Advertising for new business
I thought this was too important for it to be buried below in a thread begun on January 23rd.
[Ryan Cathey] "So would it be wise in these times to take out a line of credit in order to fund some advertising and marketing campaigns? Clients are looking thin, as about half of them were in state funded education (California is falling apart) and have simply pulled completely out of spending with us.
It's time to hunt down new clients, I guess. I just want to make sure that I'm directing marketing funds in the right direction."
I agree with: [Chris Blair] "I'm not sure I'd use a line of credit for marketing and advertising."
Advertising works in only a few ways and it is never a substitute for a sales effort. Rather it can be a component of the much bigger program of marketing.
Advertising works best when it can directly target the needs, desires and/or fears of the prospects. For advertising to be cost effective the product or service being advertised must also be fairly universal in its appeal to the group being reached. For example, mattresses, something that almost all of us own at least one of and something which wears out, creating a sale opportunity for mattress sellers. This universality is why it makes sense to advertise mattresses in extremely broad media -- newspapers, TV, radio (get it, broadcast).
The opposite of this kind of universally used product category is what most of us here in the COW are selling: video, film, web production. Only a very narrow segment, perhaps as small as a fraction of a percent, of the general population purchases production, so any type of broad advertising is easily ruled out. So then what? Business-directed newspapers and magazines? Slightly better, but still, what percentage of their readership actually purchases production? Not much.
So if you're still thinking of advertising as a means of outreach, what has a better chance of working? First directories, Yellow Page listings, etc. What raises them above other forms of printed media is the fact that their readers are specifically LOOKING for your service. A more modern, but potentially more expensive version of the directory is, of course, Google ad words and other search optimization services.
Advertising which I've found to be effective is what's known as 3D mailers. Simply put this is a custom-printed box containing an item of some value. For example, a few years ago we sent out sweatshirts imprinted with our logo and a list of our services. The outside of the box said "What we do for companies just goes over most people's heads."
The cost of this was $50 for the boxes, $1.50 each for silkscreen printing of the boxes, $8 each for 100 silkscreened, sweatshirts, $200 for the labor to fold the shirts, insert them with tissue wrap into the boxes, then wrap the boxes in kraft paper for shipping, and anywhere from $4 to $6 for Priority Mail. Bottom line this 3D mailer cost roughly $17 per recipient. Expensive advertising, yes. But it made a CONSIDERABLY greater impact on 100 pre-qualified recipients than would spending $1,700 on a postcard or a trade ad to reach several thousand strangers.
Coming back to where this started, I wouldn't borrow money to solicit new business, I'd just make sure that what money I did spend would be effective and generate results.
Nick used perhaps the most important phrase in sales "pre-qualified lead." Insert Glengary Glenross comment here!
You can send 1000 pieces of advertising to 1000 random people and get no response. Or you can send 100 pieces of more customized pieces to 100 "more likely to purchase your service" people and get a greater chance of a response.
Pick up "The Accidental Salesman", a good book for people whose first love is not selling but for whom selling is a necessary part of business.
I absolutely agree with your point. My turn-off to advertiser are to point out that if I phoned up 10 producers that I really wanted to work with in any random order, and invited them to the most expensive restaurant in town for lunch: I would most likely get their ear for at least 1 hour + it would be cheaper than doing a "random hitting" advert. And I woulnd't have to do a hard sell either - the food and wine would take care of that.
BTW: Don't invite them all at the same time - do 1-on-1's only :-)
All the Best
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