My last post discussing the results of our initial experiments with Social Media elicited a great response, including an invitation to present a webinar for TOCICO.

I’ve just created my slide-deck for that webinar and I’m happy to share it below.

If you’re interested in attending the Webinar (there is a charge for non-TOCICO members), you can read more here.

[view slide-deck]

By the  way, I noticed some e-mail clients stripped the embedded video from that last post.

If you’re interested in seeing how we’re using (low-budget) video to boost our pay-per-click results, you can view the video (along with the rest of the post) on my blog, here.

Oh, and stay tuned: I’ll be posting Chapter 5 of The Machine before the end of the week. This chapter discusses how the basic SPE principles lead to different applications for a number of different environments (commodity products, selling via resellers and small business).

Yesterday I shot and produced a short video on forecasting – pitching a booklet we’re in the process of assembling.

Aside from the pure entertainment value, this video is notable (I think) for two reasons:

1. It’s an opportunity for me to share the results of some of our experiments with social media
2. It’s an example of just what’s possible for lead generation on a very tight budget

[watch video]

What hasn’t worked

In Australia, we have a large database of executives and business owners – the result of 15 years of events, print advertising, business marketing and direct mail.

However, in the US, we’re starting at ground-zero.  So, our challenge has been to build a house list from scratch, in an environment that’s quite different from the one we launched the business in 15 years ago.

So, in the last two years, we’ve built a list of promotional activities that simply don’t work (they aren’t commercially viable). This list includes:

1. PR (we spent a small fortune with a agency with nothing to show for it)
2. Tradeshows (we exhibited at manufacturing shows across the length and breath of the continent – and trust me, it’s long and board!)
3. Advertising in daily newspapers (this is surprising, because it’s been a staple of ours in Australia for years)
4. Traditional direct mail campaigns – pre-approach pack with phone follow-up (again, this is surprising because many of our US clients have great success with this)

What is working

The good news is that there are two activities that work very well for us:

1. Speaking at other people’s events (well, this is no surprise – this has always been huge for us, on both continents)
2. Social media (I was a skeptic – but we’re kicking goals!)

We’re both surprised and excited by the results we’re getting with social media.  Specifically, we are generating all the sales opportunities we can process with relative ease (and at a surprisingly low cost).

It’s taken quite a bit of experimenting to get this far – and we’ve got a lot more experimenting to do – but here’s an overview of the formula that’s working best right now.

Our social media formula (v1.0)

Here’s what we’re doing right now:

1. Run tiny pay-per-click (PPC) ads on LinkedIn and Facebook – see example below (LinkedIn is working much better for us – and it enables us to target individuals by title, industry type, age, education and much more)
2. Direct respondents to a landing page, containing a more detailed pitch for the offer, and a form to complete and submit

Our objective is to capture postal details and a telephone number.

We’ve discovered that this is only possible if we are sending respondents a physical package (via snail-mail). Accordingly, we have a standard SPE Starter Pack that consists of a copy of my first book, a DVD and some other goodies.

We either promote this package in the initial ad (see example above), or we promote a booklet that we fulfill by e-mail – and then offer the pack in a sequence of (auto-generated) emails. The video at the start of this post contains an example of one of those booklets.

Video

I’m very bullish about video.

We’re using video extensively in our landing pages to convince respondents to take the next step and submit the form and we are keen to experiment with Google’s click-to-play advertising, in-video YouTube ads and more.

The nice thing about video – and about the whole social media formula I described above, in fact – is that you can do it all on a tight budget (and we always like to experiment on a tight budget!).

I built a mini-studio in my apartment here in LA for around $1,000 (including a 2nd-hand camera, lights, a green-screen, a wireless lapel mic and video-editing software). Sure, it’s not broadcast quality, but it’s certainly fine for Internet video.

Yesterday, it took me 30 minutes to write the script, 45 minutes to set up the lights and camera, 60 minutes to shoot the video and 2 hours to do post-production and upload it to YouTube.

Here’s an example of a landing page containing that video.

Social media: the big picture

So, obviously, I’ve only discussed one aspect of social media (PPC advertising). I haven’t discussed blogging, Twitter, Facebook and so on.

To my mind, our blog (this one) is the central plank in all of this. It generates the content for our booklets and broadcasts to our e-mail subscribers. Everything else (Twitter, Facebook, LinkedIn) promotes the blog.

Now that we are gaining traction with social media we will start to replicate some of these steps with our clients (in fact we’re doing this already). Let one of us know if you’re interested in hearing more.

Oh, and if you find this subject of general interest, please post a comment.

(By the way, the forecasting booklet doesn’t exist yet, but you can read the content of the booklet here and here.)

AdVerb is dead: long live ‘SPE Update’

After more than 12 years, we’ve retired AdVerb – the long-running Ballistix periodical.

We’ve replaced AdVerb with SPE Update – an email update of new posts, as I publish them, on my blog.

As you probably know, my blog has been in existence for some time now. But I’ve been frustrated by the fact that most of the content is hidden away. This is sad if you share my (entirely unbiased) opinion that some of the content is pretty damn impressive!

Consider just these recent posts, for example:

• Why CRM sucks: why you should never have bought the damn thing (and why you should probably keep it)
• The Holy Grail of technical sales: how to disentangle salespeople from production
• A quick and dirty approach to process improvement

And my next news item bodes well for the quality of future posts!

Let’s re-start the conversation

If you used to be a member of my old Yahoo group, you’ll remember that this forum facilitated an ongoing (and energetic debate). I’m hoping to re-start this on my blog. Accordingly, as you read posts in this update, please click-through to the blog to review comments and join the conversation.

A book in the works

We’re happy to have just inked an agreement with Greenleaf Book Group in Austin Texas – who will be publishing my forthcoming book (tentatively entitled ‘The Machine’).

This will be a traditional book (not a compilation of articles).  It’s my intention for it to be a comprehensive treaty on Sales Process Engineering – both the theory and its application.

I’ve penciled out a day a week to write this book – and my target is to produce one chapter draft each week. It’s my intention to post each chapter on my blog as I complete it, meaning it’ll arrive in your inbox within hours (if you’d like to be notified faster, just follow me on Twitter: @justinroffmarsh).

On new media

I’m frequently asked for my opinion on new media (blogs, Twitter and all that).

I may post on this in the next month or so, but let me share some quick thoughts (in part, because I can’t bear to publish something that doesn’t add at least some value).

Obviously, there’s a lot that’s new about new media.  The technology, for one.

But, there’s a lot that’s not so new. You may recall that, years ago, I used to spruik about a concept called Relationship-centric Marketing. The basic idea is that you should approach a sale in two stages:

1. First, win a relationship, by establishing yourself as a thought leader, publishing a periodical (and a manifesto), running events and, as a consequence of all that, acquiring subscribers
2. Second, manage your subscriber-base in such a way as to harvest a rich crop of sales opportunities (and ultimately sales)

Now, there’s nothing wrong with this model (it’s one I’ve always adopted, for example). However, for most organizations it’s impractical, for one of three reasons:

1. The organization sells a low-involvement product
2. The organization isn’t a thought leader and doesn’t have the (not insignificant) resources required to become one in the short term
3. In the short run there are much, much, greater gains to be had by reengineering the sales function

Proceeding cautiously

So, here’s my opinion on new media. On the one hand, I’m excited, because it slashes the costs associated with establishing and maintaining thought leadership.

