or are you making panic decisions under pressure?
          Your advertisers are reading newsletters and blogs which suggest they should “take advantage of this downturn and put the heat on media suppliers”.
        That “heat”has caused some broadcasters to sell at rates below break-even. We’ve all heard the joke about the widget manufacturer who was losing five dollars per widget but planned to “make it up on volume”.
          Even in good times, far too many sales managers let the bottom right hand corner of a broadcast order influence them to sell at a loss. You cannotsell at a loss and “make it up on volume”!
          Selling at a loss not only hurts your stations, but in the long run,hurts advertisers.
          Cutting your rates will inevitably cause cuts in service to your advertisers and to your audiences. As those cuts impact audiences negatively, advertisers will find it increasingly difficult to find a media that has enough reach and influence to achieve their goals.
          Our biggest selling job has always been internal, not external. We need to sell ourselves and our staffs on the value of advertising before they can have the confidence to sell our services to advertisers at a profitable rate.