Have business people stopped looking for answers, falling content to grouse about how bad things are in the economy and expecting somebody else to “fix” it for them?

There is a sense that they have. And what a desperate sentiment that is. I can’t imagine the state, either of believing that no answers even exist, or worse, that the answers do exist but nobody actually knows what they are. What a hopeless place to be, mentally, spiritually, emotionally.

Yet it seems for many businesses, that is exactly where they are. They have, indeed, surrendered to this notion that we’ve never been here before, so nobody has a clue about what can, should, or must be done. They seem to believe that the solutions are beyond their reach and they’re standing on the sidelines, waiting for somebody else – the government, the banks, some other industry – to figure the whole thing out, right the ship and put us all back on the path to prosperity, where they can get back aboard the gravy train to easy riches. But they sure as heck think it’s all out of their hands.

Granted, the economy is in pathetic shape. Unemployment is higher than at any time since the Carter administration, and that was long enough ago that a vast majority of business people who lived through those dark days are gone from the market now. And those times were worse than we’ve got it today, with inflation and interest rates both in double digits. (Incidentally, I still don’t believe we’ve seen the worst for this economy and I would not be surprised to see us return to Carteresque economic challenges… or worse. I’m predicting worsening economic conditions in 2010 and perhaps beyond. Sorry.)

Still, even the Carter years were not as bad as the great depression. It took a world war to pull us out of that one, and with nuclear weapons all over the planet, we can’t afford one of those again.

So when it comes to prosperity; to business growth; to maintaining and even improving sales, revenues and profits, does anybody have the answers? Are they up ahead, just around the corner?

The good news is, the answers do exist.

But you won’t find them looking up ahead. You won’t find them from government, banking or other industries. And you certainly won’t find them if you stop looking. But you haven’t been looking in the right places.

You’ll find them rooted in the pre-depression, depression and immediate post-depression past. You’ll find them among the old-timers of business, and particularly the old timers of marketing and advertising.

• If you want to make your marketing and advertising more effective, less expensive, and more accountable, look to the past.
• If you want to feel like you have control over your own sales, marketing and business destiny, look to the past.
• If you want to clobber the competition and protect yourself from being forced to compete on price because everybody else is in this economy, look to the past.

Allow me to make a few recommendations…

Read the combined volume book, Scientific Advertising/My Life in Advertising, by Claude C. Hopkins. Hopkins wrote this tome in 1923. It’s obviously so old that the copyright has expired and the book is now in the public domain. So there are many versions of it available. And there is a reason why. This book remains one of the staple classics of the advertising and marketing world, because its principles remain timeless.

Hopkins’ answers are based on research and measured results. His scientific approach to advertising – in his day exclusively print – was tested, tracked, measured, adjusted, redeployed, and tested, tracked and measured again.

You would also be wise to read Tested Advertsing Methods by John Caples. In the heyday of Caples storied career, which began in the roaring 20s and spanned 58 years, Caples was dedicated to testing and tracking, then extracting what works and why in advertising. I have seen nothing to make me believe the principles he laid out are no longer true. Among them…

- The best headlines are those that appeal to a reader’s self-interest.

- The next best headlines are those that give news.

- Long copy pulls better than short copy.

So profound are these truths that no less than the great David Ogilvy extolled them again and again in his classic work, Ogilvy On Advertising, another book you cannot afford to overlook. David Ogilvy and this book had more influence on the development of my approach to advertising and marketing, early in my career, than anything else. It led me to the others.

All three of these books can readily be found. One slightly more difficult to locate, perhaps, is Which Ad Pulled Best? This book, written by Carroll J. Swan and originally published by Printers’ Ink, shows side-by-side comparisons of tested print ads. It was copyrighted in 1951 but the lessons it demonstrates are still valid today.

Finally, lest you remain skeptical about the application of these principles of selling through the media, being applicable in print alone, I recommend Eicoff on Broadcast Direct Marketing, by Alvin Eicoff, arguably the father of the infomercial and direct response radio and television advertising.

Yes, the answers are there, my friends. But if you want to move ahead in your business, you must look to the past. It is true that the marketing of the immediate past has become ineffective. But the principles that carried many companies through the depressions can carry you through today’s recession and far, far beyond. Look to these authors. And for a modern spin on these principles, may I humbly recommend my own book, How To Market Your Crap When The Economy Is In The Toilet.

THE END

EDITOR’S NOTE: Jim Ackerman is a Salt Lake City-based Marketing Coach, Writer and Speaker. His new book, How To Market Your Crap When the Economy is in the Toilet, contains 12 vital strategies for unclogging the American economy, one business at a time, and is now available at a discount directly from www.marketyourcrap.com. Or contact he author directly at 800.584.7585.

The boss had entered into an agreement to do some television advertising and they said they wanted to do an ad aimed at increasing their wedding ring business. The client’s question to me… should I do 30 or 60-second spots?

How would you answer that question? What other questions might you ask?

More background? The original proposal from the TV station was to spend $3,600.00 on 72, 30-second spots. We had already discussed the creative and I had recommended one-minute commercials because research indicates that longer spots generally out-pull shorter ones. There is a caveat, however. The spots need to be direct response in nature. In other words, an offer has to be made with a directive to respond.