On the other hand, I’m reticent to issue a general call to arms (as so many others have) for the same reasons I stopped spruiking about Relationship-centric Marketing some years ago.

So, if you do take some first steps with new media, terrific (it’s fun to be an early adopter!) But, my advice is to proceed cautiously. If you’re already a thought leader, you don’t need my input, you’re already well and truly on your way.  But if you’re not, perhaps your first objective should be to simply get acquainted.  Stick with the basics: personal LinkedIn and Facebook profiles, and a Twitter account. Oh, and set up a Google Reader account and and search for (and subscribe to) a few blogs relating to subjects in which you’re interested.

Remember focus is less about what you choose to do than it is about the many things you choose not to do! (With thanks to Eli Goldratt, who stressed this point at this years annual TOC conference.)

How to develop an ideology-based business marketing strategy.

So you think you’re going to publish a newsletter?

Hey, that’s not a bad idea!

If you make it an e-mail newsletter — like the one you’re reading now — it’s a particularly cost effective exercise. Your distribution costs are nil. Your publishing costs are equivalent only to the time you invest in producing content.

And just think what your newsletter will achieve.

Your newsletter will keep your organisation ‘top of mind’ with your clients, potential clients and centres of influence.

Your newsletter will establish you as an expert in your field.

And your newsletter will enable you to maintain an enduring and intimate relationship with your marketplace.

Or will it?

How do you know that subscribers will actually bother to read your newsletter? They are busy people, after all.

What’s to stop them hitting ‘delete’ each time your periodical arrives in their inboxes? Or worse still, pressing ‘reply’ with that dreaded ‘unsubscribe’ word in the subject line?

It’s one thing to publish a newsletter. It’s another to produce a publication that will be avidly read, respected and even awaited by subscribers.

Of course, when it comes to publishing a great newsletter, content is the key. (The same applies to running a great event.)

But what’s the mark of great content? How should you select this content? How should you package it? And how can you ensure that you can keep producing quality content after the second, the tenth, or the one-hundredth edition of your newsletter?

Religion is the key!

Our belief is that great content is more than simple information, education or instruction.

Great content flows from a higher cause … an ideology.

The presence of this ideology adds an overriding purpose to all of your communications, supercharging their effectiveness.

Ask yourself, would Permission Marketing, Seth Godin’s runaway best seller, have been the hit it was if it had just preached textbook marketing practices?

Would upwards of 25,000 stockholders attend Berkshire Hathaway’s Woodstock-style annual general meetings if it weren’t for value investing, Warren Buffet’s counter-intuitive investment methodology?

Or would CRM (customer relationship management) have ever captured the executive share-of-mind that it has if it weren’t for Peppers’ and Rogers’ long-term one-to-one marketing crusade?

In each case, this higher cause has transformed what would otherwise have been an interesting concept into a religion (at least, in the more general sense of the word).

As a marketer, the notion of a starting a religious movement should be an intriguing one. And there’s a simple reason why.

When a concept becomes a religion it becomes infectious. In other words it self-propagates, like a virus! (It’s interesting to note that Seth Godin’s second book is called Unleashing the Ideavirus — it’s all about what he calls viral marketing.)

The real significance of this infectiousness is the impact it has on the ROI (return on investment) of your marketing activities. If you can successfully ‘start a religion’, the return on your marketing investment will increase exponentially over time. This is in contrast to the diminishing returns we see from most product-centric sales processes in mature markets.

So now you understand the importance of ‘getting religion’, how do you go about the process of starting a religious movement? And how does this concept of ‘religion’ relate to our Relationship-centric Marketing methodology?

Starting a religious movement

We’ve created a simple six-step process you can follow to start your own religious movement. The starting point for this process is your basis for communication.

If you’ve attended one of our seminars or workshops, you’ll have heard me introduce this concept. Your basis for communication is the content platform upon which the relationship with your marketplace is built. You can find your basis for communication in the area of intersection between your market’s interests and your expertise (and credibility).

Typically, your basis for communication consists of expertise that you have acquired as a by-product of the delivery of your core product or service.

For example, an office furniture retailer may establish relationships with its marketplace by sharing its workplace design expertise with clients, potential clients and centres of influence. (This firm’s market may not have an enduring interest in our office retailer’s range of workstations but it is likely to have an ongoing interest in improving workplace productivity.)

Once you’ve identified a basis for communication, you’re ready to go to work starting your religious movement!

Step one: identify ‘a better way’

It seems there’s always a better way. No matter what industry we consult to, we always hear the same thing: ‘standard practice is fundamentally flawed’.

In fact, one of the special benefits of being a consultant is having the opportunity to learn the truth about furniture design, industrial air conditioning, merchant banking, aerial mapping and myriad other industries.

Your challenge is to look at your basis for communication and describe standard practice.

Once you’ve done that, you can outline your better way.

Godin does this beautifully in Permission Marketing.

Godin refers to traditional marketing as interruption marketing. Every advertisement or promotional campaign is an unrequested intrusion. The marketer views the potential customer as an opportunity for a short-term relationship (a one-night-stand).

The permission marketer views the potential customer as an opportunity for an ongoing relationship. While she may use interruption techniques to initiate this relationship, she then attempts to exchange value for increasing levels of customer permission. (Godin refers to the highest level of permission as intravenous permission — that’s the kind of permission you give to a surgeon when you submit to general anaesthetic!)

Your better way can describe the optimal process. Alternatively, it can describe the process that should be followed in order to design the optimal process.

Step two: create an ideology

For your better way to be converted into an ideology, it needs good packaging.

And the first step in packaging a concept is to assign it a name.

It’s interesting to note that, neither Ricardo Semler (Maverick) nor Michael Gerber (The E-myth) gave their management methodologies names. I suspect their methodologies would have been more infectious had they taken this next step.

As well as naming your better way, you should also assign a name to the standard practice. (You can see how Godin has done this in the example above.)

You’ll find that it is easier to sell your better way if you position it against standard practice.

While it may seem manipulative to use polarisation as a selling tool, the reality is that you are selling only an intellectual position. (You may have noticed how ideological arguments tend to assume extreme opposing positions: ‘pro life versus pro choice’, ‘political left versus political right’, ‘salvation versus eternal damnation’, etc.)

Once your ideology has a name, it needs a model. A model is a simple diagram that provides a portal through which complexity can be viewed.

Your model can be a decision-making tool like a two-by-two matrix or investors’ economic clock. It can also be a process diagram, like our own Relationship-centric Marketing model.

It’s also worth developing your own terminology (when appropriate). When I attend meetings with potential clients, I often notice that they use Relationship-centric Marketing terminology. They do this because they have become sold on our ideology as a result of their exposure to AdVerb and our events.

We once received a request for a proposal from a potential client where the project brief was sprinkled with our own terminology. This document had been circulated to two or three other consultancies. Our potential client was kind enough to provide a link to our Website to enable our competitors to decipher the brief! Needless to say, we won the work.

Step three: write a manifesto

Now that your ideology has a name, a model and its own set of terminology, it’s time to commit it to print.

Your manifesto can be as simple as an eight-page discussion paper or as complex as a traditional book.

