(1) What Is Advertising?
Any time you tell about your
business, products or services, you're advertising.
You can tell your customers by speaking with them personally; sponsoring a
Little League baseball team whose members wear your name on their jersey;
donating money to your local Garden Club, who print your name in the program
at their annual flower show; or simply by putting your name outside your shop.
Or you may use the more recognized forms of advertising: an ad in the
newspaper; commercials on the radio; billboards, or direct mail flyers to
prospective customers. In all of these ways you let the public know of
your business.
2) Types Of Advertising.
Most people think the sole purpose of advertising is to generate
sales. But "hard-sell" ads are only a small part of
advertising.
· Hard Sell. These are ads
that urge customers to "buy now" and "come in
today." They use phrases such as "on sale", "special
purchase", "reduced prices" or "save money".
They have one purpose: to get a customer in your shop to spend money.
These are usually advertised in media that have a fast turnaround, such as
newspaper, radio or television.
· Image. Image
advertising sells the business itself, rather than products or services.
It stresses image and style, and leaves the customer with a specific
impression of the business, such as "family owned and operated",
"understated chic", "clothes for professionals",
"gourmet dining", "for the young and swinging
· Maintenance. As the
name implies, this type of advertising serves as a reminder. Its purpose
is to keep the business name in customers' minds. A good deal of regular
advertising is maintenance advertising. Look at McDonalds. It's
the number one hamburger chain in the world. It hardly needs to
"sell" itself. But if it stopped advertising, what would
happen? Burger King would continue to advertise, and as people heard that
name constantly, they would soon forget McDonalds, and Burger King would
become number one.
A classic case is RC cola. In the early days of colas, RC was the
undisputed king. Its owners decided they didn't need to promote the
product because it was so popular. So they stopped advertising.
But Coke and Pepsi didn't stop. And soon RC dropped from number one…to
number two…to a distant third place. Although RC advertises regularly
now, it has never regained its place at the top, and probably never will.
(3) What Advertising Isn't.
We've looked at all the things advertising is. Now
let's see what it's not.
· Guaranteed. All
advertising is not 100 percent guaranteed. Not every person who is
exposed to your ad will rush into your shop and do business with you. If
that happened, newspapers would be at least two feet thick and all merchants
would be rich.
· A cure for poor business
practices. If there is no need or purpose for a business; if its
employees are rude and uncooperative; if its products are poorly made or badly
priced, advertising will not make it successful. Advertising is a good
business practice, but it can't erase or overcome poor business
practices.
· Expensive. Advertising
is not an expense; advertising is an investment. And it
doesn't always take a lot of money. Handing out your business card to
people you meet is a good way to make people aware of what you do.
Wearing T-shirts or hats or giving out balloons that carry your logo is
advertising.
Putting a magnetic sign and a license plate with your logo on your car
or van spreads your name, too. And all these ways cost very little,
especially when compared to the benefits.
· A Get-Rich Quick Scheme.
Many merchants think that if they regularly keep a product "on
sale", customers will continue to shop at their store. All their
ads are hard sell.
"Sales" work well in some businesses - grocery stores, furniture
stores, etc. - but continuous sales can be harmful to the small community
merchant. "Advertised specials" are usually items, which have
a very low, or no markup, and therefore don't make a profit. And the
customers they attract are bargain hunters, who buy only the item on
sale. What's more, when they're always having a sale, the shop gets the
reputation of being a "bargain basement" of seconds instead of a
shop with quality merchandise at reasonable prices.
Sales are good because they help bring customers into your store, where you
can show off your products, your shop, your merchandising and your courteous,
efficient staff. But too many sales will put you out of business.
Always Obvious. Consider the following scenario. Bob Smith
owns a small shop that sells batteries. He runs an ad regularly in his
local newspaper, but doesn't think he's getting much response.
Meanwhile, two miles away, Sue Jones is leaving for work when she discovers
her car battery is dead. She remembers Bob's ad in the paper that
morning, so she gets a jump-start from a neighbor and drives to Bob's shop,
where she buys a battery. He doesn't ask where she heard of his shop,
and she doesn't tell him. Had he asked her, she may not have remembered.
