Have you seen those Progressive Insurance commercials? You know…The ones with the pushy gal with the headband and funky voice?
In the commercial, folks go into an insurance ‘retail’ store to choose auto or home policies off the shelf. It looks just like how we used to buy software. (Remember when we used to buy software off the shelf?) Big colorful cardboard box, shrinkwrapping, fancy packaging – in fact, ALL packaging. And when you got it home (or to your office), ripping apart all that damn packaging, after all that hype with the fancy box, you found…a tiny little disc. Not exactly sexy.
Insurance isn’t sexy either. Hence, some advertising guru had the brilliant idea to dress it all up to look a lot more exciting than it really is for those commercials. And obviously it works since they keep running those ads like crazy. It’s not quite as exciting as auto commercials or Victoria’s Secret semi-annual sale commercials, but it does get attention. And that’s the thing.
Attention is everything in the marketing business.
And there’s another irony: the marketing business isn’t particularly sexy either. Not unless you’ve got the Victoria’s Secret account.
Poof! Instant Marketing Just Appears, Right?
Marketing is one step above the boring business of accounting. (Apologies to all you accountants out there. But from where I sit accounting is as exciting as watching water boil. Sure, I need the hot water, but I’d like it better if it’d just appear out of thin air.)
And that’s how most business owners feel about marketing: It should just appear out of thin air. Customers should magically appear because you’ve got the most exciting, superior product or service since the invention of the wheel, right? So everyone should flock to your doorstep as if drawn in entranced by the Pied Piper!
In fact, many business owners do almost no marketing at all.
Imagine the mom and pop store filled with kids’ clothing and toys: They lease a storefront on Main Street. Put up a sign. Fill the window-front with the most enticing new clothes and toys. They list their shop in the Yellow Pages and White Pages.
Residents walk up and down Main Street, running their errands to the bank, a bike shop, the optician next door and the local bookshop. (Don’t laugh. There are a few neighborhood bookshops left!)
From time to time passersby see a cute outfit for little Danny. Maybe that cotton dress would look good on Cousin Sara? That new board game would be perfect for rainy weekends. And so they walk into Mr. and Mrs. Jenkins’ store to buy these items. See? Almost no marketing happening here whatsoever.
There’s just one problem.
Mr. and Mrs. Jenkins are sinking under their lease. Not enough passersby come into the store (even though Mrs. Jenkins creates the most entertaining window displays). Even though Mr. Jenkins offers some great deals and sales, and even though they know most of the town’s kids’ ages, favorite toys and clothing sizes, it’s not enough to know their products and services as well as the backs of their hands if the parents and kids don’t come through the door.
Don’t Wait for the Great Marketing Genie
Mrs. Jenkins would like to run some ads in the local paper or even try out that newfangled Facebook thing to see if it would generate more business. Mr. Jenkins, however, told Mrs. Jenkins that the ads in the local paper were too expensive to run very often. Maybe they should only try it once or twice a year, he suggested.
And although he told his wife that Facebook seemed like a pie-in-the-sky idea, he secretly tried it out one evening after work when his wife was out with her girlfriends. He spent four hours trying to figure out how to create a Facebook business page, populate all the fields and think of a way to get Likes. He quit in frustration at how long it was taking, but he didn’t tell Mrs. Jenkins.
Mr. Jenkins figures over time the folks who came into the store and bought things will tell their friends about their great store. It’s only a matter of time. And there will be other folks who walk past and will come into the store.
Mr. Jenkins believes in the Great Marketing Genie. He believes customers will just appear, poof! — out of thin air, to make his business a success.
It’s not that Mr. Jenkins doesn’t want to spend anything on marketing. As a smart business man, he understands that he needs to do some marketing in order to attract new clients. But gosh darnit! Marketing is boring. It’s a lot of work that he’s just not that good at.
Understanding the Magic of the Great Marketing Genie
You know this part: The genie grants you three wishes. What should they be?