The purpose of your manifesto is to argue the case for your ideology. Nothing more, and nothing less.

Your manifesto should build a bulletproof case by contrasting standard practice with your better way. It should then present evidence in the form of real-life case studies. While it’s nice if the subjects of your case studies are your own clients, it isn’t absolutely essential.

If you do a good job of producing your manifesto, you will find that it rapidly becomes your most valuable communications tool. In fact, we often recommend that our clients produce their manifestos in place of a corporate brochure. The fact is, your manifesto will do a much better job of selling your organisation than a traditional corporate profile ever can.

While the first evolution of your manifesto is likely to be a discussion paper, it’s well worth ultimately turning it into a book. If you can get your book onto the shelves of bookshops around the country, you have just created a self-liquidating, perpetual promotional machine!

One of the best manifestos I have ever come across is a book called The Goal, by Eliyahu Goldratt. The Goal is a gripping ‘business novel’ about manufacturing process design. It does a superb job of selling Goldratt’s contrarian process design methodology, the Theory of Constraints. The Goal has sold over two million copies, a remarkable feat for any business book — particularly one about manufacturing process design.

Step four: start a movement

Now that you’re armed with a manifesto, it’s time to start spreading the word.

In reality, this undertaking isn’t as ominous as it may sound (no, you’re not required to don a suit and spend Sundays knocking on doors!)

You simply need to redirect your promotional resources from the promotion of your organisation to the evangelism of your ideology.

And there are three good reasons to do this:

• It’s easier to sell an ideology than it is to sell a product or service.
• If you can sell your ideology, you end up selling your organisation by default.
• Each time you sell your ideology you have an opportunity to recruit a disciple — an assistant in the propagation of your ‘religion’. (Of course, this is the key to the viral growth of religions.)

If you’re familiar with our Relationship-centric Marketing methodology, you’ve already got a pretty good idea of how to go about evangelising your ideology.

Step one is to attract ‘followers’ with the offer of your manifesto. And step two is to build an intimate relationship with ‘followers’ by subscribing them to an automated communications program (consisting of regular newsletters and seminars).

Acquiring ‘followers’

You’ll find that a magical thing happens when you begin promoting your manifesto. People actually respond to your promotional campaigns!

While campaigns that promote your organisation are unlikely to yield much of a response, an advertisement for a discussion paper that advocates a new, better way can easily generate one hundred or more replies.

Accordingly, your advertisements, direct mail and other relationship-acquisition campaigns should be re-configured to offer respondents a complimentary copy of your manifesto.

Now, if you’re worried that this promotional approach will fail to deliver the brand building benefits of traditional campaigns, you shouldn’t be. The reality is that the promotion of your ideology will do more for your brand than traditional self-congratulatory advertisements ever could!

Turning ‘followers’ into ‘disciples’

Your ongoing communications should offer your subscribers assistance with the application of your ideology to their businesses (or their lives).

Each communication should focus on one facet of your ideology and explore its implementation in detail.

As previously mentioned, the presence of an overriding ideology will multiply the effectiveness of your communications. Rather than being isolated points of contact, each communication with your subscribers will be a part of an ongoing dialogue.

If you can succeed, over time, in converting interested subscribers into ardent believers (or even activists), you win in two ways:

• Your subscribers are almost guaranteed to turn to you for assistance with the implementation of your better way.
• Your subscribers will join you in your efforts to spread the word!

It’s interesting, isn’t it, that your search for compelling newsletter content has lead to the development of a complete marketing program. You could call this marketing program an ideology-based marketing strategy — or you could simply call it getting religion!

Before I leave you with your quest to identify an ideology worthy of religious fervour, let me briefly introduce you to the two final steps in starting your own religious movement.

Step five: make your ideology the industry standard

The idea of making your ideology the industry standard seems counter-intuitive. This is because I’m advocating that you give it away!

Specifically, I’m suggesting that you encourage channel partners — and even competitors — to join your religion.

In practice, as long as you’re recognised as the originator of your ideology, you will always have the most to gain from its growth.

Ask yourself, would Stern Stewart & Co have ever been able to make their Economic Value Added (EVA) the financial standard that it is today, if it was the only consulting firm to advocate it?

Step six: extend the standard

This last step isn’t really about starting a religious movement; it’s about extending the life of your movement.

You can extend your standard by showing your followers how your ideology can be applied to other areas of their businesses or lives. I mentioned the Theory of Constraints (TOC) previously. Although this theory initially related just to production, Goldratt has subsequently applied it to finance, project management, marketing, management and other business functions.

It is important not to extend your ideology until it is firmly entrenched as an industry standard. To do so would be to divert resources from what should be your number one marketing objective.

How to sell expensive (or complex) products and services

[Listen to a seminar on this subject!]

If your organisation sells expensive (or complex) products and services, odds are, you get most of your new clients by ‘word of mouth’ or referral.

If you’ve tried your hand at lead generation advertising, you’ve probably discovered that, even if an advertisement does make the phone ring, it’s a pyrrhic victory. (Isn’t it true that traditional advertisements tend to attract a calibre of clients better suited to your competitor’s business than yours?)

The problem with ‘word of mouth’ as a primary promotional medium is that, because it’s passive in nature, it’s difficult to scale. In other words, ‘word of mouth’ is limiting your business to incremental (rather than exponential) growth.

So why is it that traditional marketing wisdom breaks down when products are expensive or complex – or, worse still, when products aren’t real products at all, but intangible ‘services’? And is it possible for an organisation that sells such products to develop a more proactive approach to business marketing than a reliance on ‘word of mouth’ business?

The answer to both of these questions lies in the discovery that there are actually two types of customer in this world!

Two types of customer

We like to say that there are two types of customer in the world.

One type of customer ‘buys’ a product. (She focuses primarily on product attributes and price.)

And the other type of customer ‘buys’ a relationship. (She is less focused on the transaction, and more interested in a longer-term relationship.)

A customer tends to be ‘product-focused’ when she’s purchasing a commodity. If she’s choosing between Qantas and Ansett, between Dell and Compaq or between Holden and Ford, she’s likely to make that decision based primarily upon product features and price.

However, if this same customer were choosing a new accounting firm, looking for a financial planner, or organising an African safari, she is more likely to be shopping for a relationship than for the very lowest price.

Now this observation is more than just a curiosity. The choice between product- and relationship-focused customers affects the very design of a business. The fact is, a business designed to serve product-focused customers will drive the relationship-focused variety away in droves! (And vise versa.)

A ‘product-centric’ business promotes features and price – where a ‘relationship-centric’ business promotes a total solution.

A product-centric business exploits the value in a transaction, where a relationship-centric business profits from the value in a relationship (lifetime value).

And a product-centric business grows primarily by expanding its share of market (more customers) – where a relationship-centric business grows primarily by expanding its share of customer (more services for each customer).

A natural advantage for small businesses

While small businesses do not generally have the scale required to compete on the basis of features and price, they do have a natural advantage when it comes to delivering ‘customer intimacy’ – a key requirement of relationship-focused customers.

Furthermore, relationship-focused customers are prepared to pay a premium for these relationships – insulating smaller businesses from the inevitable ‘margin shrinkage’ that efficient markets (read: their larger competitors) inflict upon them.