·Sue is satisfied with the service
she gets, and tells her husband Jim about it. Later, while they're
having dinner with two other couples, they mention the experience, and how
satisfied they were with Bob and the battery.
Over the next few months Sue and Jim recommended Bob's shop to family and
friends who mentioned automotive needs. They tell their friends, who
tell others, and thus word gets around about Bob's shop and his excellent
service.
By the end of the year Bob's business has picked up. But he still
doesn't see the connection between his increased sales and the ad he's
running. However, just that one small, inexpensive ad has brought him
hundreds of dollars of business. And more important, if the customers
the ad brought him (both directly and indirectly are satisfied and pleased
with Bob and his shop they will return again and again.
Moral: Results of advertising aren't always obvious or
immediate, and aren't easy to determine. Like any investment, it takes
time to get a return on your money.
(4) Why Advertise?
The best business in the world can't succeed without
customers. And customers are slippery fish to catch. Even when you
get them, there's no guarantee you'll keep them. Advertising is
necessary to make potential customers aware of your business so that they come
into your store, where your employees, merchandising and atmosphere convince
them to buy.
· Display ads increase business.
Surveys prove that advertising triggers sales, reminding customers of
items they had forgotten, pointing out new uses of products, and introducing
new products. Increased sales volume helps decrease cost so you can take
advantage of better (volume) buying…and that increases profits.
· People move constantly. The
customers who faithfully shop at your store may move to Illinois next
week. And the shoppers who've just moved here from Kansas don't know
you. This is especially true in a transient area like Palm Beach County,
with the high percentage of seasonal residents and influx of tourists.
· Your business changes. Chances
are you're not the same business you were when you started. You've added
products or services, dropped some, maybe expended your shop or moved; or
changed employees, your name or your hours. Your customers don't know of
these changes unless you tell them.
· Your competitors
advertise. The world of business is tough. You have to fight
for your share of customers. If you don't advertise, you can bet your
competitors will. And when a customer is always reading about another
store's sales, products, etc., he has more incentive to shop there and
remember that store instead of yours.
· People are creatures of
habit. People are more comfortable with the familiar than the
unfamiliar. And the only way a customer can become familiar with your
store is to hear about it or shop there frequently. When you advertise
regularly, customers get to know you, and the better they know you, the more
inclined they are to do business with you. You don't marry your spouse
on the first date; you can't expect a customer to shop in your store after
just one ad, either. It takes time to build familiarity.
(5)
How Much Should I Invest In Advertising?
There is no ideal amount to
budget for advertising that will work for every business under all
conditions. But there are a few rules of thumb best suited for you and
your sales objectives.
a) Put aside 2 to 5 percent of your expected annual gross sales for
advertising.
Example: Your goal this year is $100,000 in gross sales. Your
advertising budget should then be between $2,000 (2 percent) and $5,000 (5
percent) for the year. You can allocate more than 5 percent, but you
shouldn't drop below 2 percent. If you use less than is minimally
effective, you've lost everything because your advertising won't work.
However, if you use more than what turns out to be the ideal amount, you've
only "lost" that little bit between the ideal and the extra that you
invested.
b) Keep approximately 10 percent of your advertising money for special
promotions.
Leave some room if you decide later in the year to feature a special
promotion, or join a citywide campaign, or if you come upon a good deal that
enables you to offer special prices.
Example: You allocated 3 percent of your gross sales
($3,000) for advertising this year. Hold out 10 percent ($300) for
special advertising. This leaves you $2,700 for regular advertising for
the year.
c) Divide this amount in monthly allotments that
correspond to your monthly gross sales.
Example: Last August's sales accounted for 6 percent of your annual
gross sales. Take 6 percent of your advertising budget for this year
($2,700) and you get $162. Use $162 for advertising in August. To
increase sales, increase that figure to $175 or $200.
When your business is new, you
should budget more money for advertising than after you're established.
A common rule is to spend an amount equal to your rent each month for the
first eight months. Example: Your month's rent is $700. You
would budget $700 each month for advertising during the first eight months.
