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When You Don’t Know What You Don’t Know

I just got back from Grand Rapids. As a favor, Jackson Radio Works invited me to join them for the Great Lakes Broadcasting Conference to see Roy H. Williams, aka the Wizard of Ads, do a 3-hour presentation on how radio broadcasters can turn around the Michigan economy.

Whenever I see Roy, it rocks my world and gets my juices flowing. He makes his points more clearly and in a more convincing way than any speaker I have had the pleasure to see. Unfortunately, he made so many points in those three hours that I am having a hard time wrapping my brain around all of them.

The one thing I learned is how much I don’t know what I don’t know.

When you are aware of what you don’t know, you get to choose whether or not to learn it. The problem, of course, is when you don’t know what you don’t know. Then you don’t know what to learn. When I see speakers like Roy, I realize I have that problem. I don’t know what I don’t know.

Do you have that problem, too?

So I thought of some simple solutions.

Attend classes and trainings. If you’re a retailer, the Jackson Retail Success Academy is a good start. Also look at your industry to see if there are any conferences with speakers. The American Specialty Toy Retailers Association (ASTRA) hosts a great conference every spring. Maybe your industry has a similar event? At every training, class or seminar you learn something new, something you probably didn’t know you didn’t know.

Attend events with speakers and presentations. Here in Jackson we have events like the Economic Luncheons of the Greater Jackson Chamber of Commerce and the Midtown Morning Breakfast, among other events that have speakers of interest. Because each speaker brings a different perspective to light, you are almost guaranteed to learn something you didn’t know you didn’t know.

Pick the brains of your peers and contemporaries. Have lunch sessions with these people and choose topics of discussion that you publicize before you meet. Have each member of your lunch bunch pick a topic of discussion. They may bring up a topic completely foreign to you. Ta da! Something you didn’t know you didn’t know.

Actually, it’s quite easy to learn stuff you don’t know you don’t know. You just have to be willing to learn.

Your business decisions are only as strong as the info you have. When you don’t know something, your business suffers. When you don’t know what you don’t know, your business suffers more. What are you wiliing to learn?

-Phil

What in the World is SoV?

In the last post I mentioned Roy Williams’ Advertising Performance Equation – SoV x IQ x PEF x MPo = Sales.

We talked about how PEF stands for Personal Experience Factor. In this equation, to grow your business, a customer’s personal experience must exceed her expectations. That’s what creates loyalty and fandom, and is our staff-training goal every month.

Today “SoV” is the relevant part of the equation for me. Why? I just agreed to terms with Jackson Radio Works for running a year-long radio campaign next year.

Wait. Still confused?

Let me explain…

SoV stands for Share of Voice – in other words, how much of the advertising being done in your category is yours. Think of it as a percentage. If in your market and category there is $1 million being spent on advertising and you are spending $100,000 of it, then you have a 10% SoV.

So, by that definition, SoV is equal to your marketing budget as a percentage of the total ad money being spent. Therefore, the more you spend, the higher your SoV.

Most of you upon reading this are saying, “Great, Phil, but I don’t have any more money. What if I want a higher SoV and don’t have more money to spend? Can I increase my SoV other ways?”

Yes you can. I just did.

There are many ways to advertise – TV, Radio, Newsprint, Internet, Email, Yellow Pages, to name a few. How many of those media do you own? By that, I mean, are there any media that when people think of the media they think of you?

If you listen to radio in Jackson, you know the Toy House owns some of the stations. No other toy or baby product seller comes close to running the frequency that we do on those stations. Ask someone who is the toy store on the radio and they’ll tell you Toy House. We own it. That was our goal last year and will be our goal again this year.

I don’t have the budget that my competitors have. I don’t have the power of national advertising, printing on a mass scale, or the clout to demand huge rate savings from the media. But I do have an understanding about perception. While all the big chains compete with each other with their multiple inserts, none of them gaining a perceptual advantage, I’ve got the airwaves to myself, allowing Toy House to get a perceptively larger Share of Voice than what we are spending.

Think of it this way. Most people, when thinking of advertising think (in order), Newspaper, TV, Radio, Yellow Pages, and maybe Internet. If I perceptually own Radio, I perceptually have a 20% SoV. No, it’s not perfect math. Neither is the equation (I’ll get to that in another post). But it is an improvement over my actual percentage of the SoV (about 5-7%).

Are you daring enough to get more out of your advertising budget? Are you willing to go for it by owning a media no one in your market is using?

Wouldn’t it be better to have a nice quiet conversation alone with a client than to be part of the shouting and screaming that all your competitors are doing?

Of course it would.

-Phil

Setting the Bar Too High?

One of my favorite lessons learned from the Wizard of Ads is the Advertising Performance Equation. This equation gives a quick lesson into the factors that influence how well your advertising works. The equation looks like this: SoV x IQ x PEF x MPo = Sales

I won’t go into details about the equation right now, but one of those factors has been weighing on my mind.

PEF stands for Personal Experience Factor. Roy Williams (the Wizard) teaches that your advertising creates an expectation of your store. And when a customer experiences your store it will have an effect on the power of your ads. If you do not meet the customer’s expectations, all future ads will be seen/heard with disdain and not work as well. If you exceed the expectations created by your advertising, your business will grow.

The goal, then, is to ALWAYS exceed the customers’ expectations.

This can be done two ways. Set a really low bar that is always easy to beat or set the bar higher and higher with each passing day.

As Stewart B. Johnson said, “Our business in life is not to get ahead of others, but to get ahead of ourselves – to break our own records, to outstrip our yesterday by our today.”

I’ve always believed that success for Toy House falls more into line with Mr. Johnson. We need to constantly be striving to be better. Not better than our competition, but better than we were yesterday.

But with that said, there is some validity to setting a really low expectation. We see this every year in political debates. Who “won” the debate is primarily based on who met or exceeded the expectations.

In advertising, some say that you should never brag about your customer service because you raise a really high bar of expectations that will be increasingly difficult to exceed.

I’m not sure I’m fully in that camp. Raising the bar of expectations attracts a lot of customers. Plus, it gives you incentive to train harder, to prepare more, to be more creative in ways that you can please customers.

So, I’m just gonna lay it all on the line. I believe my staff are some of the finest retail workers in the toy industry. They are informed, helpful and friendly, and will give you the best shopping experience you can find in Jackson.

There. I’ve said it. The bar has been raised. I double dog dare you to give us the chance to exceed those expectations.

-Phil