Fact is, the client’s creative had a soft offer, which put the commercial in limbo. Not really direct response, but not pure image advertising either. So again, what would you do?

Let’s do something almost no advertiser ever does. Let’s forget the reach and frequency issue and get right to the hard-core numbers. Let’s ask if this is actually worth doing at all. Here’s what we can assume…

1.    If there is a population of 120,000, there are no more than 40,000 households (assuming just three live bodies per household).
2.    Since a wedding engagement typically involves two individuals from two separate households, we’re out to reach just 20,000 potential buyers.
3.    Market research indicates that .008% of a given population gets married each year. You would take that number from the overall population, not households, so there are just 960 potential weddings per year in this market, or 80 per month.

Wow! A little different look at the numbers, isn’t it. Would you spend $3,600.00 to reach just 80 prospects? That comes out to $45.00 per potential buyer. Doesn’t sound quite as good as the $30.00 per thousand reach that the ad rep probably told our guy, is it?

Still, I’m not saying it would be a bad buy, but we’re not finished yet.

Of those 80 potential buyers, how many of them are likely to be watching TV right when my client’s ad runs? If the station has an audience share of 30 in the programming he buys for his spots – an incredibly high number, incidentally – 30% of those 80, or 24, can be expected to be watching. Now we’re up to $150.00 a prospect, just to reach them with the TV ads.

Now, how many of those 24 are ready to act? How many have loyalties to another store? How many have the budget or would qualify for financing, for our guy’s inventory? How many did the ad actually appeal to?
And we’re still not finished. What are the sales skills of our store’s sales staff? Once these few prospects straggle in, you still have to convert them from prospect to customer. If we assume that our questions in the last paragraph eliminate another 12 of our 24 prospects, we’ll get 12 respondents to the ad walking through the door. If the staff typically converts one out of three to a sale, they’ll close four sales, at an advertising cost per sale of $1,200.00 per sale, before sales commissions.

Margins are better in the jewelry business than in most retail operations, but you still have to recover the costs of marketing, inventory and overhead. So you really need an average sale of about $3,600.00, on each of these four sales to make the program pay for itself.

Of course, if the spots bring in more people and more sales are generated, the store can run this program either with more profits or with lower margins, and still justify the expenditure.

Three points from this exercise we’ve been through together…

First, some versions of the numbers – the odds – we’ve been discussing apply to your business as well, regardless of the media in which you advertise.

Second, are you considering these things as you make your marketing decisions? If you’re not, you’re nuts.

Third, the odds of advertising success are considerably less than getting a hit in a baseball game. On the surface, the odds look terrible. Yet advertising works. Advertising – yes, mass-market advertising – can and does work in building businesses. But you must realize your odds of profitably acquiring new customers, clients or patients using traditional advertising are slim indeed. Almost all businesses acquire new customers at a loss. It works, though, because as new customers come in, they also come back, without the benefit or requirement that they see ads first.

The lesson to be learned is that you must have systems in place to maximize the transaction from every new-client purchase, and do whatever it takes to get that new client to come back and buy again, as soon as possible and as often as possible. (In the case of the jeweler, he must not only sell the happy couple her wedding set, they’ve also got to sell the groom’s ring, and perhaps special items as gifts for the entire wedding party. That may be accomplished during the first visit. It may take several solicitations prior to the wedding and several afterward.)

Advertising is a messy, unpredictable, almost futile endeavor, which is, absolutely necessary. But you can increase your odds of success, by calculating your numbers in advance and making sure your ads do everything possible to get your audience to take specific action in response.

And, there are alternative methods of advertising, which can allow you to dramatically increase your chances for success, lower your costs, and postpone incurring those costs until after the new business is acquired. But that’s a topic for another column.

THE END

EDITOR’S NOTE: Jim Ackerman is a Salt Lake City-based Marketing Coach, Writer and Speaker. For his new book on How To Market Your Crap When the Economy is in the Toilet, contact Jim at 800.584.7585 or go to www.marketyourcrap.com.

Click on the link below and watch this video.

IT Will Hit The Fan

I’m not saying it’s the end of brands. There will never be an end to brands. But this notion of “branding” has got to go. And it is going quickly… although this is probably the first you’ve heard of it. I would venture to say I may be the only marketing pundit proffering this position. On top of that, it will likely be a long, long time before you hear anyone else taking this position, because all the other pundits have a vested interest in perpetuating this nonsense.

No, the marketing world will be engaging in so-called branding activities for a long time to come, despite the declining – and forever questionable – effectiveness of those efforts.

Here are the realities of life as we exit the branding era…

1. The concept of establishing “brand” in the conventional sense of the word just can’t be done anymore (if it ever could have been). That conventional branding idea is that you can establish a position for a product, service or company, ingrain it in the minds of consumers, and “own” that spot on the top of the public’s mind with relatively little maintenance.

Again, it is a dubious premise in my mind, but if we concede that it might have been possible in the past, it surely is no longer possible today.

In the “good ol’days,” assuming you had a big enough budget, you blasted away on the three national television networks and you could argue you came to “own” the category. If you could spend enough, the brand was yours.

Not so today. Too many media options. Instead of three major networks, you have a dozen or more majors and nearly countless “sub-networks.” There is also a proliferation of both local channels and sideband channels and a seemingly infinite number of satellite channels. And that’s just television!