Smaller businesses tend to recognise this. But few have any idea how to attract, to service, or to profit from relationship-focused customers.

The solution is to turn traditional marketing methodology on its ear and build a relationship- rather than a product-centric marketing program.

Selling a relationship

If you’ve decided you’d rather be in the business of selling relationships than (keenly priced) products, here’s a three-step introduction to our ‘relationship-centric’ marketing model:

1. Take your focus off sales. If your customers aren’t transaction-focused – you certainly shouldn’t be.
2. Create an automated communications program. Because a key ingredient in any relationship is communication, this system should provide your customers with regular (and meaningful) points of contact with you. Your automated communications program should be designed to exploit the value resident in the relationships under your management. However, rather than designing this program to optimise the value of individual transactions, you should design it to maximise customers’ ‘lifetime value’. ‘Lifetime value’ is a measure of the gross profit earned over the life of a typical customer relationship.
3. Identify potential customers and introduce them to your automated communications program. Rather than establishing a relationship with people after they make their first purchase (as is normally the case) you should establish a relationship in advance.

If your potential customers are those who will buy on the basis of a relationship, doesn’t it make sense to deliver this relationship in advance? (You’ll discover, in a moment, just how inexpensive it can be to introduce potential customers to your automated communications program.)

Building an automated communications program

Once you’ve decided to become relationship- rather than product-focused, your first step is to create an automated communications program.

Begin by building a central database, containing the details of existing customers, prospects (potential customers) and centres of influence. (If your database is a little cumbersome, it might be worth considering an off-the-shelf contact management application like Maximizer, Act or Goldmine.)

Your next step is to design a program of communications that will build and nurture relationships with the people on your database.

We suggest that a newsletter should be the backbone of your communications program. This is because a good newsletter is both effective and scalable. (It takes little more effort to send a newsletter to 20,000 subscribers than it does to mail 2,000.) A newsletter can either be a magazine-quality publication or, if your budget won’t stretch that far, it can be a simple two- or three-page letter, laser printed on your corporate stationery.

Either way, your newsletter should be designed to dispense valuable information to your subscribers (not to boast about your organisation). The best newsletters have a do-it-yourself feel. The great thing about sharing your knowledge with your subscribers is that it positions you as an expert in your field – and empowers them to work with you.

If you publish your newsletter quarterly – and this is our suggested frequency – it’s worth supplementing your newsletter with a monthly e-mail bulletin. While e-mail communication doesn’t have the same impact as print, its cost effectiveness makes it invaluable. For this reason, it is essential to capture e-mail addresses at every point of contact with subscribers.

Acquiring new relationships

The best-kept secret when it comes to relationship-focused customers is that you don’t have to wait for them to buy from you before you build a relationship with them. In fact, if you build a relationship with relationship-focused prospects before they need to transact, you are almost guaranteed their future business.

But how do you acquire these new relationships?

Well, if you sell to businesses, it could be easier than you think. You might just find that the names and contact details of your prospects are available from a list broker. For example, if your target prospect is a ‘human resources manager working in a company with 100 or more employees’, this list is available from all good list brokers. Simply buy the list and add the records to your database.

If your prospects need to be better targeted than this, it might be worth commissioning some telephone research to filter these records. For example, if you want to identify those human resources managers who operate a particular software application, it’s still cheaper to have someone ring and ask, than it is to try and build the same list using advertising!

If you cannot purchase (or otherwise acquire) a list of suitably targeted prospects, you may have to resort to less direct forms of ‘lead-generation’.

Now, because you’re looking for relationship-focused prospects, the trick with lead-generation is to promote a relationship – rather than your product or service. The obvious way to do this is to offer prospects a free 12-month subscription to your newsletter. Remembering that your newsletter has been designed to be truly valuable to prospects – this is an offer that’s likely to be eagerly accepted. (About 100 people a month request free 12-month subscriptions to AdVerb via our Website.)

We recommend the following promotional mediums for your relationship-acquisition campaign (listed in typical order of effectiveness):

• Strategic alliances. Your prospects are already other businesses’ clients. Identify businesses that serve your prospects, and convince them to offer a free 12-month subscription to your newsletter to their clients.
• Direct mail. If the lists that you can obtain from your list broker are not qualified enough to warrant the cost of telephone research, you can identify qualified prospects by offering a newsletter subscription to this list. Respondents are likely to have both an interest in your services, and a bias towards relationships.
• Advertising. A successful lead generation advertisement is little more than a good direct mail letter, reformatted for the media in which you’re advertising. Of course, your offer is still a free 12-month subscription to your newsletter.

A recipe for growth

The turning point in the development of any business is the creation of a turn-key marketing program. If you sell expensive (or complex) products and services, our Relationship-centric Marketing Model is such a program.

Once you have recognised that your ideal customers are those who are in the market for relationships (rather than low-margin commodities), the battle is half won.

Now you can take your focus off transactions and apply it to building and nurturing relationships with a growing army of customers who are prepared to pay a premium to work exclusively with you.

It’s easy, once you recognise that there are actually two types of customer in the world!

Following is the sad story of the entrepreneurial Harry Edgecliffe and his ruthless competitor Spot Pet Foods. Although neither Harry nor Spot exists, their tale provides a number of invaluable lessons for all marketers. Harry Edgecliffe is not a happy man! In recent months, the business he toiled for so many years to build has been introducing incredible stress to his otherwise tranquil lifestyle. For the first time in his life, Harry feels that he is in a no-win situation. He wants to grow his business (he is, after all, an entrepreneur at heart) but whenever his marketshare grows, his margins shrink. This year will be the first in his business’s proud seven year history that it declares a loss. Harry is heart-broken. Harry launched his pet food business with a great product and with what he believed was a powerful competitive advantage. His experience as both a veterinarian and a dog breeder gave him the specialist knowledge he needed to invent a dog food that had all the nutritional qualities of fresh meat while still being able to be stored for long periods without deterioration. Harry’s business grew exponentially in its first few years. His product was an instant hit with dog breeders around Australia and, before long, he was the envy of his colleagues.

‘Simply a better product at a lower price’

Harry’s success formula was simple. He shared it willingly with colleagues and even the business press. ‘We simply sell a better product at a lower price.’ Harry had discovered that he could undercut other popular dog food brands. After all, he didn’t have the operating expenses that the supermarket brands had. He had no corporate headquarters, no commissioned sales reps and no research and development budget. Before long, Harry had saturated the local dog breeder marketplace. But, because his margins were low, he realised that he would have to expand into the mass market to increase his volume and reach his modest profit targets. Fortunately, his product was embraced by a national chain of independent food stores keen to capitalise on his success story. Harry’s product was now well on its way to becoming a household brand. And that’s when Harry’s problems began. Until then, his major competitor had ignored his growing business. It had little interest in competing within his specialist market niche. But, when Harry started to steal Spot Pet Foods’ shelf space, its reaction was fast and ruthless.

