Exposure… It’s a nasty word… an outright dirty word if you ask me. Just the thought of it makes me cringe. If I had a nickel for every time that an advertising salesperson told me that I would get great exposure if I advertised with them, I would be a rich man. Furthermore, if I had bought into what they were saying and advertised with them every time, I would be a completely broke man and more than likely have about ten different loan sharks coming after me! “Advertise with us. You will get great exposure!” I have heard it a hundred times. If you have owned a business for more than two days you know the sales calls that you get. As soon as a new business registers a business license, the advertising “Hawks,” as I affectionately call them, are out in full flight. Now, do not get me wrong, all forms of advertising are good for someone out there. But, not every form of advertising is perfect for every business. If you are an entrepreneur, you have heard the line that they give you of “This would be perfect for you.” How do they know it would be perfect for me? Do they know how my business works? Do they know how my business makes money? Do they know what my challenges are? Do they know what my profit margins are so we can determine the ROI required? The answers to these questions for most advertising salespeople is no. Just because they know what our business is and have a vague idea of what we do does not mean that they understand it and are qualified to educate on what the best decision is for our business. (If you are in sales, please use this advice as constructive criticism. Show a genuine interest in your prospects. Learn about their profit margins. Find out how many sales it would take them to recuperate their investment. It will pay you, and your clients, dividends in the long run while earning you much more referral business. You can demonstrate to your clients that it works)
The first time that I fell victim to the “Exposure Bug,” as I like to call it, was when we opened Just Dine In, the restaurant delivery service that I owned in Albuquerque. Jared, my business partner, was still arranging his move to Albuquerque from Phoenix, AZ. I was finishing up my two-week notice with my prior employer and was getting things organized to start our restaurant delivery service. A friend of mine referred me to an advertising salesperson from the Yellow Book, another version of the yellow pages. Let’s call her Kelly. Kelly had just began working for Yellow Book and upon meeting me immediately began the subtle advertiser’s flirt. Kelly was an attractive middle aged blonde woman who was recently divorced and made sure that I knew that. She told me how she loved to have a good time at happy hour and that we should consider meeting for drinks sometime. With it being my first decision as a full-fledged entrepreneur, I was a little nervous and a little impressionable. Her flirting began to work and I was easily baited into purchasing some advertising. Margaritas had that effect on me when I was single!
At the time, I didn’t even realize that Yellow Book was actually different from the phone book of the local telephone company, Dex. I would later find out that the distribution of Dex was far larger than that of the Yellow Book. This was Strike One for me, according to Jared. Strike Two was that I committed to the bargain price of only one hundred sixty-nine dollars a month for twelve months. No negotiating, no looking at other rates or packages, I just took what she offered. To Jared, this easily translated to a little over two thousand dollars! In our industry, our gross profit margins generally came in at about 30% of sales. This implied that for us to just break even, we would need at least six thousand dollars in sales from this advertisement, just to pay for it. Given that our average transaction size at that time was about thirty-five dollars, this would have required one hundred seventy-one transactions.
Over the next twelve months, we received four orders which we know of, directly from this advertisement! Not a profitable decision, I am sure that you would agree with that assessment. Now, I am not here to tell you that advertising in the Yellow Book is a bad idea. For some companies it is a bad idea to not advertise in the Yellow Book. Also, a lot of this comes down to how you do it. I had no tracking mechanism, no compelling offer, no way of even communicating what it is that we do to the consumer. There was no way for them to know what it was that we do. If this advertisement had been designed differently and perhaps I had negotiated a little bit of a better deal, there is a chance that it could have been effective. But, this was not the case and I learned a valuable entrepreneurial lesson.
As Entrepreneurs, we have to be so careful of how we spend our money on marketing. When we are making a marketing decision we must analyze the marketing triangle:
- Message – What is the Message that you need to portray
- Market – What Market that is your target market? Your Bullseye?
- Media – What media are you using to get this message your clients?
It is essential that we look at all three legs of the tripod with each and every marketing decision made. If one leg is weak, the entire tripod will fall down. If we neglect this, we are simply depriving ourselves of the necessary information to determine if this is going to be a good decision for our business. Just because the advertising salesperson (who knows nothing about our business) says that it is perfect for us does not mean anything. We must ask ourselves these questions and then if you cannot track it, you cannot measure it.
How to Track Your Marketing
The most common way that businesses track their marketing is through the use of promotional codes or coupon codes. “Save $5 when you use Coupon Code FREE22” may be the prompt for the consumer to do this. Not all businesses permit discounting or even choose to discount products or services because of the perception of it. In cases like this, it may be beneficial to use a “Free Gift with Purchase” approach. Instead of discounting your product by $10, give them a bonus product, feature or something unrelated with a perceived value of $10. This product may only cost you a few dollars but the customer perceives it as a valuable commodity. Your offer may read something like this: “Schedule your free appointment with us and receive a free pair of executive binoculars.” You can track it by how many pair of binoculars that you end up buying. There are many companies out there that can help you arrange a “Free Gift with Purchase” program. My favorite is Travis Lee from 3D Mail Results in Seattle, WA who, coincidentally, will be our featured speaker at Power Circle on November 14th!
With offers you can purchase trackable phone numbers. These are phone numbers, not the same as your normal phone number but allows you track statistics on how many people call that number, how long the average call time is and other features too. With some offers, you may want to offer a free twenty-four-hour hotline. This would be a recorded message where you (or a spokesperson) reads a sales letter that you have crafted to give them the necessary message to begin attracting them to your product or service. If people see that it is a recorded hotline, they may fell less pressure because they know that a live human will not be trying to sell them something and they can just listen.
However we do it, we must be able to track our results. Without an effective tracking mechanism, there is no way to determine whether or not our marketing is effective and our marketing will then just be exposure… and you know how I feel about that!