It’s true, there are fewer newspapers and maybe fewer magazines, although I wouldn’t bet on that, but there is more radio than ever.

But the deal buster is the internet. It’s ruining everything for advertisers. They’re not needed anymore. Previously the tradeoff was, “You can enjoy our entertainment and information, but you have to take the ads with it.” No more. You can get all the information and entertainment you want, for FREE, and without ever having to watch a commercial or read an ad.

By the way, I’m dismayed by this. It makes my job and every advertising expert’s job, way, way tougher. And don’t think anybody’s got a complete handle on the internet. Most have all of a finger or two on it, and that’s it.

Think about it. You want either information or entertainment, you don’t even have to rely on a single expert or a pro entertainer. From Wikapedia to YouTube, the guy next door is providing whatever you want.

There is just no way to “be there” in the face of the right prospects, virtually all the time. Nobody has that much of a budget!

2. You no longer control your brand. You can pay the ad agencies all you want. You can do all kinds of market research and engineer the message you put out there with the precision of a brain surgeon. But it’s your customers who are in charge of your brand now.

Yes, it’s the internet again. The people are in touch with each other today. I mean all the people are in touch with all the people, all the time. You screw up and you’re screwed.

And there are a lot of ways to screw up. You come up short on anything you promise and the masses will find out about it. The consumers talk to each other on the internet. They do it formally through sites like Angie’s list, and they do it informally through facebook and twitter, and even through their own email lists. (That being the case, it blows me away that any business owner would tolerate even the slightest slight in customer service. It’s just too costly. You lose the customer and you may lose several, as the offended broadcast their unhappy experiences to friends and strangers alike.)

So your customers now control your brand, unless you commit at a higher level than ever before to control it by living up to every promise and serving customers at such a high level that all you get is praise.

And therein lies both the secret to and opportunity for exceptional prosperity. You want a good brand? Then do what I’ve always recommended. Make a lot of sales and have a ton of happy, buying customers.

And how do you do that?

Forget brand building through your advertising and use your advertising for what it was always meant to be. A ways to SELL stuff.

I don’t care whether you’re advertising on local or national TV, on radio or in print. I don’t care if you’re on billboards or banner ads. It can be direct mail or email. If you want to build brand, make sure your advertising – all of your advertising – is designed to do one of two things. Either make the sale, or get the prospect to take the next step in the buying process. And once that next step is taken, get them to take the next step and the next, for as many steps as it takes for them to finally buy.

You do that and as the branding world evaporates around you, your era of branding will have just begun, along with the increased profits that come with the right kind of branding.

THE END

EDITOR’S NOTE: Jim Ackerman is a Marketing Coach, Writer and Speaker. His new book, How To Market Your Crap When the Economy is in the Toilet, contains 12 vital strategies for unclogging the American economy, one business at a time, and is now available at a discount directly from the author. Contact Jim at 800.584.7585 or go to www.marketyourcrap.com. where you can also register for a F*R*E*E Market Your Crap Seminar.

Anyway, I snuk in, telling them I was a speaker and author. So I didn’t lie, and they didn’t ask any further. And for the record, I did not “over participate” or address those sales, marketing and advertising issues that might otherwise not come up. I was a good boy.

The group of men, all 50+ — what a crowd that was — was being asked what they knew and felt about a kind of cancer and TV commercials that were designed to encourage people to be tested for early detection.

What I experienced there was highly AFFIRMING to my beliefs about what works in advertising and selling. Let me review what went on, then I’ll share my conclusions…

1. There was a wide diversity of knowledge and opinion about the topic and the treatments.
2. There was a wide diversity of feeling and reaction to the topic and the treatments.
3. The group was diverse as far as socio-economic status, education, occupation and so forth.
4. We spent most of the time talking about what we knew or thought we knew about the topic and the treatment, and our thoughts and feelings about the topic and the treatment.
5. At the end, we viewed three television commercials that took three dramatically different approaches to encouraging people over 50 to be screened for cancer. The first was a testimonial approach, the second an emotional appeal, and the third, humorous.

The testimonial approach featured a person who had cancer and had gone through treatment, but who also had been told by a doctor that an early screening could have prevented the problem. The spot included stats as well as this fellow’s personal story. The story was moving, the facts backed up the claims. The facts typically were given by graphics on-screen without the benefit of voice over.

The emotional appeal featured a youngish grandfather in a pool with his granddaughter, grandma looking on from the side. Nobody else in the pool buy grandpa and child. Music playing in the background. Highly produced spot. Message was all voice over. Talked about being around to see your grandchildren grow up.

The humorous approach featured an actor giving excuses why he wouldn’t go get tested. He listed off a bunch of things all boiling down to it being embarrassing. Only during the last eight or 10 seconds of the spot were you sure he was talking about cancer — after they logo of the sponsoring non-profit organization appeared at the call to action.

The reactions of the group were fascinating…

• Everybody unanimously and enthusiastically said the testimonial spot was the most powerful and persuasive. They sited the emotional appeal of the guys own story, the contrast between what was and what could have been, if only he’d been screened, the stats. They also criticized the spot for not using voice over when showing the stats, saying that during those silent times, they lost attention. (By the way, I didn’t contribute my thoughts about the spot until everybody else had said their piece.