A ruthless Spot

Spot Pet Foods was a national company with a number of popular pet food brands. Until now, Spot’s position of dominance in the dog food market had been virtually uncontested. Spot was unimpressed to see a newcomer undercutting its product and ‘stealing’ marketshare. Spot’s brand management team quickly appraised the situation and devised a three pronged defence strategy. Spot’s sales reps began offering retailers enticing volume-based incentives across its range of brands. These incentives encouraged retailers to be loyal to Spot’s brands. Spot recognised that Harry’s perception as a ‘dog nutrition expert’ was popular with dog owners. However, Harry had never had the marketing budget necessary to take ownership of this positioning in the mass market. Spot had no such budgetary limitation. It quickly recruited a television personality (who hosted a show about family pets) as a representative for its dog food brand. This personality was then featured prominently in a new television advertisement. Spot supported its television advertising with an aggressive couponing campaign. Coupons distributed in newspapers allowed consumers to purchase Spot’s dog food at 20% less than the price of Harry’s competing product! To allow its retailers to maintain their margins, Spot Pet Foods reimbursed retailers for the coupons they collected from customers, at face value. Within days of the Spot campaign launch, Harry’s confidence began to wain. Retailers began to cancel orders for Harry’s product as Spot’s dog food brand reclaimed almost all of its lost marketshare. A major discount chain reneged on a deal it was about to sign when Harry could not match Spot’s volume-based incentives (unlike Spot, Harry was a one-brand company). And, while the independent chain of food stores that was distributing Harry’s product was happy to continue the relationship, it insisted that Harry discount his dog food product to make it more competitive with Spot’s.

An entrepreneur with a headache

This morning, Harry Edgecliffe woke up with a splitting migraine. He wasn’t surprised. It was the same headache he’d been living with now for several weeks. Despite think-tanks with employees, discussions with customers and many sleepless nights, Harry couldn’t see a way out of his current predicament. He’d tried discounting to regain marketshare, but each time he dropped his prices, Spot increased the value of its coupons to negate his price advantage. What’s more, Harry’s falling sales, together with his smaller margins resulted in his overdraft being stretched to the limit. This financial year he will post his first loss ever. He’s not sure how much longer his business will survive.

Harry’s problem diagnosed

Although Harry would undoubtedly disagree, he is not a victim of unfair competitive tactics. Rather, he is suffering under his own lack of understanding of fundamental marketing strategy. When Harry began his business, he miscalculated his ‘sustainable competitive advantage’. He then proceeded to engage in a marketing battle that he had little chance of winning. When Harry thought that he could build his business around the age old adage, ‘a better product at a lower price’, he was sorely mistaken. Sure, in his early days, he did appear to have a cost advantage over Spot Pet Foods. But that was only because he failed to calculate the additional expenses he would have to incur in order to build his business. (These included distribution, and research and development costs). When Harry attempted to compete head-on with Spot Pet Foods, he discovered that he had no competitive advantage. Spot had better distribution, a larger promotional budget and ample resources to survive a discounting war.

If Harry had his time again …

Our friend Harry had a good sustainable competitive advantage all along. He just didn’t recognise it. His true competitive advantage lay in his market intimacy. His product was created specifically for a market niche too small to be catered for by Spot Pet Foods. Harry’s niche market (dog breeders) appreciated the virtues of Harry’s product and respected its link with his personal reputation. If Harry had understood that he was a niche marketer (and not a low cost producer), his approach to growing his business would have been totally different. For a start, Harry would have recognised that what was important to him was not ‘share of market’ but ‘share of customer’. (He was really selling relationships, not dog food.) Accordingly, he would have created an entire range of products for members of his niche market. Perhaps he would even have packaged versions of his range for different sub-sets of his niche. Just imagine, a complete care program for poodle breeders (from Harry the dog-loving veterinarian!). This could have included a complete nutritionally balanced meal program, a set of treatments for poodles’ coats, and a poodle first-aid kit (with medication dosages suited to poodles’ small size and delicate constitutions). Would Harry have tried to sustain a price advantage over Spot Pet Foods’ products? No way. Harry’s customers would have had to pay a premium for his unique ‘value package’. Harry would have priced his products so that his business could make a fair profit on a small volume of sales. Of course, he would also have built an allowance for ongoing research and development into the price of his product. Harry’s promotional activities would certainly not have been directed to the mass market. His message would have been targeted at dog breeders (and perhaps those dog owners who seriously loved their pooches). And, rather than competing with Spot Pet Foods for supermarket shelf space, Harry would have distributed his products through the distribution channels used by other specialist suppliers to his niche. In fact, Harry would probably have developed a strategic alliance with another (non-competing) supplier to share its distribution channels.

Is it really all over for Harry Edgecliffe?

Is Harry in too deep? It’s hard to say. Sure, it will be possible to turn his business around – but it won’t be easy. He’ll need a little cash, and a lot of patience. For a start, he’ll have to force himself to undergo a paradigm shift. He’ll have to realise who his customers really are (and who they aren’t). And he’ll have to grasp and apply a new success formula. Harry will have to raise his prices and rescue his margins immediately. He’ll have to re-focus his attention on his niche market. And he’ll have to find ways to add value to his products in areas that will be appreciated by this market. Harry will just have to hope that he hasn’t trained his market to be too price (rather than value) sensitive. If he has, he might just have to conclude that his brand has developed negative equity! (This is when brand image is out of line with intended positioning.) This turnaround strategy will be a bitter pill for poor Harry to swallow. His higher prices will obviously disenfranchise many of his customers (retailers as well as dog owners). The structure and the culture of his business will have to change to embrace a new value system. And he’ll have to make decisions that appear to fly in the face of conventional wisdom. (Just imagine how excited Harry’s bank manager will be about his decision to increase prices and invest in new product development in the face of plummeting marketshare!)

Marketing lessons for all of us …

There are lessons for all business people here – not just specialist dog food manufacturers. For a start, we should only compete on price if we have a genuine and sustainable cost advantage over any current (or potential) competitors. (Remember, accountants recently lost a big chunk of their compliance work to tax agents because they did not have a cost advantage in this area.) If we don’t have a cost advantage, we can only compete effectively by offering more innovative or more customer intimate products. Of course, regardless of how we compete, we have to build a margin into our prices to allow us to continually hone our competitive advantage. (The market just doesn’t stand still.) And we should be careful only to engage in those battles that we have a real chance of winning. (Just think, this year Microsoft upped its research and development budget from $1.5 to $2 billion to compete with Netscape for its share of the Inter/Intranet market. How would you like to be in Mark Andreessen’s shoes?)

A gentle warning

If your phones are ringing off the hook … if you’re struggling to fulfil orders … and if you’re in the midst of expanding into new markets, the last thing you probably feel like doing right now is stepping back and reflecting on your marketing strategy. How could anything possibly be wrong with your business? Fact is, businesses apply a lot of leverage to entrepreneurs’ seemingly simple decisions. If your marketing strategy is just a few degrees off track, it’s possible that success could kill your thriving business. Just ask Harry.

If I had a dollar for every time someone asked me what percentage of their sales they should be spending on advertising, I’d be writing this column from Aspen!

Problem is, it’s simply the wrong question to ask. And I’ll show you why…

Let’s assume that the objective of your advertising is to generate sales. If this is the case (and I truly hope it is) it seems logical that your promotional expenditure should precede sales – and not the other way around. (Surely you don’t make sales just so you can afford to advertise?)

