My favorite class segment in the Jackson Retail Success Academy was always the Marketing and Advertising Segment. One portion of that segment was dedicated to Media, Myths, and Money. We would discuss all the various forms of media and how/when to use them properly. We also discussed several myths about advertising. One of the biggest myths was this …
Advertising will fix your business.
No it won’t.
If your customer service sucks, advertising will only draw in more people to find that out and tell their friends to beware.
If your product selection sucks, advertising will only find you more disappointed and empty-handed customers.
If your market isn’t big enough to support your business, advertising will only drain your coffers faster, and hasten your demise.
That is why, of all the Diagnosis Tools, this one is last.
Think of your business like a boat. Your Core Values are the hull and body of the boat. Your Market Potential is the size of the body of water. Customer Service is the driver of the boat. Inventory is the engine/oars. Advertising is the launching of the boat. Would you launch if you knew you had a leak, didn’t have a driver, or had an engine not working? Of course not.
You need to make sure your boat is rock solid and ready to go before you launch. (Check out Tool #1 Core Values, Tool #2 Market Potential, Tool #3 Customer Service, and Tool #4 Inventory Management if you think your boat has even the tiniest of leaks.)
Advertising will not fix your business, it will only speed up what was going to happen anyway. If your boat is leaking, advertising will just sink you faster.
DEFINE THE TERMS
First, let’s understand the difference between “Marketing” and “Advertising”. Marketing is everything you do to attract customers to your store. Advertising is a subset of Marketing. It is the paid marketing you do through a form of media.
Marketing includes your building, your signage, your front door, the “Open” sign on your building, the events, activities, and classes you hold inside and outside your building, the networking you do by joining clubs and being involved in your community, the free publicity your garner, etc.
One of the first steps in this self-diagnosis is to list all of the ways outside of Advertising that you are Marketing your store. For some ideas of different things you can do, check out the FREE eBook Main Street Marketing on a Shoestring Budget.
You should have a healthy list of ways you are marketing your business outside the realm of traditional advertising. Fortunately most of these ways cost more time than money. If you don’t have enough customers—the whole reason you’re marketing your business—then you should have the time.
Once you have that list, see which Core Values are evident in each activity. All of your Marketing efforts must be aligned with your Core Values to be most effective. If there is anything you are doing that doesn’t speak to your values, change it or drop it for something else.
The next thing to do is to look at your paid advertising through the same lens as your other Marketing efforts. Pull out all of the ads you ran last year. Look closely at the message you sent. Ask yourself these six questions …
- Does it look or sound like an ad? Chances are good that it does. Did you know our brains are hard-wired to ignore advertising? Maybe you should create something that doesn’t look or sound like an ad to keep from being ignored.
- Does it tell a story? Stories are more interesting, get people to pay attention, and are more memorable than facts and figures. Your ad needs to tell a story if you want it to work best.
- Does it make only one point? The person seeing or hearing your ad will only remember one point at best, so only give her only one point to remember.
- Does it speak to the heart? Emotions always trump logic. Always. What emotion does your ad invoke?
- Does it speak to your tribe? Does it align with your Core Values? If you want to attract better customers, speak more directly to those people who share your values and ignore everyone else.
- Does it make your customer the star? Ads about you will be ignored. Ads about your customer and what you can do to help her will gain her attention.
The message is more important than the media. Here is another big myth in Advertising …
You must reach the right people.
Nope, nope, nope, nope, nope. You can reach all the right people but if you don’t say the right thing, all is for naught. Also, everyone you reach is potentially the right person because even if they aren’t your customer, they know someone who is your customer.
It isn’t who you reach that matters. It is what you say to the people you reach.
Get the message right and everything else will follow.
(Note: to help you choose the right media for your business, go to the Advertising Media Reference Guide and check out your options.)
The last thing to check is your budget. How much should you spend on Marketing? Notice how I said Marketing, not Advertising? Part of your Marketing is your location. If you spend a lot in rent to be in a high-traffic area, you don’t have to advertise as much as the guy under the bridge on the wrong side of the tracks. The Cinnabon store at the airport doesn’t spend a penny on Advertising. He just bought a fan to blow that cinnamony goodness out into the terminal. That’s his Marketing Budget.
There are many formulas for calculating a budget. The one I like best came from Roy H. Williams, aka The Wizard of Ads. He suggests you take 10-12% of your Gross Sales as your “Total Exposure” budget. Then multiply that by your Percent Markup (this is different than Profit Margin – the formula looks like this Percent Markup = (Gross Sales – COGS)/COGS) to adjust for your pricing and profit. Then subtract your rent from that number to find out what you should spend on Advertising.
For many businesses, however, that leaves a budget close to zero as rent is often 10-12% of your budget.
I will tell you to push that upper limit to 15% of Gross Sales, but only if you can find that money without taking it out of Payroll. If push comes to shove, Great Customer Service is always more important than Advertising. It is what drives your boat.
PS There you go … Five tools for evaluating your business to see where you need to improve as you sail into 2019. Take a critical look at all five in order and you’ll find your silver bullet for success. If you don’t think you can be those critical eyes because you are too busy trying to drive the boat yourself, call me. I’ll come do an analysis of your boat using all the criteria in these five Tools and show you where the boat needs work.