• For all of us except one, the emotional appeal was the second favorite, but it was a distant second. The consensus was that this “touchy-feely” attempt fell short. (Interestingly, after the  session was over, the  moderator revealed to us that the emotional appeal worked best with women.) As men, we didn’t oppose the “tear jerker” approach, we just felt that this attempt didn’t quite “get there.” (Personally, I like a good tear jerker ad, but it has to get to the tear or the tickle if it’s going to be successful.)

• Finally, the humorous attempt fell on its face with our group, except for one guy, who placed it a close second to the testimonial ad. Some people felt like humor was inappropriate for the subject matter, but most just thought it wasn’t well executed enough. They said it wasn’t funny enough, the actor wasn’t convincing enough, that kind of thing. They didn’t laugh or even chuckle.

Here are the marketing principles the reaction of the group confirmed for me…

1. People are more moved by “moving away from pain” than they are by moving toward pleasure. (Especially men, apparently.
2. There must be emotion, but emotion must be backed up by proof. Credibility is everything in advertising.
3. People prefer and are more influenced by people and situations that they consider “real” as opposed to contrived for the sake of the commercial.
4. Emotion based on real is very important. Contrived emotion is difficult to make work. And if you can’t pull it off, you’re better off not to try. And most people can’t pull it off. Go with the real.
5. Humor is difficult to make work. It’s not that it can’t work. It’s just very difficult to bring it off. More difficult, in fact, than the contrived emotional appeal.  If you can’t do it, better not to try.
6. Every ad should be a complete sales pitch, including an offer and call to action.
7. TV ads should include audio that matches written words displayed on the screen.

So there you have it. Human nature confirmed again. It is immutable. And those advertisers who recognize this and use it will find their economic situation on the rise, while those who choose to ignore the infallibility of human nature do so at their own financial risk.

Hooray! Happy birthday to the recession! We’ve recently passed the one-year mark since the official crash and resultant “little” recession. How did you celebrate?

Actually, it hasn’t been just a little recession, has it? It has been, and continues to be, a big recession. A devastating one for many people. Unemployment at higher levels than it has been since the Carter administration. And this despite record low interest rates, that you would think should stimulate the economy and enable people to hire, make capital purchases, and grow.

But it ain’t happening. The stimulus hasn’t stimulated and we remain in an economic malaise.

Of course, I recognize there have been some positive economic signs of late, but many indicators suggest – and many pundits agree – that with what’s on the horizon, the recent positives amount to a dead cat bounce, and, while the downward trends may be leveling out, they have not bottomed out yet.

I suggested one reason why we’re at a standstill in my recent post on Political Paralysis. Those conditions still exist and I suspect they will continue for some time. There are other challenges, most of which were either directly or indirectly caused by government, and we the people, buying in to the “sugar fixes” our elected officials have given us over the years.

But I don’t want to talk about any of that. I want to talk about the people who have chosen NOT to participate in the recession. Common, ordinary, low-tech businesspeople, in common, ordinary businesses, who have quietly plodded along and had the best years of their careers in the last 12 months.

Let me talk about three plumbing and heating contractors. One located at the crossroads of the west, in Salt Lake City, one located in near-depressed Ohio, and one on the east coast, in the Wilmington, Delaware/Philadelphia area.

Kent Whipple is the owner of Whipple Service Champions in Salt Lake. Over the last few years he has grown his business into the largest residential plumbing and heating company in his marketplace. He hasn’t done it by acquiring other businesses. He has done it by simply growing his own.

Kent may not admit it, but I believe his success comes from smart marketing. Here is what he has done…

1. Established credible points of difference in the services he renders and the way he renders them, between himself and the competition. (Yes, there is an operational aspect of this, but the decisions on differentiation are primarily marketing driven.)

1. Made sure his technicians are all trained, not only in technical competence, but also in providing an exceptional experience for the customer. And that includes at least attempting to solve ALL of the client’s plumbing, heating and air conditioning problems in one service call, and setting up systems to economically PREVENT problems in these home systems in the future. To do this, his technicians must have systems for selling and know how to use them.

1. Priced his services commensurate with the value being rendered. Kent is not the cheapest plumber in town. But his pricing if fair, when considered in the light of the exceptional services he provides. And unlike his competition, by refusing to compromise his pricing, he has insured enough profitability to STAY in business, while so many of his competitors have low-priced themselves right out of business. How does that serve the customer, either now or in the future?

1. Kent continues to market and advertise. He hasn’t backed off because of the recession, as so many of his competitors have. By continuing to market aggressively, Kent has poised himself to be there when competitors fail. This has allowed him to grow right through the recession, and positions him for explosive growth when we finally turn this thing around. He’ll pick up all kinds of market share that has been abandoned by fallen competitors, and even those who have survived but have failed to maintain their spot in the market, because they cut their advertising.

Bill Blind (pronounced with a short “I”) of Blind & Sons Tri County in Barberton, Ohio provides plumbing, heating, electrical and air quality services to the greater Akron area.

Of course, Ohio is one of the most depressed economies in the nation, a big issue of which was made in the last election. But Bill hasn’t bought any of it. That doesn’t mean he hasn’t made some adjustments.