Your advertising expenditure should determine your sales volume. This means that your advertising budget should be calculated by multiplying the number of sales you plan to make in a given period by the amount you need to invest in advertising to generate each sale (your ‘acquisition cost’). So, if you decide you want to double sales, you simply double your promotional spend.

Most organisations use sales volume to determine advertising expenditure because they simply cannot detect a relationship between advertising spend and sales!

If you can’t measure the relationship between advertising expenditure and sales, it’s either because you don’t have a system in place to make such measurement possible, or because your advertising simply doesn’t work.

Either way, building a system to measure the effectiveness of your advertising should be your number one priority.

Your first step is to calculate the amount you are prepared to invest in advertising and promotion to acquire a sale (your ‘allowable acquisition cost’). When determining this figure, be sure to consider the lifetime- rather than the transactional-value of a typical client.

Once you know what you can afford to spend to acquire a sale (or a new client), your next step is to measure what you are currently spending.

To do this you need to record a ‘source’ for every sales inquiry your business receives. It’s best to determine the source of an inquiry at the very first point of contact. Make it compulsory for your reception staff to ask inbound callers what prompted their calls – and add a compulsory source field to any forms on your Website.

If you know the source of every sale, it’s now a matter of dividing the number of sales you receive from each promotional campaign in any given period by the cost of that campaign. This will give you your acquisition cost – itemised by promotional campaign. If your average (actual) acquisition cost is lower than your allowable acquisition cost, you should reinvest the balance into additional promotion. If it’s higher, you need either to find a more cost-effective promotional campaign, or to increase the price of your product.

Once you understand the relationship between promotional expenditure and sales – provided you have promotional campaigns capable of generating sales at or below your allowable acquisition cost – you really can ‘dial-up’ next year’s sales figures.

If you’ve attended any of our recent breakfasts, you’ll know that I am a big fan of e-mail perodicals – or ’eBulletins’, as I call them.

Now, whenever I mention eBulletins, someone asks, ’But Justin, isn’t broadcast e-mail spam?’

My answer: ’Well it is, and it isn’t!’

You see, it all depends on your definition of spam. And it’s here that I disagree (as usual) with conventional marketing wisdom.

Most marketers will define spam as ’opt-out’ e-mail. Opt-out e-mail refers to e-mail communications that you have not specifically requested. In other words, their sender has assumed that you wish to receive them, and has (hopefully) provided you with the option to opt-out of the list by unsubscribing. (An opt-in communication is one that comes from a list to which you have subscribed.)

This definition of spam may seem logical, but our experience is that it isn’t practical.

Our experience is that e-mail recipients tend to define spam as ’irrelevant e-mails’ regardless of whether or not these e-mails come from an opt-in or an opt-out list.

In other words, recipients would rather receive a relevant communication from an opt-out list than they would an irrelevant communication from an opt-in list.

Now, it’s important to note that this opinion is not a blanket endorsement of mass distribution of unrequested e-mail. I’m simply suggesting that if you have a communication that you have good reason to believe will be highly relevant to its recipient – then it isn’t necessarily a sin to send it to a tightly targeted opt-out list.

Our own experience supports this opinion …

Periodically, we rent lists of executives and gift them free 12-month subscriptions to AdVerb (our offline quarterly marketing newsletter). When these lists contain e-mail addresses, we also add these addresses automatically to our list. (i.e. we subscribe ’strangers’ on an opt-out basis.)

Now, I just ran a query on our subscriber base (6,596) to find out the unsubscribe rate for opt-in versus opt-out subscribers. No prizes for guessing our opt-in unsubscribe rate is lower (4.4%). Our opt-out unsubscribe rate is three times that (12.3%).

I’m no mathematical genius, but by my calculation, our opt-out unsubscribe rate is telling me that 87.7% of our subscribers are happy receiving their unrequested e-mail periodical.

I’m sure you could argue that a percentage of these involuntary subscribers have simply failed to unsubscribe due to inertia (or because they do not wish to confirm the validity of their e-mail addresses). And you could argue that this silent percentage is cursing me under its collective breath for my flagrant abuse of its privacy.

And I’m sure that in at least one or two instances you’d be correct. But the fact that I have rarely seen an impolite ’unsubscribe’ request (and I get copied all of them) leads me to suspect that, if this silent percentage exists, it’s certainly a minority group. I also suspect that any ill will generated by the existence of this angry minority is more than compensated for by the goodwill generated by our happy (opt-out) subscribers.

How can I claim this? Simple: our greatest single source of new subscribers is referrals. Now, if I assume that our opt-out subscribers are one-third as likely to refer as their opt-in cousins, we are still gaining more new subscribers from our opt-out list than we are losing through unsubscription requests!

Find fault in my maths if you can. Shoot holes in my logic if you will. But unless someone can convince me of the error of my ways, I’ll keep adding those executives to my list on an opt-out basis.

Follow this simple process to transform your brochure into a powerful sales tool.

Go on: admit it…

Most brochures make you yawn so hard you fear your jaw’s about to snap!

You know, the ubiquitous picture of the board, standing rigidly to attention. The bland letter from the CEO, explaining his company’s revolutionary policy of putting its customers first. And the picture of corporate headquarters, complete with a fleet of trucks, apparently hijacked by the Olympic precision parking team!

Fortunately, there’s no law that says your brochure has to be a printed alternative to Rohypnol. If you follow the simple steps outlined in this article, you can deftly transform it into a super salesperson for your organisation.

Defining an objective

Think about the business challenge you want your brochure to solve. Do you want it to assist in the sale of your products or services? Or do you want to use it to introduce yourself to potential stakeholders (bankers, investors or alliance partners)?

Obviously, each scenario calls for quite a different document.

Once you’ve decided on an objective, the next step is to consider the role that your brochure will play in your sales process. Will you mail it direct to potential clients? Will interested parties respond to advertisements and request your brochure? Or will your salespeople use it as a sales aid?

Our first law of sales process design is that each component of a sales process should attempt to sell only what it has a reasonable likelihood of selling.

This means that if a brochure, or for that matter, an advertisement or a telephone call has little chance of consummating the sale of your product or service, it shouldn’t attempt to. Rather, it should ‘sell’ the next step in your sales process.

If you sell expensive or complex products or services (as most AdVerb subscribers do), your brochure is likely to fit somewhere in the middle of your sales process.

The first step in your sales process is likely to be an advertisement, or a direct mail piece, inviting interested parties to ‘put up their hands’ and request more information.

The information they request is likely to come packaged in a brochure (although it could also be packaged in a newsletter, an audiocassette or a Website).

Your brochure is then likely to sell the final step in your sales process – perhaps a face-to-face meeting with a sales consultant.

In this scenario, the primary objective of your brochure will obviously be to sell this appointment. Its secondary objective will be to provide a compelling offer for your lead-generation (or relationship-acquisition) activities.

The importance of desirability

Let’s consider this secondary objective first.

Because we’re expecting people to telephone and request your brochure, we need to be able to create the perception that it is eminently desirable.

And because we would like to maintain a relationship with respondents after their receipt of your brochure, this desirability needs to be more than just a perception – your brochure actually has to be desirable!

The best way to make your brochure desirable is to make it valuable to the recipient. You can do this either by packing it full of useful information – or by stuffing it with $50 notes.

The former is both more sustainable and more relevant!

