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CHAPTER 1
Find New Products for Current Customers
The most expensive part of any business is acquiring customers. The best way to build your business is to selling more products to the same customers.
Assignment
On a 3 × 5 card, write, "Find new products for current customers."
My mail order business geared to new moms spent a bundle bringing in new customers. We expanded our business by selling unique products that appealed to new mothers, such as good quality audio tapes for mother and baby, books not easily found in big book stores, and simple, quality puzzles for small hands.
Incremental sales of these and other products increased our customers' lifetime value to our company. The more a customer is worth, the more we could afford to pay to acquire them.
If we had tried to expand our company by selling totally different products, we would have had the high cost of acquiring new customers to buy the new products, and we would not have had the additional products to increase their lifetime value. Through time, that strategy would have put us out of business.
Epilogue
Stay focused on increasing sales within your customer base. Don't waste money branching off in the wrong direction.
CHAPTER 2
Stick to a Budget
Spend time preparing your budget and put together a budget committee. It may help to have several people examining your expenses and projecting sales.
Assignment
On a 3 × 5 card, to be reviewed before every meeting with your ad agency, write, "I will spend what I can afford."
Include spending to support your sales staff, your overhead costs, and, of course, advertising. You need an advertising budget; without advertising it may be very hard to bring in customers and make sales.
However, once you have a solid advertising budget, stick to it. If your advertising agency or consultants try to convince you to spend more than you have allotted, don't be swayed. If they are getting paid on commission, they make more money if you spend more. They need to figure out how to get you the biggest return within your budget.
No one knows your business as well as you do. Therefore, consultants cannot tell you what you can afford to spend on advertising. If your advertising is successful and sales increase, then you can afford to increase your advertising budget, based on results.
Epilogue
While advertising is essential, don't spend to the detriment of other aspects of your business.
CHAPTER 3
Consultants on Commission?
Commission arrangements with the sales staff are good for the company; you only pay out when sales are made. But commission arrangements with advertising agencies or consultants work against you, because the more you spend, the more they make.
Assignment
On a 3 × 5 card, write, "My advertising budget will not be taken up by consultant or agency fees." Revisit the reminder whenever you consider hiring advertising help.
You can't be sure that a recommendation to use expensive billboards or network television is really going to work for you — is it recommended because it will create income for your consultant?
In all my years of advertising, I never worked for an agency that charged the clients on commission; we charged fees based on hours. When I began my own agency, I charged by the project.
If you are paying by the hour or on a project-by-project basis, create an advertising plan with an estimated number of hours you will need to execute the plan. Also, create an agreement in which additional hours will not be charged without prior agreement.
Epilogue
By holding your advertising advisers to reasonable fees not tied to your spending, you can have more trust in what they are recommending to you.
CHAPTER 4
Opportunity Budget
Set aside funds to create an opportunity budget. During my 30 years in the advertising business, I've had to turn down some amazing, last-minute deals for clients because there was no money left in the budget.
Assignment
Put aside some money from your budget to take advantage of an unplanned opportunity. Put it in a separate account if need be.
When you deal with as many magazines and newspapers as I, you get 11th-hour calls, sometimes even after the closing date, when another advertiser has missed the materials deadline. The bargain of a lifetime is at your feet, but, if there is nothing left in your budget, you can't take advantage of the special deal.
A good way to be prepared for such opportunities is to leave 10 percent of your budget unplanned. You never know when you may have the chance to ride along with another company's mailing at a reduced rate or get a special price to advertise in a new magazine.
What about an unexpected success? Did you have an ad with a special offer produce more business than expected? Use your opportunity budget to repeat your advertising successes.
Epilogue
Missing special opportunities that come your way because you don't have an opportunity budget can hurt your business.
CHAPTER 5
Define Your Unique Selling Proposition
Create a strong, unique selling proposition (USP) for your product or service. Avis Rent A Car Systems, LLC first used theirs as their advertising slogan: "We Try Harder." The words We Try Harder appeared on everything. The public began to believe that they did try harder, and Avis began to grow.
Assignment
Brainstorm the strongest USP you can with your managers, consultants, or trusted friends.
Your unique selling proposition defines who your company is and what it is selling in a few words. Sometimes a unique selling proposition can be just two words, such as American Express: "unlimited credit." American Express was the first credit card not to impose a credit limit on it customers. For years, it ran ahead of the pack, just because it had the best unique selling proposition.