“We’ve gone back to the basics… the fundamentals,” he told me. “We have our entire staff focused on billable hours, and we’ve established a way that staff members can be rewarded for helping to generate more billable hours, in the customer’s best interest.”

In other words, Bill has his plumbers recommending clients get their heating and AC systems checked, electricians recommending air quality inspections, and so forth. There is no better way to grow, especially in a recession, than getting more sales and bigger sales from your existing customers.

Mark Aitken runs Horizon Services, headquartered in the greater Wilmington, Delaware area, and serving both that area and Philadelphia. Mark’s story is, perhaps, the most dynamic of the three. When Mark and his partner Dave Geiger first enrolled in my Principle-Centered Marketing Coaching™ program a decade ago, they had already grown their business from under a million dollars to nearly five million, in just a few years. Since that time, they have grown it to nearly 34 million with average growth rates close to 20% a year and sometimes substantially more.

Mark tells me that so far this year leads are up nearly 30%, and while closing rates are down a bit and so is the average transaction, that huge increase in leads means revenue is actually up 12% and profitability is also up over last year.

Mark has actually increased his marketing budget from 5% to 7% of sales. That’s about a 30% increase in actual advertising expenditures. (Interesting that leads have increased at about the same rate as his ad budget.)

Mark also says a return to fundamentals and an exceptional emphasis on training his people to sell is at the heart of Horizon’s success. And he does think that his increase in marketing while others are cutting and then failing, is bring abandoned clients his way.

So again the question, how are you celebrating the birthday of the recession? Are you fretting, cutting, operating out of a scarcity mentality? Or will you simply choose not to participate.

THE END

EDITOR’S NOTE: Jim Ackerman is a Salt Lake City-based Marketing Coach, Writer and Marketing Speaker. His new book, How To Market Your Crap When the Economy is in the Toilet, contains 12 vital strategies for unclogging the American economy, one business at a time, and is now available at a discount directly from the author. Contact Jim at 800.584.7585 or go to www.marketyourcrap.com. 

I’m a marketing expert. I help people sell stuff. I help them advertise more effectively and efficiently. I help them get more bang for their marketing buck. I’m all about testing and tracking, chasing cost per lead, cost per sale, profit per sale.

I don’t have a desire to become a political commentator, but as I look over several of my posts since early in ’08, it seems I have addressed politically related issues on more than one occasion.

You see, we can’t just market in a vacuum any more. We can’t simply ply our trades, oblivious to all that’s going on around us.

Why?

Because they’re killing us, that’s why.

The politicos are literally killing the economy of this country and everybody is going down with it. It’s a pernicious, insidious death.

Please allow me explain the following five points…

1.    Every organization is a reflection of its leadership. This is true of anything from a family to an entire society or culture. Our leadership has led by example. They have told us for decades that there are two kinds of debt. Good debt and bad. They have used this excuse for endless deficit spending, government growth, and incredible, no – inconceivable – national dept. (Can you conceive of a trillion dollars?) So what have the states, cities, families, companies and individual investors done? Gone deeply into debt. We’re a nation of debtors, taken there by our leaders of both parties. Can we continue to fool ourselves into believing that debt is good? Debt’ll kill you, man.

2.    Whether by tax and spend or borrow and spend policies, the politicians have promised us more and more freebies, making us less and less self sufficient and more and more dependent on government. In other words, dumb and lazy, and feeling “entitled.” How long can that go on?

3.    Rather than let the marketplace dictate things like wages, we have minimum wages, dictated by people who don’t have to make a payroll every two weeks. They don’t get it, do they? As the minimum wage goes up arbitrarily as mandated by the government, and without a corresponding increase in profits, something has to give. So fewer people are hired. No choice. What kind of impact do you suppose that has on a company’s ability to market their goods?

4.    In the name of saving us, the government spends your money and mine to bail out its selected favorites, rewarding them for their stupidity. They pass laws that offer unsustainable programs. The politicians, not private enterprise, creates the environment, the regulations and ultimately insists that people in banks and other institutions do stupid things that don’t make any sense at all, and we all end up paying for it.

5.    But the biggest burden of all is manufactured uncertainty. Are you going to create new positions, invent new products, build new facilities, and undertake the activities of commerce, when you don’t know what to expect? Probably not. Are you going to buy things that the law may soon outlaw? Not likely.

Here’s why the American economy isn’t going anywhere good, anytime soon. Nobody has a clue what to expect. With cap and trade on the table, how do you buy a car, or open a plant, or invest in traditional energy, or do anything that takes energy? You can’t. You can’t run the risk of making a decision that makes sense in today’s world but not in tomorrow’s.

How about healthcare? Do you switch plans, keep what you’ve got, look to the government, don’t expect anything out of them? Who knows? How can you hire somebody when you don’t know whether that person will be profitable to have on-board in your company or not?

And as an individual, you can’t buy health insurance today. Will it be around tomorrow? Will it even be legal?

You can’t buy a car or a home or anything else. If I buy a bigger home, the energy costs, which I can afford today, could bankrupt me tomorrow.

And finally, how can I buy anything? I don’t know what my money will be worth tomorrow. I’d better hang on to whatever I’ve got.