Mr. Jenkins’ problem is that he’s focused on the wrong thing. It’s mindset, remember? He thinks the genie will just bring him more customers if that is his wish. Whoopee! (Sigh.)
More customers will be good, but it may also mean a lot more work to restock more often and to buy more inventory. More work! (Sigh.)
Unfortunately Mr. Jenkins hasn’t thought through his marketing wishes well enough. Right now he sees his Great Marketing Genie as a big, fat expense. He’s got to polish the lamp regularly (upkeep). He’s got to feed and clothe the genie. What’s the ROI (return on investment) of a genie?
Does Marketing Have a Return on Investment?
Let me ask you this: What’s the ROI on your accounting system? Stumped, eh? How about on your office lease? No? Why is it that we specifically ask about the ROI on marketing projects and not any other aspect of business?
As I recently reviewed in this insightful post at Copyblogger, marketing isn’t an asset, at least not in the way you consider an asset an investment. You can’t sell it later, as if it’s held or grown in value (by an accountant’s definition). So ROI is rather a strange (albeit catchy) measurement tool to make marketing seem hip and trendy. Marketing is more like office supplies or utilities. You use it; pay for it; and it’s gone. Done.
You pay for a direct mail campaign, newspaper ad, Google Ads, etc., and the money is gone whether or not you’ve made a sale from them. Marketing is money out the door.
This is why so many business people are reluctant to spend on marketing. It’s a gamble.
What about your email system? Telephone? Insurance? These are all gotta-haves, right? You can’t run your business operations without communications systems or a way to track where the money is going in and out, right? Expenses.
So theoretically marketing is another expense. And during much of the recession, it’s been considered an optional expense for many smart business owners like Mr. and Mrs. Jenkins.
But this is where Mr. Jenkins doesn’t really understand what the Great Marketing Genie can do for him. All he sees is more work, maybe more customers (maybe not), but it’s just money out the door for him. What he’s missing is what the genie can do for his business: Profits!
Making the Right Three Wishes
Mr. Jenkins simply asked for the wrong thing from the genie. (You recall what difficulty Aladdin has with wording his requests of the genie?)
Instead of simply asking the genie for more customers, Mr. Jenkins should request more profits, right? With more profits Mr. and Mrs. Jenkins can go on that long-dreamed-about vacation in Tahiti. With more profits Mr. and Mrs. Jenkins can focus their business more on the high-end educational toys and games they’ve long-admired and seen great results from that will bring them a bigger profit margin.
Now a funny thing happens when Mr. and Mrs. Jenkins sit down one evening to examine their options for their business. Mrs. Jenkins, sensing her husband’s frustration over their stalled business growth, asks him a few key questions:
- “What do you think are the primary reasons our sales aren’t growing?”
- Mr. Jenkins thinks long and hard before replying, and says, “Not enough people know about our store. Once we do get new customers, they love us. So we have an attention problem. Second, they don’t revisit the store often enough to see all the new products we have. And third, we don’t have enough contact with our repeat customers like a grocery store would have. They only time we get to talk with them is when they’re in the store.”
- “What will it take to turn around those three problems?”
- Mr. Jenkins looks at his wife wondering if he will have to have to do all the hard thinking but sees a twinkle in her eye. So he finally says, “Walkins and word-of-mouth are too few and far in between. We need to reach a wider audience. Plus, we need each of our customers to spend more during each shopping experience. Finally, we need to find a way to regularly converse with them so they’ll want to stop in more often – like an old-time corner store where they stop in to just say ‘hello’ and happen to mention they need another such-and-such game for their nephew’s birthday.”
- “Let me summarize: We need to reach more people. We need them to shop and buy more frequently. And we need to engage them so they’re more comfortable stopping in any old time. Correct? It sounds a bit like we need to actively market our business. So is marketing just an expense or way to boost our profits?”