In the early years, Burger King made great inroads on McDonald's with its short but meaningful unique selling proposition: "flame-broiled, not fried." Geico's USP, "save 15 percent," got it off the ground.
Once you have a solid USP, use it on stationery, your Website, and so on. Your USP is who you are. Don't hide it.
Epilogue
A USP guides all advertising and defines who a company is and what its products and services are.
CHAPTER 6
Be the Best You Can Be
As an employee, you have to cut corners to preserve money at all costs. However, sometimes saving money damages the image, reputation, and integrity of a business.
While I had to do that for others in the past, when I worked for myself, I refused to cut corners, and was proud of the services we provided. If a customer called up to complain about an error, we reprinted and reshipped the stationery by priority mail at our own expense. I never asked for proof of an error or required a customer to mail back the faulty product; that is tantamount to calling your customer a liar. Our "no questions asked" policy has led to many reorders.
Assignment
In a place visible to your employees, write "Be the Best." Then live up to it.
When you own the business, always strive to sell the best products and services, make the best offers, and have the best customer service. Be proud of what you do, and allow yourself to look in the mirror every morning and know that your company has integrity.
Epilogue
Being the best lifts your spirits, even through hard times. Quality wins in the marketplace.
CHAPTER 7
Big Ideas Mean Big Business
What is a big idea? How about Nike's "Just Do It," American Express's "Don't Leave Home Without It," and Geico's "Even a Caveman Could Do It."
A big idea is a concept that gets across your USP in a memorable way with few words and great visuals. Sum it up with a good tagline that paints the picture. The big idea should make your company, products, and services different, better, more affordable, or more desirable.
When the big idea is right, the slogan will write itself. The most fantastic big ideas become part of pop culture, such as Geico's gecko and cavemen.
Assignment
On a 3 × 5 card, write, "Have you thought of a big idea today?" Put it where people can see it. This may start their thought process.
A small, local business needs a big idea just as much as a national one. In the local arena, it's easier to make a big splash with less money. A new idea can garner more attention and recall, and a top-notch idea can actually make your advertising budget go further because it is more memorable.
Epilogue
The bigger your ideas, the greater your advance against the competition.
CHAPTER 8
Increase Payment Options
Offering customers multiple payment options will increase sales. Credit cards are now necessary for online, mail order, and retail sales. Although cash-on-delivery (COD) is no longer used, PayPal is now an option for online purchases. PayPal is very easy to sign up for; merchants and consumers can do it online.
Assignment
Create payment plan tests. The results will tell you which plan brings in the most revenue.
What about installment payments? Watch for TV ads using these methods. Direct response TV commercials often offer three monthly payments of $33 rather than one payment of $99. Not only may it be easier for the customer to handle three lower payments, the lower payment price makes the product seem less expensive.
Basically, you are offering no-interest credit when you delay payment due dates by several months. Where else can the consumer get that today? Conversely, if you make it difficult for the customer to pay, you will lose the sale, so be sure to make your offer easy to understand.
Epilogue
The consumer will always choose the option that is the easiest to select and the easiest to live with. Give your customers what they want.
CHAPTER 9
Exchange With Noncompetitive Businesses
Do you mail to your customers? Offer to put promotion material such as letters or flyers from a noncompetitive company in your mailing. Be sure to ask those companies to exchange with you, and put your materials in their mailings.
Assignment
Create a list of noncompetitive businesses in your area that want to reach the same customer you currently reach. Approach them for exchanges.
You can arrange an even exchange like this: You mail 5,000 flyers for the bakery down the block to your customer list, and they mail 5,000 flyers for your stationery store to their customers. You will save on list rental and postage, which are usually the biggest expenses when you mail. Exchange with as many companies as you can find. Analyze results and drop the ones that don't produce.
Be sure that your exchange partner's mailing piece isn't so heavy that it will increase your postage cost. One page printed on light-weight stock shouldn't add much to your mailing if it isn't heavy to begin with. Also, be sure the other company isn't going out of business before you get your reciprocal mailing.
Epilogue
Joint ventures can expand your advertising for a fraction of the usual cost.
CHAPTER 10
Donate
Local schools, churches, and scout troops are always trying to raise money. Why not donate to them? Not only is it the right thing to do, but it will bring loyalty and free advertising for the paltry price of a few items or services.
Assignment
List all the nonprofit organizations in your neighborhood. Keep their addresses and phone numbers handy, and donate to as many as you can afford each year.