Tell me you don’t feel this way. I know you do, because nobody is buying anything. We’re in the throes of “political paralysis.”

At first blush, this may appear to be a hopeless situation. It is not. And like everything else, you have got to sell your way out of a business problem. The marketing principles, strategies and tactics we have talked about in this column over the better part of five years now, must be applied to politics. And we’re all going to have to turn into the marketers… the salespeople.

We’ve begun to see it in the town meetings and demonstrations. People are talking about move-away-from-pain benefits. They’re speaking – selling – with passion and emotion. Changes are afoot, and they need to be.

My recommendations…

1.    Implore your Congressmen and Senators to introduce a bill requiring all members of the government to have to live by the laws they create. No more opting out of social security for government officials, elected officials and bureaucrats – or union members for that matter. And they live with the same health care laws we have to live with.

2.    Term limitations are a must. No more than six terms for a Congressman, two terms for a Senator. This wasn’t meant to be a life-long career.

3.    No pensions for these people if they serve less than what your local schoolteacher or cop would have to serve to get a pension. They get the same vesting limitations as the rest of us.

4.    Consider a Throw-the-Bums-Out movement. Yes there are some good politicians, but they’re few and far between. Need a thorough housecleaning. It’ll take us six years to get rid of them all, but they all need to go.

5.    Insist on a constitutional amendment to require a balanced budget except in time of war. And then put a strict limit on the amount of time allotted to pay back wartime debts. My personal preference would be to tie the budget to the gross domestic product, but if people want to spend like crazy, let them, and see how the voters feel about the kind of universal tax increases it would take to feed the insatiable government machine, if they constitutionally had to pay for their programs as they go.

The marketing implications are vast…

Every marketing skill will have to be brought to bear and the work will have to be consistent for a long time to come. But it can work. It has worked. Consider the dramatic drop in smoking over the last couple of decades. A function of marketing. Consistent, on-going, almost pervasive marketing, designed to educate individuals about the dangers of tobacco.

It will take time, but these measures will rebuild our economy, and more important, our national character. We can do this, if we will.

EDITOR’S NOTE: Check out my new book. How To Market Your Crap When the Economy is in the Toilet, is now available at Amazon.com and Barnesandnoble.com, or at a discount directly from me. Call me at 800.584.7585 or go to www.marketyourcrap.com. Or you can email your request to mail@ascendmarketing.com, and put the word Book in the subject line.

I’ve complained almost tirelessly about the phone company over the years. If you’re a faithful follower of this column, or a reader of my latest book, How To Market Your Crap When The Economy Is In The Toilet, you’ve been an eye witness of my rants about poor customer service from the prominent telephone company, most of us are stuck with.

Well, I recently found an option. I’ve switched my business lines to Integra Telecom and, so far, the experience has been gratifying.

It started with personal attention. They sent a real live salesperson directly to my office to explain their products and services. Imagine that! Somebody who thought I was important enough to talk to face-to-face.

When I made the decision to make the switch – not a difficult call because the pricing is substantially better and I didn’t feel like the service could possibly be worse – they told me exactly what I could expect in terms of the switch-over process.

But things did not go smoothly. There were some bumps in the road. Some places where I got a little confused and a little concerned. At each challenge I had good communication with the company. Their customer service people were on the phone, patiently taking care of me. They had answers and I didn’t get shuffled off to other departments. No buck-passing.

They even gave me a 90-day guarantee that said if I was unsatisfied during that time I could opt out of my contract.

Incidentally, by comparison, within two weeks of terminating my relationship with Qwest, they sent me to collections for my final bill. I’m not kidding. Two weeks after termination, I got a nasty call from a collection agency.

Meanwhile, my first bill came in from Integra. Less than half of what I had been paying the former vendor. Better pricing, less hassles and great customer service to boot. That is a winning combination for marketing success in a challenged economy.

Now, on to story number two, which will prove that not just agile little competitors can accommodate needs and win the battle for customer loyalty.

You can’t get much bigger than The Home Depot. And here’s my story.

I am finishing my basement… finally.

I had contacted a company to do granite countertops for my kitchen and they – a good customer service story in their own right – completed the fabrication process far more quickly than I had anticipated. (Their competitors were seven to 12 weeks out. This outfit got my done in less than two weeks.) So these guys showed up to install the counters before I had a chance to buy a cooktop. So, it was off to The Home Depot to see what we could discover.

Timing was on our side as they were having a 10% off sale when we showed up. Nice. Ten percent isn’t meaningful when you’re buying a $40 pair of shoes, but it is when you’re buying a $600 cooktop.

The salesman, Larry, was very helpful, and when we determined what we wanted he indicated we could get an additional 10% off if we applied for a Home Depot credit card.

Only one problem. The Riverton store didn’t have any of the model we wanted in stock. Larry did what I would have expected, and checked the computer for other stores that might have one, and found one in American Fork, about 20 miles away. But it was almost closing time, so we determined to go there the next day.

So far, the customer service has been good, but not extraordinary. But this has only been the beginning of the story.

The next morning, just to make sure, I called the American Fork store to confirm that the product was, in fact, in stock. I asked for the appliance department, but somehow got transferred to Pam, the manager. Lucky me.