There are two more reasons why you should fill your brochure with useful information. Useful information increases the likelihood of your brochure being read. It also positions your organisation as an expert in its field – which certainly makes your services more desirable.

Giving away the shop

Fortunately, this useful information isn’t hard to find. All you need to do is package some of that valuable knowledge you have hiding in your organisation.

Now if there’s one gem of advice that incites panic among our clients, this is it! I’m frequently asked, ‘Why on earth would we want to give away our intellectual capital?’

Let me answer this question with a question: What’s the number one reason your potential customers buy elsewhere?

Isn’t it because they don’t appreciate the additional value they will gain if they pay a premium to work with you?

Well, in sharing your knowledge with potential customers, you will actually educate them about your point of difference. The act of sharing your knowledge will empower potential customers to do business with you!

Now, I’ll let you in on a little secret. Your knowledge isn’t worth as much as you think it is. (If you don’t agree with me, put it in book form and see how much you can get for it. Even in hardcover, you’ll be hard pressed to sell it for more than $100!) The true value lies in your ability to implement this knowledge.

Which brings me to our second law of sales process design: Give away your knowledge and earn the right to charge a premium for implementation.

We recommend that you package your knowledge in a do-it-yourself format. This do-it-yourself treatment will make your knowledge practical and relevant, rather than academic and obtuse. The reality is that only potential customers who can’t (or won’t) afford your fees will actually attempt to do it themselves. And, by definition, they aren’t potential customers anyway.

Putting your brochure together

So far, we’ve defined a primary and secondary objective for your brochure, and discovered its most important content element.

Now the strategic issues are resolved, it’s time to plan the format of your document.

It all starts with the cover.

Please open me!

The cover of your brochure is nothing more than an advertisement for the brochure itself.

And like any good advertisement, your cover’s most important element is its headline. Of course, this headline should promote the valuable knowledge I’ve just convinced you to package and place in your brochure.

The name of your product, or of your organisation, should be placed underneath this headline (along with the appropriate logo and descriptor).

To write a compelling headline for the cover of your brochure, write the words ‘How to …’ on a sheet of paper. Then follow these words with the primary benefit the reader is likely to enjoy if they read – and act on – the content of your brochure.

The brochure we produced for Medical Spectrum, a company that sells practice management software, carries the headline: ‘How to dramatically improve patient care and increase the profitability of your practice.’ (Writing good headlines isn’t anywhere near as hard as you thought it might be!)

The photograph on the cover of your brochure should be chosen to complement the headline – rather than to compete with it for the reader’s attention.

Introducing …

When your reader opens your brochure, she should find a brief introduction.

This introduction should expand on the promise contained in the headline and pre-empt the contents of the document. This is particularly important if your brochure is more than eight pages long.

Educate the reader

The next couple of pages of your brochure should deliver the valuable knowledge we discussed earlier.

Please try and deliver this knowledge so that it has stand-alone value. For example our brochure for Gavin Ross Portfolio Management Services spells out Gavin’s five laws of value investing. Some of Gavin’s other communications even go to the trouble of explaining his stock valuation methodology.

Our brochure for Aleis International’s livestock management system provides the reader with a brief introduction to the optimum stock management methodology. And the substantial document we produced to enable fullife pharmacies to recruit new member pharmacies provides prospective group members with a detailed introduction to leading edge pharmacy marketing practices.

In each of these cases, we have tried to impart this information in such a way that it has stand-alone value. In other words, so that the reader can benefit from reading it whether or not she actually purchases the product or service on offer.

As mentioned previously, this approach will position you as a leader in your field (thereby making future information more valuable). More importantly, it will create a need for your product or service.

Profile your product or service

In other words, by the time you get around to presenting your product or service, the job of selling is more than half-done.

Consider Aleis International’s brochure. This document explains that, rather than managing livestock using aggregate data (as producers typically do), the optimal stock management methodology enables a producer to manage 10,000 animals on an animal-by-animal basis.

If a producer wishes to implement this management methodology, he has two choices. He can manage his animals manually, which is indeed possible. Or he can manage them using Aleis International’s electronic stock management system.

The reality is that, a producer with 1,000 or more animals will reap enormous economies from using Aleis International’s electronic stock management system.

You see, if you can create a need for your product or service by teaching the reader your methodology, all you have to do now is prove beyond reasonable doubt that your product or service is capable of servicing this need.

A unit of conviction

Years ago, in the insurance industry, a sales trainer taught me that, in order to convince a prospect of something, I should present my information in the form of a unit of conviction.

“A unit of conviction,” he explained, “has three components: a product feature, an associated benefit and evidence.

As is the case with many direct sales techniques, units of conviction work just as well in print as they do face-to-face.

The significance of this technique is that, in tying each of your product or service’s features to an associated benefit, you keep these features relevant to the reader.

If you’re not sure what the benefit of one of the your product or service’s features is, ask yourself this simple question. ‘How does this feature assist in servicing my reader’s need?’ (If a feature does not make a contribution to a reader’s need, you would have to assume that the feature is irrelevant.)

If an associated benefit makes your feature relevant, evidence makes it believable.

Evidence can take the form of a photograph or diagram, technical data, a testimonial or the results from an independent test.

Case studies

I don’t think we’ve ever created a brochure without case studies – and I certainly hope we never do!

A case study is the story of a client of yours who has used and benefited from your product or service. It should be written in third person – unlike a testimonial, which is written in first person.

A case study should consist of three components: a description of the problem your client faced; an outline of the steps you took to solve this problem; and a description of the end result. Where possible, a case study should contain direct quotes from your client.

Case studies are important because they enable prospective clients to experience your product or service through someone else’s eyes. Case studies are particularly important to service providers because they make an otherwise intangible service tangible.

Your organisation’s credentials

We’ve left the information about your organisation until last for one very good reason. The fact is, until your reader has discovered that she has a need for your product or service – and then been convinced that your product or service has the potential to service her need – information about your organisation is of absolutely no relevance.

When it comes to presenting your organisation’s credentials, I have only one piece of advice for you. Make sure each inclusion is relevant to the reader!

If you’re in the logistics business, a picture of your fleet of trucks is probably relevant. If you’re a computer reseller, it probably isn’t.

Now, I understand that some business people feel that pictures of buildings and trucks give their organisation a feeling of substance. My guess is that you can achieve a better result by paying close attention to the overall quality of your brochure – and it’s relevance to your reader.

Ask for the ‘sale’

The last component of your brochure is identical to the last component of each step in your sales process. You should ask for the ‘sale’ – remembering that the ‘sale’ can either be the next step in your sales process, or an order for your product or service.

Now that you’ve created a need and demonstrated that you have both the ability and the credentials to fulfil that need, you should close by asking the reader to move to the next step in your sales process, which is, in this scenario, an appointment.

The best way to compel your reader to pick up her telephone and book an appointment is to explain how she will benefit from doing so.

Like your brochure, an appointment should be designed to impart some value to your prospect – regardless of whether or not she ultimately purchases from you.

Fortunately, if you sit in on one of your salesperson’s appointments (or record one of your own) you are likely to discover that you are already doing this. My guess is that one of your appointments typically begins with a fact-finding exercise (an informal audit, if you like). It probably then proceeds to the presentation of a set of preliminary recommendations. And concludes with an outline of how, if appropriate, you can assist your prospect with the implementation of these recommendations.

