The first step towards improving your advertising performance is to determine what type of sale your business is making. This is a critically important part of creating a marketing strategy for your business.
Without a marketing strategy, you’ll be engaging in spray and pray advertising. Spray and pray advertising simply means using a wide variety of marketing tactics without any overall guiding strategy. There’s a huge difference between marketing tactics vs marketing strategy. Marketing tactics are things you do, like sending out postcards. There are marketing tactics which work great for some businesses but not for others.
You probably intuitively understand that selling office supplies is an entirely different business than running a medical practice. Neil Rackham quantifies this intuitive understanding by classifying business according to type. On the one hand, you have Minor Sales. Selling office supplies is an example of making a Minor Sale. If you buy the wrong paper for your copy machine, it’s not a big deal. Even if you purchase reams of the “wrong” paper, it will hurt your pride more than your pocketbook.
Then there’s the Major Sale. Just as a Minor Sale mistake isn’t a big deal, making a Major Sale “mistake” is a big deal. In the case of the medical practice, the surgeon you choose is a Major Sale. Google has even created a special classification for businesses engaged in these high stakes engagement where what is at stake is literally “Your Money or Your Life” or YMYL.
Some marketing tactics, while great for making Minor Sales, can actually do more harm than good for anyone making a Major Sale.
When you spend money on advertising without a plan, it’s like going to the store without a list. When you go shopping without a list, you often end up with a cart full of “impulse” purchases. Fortunately, physical products bought on impulse can be returned. However, you can’t return your advertising to get a refund. Without an incredible dedication to measuring your marketing, you’ll find it difficult to identify and trim any excessive spending.
A Pioneer in Advertising
Trying to get the most out of your advertising dollars is nothing new. Considered the father of modern day retailing, John Wanamaker grew his clothing store into the first department store. In 1876 he opened a restaurant inside his store. Two years later, he installed electric lights.
In the Who Made America series on PBS, John Wanamaker’s stores were called “palaces of consumption.” He was constantly thinking outside the box when marketing his business. In 1874, he printed the first-ever, copyrighted store advertisement. In his ads, he promised quality goods and offered a money-back-guarantee.
Remember, this was a time when “snake oil” salesmen roamed the land making outlandish promises to sell their wares. After a short stay in one town, these peddlers would slip off into the night to fleece the residents of yet another town.
When the local residents discovered the promises he made in his ads were true, his business boomed.
Wanamaker is widely credited with saying, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
He would be stunned at how precisely we can measure the performance your advertising dollar today, but I suspect it wouldn’t change his mind about the above statement.
Measuring Vs Polling
There’s nothing wrong with trying to “trim the fat” from your marketing budget. However, if you’ve been engaging in spray and pray advertising, this can actually do more harm than good. Back in the 1990’s I was once called by a business owner whose business was on the verge of closing. He needed help and he needed it fast. During our initial meeting, I asked him to describe a time when his business was successful. His face light up as he told about when his business was thriving. I then asked about the advertising he was doing at that time. He reported that he used a wide variety of media – television, radio, newspaper plus a number of local print publications.
Next, I asked him when things started to go wrong. He thought for a moment and decided the decline started when he tried to measure the effectiveness of his advertising.
Like John Wanamaker, he was pretty sure more than half of his advertising dollars were being wasted. Unfortunately, he began polling his customers trying to measure his advertising’s effectiveness.
His polling took the form of aggressively grilling new customers as they walked in the door. When the customers he polled didn’t mention his recent television advertising campaign, he canceled his TV advertising. When the customers he polled didn’t mention his radio ads, he canceled his radio advertising.
One by one, he described how and why he had canceled his advertising contracts with various media outlets. By the time he finished telling me of his analysis, he realized what he had done.
The decline in his business had happened gradually. Each time a local resident saw his tv ad, or hear his radio ad, or saw his print ad, another drop fell into a metaphorical “market awareness bucket”. When he cancelled a media contract, he would punch a few new pinholes into this bucket. Not only was he punching pinholes, he was also failing to refill the bucket.
Our metaphorical “market awareness bucket” is a leaky vessel. It has to be constantly filled or it will drain away. This is why he couldn’t point to a single pinhole that caused the bucket to empty. Instead, his business began trickling away slowly. The decline was so gradual that he hadn’t recognized the cause and effect until he was recounting the decline of his business to me.
He’s not the first business owner who’s tried to measure his advertising performance by polling his customers. However, his tale was one of the most extreme I’ve heard. I had developed a reputation for helping business owners operating on a shoestring marketing budget to get great results. By the time he contacted me, he couldn’t even afford the shoestring. I couldn’t help someone who had no money for advertising and that’s exactly where he was.
Instead of Polling, Measure Your Marketing with Your Call to Action
I’m reminded of another client I worked with years later who also decided to measure his advertising by polling his customers. At the time, we were running a carefully crafted marketing campaign. The campaign was designed with the call to action (CTA) as “Visit our website.” I had a very good reason for this. I wanted to measure the effectiveness of our marketing by directing visitors to the website. There I could use log files to actually SEE if traffic improved. This was in the early 2000’s, and I had to fight with the media rep and the production company over the CTA I wanted to use. They were in the habit of using “call now” or “stop by today” as calls to action. Instead, I wanted to use the site’s log files to measure the campaign’s effectiveness.
My client wasn’t combing through his logfiles and didn’t know his web site traffic had spiked considerably as a result of the campaign. What he did know was that he was seeing new customers. He was understandably excited. It was the first time he had ever seen results from his advertising. I cringed when he told me of the grilling he had put one of his new customer through.
He began by asking “Did you see our ad on TV?” We had just added a TV spot to the mix. The customer replied, “No.” My client was disappointed but wasn’t one to give up. He continued, “Did you find us on the web?” Again, the customer said she hadn’t visited the website. My client kept pressing his poor new customer for an answer. I imagine the customer was regretting the decision to visit his store by this time. In an effort to end the line of questioning, the customer finally blurted out, “I saw a sign when I was on the way over here.” My client was crushed. He didn’t have any signs posted anywhere other than in his front door. We weren’t running billboards or using any other signage.
In case you’re wondering, this didn’t stop him. He kept pressing her to find out WHERE she had seen the sign. (Yes, he grilled her as to the route she took to find him. SIGH!) There was no sign for his business upon road she had traveled.
Fortunately, he told me that he was polling his customers. I BEGGED him to stop! I explained that even though the new customer had wanted to help, she couldn’t. She honestly didn’t know WHY she had chosen his business. It’s that way for a lot of your customers.
That’s why polling your customers is a really bad idea. It’s also why “stop by today” is a terribly CTA. Instead, we used “visit the website.” By using this CTA, we were able to measure the effectiveness of the campaign by the increase in visitors to his website. However, the real measure of effectiveness of his advertising campaign was the new faces he saw as a result.
Keys to Effective Advertising
Why was this advertising campaign the first time my client saw new customers as a result of his advertising?
- This was the first time he had used a marketing strategy. Previous advertising had been of the spray and pray variety.
- We created a marketing message focused upon benefits instead of features.
- We used marketing tactics that were appropriate for his YMYL type business.
- I created a CTA with measurement in mind so he wouldn’t have to subject his customers to incessant polling.
There are two general types of business models according to Neil Rackham, Major Sales and Minor Sales.
The marketing tactics that work well for one business, may not work well for yours. Minor Sale marketing tactics usually don’t work for Major Sales.
Most consumer buying decisions are too complex to track by a single metric. let alone by random customer polling. Polling is not measuring.
Want to learn more? Pick up a copy of my book Beyond the Niche.