Up Your Business - August - 2016

People-First Advertising

At this year’s Powertrain Expo, I’m presenting a workshop entitled Pea Soup: The Cure for Entrepreneurial Split Personality Disorder. I’ve compiled some practical tools to conquer the two-hat challenge that I wrote about in the May 2016 issue. These tools will help you take your company exactly where you want it to go. You’ll learn the secrets for managing things and leading people.

This month’s article discusses another P-word: People. People are essential for business, and, of course, for the “Pea Soup” recipe. To be more specific, people, in this case, refers to customers and potential customers.

If you’ve attended past Powertrain Expos, you’ve heard the term customer-centric. This month we’re going to look at the idea of making your advertising customer-centric, or, to stay with the Pea Soup theme, people-centric.

Most Advertising Is a Waste of Money

Have you ever wondered why advertising agencies don’t advertise? What do they know that they aren’t telling us? They’re the pushers and we’re the addicts. Let’s face it: Advertising is like a drug addiction in that it makes us uncomfortable when we’re not doing it.

After spending over 30 years studying advertising through experimentation and observation in my own businesses, and after having been an advertising addict for over 25 of those years, here are some of my conclusions about advertising:

  1. Most advertising is a waste of money. It’s not because advertising doesn’t work because all advertising produces results… even if the results are bad, they’re still results. Most advertising is a waste of money because it fails to produce the results the advertiser wants it to produce.
  2. Most advertisers don’t even know what results they want. They express their desires in vagaries that are based on feelings rather than measurable targets. The advertising fails right out of the gate because there’s no clear plan or objective.
  3. Most advertisers don’t understand the purpose and role of advertising. Advertising has one purpose: to generate leads. The terms advertising and marketing are often used interchangeably, but they aren’t the same. Advertising is paid placement on radio, TV, print, online, or other media. Advertising is only one element of marketing, and, in and of itself, it doesn’t necessarily increase sales.
  4. Marketing includes advertising, but it also includes strategy development, branding, defining your image, and developing sales procedures that fit your company culture.
  5. Top of Mind Awareness (TOMA) is the ultimate goal of advertising because TOMA reliably produces leads.
  6. Most advertising goes completely unnoticed by your target customer. It’s a sad fact that your ad is only important to three people:
    1. The person buying it (you)…
    2. The person selling it (the ad rep), and…
    3. Your competitors.

    You need to make it important to the only person who really matters: your target customer.

  7. Unless a person needs, wants, and can afford what you’re selling, all the advertising in the world won’t work. For instance, no amount of advertising will create the need for an auto repair or cause a sane person to want to buy an auto repair they don’t need it or can’t afford. You can hope that they’ll remember you when they need you, or that you’re lucky enough that your ad lands on them exactly when they need you. But that’s just a crap shoot.
  8. Automotive businesses often offer products or services that are so similar that potential customers have a difficult time differentiating them on any basis other than price. Successful marketers distinguish themselves with effective solutions to problems.
    Rather than talking about your products, services, or prices, talk about the customer; solve his or her problems: People-First Advertising.

Track and Measure Results

Let’s start with the planning process. First, determine how much you’ll need to sell just to break even on the advertising investment. One approach is for a specific promotional campaign to acquire new customers. Using this concept, if your gross profit is 50% and the campaign cost is $5000, you’d need $10,000 in sales to break even.

But if you take a long-term budgetary approach, which is based on investing a certain percentage of your total sales into advertising to attract new customers as well as building customer loyalty and repeat sales, the calculation goes like this:

For a 5% budget, for every $500 you invest must generate $10,000 of sales ($500 ÷ 5% = $10,000). It’s essential to track sales, but also advisable to track your gross profit on these sales to confirm whether your advertising campaign is successful.

Either way, at least you have a target, and this is better than just “going with your gut.” Now you can calculate how many leads your advertising needs to generate to achieve your sales goal. For every $10,000 of sales, if your average sale is $400, the campaign needs to yield 25 service orders ($10,000 ÷ $400 = 25 service orders).

Now you need to determine how many leads it takes to generate 25 service orders. If you convert 70% of your leads to sales, you’ll need to generate almost 36 leads (walk-ins or phone calls) to get 25 customers (25 ÷ 70% = 36 leads). Clearly, you need to track leads and sales conversions faithfully.

Reaching Your Target Customers

Okay; you know what you want to achieve so let’s plan your strategy to reach your target customer. The 4-part formula goes like this:

  1. Say something important.
  2. Say it to the right people… the people it’s important to.
  3. Say it well with a compelling message.
  4. Say it often… once is not enough.

Saying something that’s important and saying it to the right people is integral. To do this successfully, you need to know who your ideal target customers are and what’s important to them. It makes no sense to spend money reaching and attracting customers that aren’t a good fit for your business model.

