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Promoting Your Business
Overview
Every marketing plan starts the same way: by defining your target customer. Only after you have defined your target customer can you figure out the best way to reach them. Naturally, different types of target customers, or audiences, require different media and campaigns — referred to as a promotional mix — to reach them most effectively and efficiently. To begin, you must ask yourself, "How tightly can I pinpoint my target audience?" "How large is this group?" "How easily can it be reached by the media?" The answers will dictate the type of promotional campaign you choose.
Anyone can create an advertising plan, but only a few can create a cost-effective media plan that produces a good number of higher quality leads that convert into sales. We'll take a look at some different types of promotional media, and discuss the pros and cons of effectively reaching a target audience through each.
I. Analyzing Costs
The benefit of choosing an effective promotional mix is realizing lower costs by delivering your advertising messages to only high quality prospects who are most likely to buy your products and services. By choosing the right media through which to broadcast your messages, you'll spend less money initially and have less wasted advertising expense throughout the life of your business.
The cost of reaching people with your advertising message can be defined in terms of CPM, or cost-per-thousand. You can figure out the cost to reach 1,000 customers by dividing a medium's circulation by the cost of an advertisement. If, for example, a full-page, black and white magazine ad costs $2,000, and the publication reaches 50,000 people, the CPM is $25. In other words, it costs $25 to reach 1,000 people in that magazine. (This CPM for each magazine can also be found in a reference book like Oxbridge Communications Directory of Magazines.)
CPM can also be applied to other media, like radio or television, and these figures are the language of salespeople in those industries. Perhaps more important are the terms CPI (cost-per-inquiry), and CPO (cost-per-order), which is the make-or-break number for your business.
Final consideration in promotional media selection is how much each prospect is worth to you if you close a sale. For example, if you are selling printing presses for $500,000 each, you may sell only one press every 18 months to two years. You may only close one prospect in every 20,000 leads, and your CPO may be $8,000. But if you're selling newsletter subscriptions at $39 a pop, you may need to close 3 of every 100 direct mail pieces you send out (3 percent).
II. An Overview of Your Media Options
The following is an introduction to the traditional sources of advertising available to your company.
III. Magazines
Magazines have good reach, but poor depth. Magazines reach both consumer and business-to-business markets, and most industrial products are traditionally marketed through this medium. There are more than 10,000 magazines to select from, and almost every industry has several of its own trade journals.
PROS: May be tightly focused on a particular market or niche. May have the most efficient and cost effective CPM, CPI or CPO. The only way to reach some targeted markets efficiently besides direct mail. Circulation figures are general guidelines only. Readership is generally highest in colder months like January, February and March.
CONS: Magazines aren't read every month. Most magazines are just scanned by readers. Smaller ads run in the back, and some readers never get that far. Competition for reader's attention and response on every page make your ad easy to miss. The most common response vehicles are the bingo cards (which allow readers to request more information about advertisers in the issue) or reader response cards, but these are the worst quality of leads. While circulation figures remain steady year round, be aware that readership falls off in the summer as more people spend time outdoors. Almost every inquiry needs to be followed up with a phone call, a direct mail piece or both. A three-month lead time to measure response is normal for most magazines. Don't believe pass-along readership figures; they're typically grossly exaggerated.
RECOMMENDATIONS: Some publishers will give you free ad space if you create a clever press release — the most valuable single sheet of paper in all of marketing. A press release can be used to test the effectiveness of a publication to see if it will pull a response before you place an ad. Ad position is always a negotiated factor. Many magazines discount heavily from their published price list — always ask and negotiate (start by asking for the 12-time rate). Never place three ads in three consecutive issues without running a test first. If the first ad fails, you won't have time to cancel the other two.
To find magazines in any particular market, look up the market classification (i.e., photography, banking) in the SRDS Business Magazine Directory, Oxbridge Communications Directory of Periodicals, Burrelle's Directory of Magazines or Bacon's Magazine Directory. Consider advertising where competitors consistently run ads.
IV. Direct Mail
You can reach any market or a selected part of a market and sell almost anything with direct mail.
PROS: Creative, interesting mail is well received. Long copy that is well written can hold a reader's attention, sell products, build loyalty, create brand awareness, overcome objections, and reach higher level purchasers.
If initial tests are successful, rolling out your mailing to an entire list may be extremely profitable and easy to do.
CONS: CPM may be quite high at $500 or more. Incorrect selection of a list may completely wipe out the appeal of a great product, a great package or a great offer. Testing may also be expensive.