The good news is that, if you formalise this process – and explain it to your reader in advance – you’ll find she’s more likely to go ahead and schedule that appointment.

Use our simple five-step formula to turn under-performing lead generation advertisements into high powered sales tools.

Bill King and son, Stephen, were facing a dilemma, common to many business people. They had a great product on their hands. Something handymen and tradesmen would jump at. But they were having trouble launching it into the marketplace. As the product’s Australian distributors, the Kings had hit a brick wall. Hardware store owners were reluctant to stock the product, because it was new and, in their eyes, untried. As part of a coordinated marketing program, we set about writing an advertisement to achieve two objectives:

1. Encourage consumers to trial the product (an alternative to sandpaper, called FlexiFile)
2. Convince hardware store owners to purchase stocks of FlexiFile.

In this article, we look at the process for creating such an advertisement. And we show you how you can apply the same methodology to create your own high powered print advertisements.

One step or two?

Before you begin to create an advertisement for your product or service, there is an important decision to be made. Is it reasonable to expect the person who reads your advertisement to purchase your product purely on the basis of the information supplied? Or is the purpose of the advertisement to solicit an ‘expression of interest’? If you are selling a simple and inexpensive product, you may be able to make a sale ‘off-the-page’ in one simple step. However, if your product is complex or expensive, your sales process may need to consist of two or more steps. With a two-step campaign, your advertisement is what we call a ‘lead generation’ ad. In other words, it is designed to introduce prospects to a sales process – rather than to make a sale at that first point of contact. A lead generation advertisement would normally offer readers a free information package, report or sample. This ‘expression of interest’ would then be followed up with either a direct mail campaign, or a telephone or face-to-face presentation.

It’s as easy as AICDC!

There’s a simple, five-step process to creating a powerful advert. We call it AICDC – short for Attention, Interest, Conviction, Desire, Close. If you adhere to this simple process you will find it remarkably easy to create highly effective advertisements.

Grab their attention!

The most critical component of an ad is its headline. It’s the job of the headline to grab the reader’s attention – stopping her in her tracks. If your headline doesn’t capture the reader’s attention in a split second, she will simply turn the page without reading your advertisement. Try this simple test yourself. Flick through a newspaper or magazine and take note of what catches your eye. Your eyes will automatically skip over those articles that don’t interest you, and pause where something demands your attention. Your headline should make a big claim, in bold, no-nonsense language. This claim doesn’t necessarily have to be believable – in fact, the more incredible it sounds, the better – but it must be relevant to the reader. Of course, it must also be truthful. The FlexiFile headline makes such a claim: Miracle abrasive renders sandpaper obsolete! The inference here is immediately obvious. Anyone using sandpaper is doing things the hard way. There’s a better alternative. To find out what it is, the reader must read on. Ideally, your headline should take up at least 25% of your advert’s space. And the best headline is one that promises a clear customer benefit. The headline on the advertisement above does exactly this. Headlines that trumpet a technological or scientific breakthrough tend also to generate an excellent response. You’ll notice that the producers of television ‘infomercials’ favour products that can be promoted as ‘new technology’ (as well as those that are demonstrable). How many times have you seen a commercial for an exciting new ‘widget’ and found yourself fumbling for your credit card? In the FlexiFile advert, the breakthrough factor is emphasised through words such as ‘miracle’ and ‘revolutionary’. The following are two more examples of headlines that have generated enormous volumes of new business for our clients: Rest easy … that bastard’s pinching someone else’s hog! (Promoting a locking device for Harley Davidson motorcycles.) The world’s greatest marketing blunders – and how to avoid them in your business. (Promoting a business seminar.) A headline is generally reinforced by a sub-heading, as in the FlexiFile example: Amazing new FlexiFile is guaranteed to never clog – and to outlast ordinary sandpaper by up to three times! Often, the sub-heading will pre-empt the offer – providing the reader with an additional incentive to read on. Responsibility for attracting readers’ attention is often shared by the photograph or illustration. The role of a picture is simply to amplify the message transmitted by the headline. Before and after photos are particularly effective. If you have a product that lends itself to such a comparison, go for it! You’ll notice that both advertisements featured in this article make use of before and after photographs.

Building interest

While your headline/picture combination captures the attention of the reader, the responsibility rests with the first two paragraphs of your advertisement to secure her interest. We often accomplish this with a problem-solution formula, as in the FlexiFile example: Until now, sanding has been a frustrating and time-consuming exercise. This is because ordinary sandpaper is simply not made to last. Within minutes, it starts to clog and lose its abrasive surface, and soon falls apart. (Problem). And the solution? FlexiFile is an advanced silicone carbide sanding sheet that’s guaranteed never to clog.

Convince your readers

Use the remainder of your copy, known as the body copy, to build a compelling sales argument. To put it another way, this is your body of evidence. As a barrister is required to prove his case point by point in a court of law, you must be able to justify the bold claim you made in your headline. Describe the features and benefits of the product or service, and offer evidence to support your claims. When writing your advertisement, try to emulate the style of a newspaper report. The aim is not to trick readers into thinking it’s news. It’s simply that this is the format that most people are familiar and comfortable with. Newsy text also sounds more credible. Keep sentences short and interesting, with the most important points in the first few paragraphs. Don’t waffle, or get bogged down in technicalities. Use simple, layman’s language. And never insult the reader’s intelligence, by stating the obvious. Some copywriters try to be too clever or subtle, and end up simply confusing the reader. Write your copy to sell your product or service, not to win advertising awards. In a two-step campaign, it is important to remember to sell your offer (information package, etc) in your advertisement, not your actual product or service. You’ll get plenty of opportunity to do this if your advertisement is successful.

Stimulate desire

Desire is your emotional argument. This is the mental picture that you create to make the reader feel good about using your product or service. It’s like a virtual ‘test-drive’. We also call this technique, future pasting, because the reader is ‘teleported’ to a situation in the future. Stimulate desire by painting a word picture of the reader using and enjoying your product at some stage in the future. E.g. You’ll leave this seminar empowered with ideas to multiply the profitability of your business.

Closing your case

The close should be a simple, call to action. In the case of FlexiFile, it was a coupon, offering the reader the opportunity to obtain a free sample of FlexiFile from her local hardware store. (To encourage retailers to participate in this campaign, FlexiFile sold them sample packs and then purchased the coupons collected at the normal retail mark-up.) In a two-step advertisement the offer can take any number of forms. It may be a free product information pack, or a subscription to your company’s newsletter, even an invitation to a seminar or executive briefing.

How did AICDC work for FlexiFile?

From its first insertion in the Sunday Mail (Brisbane’s only Sunday newspaper) the FlexiFile advertisement motivated around 1,000 people to visit hardware stores around Queensland and request the free sample on offer. Similar results were then replicated with placements of this advertisement in select national magazines. As well as effectively ‘making a market’ for FlexiFile, the success of this campaign converted some retailers, who had previously opted not to carry FlexiFile, into enthusiastic stockists. FlexiFile had arrived! And it was all thanks to the simple, but effective principles of AICDC. While creativity does undoubtedly play a role, we have proved time and time again that the production of a successful advertisement is more science than art. And, as you can see, this is a science that anyone can master.