Monday, July 25, 2011

Image Advertising: Is It Worth It?

Let’s talk about your advertising. Why it works and why it doesn’t work a lot of the time. There are three basic advertising functions, which you must keep in mind. These are the goals that advertising can accomplish for the advertiser: image goals, sales goals, and positioning goals. They are not mutually exclusive and certainly many ad messages accomplish or attempt to accomplish more than one. But for now we will focus on image goals.

Image advertising goals are those sort of warm, fuzzy, amorphous ambitions that many advertisers have. They want people to feel good about their business or good about their company. There is no question that television is the great image medium. But keep in mind that those kind of images don’t sell a heck of a lot of merchandise, so image advertising needs to be used with great care. The key to doing this kind of advertising is to start by answering the question, who are we trying to influence? Who is the intended recipient of our message?

Legitimate image advertisers almost always have a very specific and narrow intended audience. These will tend to be companies like financial institutions, public utilities, health care companies, certain manufacturers or others who have very specific image problems. The people they are trying to reach will have some influence on the success or failure—the economic health—of the advertiser’s business. The root of addressing an image need through advertising isn’t to enhance the image—it’s ultimately to affect the bottom line, which can mean either profit or loss.

A company’s employees are a frequent target audience for advertisers. If the employees feel better about their company, they’re less inclined to do nasty things like go on strike, more apt to work harder, and less likely to leave for greener pastures, among other things. That’s why you’ll often see companies advertising on TV a year or so before their union contract negotiations begin. They want to soften up the opposition. They can’t very effectively address employees directly with messages about company love, but they can obliquely get the message across through such image ads on TV.

Sometimes advertisers spend to influence even smaller groups, like government regulators. If you’re in one of many kinds of regulated businesses, like public utilities, insurance, or telecommunications, your ability to make a profit is highly dependent on the attitudes toward you held by the public service commission or insurance commission or other regulatory body that governs your business. That group of five, ten, or fifteen citizens holds your fate in the palm of their hands.

Lastly, there’s another audience that image advertisers sometimes try to influence, but it’s one that they don’t talk about much. In fact, they’re usually not even conscious of their attempt to reach them. Many times, image ads are directed at the advertiser’s friends and acquaintances! If you’re the only bank in town that doesn’t advertise on TV, you may feel somewhat self-conscious at the country club when your peers and competitors are talking about their TV campaigns. There’s some keep-up-with-the-Jones’ in business life, too.

The danger of all image advertising is that it doesn’t directly influence the sales or other revenues of that company. But it can be profitable when it comes to getting the word out there about your small business.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

Monday, July 18, 2011

Beating The Competition Through Profitable Sponsorship

When it comes to sponsoring sports teams, it’s all about ROI: Return on Investment. Put another way, what’s in it for me?

The marketing essence of sponsorships—-whether you put your money into race teams or the PTA bake sale—-is the endorsement value that the investment gives you. There is, hopefully, a halo effect in which the potential customer’s good feelings about the sponsored entity transfer to your shop or product as well. And if the customer admires and wants to emulate them, all the better. That’s why golf club manufacturers shower golf pros with free clubs, balls, and shoes. But is the halo effect enough?

“It’s essential to show the sponsor that you gave them value for their money,” according to Tony Thacker, VP of Marketing for So-Cal Speed Shop, which is headquartered in Pomona, California. “It’s very difficult to quantify the return on sponsoring somebody else’s race team effort,” he says, “unless you know that they’ve got the wherewithal to give you the return that you need.” So-Cal’s high-profile involvement with racing dates to 1946. Thacker points out putting a decal on the car is just the tip of the iceberg when it comes to giving value to the sponsor. “In our own race effort, we send regular reports out to all of our sponsors and we try real hard to get stories on the race car in different magazines. Typically, other people don’t do that. Professional racers do, but the typical people calling us don’t realize that that’s the more important part of the job."

A productive sponsorship will also generate publicity outside the track environment, with personal appearances, endorsements, and other news-worthy events. That’s what drives the maximum return on investment.

Here are some suggestions of things you can ask for when sponsoring a team:

1. Pictures of the team in action that you can use in your advertising.

2. A letter from the team thanking you for your support that you can post in your business, use in other advertising, and attach to proposals when you give them to potential customers.

3. Personal appearances by the team members—and their equipment—at your shop. You can promote the appearances with direct mail, email, or even newspaper ads as events where fans can “meet the pros” while they inspect your business.

4. Distribution of frequent press releases—identifying your shop as a team sponsor—on event results and team developments.

All of these things will help the team, too. Remember, sports teams depend on fans just like a business depends on customers. The more fans the team attracts, the greater the value of the sponsorships it sells.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

Wednesday, July 6, 2011

Buying Good Word Of Mouth

Plenty of small business owners consider advertising a total waste of money. According to them, word of mouth is the best advertising and that’s something you can’t buy. They’re right, but only partly: word of mouth is the best, but you can buy it. That’s what good advertising does-—it buys word of mouth. Keep in mind, that “advertising” doesn’t have to be a million-dollar TV commercial on American Idol. A fifty-cent postcard announcing your new selection of life-enhancing widgets mailed to a targeted list of a couple of hundred potential customers is advertising, too. It’s the kind of advertising that buys some word of mouth.

When to advertise, how much to spend on advertising, even whether to advertise at all are questions that are at best difficult to answer for businesses in the automotive performance industry (or any other). On the one hand, you like to think that your reputation for good work and fair prices will draw people into your shop. On the other, you have to realize that if they don’t hear about you in some way, that elusive new customer isn’t going to even know you exist, much less that you have a strong reputation. And when you factor in all the competition you face, advertising becomes much more imperative.

Linda Hietala, who owns Reliable Welding and Speed in Enfield, Connecticut, with her husband Brad, agrees that you have to keep trying to attract new customers. “The best form of advertising is word of mouth and referrals,” she says, “but you can’t totally rely on that. You need to be in different publications so people can find your name and phone number.”

So how do advocates of small business advertising go about it? Hietala believes in the scattergun approach, using as many different promotion vehicles as she can afford and not relying on any single medium to hit all the targets. “We try to reach everybody in every different way,” she says. Reliable advertises in Speedway Scene and regional racing papers and also does track programs and similar publications. She’s also a believer in the Internet.

Like many speed shops, Reliable is also a heavy supporter of the local race scene. “We have a forty-foot parts trailer that we bring to one of the local race tracks,” Hietala explains. “That’s a good way for us to advertise because the track (Stafford Speedway) has, in addition to their weekly racing, special events through the year where they’re bringing in other touring series like the featherweight modifieds and the Busch North. Being visible there with a trailer, we’re reaching a lot of people.” Constantly assessing how well advertising performs is also vital Hietala believes. But she also gives each promotional outlet plenty of time to prove itself.

While these advertising opportunities are specific to speed shops and other automotive-related businesses, many similar ones exist for small business owners serving other markets. Many pet shops support their local animal shelter, for example, and clothing retailers are often big sponsors of local fashion shows. Of course, as with everything, one of the keys to success in advertising is consistency. This will require large amounts of time and money but in the long run it can pay off.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.