RECOMMENDATIONS: Long copy that is boring or dull is usually thrown out, so keep your message short. Include an electrifying letter in every direct mail package and fill it with benefits. Reminder: benefits are what the customers get from the features of your product. For example, a feature of a teacup is its handle. The benefit of that feature is that you can hold a hot cup of coffee without getting burned.
Lead with your biggest benefit, then expound on that. A short bulleted list of benefits gets high readership. Don't forget to ask the reader to call several times in the letter. A brochure should be included to build credibility and show the features. The secret of direct mail: show the features in the brochure, show the benefits in the letter, and get the reader to call you.
V. Yellow Pages
This medium can be one of the most effective advertising sources for some businesses, like emergency drain cleaning and appliance repair services.
PROS: Reaches consumers at an excellent time — when they are ready to shop or need information about products they are about to purchase.
CONS: Expensive. You are quoted monthly rates by sales personnel, but your contract will be for a year.
RECOMMENDATIONS: Everyone likes to shop in their own backyard, so you should prominently display your location in your listing. Use short, crisp wording that issues a call to action ("Large stock of widgets. Huge inventory. Call for fast, friendly help."). Don't forget, the primary objective is to sell the call. The objective of the call is to have the customer come in or buy your service.
VI. Radio
Radio is an effective medium if the listener doesn't have to write down your information to remember it. Radio works well with large events and broad audience demographics. It's most effective when ads are repeated over and over. Stations are priced by their Arbitron ratings, and rates are always negotiable. Stations cater to specific audiences, usually grouped by age.
PROS: If you need a general audience and have more than one or two locations around town, this medium may be ideal. Radio stations may even write your ad and produce it for you. Since it has quick response, it's easy to test. Works well with immediate sales.
CONS: Tough to benchmark results. Can be expensive. Small numbers of ads don't test well. Audience must be willing to drive to your location for your product. You pay for reaching everyone in the entire area that can receive the station. If they aren't all potential customers, you may want to rethink this medium. Commercials may need to be obnoxious to be noticed.
RECOMMENDATIONS: Great for businesses with a broad-based audience and easy-to-remember contact information. Works well with vanity numbers that spell a word (1-800-FLOWERS, for example). Can also work well for insurance, disk jockey services, sports events, shows and big sales events.
Spots are assigned to run at approximate times like "morning drive" or "midday," each at varying rates. Negotiate; there is a big difference between 8:30 a.m., when everyone is in their cars, and 9:05 a.m., when most are at work. Never buy run of station (ROS), which means the station places your spots anywhere they want. After all, it's your money that's lost if the ad fails to draw a response due to poor placement. Radio is immediate — virtually all of your response will come within two or three days of the ad, unless you own a restaurant — where there may be some delay for patrons to schedule. Remember, there is a commercial on right before yours, and another right after yours.
VII. Web Advertising
While there's much debate about how effective banner ads are,many online marketers have found success in making them part of their overall promotion strategy. Another way to draw people to your Web site is to obtain reciprocal links with other sites that may share your target market, such as industry magazines. You can also visit chat rooms and usenet groups to let people know that your site exists. Once you have the viewers at your site, it is your job to use your promotional materials to make the sale.
PROS: Cutting-edge technology; it pays to stay in the loop because there are new opportunities opening up every day. If you can get people to your site and keep their attention, you have a great method for communicating with them. It allows them to shop, price and research almost anything else about your company.
Highly targeted medium; you can purchase space on search engines or other sites that are tailored to viewers in your target market.
CONS: Viewers only stay on Web pages for seconds at a time, so it is tough to get them to click on your ad, which brings them to your site. Creating banner ads is very different from traditional ads; you may need to hire a specialist to help you.
RECOMMENDATIONS: Look up site profiles on the SRDS Interactive Advertising Source, which shows company site profiles, visitor hits and pages per week, and the cost of links, banner ads and so forth. Try to negotiate placement and advertising trades with other sites.
VIII. Trade Shows
Each year there are more than 10,000 trade shows held across the country. Although trade shows sometimes get a bad rap for being ineffective, they are actually quite valuable because there is a wealth of knowledge focused around a particular cause or industry assembled in one place. You can learn a lot in a short period of time.
PROS: Trade shows are an excellent way to get industry information, meet competitors, network, find resources, receive product feedback, and explore new ways of marketing face to face with both exhibitors and attendees. The personal interaction represents selling at its best. If you can't close them here, you're at the wrong show or in the wrong business.
CONS: While booth space may be inexpensive, don't forget to factor in the costs of assembling and staffing the booth, and producing all of the promotional materials you'll be giving away. You'll also have to figure in the time you and your staff will miss at the office.