When Domino's Pizza donated 10 pies to our Cub Scout troop for our awards ceremony, it had a big effect on me. At our house, Domino's became our number-one pizza place. You can't buy that kind of loyalty.
The organization to which you donate will advertise your business every time it sends out a flyer with your donation listed, every time the members talk about your donation, and, if it's an auction or raffle, every person who attends will see your donation. Supporting your community will benefit you tenfold from the cost of your donation.
Epilogue
Generosity is often rewarded by consumer loyalty. Donating to nonprofits is one way to build an excellent reputation for your business.
CHAPTER 11
Give a Break to Nonprofits
Give discounts to local church members, local schools' family associations, and scout families. Create a coupon booklet or discount card and give them to your local nonprofits for distribution among their families.
Assignment
Get the contact information for the five largest companies in your area. Call them or send a letter.
Offer $1 for every card presented at your place of business, or give them a 10-percent discount. Either way you are giving nonprofits an incentive to promote your business at little cost to you. Giving back to the community is good for business in addition to being the right thing to do.
Take it one step further and offer the cards to large businesses in your area. If you can connect with the human resources department of a large company, your discounted offer can be distributed to all the employees: free advertising and promotion happening right in your neighborhood!
Epilogue
Even if you only distribute discount cards to 100 people, those 100 people may come to you before your competition because of your discounted prices — and they will spread the word.
CHAPTER 12
Establish the Lifetime Value of Your Customers
The lifetime value of your customer is more important than the cost to acquire him or her. Lifetime value means how much that customer spends with you through the years. If your customers only purchase once or twice, then you have to spend less to get them. But if they spend hundreds or thousands of dollars through time, you can spend more to get them.
Assignment
Create a formula that measures the lifetime value of your customers and the average order size. Breaking even or losing money up front on customer acquisition may pay in the long run.
Business customers are worth more than consumers because the price of business supplies is higher than consumers. The college at which I teach goes through hundreds of reams of paper each year. The school has a high lifetime value to their paper supplier.
If your customers are high-ticket buyers, you can afford to spend more on them than you make in the first year. Do the math, and know what a customer is worth to you before you budget your advertising.
Epilogue
Consider the long-term effects when you evaluate your advertising and promotion for success. Promote heavily to increase lifetime value.
CHAPTER 13
Make Lemonade From Lemons
Be analytical. When something doesn't work, don't just toss it out without learning what went wrong. Was the offer not good enough? Was it the wrong medium? The worst thing that can happen is to have a test that you can't read.
Assignment
Establish a control ad with all the elements that work for you.
If you know what went wrong, you can save money by not making the same mistake again. The important lesson is to create tests that you can read. Don't test too many variables.
If you're testing a new medium, such as a co-op, use an offer that has been successful for you in the past. Testing an offer and a medium at the same time is risky; if it doesn't work, you won't know what failed — the offer or the medium.
Establish a control that has a history of success. Then test new media or ad sizes with the control offer. Also consider positioning, headlines, and timing — was there a snowstorm that prevented the newspaper with your ad from reaching its full circulation?
Epilogue
Never test too many elements. Having results you can't read is worse than having an ad that doesn't work.
CHAPTER 14
Build Your Business Carefully
Mike and Sarah had a personalized stationery business. They were doing well, so they decided to double the amount of catalogs they mailed before Christmas. They also added a free shipping offer to increase sales, and the response was overwhelming.
Assignment
Create a time line. Make accurate response projections before advertising.
Unfortunately, they didn't plan for this success, so they didn't have enough stationery in-house to fulfill all the orders. Their printer was printing catalogs, and couldn't print their new stationery for several weeks. They couldn't afford to go to another printer because their profit was down, because they had to absorb shipping costs.
They had many angry customers who didn't get their stationery and cards on time. Mike and Sarah didn't count on huge success putting them out of business.
You must be ready for your response. Don't launch a big e-mail campaign until you are ready to respond and fulfill. E-mail responses will start arriving on the same day the e-mail is launched, sometimes within minutes. If you delay, you will lose customers.
Epilogue
Expect the unexpected. Have a contingency plan for higher response.
(Continues…)
Excerpted from "151 Quick Ideas for Advertising on a Shoestring"
by .
Copyright © 2008 Jean Joachim.
Excerpted by permission of Red Wheel/Weiser, LLC.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