Start by determining your ideal customers’ primary frustrations with respect to buying auto service and repairs. Tell them how you’ll solve their primary frustrations. This is important to them, so it should be the focus of your ads. For instance, in no particular order, here are some of the common frustrations expressed by auto repair consumers:

  • Inconvenience of taking time away from other commitments, being without their cars, or having to wait while their cars are being worked on.
  • Not knowing what they’re getting and why.
  • Fear of paying too much or paying for something they don’t need.
  • Being up-sold… the estimate always goes up before the job is done.
  • Having to come back for the same problem after it’s supposedly fixed.

Can you think of other areas of frustration that transmission and auto care consumers might have? It probably differs geographically and demographically, so you might consider taking a random survey to find out what people in your area find frustrating.

Saying it well has to do with carefully structuring your advertising message to reach your target customer. Don’t water down your message; tailor it specifically to address the primary frustrations you’re solving.

It must be important to your target customer. It doesn’t matter if it doesn’t apply to everyone… it matters that it fits your ideal target customer. Don’t try to advertise to everyone because you’ll reach no one.

The ad must accomplish 4 things and they must be accomplished in the following order. –A simple way to remember them is the acronym A I D A.

  1. Attention — you must first get their attention. If you don’t do this, nothing else in your ad matters because they won’t notice it. You might need to be outrageous because you literally have to interrupt them, shake them from their complacency, and break through what is called their Reticular Activator System.
    The RAS is a type of filter in your brain that filters out things that aren’t important. It’s kind of like an auto pilot for your brain. An example of how it works is when you drive all the way to work and don’t remember the trip, or how you never saw people driving your type of car until you bought one.
  2. Interest — once you’ve interrupted them and have their attention, you need to peak their interest enough to want to check out your ad. Give them just enough compelling information to interest them in the details. Highlight one or more of the primary frustrations, and, if they relate, they’ll likely want to learn more about what you have to offer as a solution.
  3. Details — people who are interested will hang in for the details. We don’t care about the rest because we’ve connected with our target customers. Don’t say any more than necessary to get them to step 4. By the way, you’ll still reach people who aren’t your target, but keep your message focused on your target customers.
  4. Action — tell them what to do now. For example, call you, come in, write down your number, save your coupon, or whatever action you want them to take.

Finally, commit to saying it often. Studies have confirmed that it takes nine or more impressions before the message breaks through and makes a lasting impact. A person might have to see your ad nine or more times before you achieve Top of Mind Awareness. This varies depending on your ad message, how well you targeted the message, and whether the reader currently needs your service.

It’s better to reach 100 people 10 times than to reach 10,000 people one time. Because people tend to be creatures of habit, a good way to accomplish this is to advertise in the same place on a regular basis for at least 90 days.

People are creatures of habit, so, if you’re advertising on TV or radio, advertise at the same times on the same days of the week. In print, be on the same page with the same size and appearance on the same days every week. For direct mail, don’t expect results to roll in until you mail several times to the same list.

Another great way to break through the Reticular Activator System and get the word out about your company is to join community groups and service clubs. I was a member of the Chamber of Commerce for 25 years, but didn’t attend a single meeting for the first 20 years.

When I finally got around to attending, I discovered that I was the only auto service company at the meetings. I quickly picked up new business from other attendees, and they began to refer friends to me, their new friend in the car repair business. So joining clubs works, but only if you get involved. When it comes to community service, you benefit in direct proportion to what you put in.

The internet has opened the door to reach people when they need you. This is a topic worthy of an article unto itself, so I’ll simply say that internet advertising is no longer optional. Statistics demonstrate that most shoppers who don’t already have a relationship with a service provider will begin their search on the internet.

Today, a web site with an internet marketing strategy that includes search engine optimization (SEO) is essential. Start tapping into social networking tools like Facebook, Twitter, YouTube, and Instagram. Set up an automated email system that sends brief, informative email messages at frequent intervals.

Expand the power of the internet with website alliances that align your shop with other quality businesses. For instance, your ATRA membership gives you a presence on the ATRA web site.

In Closing

Marketing and advertising are addictive and fun. Whether you’re placing traditional advertising, getting involved in community-based networking, or employing internet strategies, stop talking about you and start talking about how your customers benefit when they choose to do business with you.

Apply the principles discussed in this article and use a people-first advertising strategy before you waste another dime on advertising that doesn’t work.

This year’s Powertrain Expo is scheduled for the last weekend in October. Come and learn from a whole slate of management experts about how you can take your business to the next level. Plus you get to spend Halloween in Las Vegas… does it get any better than that?

I hope to see you there.