RECOMMENDATIONS: Visit shows as an attendee before even considering booth space, then get the best booth location you can afford. Have an objective for attending and a goal for exhibiting. Don't spend too much time speaking with each passerby; instead get a business card and follow up with them later. Following up with prospects is the only way to make the show pay off. Can't make it? Consider buying a mailing list from either exhibitors or attendees.
IX. Television
While the national networks like NBC, CBS and FOX are still reserved for big-time advertisers like Coke and Reebok, one of the best media buys during the past 10 years has been cable television. If you're shooting for local demographics, cable can be focused to neighborhoods around your storefront with subscriber lists as small as 10,000 households.
Today's cable TV selection offers hundreds of channels, which is great for the viewer but much tougher for the advertiser. Great care must be taken to place ads where audience demographics of the show makes them work. The good news? Once you stumble onto the formula, you can run ads endlessly, and it will continue to pay off well for years.
PROS: Inexpensive testing. Local commercial video studios can shoot commercials for $350 to $500 for a 30-second spot. And you can be effective in a 30-second ad, since it's auditory and visual, and the demographics are targeted to your store or shop.
CONS: Multitude of channels makes selection of where to place an ad very difficult at best, and a nightmare at worst. Reps sell ad time and may not know where your ad will work best — only where they have time available, or shows or time slots they are asked to push by the station management.
RECOMMENDATIONS: Negotiate hard for ad time and extra free spots. Like in radio advertising, never take ROS because longer running ad schedules and larger clients get the best spots. Track response closely.
X. Card Decks
Undoubtedly, you have received these bulk-advertising vehicles in the mail. Card decks can contain up to 64 cards per pack and are mailed to specific prospect lists. Many card decks are sent by magazines to their subscriber lists. Mailings are usually 100,000; advertisers can often buy half the deck to test or split the run with two different promotional offers.
PROS: Card decks are so effective for some companies, they market solely through this medium. Like magazines, they are mailed on a regular basis but usually less frequently — on average four times per year.
CONS: Expensive to test. Your card can get lost in the pack. Since there are so many decks marketed, if the one you purchase arrives in the prospect's mailbox with two or three others on the same day, there's a good chance it will get tossed out.
RECOMMENDATIONS: Don't rush to purchase; study the deck you are interested in. Look for other similar offers that are run time after time and ask the rep how long and how frequently they've been running. Most decks have asking prices of $2,400 to $3,500 per card (for a full run). This price is not set in stone; most are actually sold at $1,400 to $1,700 per card or less. A few fetch $2,400 consistently. Some decks can be bought for $700 to $800 per card. The bottom line? Negotiate pricing with your salesperson.
Your card's position in the deck does matter, so you should also negotiate for the exact position you want. Don't settle for "We'll give you a good position." Their idea of a good position (first half of deck) and your idea of a good position (in the first five cards) usually won't jibe. Use second side of card for sales copy — it's a waste of valuable ad space to use it as a name and address side. The headline accounts for 90 percent of your readership — write a great one.
XI. Newspapers
One of the more immediate advertising venues. Lead time for a newspaper ad is just a day or two, so testing is easy and fast.
PROS: Selectivity in areas served: your hometown or across the country. Different sections draw different readership, so you can target your ad to your market. Newspapers work for a large variety of offers: sales, products, shops, retailers, service organizations.
CONS: Too many papers dilute the market. Bigger ads can overshadow your small ad. Your ad can get lost in the clutter in larger papers. Big run papers can be expensive for small advertisers (large advertisers get huge discounts for running volume lineage). Your ad may be grouped with competitors.
RECOMMENDATIONS: Testing is the way to go. Some of my clients have had good success with the TV Listings section, some with the Business section. Negotiate good placement in the paper and good placement on the page. Sundays are not as good as weekdays for smaller ads because they can get lost. Wednesday is coupon day, which has high female readership. Don't forget local weeklies and classifieds. Local papers are much cheaper than larger metropolitan papers with better demographics for single retail stores. Don't forget to send press releases.
XII. Alternative Media Options
In addition to the traditional advertising media, there are many new alternatives popping up everyday that you should be aware of. Here is a sampling:
Whatever you do, don't forget to track response. When working with any print media, always send press releases and negotiate price and position.
XIII. Resources
SRDS Directories
Consumer Magazine Advertising Source
Newspaper Advertising Source
Radio Advertising Source
Interactive Advertising Source
Direct Marketing List Source
Out-of-Home Advertising Source
Oxbridge Comm/MediaFinder.com
The National PR Pitch Book Directory (Infocom Group)
Burrell's Media Directories
Bacon's Information, Inc.
Trade Show Week Data Book Directory (Cahners Business Information)
Trade Show Central
Copyright © 2013 Virtual Advisor, Inc.