Why Waste Advertising Money?
Is your advertising a money waster? From direct mail to radio ads to internet advertising, do you know which part of your advertising is working…and which part is wasting your money?
Almost a century ago an advertising man from Chicago found a simple and inexpensive way to solve that problem. His name? Claude Hopkins. As an advertising copywriter, he was tired of the platitudes and puffery of most national advertising campaigns (like John Wanamker, he believed much advertising was a waste of money). For Claude Hopkins, if you aren’t testing the market by measuring how well (or poorly!) your ads are doing then your advertising is a hit or miss gamble.
In his book SCIENTIFIC ADVERTISING he shows you how to remove this gamble from your advertising. It’s all here. From making small controlled tests with a limited budget to split copy testing of headlines and short copy vs. long copy. Not just another memoir of advertising jargon and personal opinion. This is test marketing wisdom that has stood the test of time. Indeed, what you get today from any of the notable direct response marketing gurus is simply a repackaging of what Claude Hopkins said nearly a century ago.
Regardless of your product or service or target market, heed his words. They are as relevant today as when first published in 1923.Get this book and read it. You will never again waste money on any form of advertising campaign decided by personal opinion rather than measured returns.These chapters especially helpful!
- Test Campaigns: Almost any (advertising) question can be answered cheaply, quickly and finally by a test campaign. And that’s they way to answer them — not by arguments around a table.”
- Just Salesmanship: “Advertising is salesmanship. Treat it like a salesman. Force it to justify itself”.
“A mediocre salesman may affect a small part of your trade. Mediocre advertising affects all of your trade.”
“Ads are planned and written with some utterly wrong conception. They are written to please the seller. The interest of the buyer are forgotten. One can never sell goods profitable, in person or in print, when that attitude exists.”
- Good Business: “…most national advertising is done without justification. It is merely presumed to pay. A little test might show a way to multiply returns.
- Things Too Costly:Many things are possible in advertising which are too costly to attempt. That is another reason why every project and method should be weighed and determined by a known scale of cost and result.”
- Letter Writing;“Letters to inquirers, follow-up letters, whenever possible they should be tested. Where that is not possible they should be based on knowledge based on tests.”
- Offer Service:“Remember the people you address are selfish, as we all are. They care nothing about your interests or your profit. They seek service for themselves. Ignoring this fact is a common mistake and a costly mistake in advertising.“
- “People can be coaxed but not driven. Whatever they do they do to please themselves. Many fewer mistakes would be made in advertising if these facts were never forgotten.”
‘Nobody, at any level, should be allowed to have anything to do with advertising until he has read this book seven times.” — David Ogilvy
Customer Service Strategy
“Profit in business comes from repeat customers, customers that boast about your product or service, and bring friends with them” . —W.Edwards Deming
Taking customers for granted was easy…until THE recession crashed the party. Layoffs..foreclosures…bankruptcies…bank failures…budget cuts and budget freezes — the game has changed. And so have the rules.
- As markets go dry survival of the fittest moves your business square into your competitors’ cross-hairs. Up for grabs are your customers…and anything else that moves. Also smelling blood are the price driven bottom feeders. Because their markets have vanished these predators have reinvented themselves as “experts” in your niche field.
- Their strategy for getting your customers is simple: Beat any price. But trading margins for volume —- unless checked —-can cannibalize a market…turning once profitable business models into shipwrecks. Take note: Studies show it takes seven years for a brand to recover its value once it’s been discounted. Seven years!
- In this market anyone with money to spend should be treated like a king. Is your business getting it right? Are your customers getting more attention… better service…better quality…and greater value for their money?
- Service means survival. If you don’t love your customer, get another customer. If you can’t find a customer to love, get another business.
Question: What’s the purpose of a business?
Answer: To get and keep customers.Helping YOU do this in a frugal way for your business is the purpose of this blog.
- The sales marketing methods discussed here involve little risk . The focus is test campaigns…everything from prospect lists to phone scripts to follow-up letters is tested on a small scale. The reason is clear.
- If the test fails you are spared the needless expense of a big ad campaign. If successful, you expand your test…one step at a time ( crawl before you walk).
- Done right, any product or service can be marketed using this simple method.
So, if you want more bang for your buck, but without the risks, costs, and logistical bottlenecks of “traditional” marketing campaigns, this blog is for you. Go here for more info on Marketing Direct and what we can do for you.
Direct Response Marketing Winner
Outbound telemarketing delivers the highest response rates of all media.
So says the 2009 Response Rate Report (March 
2009) by The Direct Marketing Association (DMA). Some findings from the report:
- In the direct order sector, outbound telemarketing had the highest average response rate among all media (4.41% for house lists and 2.92% for prospect lists), followed closely by catalogs (3.95% for house lists and 1.85% for prospect lists) and direct mail (3.65% house lists and 1.65%-prospect list).
