A quick 80-20 rule technique for your business.
Unless you’ve been under a rock you’ve heard about The Pareto Principle aka the 80-20 rule. It states for many events roughly 80% of the effects come from 20% of the causes. (Not just in life but in business as well.) If you ever wanted to know what advertising and marketing endeavors are bringing in the cash (and which ones to eliminate) then here’s a simple way to apply this rule to find out.
Make a list of everything, even advertising specialties (pens, calculators, etc.) and brochures and business cards along with how much you money you spend on them. Then work out the numbers over a period of time to see which of those efforts brought in the most money. Make sure you do this carefully or you could end up eliminating something that’s working. Review your list and determine the top 20% that made the cash register ring 80% of the time? Now comes the hard part. STOP DOING THE THINGS THAT ARE NOT WORKING UNTIL YOU FIND OUT WHY. (Don’t make me write the definition of insanity.)
Don’t go blowing the extra money.
Since that money was already part of your advertising budget you should put it to use by tweaking a few of the money wasters or with a new type of marketing. If you need to go over some unique advertising and marketing techniques just give us a call.
Let me know how you did.
Sight, Sound and Smell
For retailers that have a storefront it is important to remember that the marketing mix also includes the retail customer experience. When a customer enters your store it’s of utmost importance that the proper sight, sound and scents are used to invoke the feelings that will move your customers to a purchase.
Now I am not saying use mind control (well maybe I am) but using the proper scents, visual elements and sounds definitely result in more purchases. For example did you ever wonder why the bakery sections of the larger supermarkets are positioned in the front of the store? It’s because they know that the smell of baking bread and cookies will make you hungry and thus purchase more throughout the store. (Same thing with the roasted chicken.) Did you know that on many of the overhead music tracks there are subliminal messages that are designed to guide you to a purchasing decision? What about the spray they use on the vegetables? Who wants to buy a dull colored vegetable? The water makes them more appealing to our senses. What about the music? Do you think that is random songs?
Below are some things to consider.
Sight
Color influences behavior and affects shopping habits. Impulse shoppers respond best to red-orange, black and royal blue. Shoppers who stick to budgets respond best to pink, teal, light blue and navy.
Have you noticed that most fast food restaurants are decorated with vivid reds and oranges? It’s been known that reds and oranges encourage diners to eat more and faster.
Toys, books and children’s sites usually contain blocks of bright, primary colors? Young children prefer these colors and respond more positively.
Since the three senses mentioned influence customers decisions to buy or not to buy choosing the right strategy for your company is crucial. You should not go it alone.
Sound
Make sure that the music you do play is pre-recorded. This way you have total control over the type of music and the tempo.
According to:
Advances in Consumer Research Volume 20, 1993 Pages 336-340
THE INFLUENCE OF BACKGROUND MUSIC ON SHOPPING BEHAVIOR: CLASSICAL VERSUS TOP-FORTY MUSIC IN A WINE STORE
Charles S. Areni, Texas Tech University
David Kim, Texas Tech University
As part of a field experiment in a large U.S. city, the background music (classical versus Top-Forty) in a centrally located wine store was varied over a two month period. The results of an ANOVA indicated that the classical music influenced shoppers to spend more money. Additional findings suggest that, rather than increasing the amount of wine purchased, customers selected more expensive merchandise when classical music was played in the background. MacInnis and Park’s (1991) notion that music is more persuasive when it “fits” the persuasion context is employed to account for these results.
Scent
Since smell is the closest sense linked to memory. Creating pleasant scents in your store gives consumers a feeling of nostalgia. They become more relaxed and thus increase the chances of making a purchase. Using a customer scent helps consumers remember your brand. You can also incorporate scent into printing thus increasing your direct mail success. A website to find your scent is here: http://www.scentair.com/products-services-scents/
I hope this helps. As always your comments are always appreciated.
The importance of a great offer.
When consulting on advertising I often get asked what the offer should be to get the maximum amount of calls. Here are a few things to consider.
The more pain the better. Give as much as you can to get a new customer. Then once you got them you will re-market to them over and over (if you know how). Don’t worry if the offer is just allowing you to break even, since in most cases the lifetime value of a customer is longer then the first sale so you’ll make it back on the second, third, fourth, sale. That will also force you to stay in contact with the customer.
Don’t use a percentage off all services. Using a percentage (10% off) is problematic at best as most people will not calculate on the fly and we don’t want them to have to do something before they contact you anyway. In most cases they are thinking “off what”? Do you respond to those types of ads? Many don’t, so it’s better to give them a dollar amount. $50.00 off is much easier for people to understand what exactly they’re getting. Also, use as much copy as you need to describe the offer fully. People want information, that is the reason they are reading the piece, so give it to them. Statistically it’s always better to have more copy then less. Then have a strong call to action. Call today. Supplies are limited so call now. etc.