Pam personally checked the computer, only to find that, not only did they have none, but the computer said they were a negative four in inventory. I don’t know how you do that, but that’s what Pam’s computer said.

It could have ended there, but Pam didn’t quit. She walked the floor to the department and personally looked for a display model. No soap. Then she went to the back to check the reserve inventory. Still no luck.

Pam returned to the computer and checked all the stores in her district. Said she found only one at the 21st South store in Salt Lake City.

Again, she could have given me a phone number or sent me there on my own, but she didn’t. She got on the phone with the other store and found out that the one they had was their display model. She virtually ordered the store to sell me the display model, but when I heard that, I said, “Pam, the Riverton store had a display model. I didn’t know they’d sell me that.”

Pam said it was unusual to sell floor models and that the Riverton store was outside of her district where she had less influence, but she would call Riverton while I waited and see if they would.  I overheard the conversation and to make a long story short, both parties were very accommodating and I was able to get the unit from Riverton, which was far closer to my home than going to downtown Salt Lake.

Then, to top it all off, we asked for an additional discount when we got to the Riverton store, because after all, it was a display model. No box. They gave us an extra $20 off.

This is what customer service is supposed to be. This is what it takes to cultivate rock solid customer loyalty.

I called Pam’s regional manager to let him know what a great job Pam had done for me. I also told him I’d be writing this column. He indicated that the example comes from the top down, giving credit to the Home Depot’s relatively new CEO – on the job less than three years– Frank Blake, who has refocused the company on the customer.

A great lesson for the rest of us in business. What is your greatest asset? It’s not your product or service. It’s not your systems, your inventory or even your people. It is your customers, clients or patients. Remember that, and build everything around that concept and you’ll be well poised to compete in this economy or any.

The boss had entered into an agreement to do some television advertising and they said they wanted to do an ad aimed at increasing their wedding ring business. The client’s question to me… should I do 30 or 60-second spots?

How would you answer that question? What other questions might you ask?

More background? The original proposal from the TV station was to spend $3,600.00 on 72, 30-second spots. We had already discussed the creative and I had recommended one-minute commercials because research indicates that longer spots generally out-pull shorter ones. There is a caveat, however. The spots need to be direct response in nature. In other words, an offer has to be made with a directive to respond.

Fact is, the client’s creative had a soft offer, which put the commercial in limbo. Not really direct response, but not pure image advertising either. So again, what would you do?

Let’s do something almost no advertiser ever does. Let’s forget the reach and frequency issue and get right to the hard-core numbers. Let’s ask if this is actually worth doing at all. Here’s what we can assume…

1.    If there is a population of 120,000, there are no more than 40,000 households (assuming just three live bodies per household).
2.    Since a wedding engagement typically involves two individuals from two separate households, we’re out to reach just 20,000 potential buyers.
3.    Market research indicates that .008% of a given population gets married each year. You would take that number from the overall populaton, not households, so there are just 960 potential weddings per year in this market, or 80 per month.

Wow! A little different look at the numbers, isn’t it. Would you spend $3,600.00 to reach just 80 prospects? That comes out to $45.00 per potential buyer. Doesn’t sound quite as good as the $30.00 per thousand reach that the ad rep probably told our guy, is it?
Still, I’m not saying it would be a bad buy, but we’re not finished yet.

Of those 80 potential buyers, how many of them are likely to be watching TV right when my client’s ad runs? If the station has an audience share of 30 in the programming he buys for his spots – an incredibly high number, incidentally – 30% of those 80, or 24, can be expected to be watching. Now we’re up to $150.00 a prospect, just to reach them with the TV ads.

Now, how many of those 24 are ready to act? How many have loyalties to another store? How many have the budget or would qualify for financing, for our guy’s inventory? How many did the ad actually appeal to?

And we’re still not finished. What are the sales skills of our store’s sales staff? Once these few prospects straggle in, you still have to convert them from prospect to customer. If we assume that our questions in the last paragraph eliminate another 12 of our 24 prospects, we’ll get 12 respondents to the ad walking through the door. If the staff typically converts one out of three to a sale, they’ll close four sales, at an advertising cost per sale of $1,200.00 per sale, before sales commissions.

Margins are better in the jewelry business than in most retail operations, but you still have to recover the costs of marketing, inventory and overhead. So you really need an average sale of about $3,600.00, on each of these four sales to make the program pay for itself.
Of course, if the spots bring in more people and more sales are generated, the store can run this program either with more profits or with lower margins, and still justify the expenditure.

Three points from this exercise we’ve been through together…

First, some versions of the numbers – the odds – we’ve been discussing apply to your business as well, regardless of the media in which you advertise.

Second, are you considering these things as you make your marketing decisions? If you’re not, you’re nuts.

Third, the odds of advertising success are considerably less than getting a hit in a baseball game. On the surface, the odds look terrible. Yet advertising works. Advertising – yes, mass-market advertising – can and does work in building businesses. But you must realize your odds of profitably acquiring new customers, clients or patients using traditional advertising are slim indeed. Almost all businesses acquire new customers at a loss. It works, though, because as new customers come in, they also come back, without the benefit or requirement that they see ads first.