Take Advantage of Cooperative
Advertising
Many of your suppliers offer cooperative advertising (called
"co-ops") where they'll pay a portion of your advertising costs when
you feature their product or brand name in your ads.
Usually you'll pay the costs and submit proof of advertising (a tear sheet
from a printed publication, notarized statement from a radio or TV Station, or
photo from outdoor advertising) to the supplier for reimbursement.
Check with your suppliers to see who offers co-ops and use co-ops as often as
possible. Maybe you're already featuring their products in your ads
without realizing you can get a partial rebate. And some suppliers with
extensive co-op programs have ready-made ads you can use by simply adding the
name and address of your business.
Used properly - but not excessively - co-ops can save you money and
time. Talk with your suppliers today.
(6) Forms Of Advertising.
The broader your campaign the more effective it will be.
Don't restrict yourself to just one form of advertising. You'll find
that the more ways you advertise, the better they'll work together.
· Print. Includes
newspaper, shoppers, magazines, directories, programs, catalogs, newsletters
and direct mail flyers. Advantages: permanency, high
retention, low cost, visual medium, and flexible.
· Radio. Advantages:
frequency, personalized message, and ability to change message often.
· Television. Advantages:
large audience, and manner of presentation - the combined visual/aural
message offers a realistic view of product, and shows how to use your product.
· Outdoor. Includes
billboards, benches, posters, busses, cabs, and signs. Advantages:
permanency, high retention, frequent exposure, high reach (number of
persons exposed to the ad), visual medium.
· Specialty. These are
functional items that advertise: T-shirts, hats, key chains, buttons,
balloons, bumper stickers, pencils, calendars, coasters, tote bags, license
plates, etc. Advantages: permanent, frequent exposure to
the persons using them and to others that see the object. Because
they're functional (useful), they leave a good impression.
· Token or charitable. These
are, in effect, donations. Include church bulletins, school yearbook,
band, club newsletters. Advantages: They promote goodwill
toward your business and a keep your name in the public eye.
· Sponsorship. Sponsoring
a bowling or Little League (or any kind of) team; an individual athlete; a
parade float; scholarship; trip or activity, etc. Advantages: promotes
goodwill, and builds you a reputation as a business that cares about the
community.
(7) Planning an Advertising Program.
Advertising should never be approached as a hit-or-miss, haphazard
venture. It's a serious, important business practice that should be
carefully planned out at least six months in advance.
While you're working out your budget, spread a large desktop calendar in front
of you; use one with plenty of space to write in.
Mark the budgeted amount for advertising at the top of each month, and break
that down into weeks. Note what holidays, special events or promotions
are scheduled for the month and plan your advertising around them. For
instance, you'll know that in the week before Mother's Day you'll want more
advertising than usual to attract buyers of Mother's Day gifts. So
you'll allocate more money to that week than to the week after.
Because you're the best judge of what products and services are in demand
during which periods, you should use this time to plan the content and type of
ads you'll use for the year. You'll want to use hard-sell ads before
your special sales and holidays, and follow-up with maintenance
advertising. You'll plan "End of the Month" and "Business
is Blooming" sales during slow periods to increase traffic. You
might prefer to use image ads in longer lasting media, such as billboards,
magazines or church bulletins.
A WORD ABOUT PRICE: DON'T AVOID IT. If you don't mention price in
your ads, which feature products, the customer will be suspicious. You
price all merchandise in your store, why not in your ads? Customers
think if the price is omitted, it must be high, or the shop might charge
differently according to ability to pay. So they'll shop at another
store that does advertise the price, even though it may actually be
higher than yours.
LOCAL PEOPLE READ THE LOCAL PAPER It's nice to know what's
happening in the world; and TV and the daily newspaper keep you well informed.
But if you want to know what's happening around the corner…in your
neighborhood…at your church…in your child's school…things at a local
level, you turn to the hometown weekly. We keep in touch with our
neighbors...and so can you with a far reaching, inexpensive ad designed to
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advertising expertise is yours...all you have to do is call 844-2408.
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.Advertising is like learning - a little is a dangerous thing. If a man has not the pluck to keep on advertising, all the money he has already spent is lost. - Phineas T. Barnum