In addition to the offer there are many other things to consider. Use people in your ads as people relate to people. If most of your customers are seniors then do not use young people in the ad. Also, keep your logo at the bottom. Don’t waste valuable space with a huge logo. Remember no one cares who you are they only care what’s in it for them. And make sure you use a strong headline as the best headlines describe the offer.
Let me know when this helps.
Happy Thanksgiving!
How to spend less money on advertising?
An easy way to spend less on advertising is to make sure that you have a great informative website to compliment all of your advertising and marketing endeavors.
Think of your website as the center of all your advertising and marketing. Everything you do will point to the website. Once your website is up, it takes a small amount of time and effort to keep it fresh. This allows you to spend your advertising dollars on smaller more targeted ads in publications that before the price was out of your reach.
As always your comments are appreciated.
Don’t be scared, they want to meet you.
A few days ago I was speaking with a client about social media and how it can improve their companies’ exposure and in many cases, if worked correctly, can bring them new business. But with social media technology many people rely too much on the actual tool they are using.
Social media marketing sites like Facebook, LinkedIn and Twitter are great for cultivating connections that are too far away to grow in person but you should still strive to go out and actually meet the people you are networking with either on a one-to-one basis or in a social gathering.
Try this and I am sure you will leave the experience with a much stronger bond than any social networking site can achieve.
Is Your Advertising Making The Cash Register Ring?
When you are advertising your business you need to make sure that you are placing it in the right place and with the right message. These two important items are usually missed simply because many businesses owners do not know exactly who their customers are.
You should know your customers Geographic, Demographic and Psychographic variables. If you don’t then I can guarantee you are losing money on your advertising. When this information is known you can make a educated decision when a sales representative from a magazine, radio station, newspaper, etc tries to sell you advertising. You will be able to weed out the poor choices by simply asking them who their readership or listeners are. Most of the professional media companies will know this information. If they are vague with the answer or if their data is old and out dated then they are not the right fit for you.
Here are some things you should know:
Geographic Variables (Helps determine where to advertise.)
- Region
- Size
- Population Density
- Climate
Demographic and Psychographic variables will help determine what media to place your advertising in and what copy and imagery you should use.
Demographic Variables
- Age
- Gender
- Family Size
- Income
- Occupation
- Ethnicity
- Religion
- Education
- Marital Status
Psychographic Variables
- Activities
- Interests
- Opinions
- Attitudes
- Values
Even if you only identify some of the variables listed above it will help you
make better decisions and save you money on your advertising.
After you have this information it is extremely important to tailor your advertising and message to attract the right customers. For example if you are looking to attract customers with families you do not place images of single persons in your ads. You also make sure that the copy is properly written to appeal to the segment you are trying to attract. Don’t be afraid to use a lot of copy. After all if a potential customer is reading your advertisement it is better to give everything they need to make a decision to call you then not enough information. Then when they do call they are a much warmer prospect.
Let me know how you are doing. As always your comments are appreciated.
The importance of good sales and customer service training.
After many conversations in the last month I am amazed that many business owners do not train their employees in sales and customer service and this is a huge oversight.
If you’re a business owner and have employees that answer the phone with the ability to make a sale either a cold sale, up sell, etc. these employees should be trained in basic sales techniques and customer service practices to ensure they are selling the right solution to the customer and keeping the new and existing customers happy. If a customer purchases the wrong product or service it creates ill will and the customer could loose trust and will force them to start looking for another company to serve them. On the flip side, when a customer purchases the right product or service that serves their needs it will cut back on refunds thus saving the company money. They will feel good about their purchase and experience thus referring others to your company. (Can you hear the cash register ringing? Cha Ching!)
When an employee is trained they will know how to handle situations on their own. Make sure you empower them with the ability to fix most problems. This power to fix issues will save time and create good will with the customer as they feel that the employee is going the extra mile to help. Example: If you went to a store and had a problem or question and went to a sales clerk, then the sales clerk had to go to a assistant manager, that in turn had to go to a manager, etc. etc. you get the idea. (Just typing that was painful.) Now I am not saying to invest in expensive and extensive training. I would start with a book or audio program that you read and listen to as well. Then you review the information with your employees and apply the education to your business. When you see how well it works you can consider advanced training.
So invest the money to properly train your employees that have interaction with the customers. It will help your business grow and allow you to become the leader in your industry.