- One last time Mr. Jenkins takes a big breath, looks at his wife who is finishing her question to him. “We’ve been making sales, taking in revenue…” he begins in reply. Then he has an epiphany (not unlike the Grinch at the top of the mountain when his heart grew three sizes and broke the cartoon heart close up frame). He turns to her (rather smugly, I might add), and explains: “Marketing is the kind of expense that generates profits!”
Marketing is the New Black
With that Mr. Jenkins jumps up in search of a pad and pen much to Mrs. Jenkins’ surprise. He begins rattling off more questions about her marketing ideas for the store. He sit downs and begins taking notes. All of the sudden he’s much more enthusiastic about running a series of ads in the local paper. He discusses what type of content Mrs. Jenkins wants to post on Facebook and even the possibility of running ads on Facebook.
Mrs. Jenkins is astounded at his energy and enthusiasm and asks, “What’s different?”
Mr. Jenkins stops writing to consider his answer and looks up at her, “I want that trip to Tahiti! Until now I didn’t see any way to make enough to get us there. So all I saw was writing checks to pay for ads that may or may not bring in new business. But now all these ideas are racing around in my head: When we run the ads, we can repeat them on Facebook. We can also post them on a sign or make flyers that say, ‘As seen in…’ to leverage the ads on the other mediums. Marketing will get us to our goals faster.”
Marketing is the efficient way to increase sales and profits from the speed of a horse and buggy: Instead of clip-clopping along, use the Great Marketing Genie to grant you sales and profits in a (relative) blink of an eye.
Marketing Pushes Sales Into Profits
Is that a happy ending? Mr. and Mrs. Jenkins have a lot of work ahead of them despite the rosy outlook. But it is Mr. Jenkins’ change in mindset that puts the wheels in motion. While their clothing and toy products may not be sexy, Mr. Jenkins seems to find his goal of a trip to Tahiti very sexy. And he’s willing to explore the unsexy marketing steps in between to make his dream come true. Because he can see the glimmer of his dreams coming true, he sees more possibilities in how to successfully integrate marketing to efficiently and quickly attain that trip to the tropics.
Here are a few essential components to the Jenkins’ success:
- Commitment ~ Until now Mr. Jenkins didn’t perceive the value in committing to a marketing strategy. By committing wholeheartedly Mr. Jenkins finally saw why previous strategies hadn’t worked: He hadn’t stuck it out long enough for plans to come to fruition. He had even caught himself acting nonchalantly with customers about campaigns, nodding his head that he wasn’t convinced. He realized that probably conveyed to his customers that he didn’t care if his advertising succeeded.
- Engagement ~ Prior to launching their Facebook fan page both of the Jenkins felt a disconnect with their customers. They had great conversations with them when they were in the store, but between visits it felt like dead air. Once Mrs. Jenkins began engaging with customers on their Facebook page, they were astounded at the responses. Customers had questions and comments about the toys and games. Some posted pictures of their children wearing the clothes they’d bought at their store. And they posted gushing testimonials about how well-versed the Jenkins were about their products and what kids liked. The Jenkins loved the two-way dialogue they developed with customers and felt it added enormously to their understanding of what their clients wanted from them so they could fine tune their offerings.
- Measuring Success (and Failure) ~ While their Facebook page was a big hit, the Jenkins decided a year later to drop their Yellow Pages advertising – even online. Since Mr. Jenkins had instituted a tracking system to find out where customers learned about them they found only a couple of people (grandparents!) used the phone book to find their store. While spending on the phone book had been a big expense (ahem!), they decided it was worth it to find out what didn’t work and used the savings from not advertising in the phone book to develop an online store. Tahiti was getting closer and closer!
Are you waiting for the Great Marketing Genie to grant your wishes? Is the genie a drag on your Profit and Loss statement, or do you see infinite possibilities to make your dreams come true? Is marketing just an expense for your business or way to fast-track your profits?