The lesson to be learned is that you must have systems in place to maximize the transaction from every new-client purchase, and do whatever it takes to get that new client to come back and buy again, as soon as possible and as often as possible. (In the case of the jeweler, he must not only sell the happy couple her wedding set, they’ve also got to sell the groom’s ring, and perhaps special items as gifts for the entire wedding party. That may be accomplished during the first visit. It may take several solicitations prior to the wedding and several afterward.)

Advertising is a messy, unpredictable, almost futile endeavor, which is, absolutely necessary. But you can increase your odds of success, by calculating your numbers in advance and making sure your ads do everything possible to get your audience to take specific action in response.

And, there are alternative methods of advertising, which can allow you to dramatically increase your chances for success, lower your costs, and postpone incurring those costs until after the new business is acquired. But that’s a topic for another post!

Oh, this is classic! I quote the May 21, 2009 headline from Adverting Age magazine… “Obama Halves Chrysler’s Planned Marketing Budget.”

The article goes on to say, in part,

“DETROIT (AdAge.com) — Chrysler wanted to spend $134 million in advertising over the nine weeks it’s expected to be in bankruptcy — the U.S. Treasury’s auto-industry task force gave it half that.

“So if GM, which is wrestling with the possibility of a Chapter 11 filing itself, is wondering how much influence the task force will have over marketing, the answer is: plenty.”

So here we are in near depression. We’ve got the government virtually nationalizing private businesses all over the place. Everybody seems to be looking to the administration to get us out of this mess. We believe our leaders are supposed to be wise. We look to them for an example; to show us the way to go; to give us the path back to prosperity.

And what do they do? Tell us to stop selling.

Are these people crazy? Don’t answer that. None of us really wants to know.

Now wait a minute. I’m not here to argue the relative merits of Chrysler’s mid-bankruptcy advertising and marketing efforts, specifically. You could argue – and apparently even the bankruptcy judge did bring up the question – that, with manufacturing plants shut down, why should Chrysler advertise at all? You could make the argument that they have no business running a single ad at this time, let alone $134 million worth of them.

But that’s not the point. What is, is whether the federal government has any business telling Chrysler, GM, any auto-maker, bank, insurance company, newspaper or lemonade stand, what they should do to market their business, how much they should spend, how they should spend it, or anything else related to the operation of that enterprise.

Think about this. Barack Obama has never run a business, small or large. The only one he’s ever been in charge of is the one he runs now – the government itself – and his ability to run up red ink makes GM and Chrysler’s combined bankruptcies look like chump change. We’re a far cry from having even the slightest inkling that this guy is any kind of a corporate turnaround artist. He has never had to make marketing decisions, where sales and profits were on the line. (Believe me, getting people to decide to vote for you among a choice between 2 alternatives, is a veritable cakewalk, compared to getting people to go deep into hawk for a car that costs twice as much as some of the houses in Detroit.)

Okay, I acknowledge that the President didn’t make this call on his own. His Auto-Industry Task Force made a recommendation that was surely rubber-stamped by the White House, and carried before the bankruptcy judge. And I confess I don’t know who is on that task force or what their background is. I’m sure a bunch of bean counters and other auto industry execs and former execs (whose credibility in making any kinds of decisions regarding growing a car company, has to be suspect given their track record over the last four or five decades, unless their names are “Mr. T” (Toyota) and Mr. D” (Datsun, now Nissan)).

But even that misses the point. The real issue at hand is that you can’t stop selling. You can’t stop marketing. How do you do anything without sales and marketing?

You don’t. You simply wither away and die.

If you’re really frugal, you wither slower and die later. But the minute you stop selling, you seal your fate. You’re headed for the scrapheap.

Let me tell you something you’ve probably heard before, but that has apparently escaped the Obama administration and the vast majority of unthinking political types out there… Nothing good happens until something gets sold. Nobody gets paid until something gets sold. Nobody. Not the janitor, not the CEO, not the Congressman, Senator or President. Nobody gets raises, nobody gets a retirement income, nobody gets healthcare until something gets sold.

You can print money based on nothing and by so-doing stave off the collapse for a while, but it can’t go on forever. And in the current anti-business, anti-sales, anti-prosperity climate in our political class and among the academic elite, as well as the unenlightened, “pro-big government please save us” working masses, our ultimate demise is being hastened.

Again, I don’t know that Chrysler should be spending a plugged nickel on advertising right now. I do know that as a symbol of the attitude of government toward business and government’s role in business, this decree is a bad omen indeed.

Incidentally, the Ad Age article went on to say that Chrysler had argued, and the task force agreed, that totally cutting advertising would erode the brand during the predicted nine-week bankruptcy process. That is a crock. The brand is already eroded. The hiatus from largely ineffective advertising would be highly unlikely to hurt further, particularly if, upon emerging from Chapter 11, the manufacturer came out with some hard-hitting, direct response ads actually designed to sell cars, instead of merely build brand. (Again, beside the point, but I just couldn’t resist.)

What’s it mean for you? What kind of executive decisions are you making these days about your own marketing, advertising and sales efforts? Are you cutting budgets? Are you trying to conserve your way to prosperity while actually diminishing your sales-related activities? Are you insane?

Got a business problem… a revenue problem… a profits problem? Get out there and SELL your way out of it. And do it NOW, before Big Brother Barack tells you you can’t.