- Response rates were higher than in previous years, perhaps as a result of better list management and more sophisticated targeting.
- The Catalog and Retail segment outperforms other industries in direct mail response rates.
DMA’s Response Rate Report was conducted through a survey emailed in December 2008. When the survey was closed, 1,175 responses were received. Although the report surveyed twenty-four major industries, only thirteen are covered in-depth in this report.
From personal experience, I’ve found that when handled properly, outbound telemarketing can deliver sales conversion rates much higher than the response rates from direct mail or email campaigns that are not supported by follow-up calls.
Sales Marketing Support via Outbound Telemarketing
Outsourcing to a telemarketing call center or doing it yourself, the secret to sales marketing support with outbound telemarketing is to start small and keep it simple.
Test your program with one telemarketer…using low-key phone prospecting and on time call backs supported with follow-up letter writing to your best prospects.
But outbound telemarketing metrics is more than getting appointments, increasing response rates, and building your customer base.
Consider the following...before you pick up the phone!
- Make outstanding service to customers and prospective customers your goal with each outbound call. When customers receive great service, they reward you with repeat business and more referrals.
- Be on time with your follow-up calls. Prompt follow-up makes you outshine the competition and helps build long lasting business relationships.
- Boost your customer care by having sales rep and telemarketer work together…as a sales marketing team. Example: When cross-selling lead develops have your sales rep off-load the sales data to your telemarketer…who then makes follow-up call to the prospect. This gives field sales more time to develop new accounts and boost sales of their bread-and-butter accounts. Also, this dialog expands product knowledge and prospect call list for telemarketer. Best of all, your prospect enjoys an exceptional sales experience by getting lots of attention and great follow-up service!
- ACTION PLAN: Sit down with sales marketing team. Explain how your phone person or call center will help them build their customer base by improving the overall customer experience. Show them results from your outbound telemarketing metrics (see below) so they grasp the numbers and understand the efficiency of telemarketing done right.
DETERMINE TELEMARKETING METRICS: Get a true and accurate picture.
- Determine (1) cost per outbound telemarketing phone hour, (2) cost per outbound call, and (3) cost per order (or appointment). Control of these outbound telemarketing metrics is vital to any call center’s success. Best advice I can give you is this: when starting your outbound program, keep it simple. Use one telemarketer. Do not get talked into using multiple phone people when testing your program . Same goes when outsourcing your program to a call center. ONE TELEMARKETER! Trust me on this one!
- Outbound telemarketing costs depend on total dialings per hour…total decision maker contacts per phone hour…and total appointments per phone hour.
- Full time outbound telemarketer in business to business telephone program can make 25–30 completed calls per day — i.e., call in which decision maker is reached. In part-time effort, 5 to 7 completed calls in an hour are generally attainable. But careful who you hire. The right telemarketer will prove invaluable. The wrong person can cause real harm. This checklist may help.
- ACTION PLAN: Set a goal — say 90 days — for getting 50 new qualified sales leads from outbound telemarketing .
- Determine break-even points based on outbound telemarketing metrics including …product margins…realistic close ratios from qualified appointments…realistic average orders…buying cycles — both frequency of purchase and likely dollar amount of repeat orders.
- Include costs for literature and product information. Test call scripts, follow-up letters and call backs to improve sales efficiency of these sales marketing efforts.
- Track results. Set realistic goals. Include number of completed calls per day…dollar value of sales per quarter.…appointments made by phone and results of these appointments.
CONTROL YOUR COSTS BY KEEPING IT SIMPLE!
- Sales marketing via outbound telemarketing is much easier to control than inbound telemarketing. And the reason is clear. You control (1) who is making the calls and (2)when they are being made. Therefore, keep it simple. Start with a simple offer…simple script…and a highly focused prospect list.
- Have some sort of preparatory mailing. Brief and introductory. Test it two ways. (1) Call first…saying “I’d like to send you something with your permission and get back to you after you’ve had a chance to look it over. You’ll find you can save a lot of money with our services. In fact, we’ll give you a 30% discount on your first order”. NOTE: For help creating sales letters that pull orders, get appointments, and make sales go here.
- Second way to test sales marketing via outbound telemarketing is to call after the mailing…and not before.
- Both methods minimize intrusion factor…making it easier to “get in the door”. Saves time for telemarketer.
- ACTION PLAN: Try this method on your house list of existing prospects. Have your telemarketer contact 100 prospects. Test mailing and calls two ways…as described above.
- Follow the cardinal rule of direct response marketing: test everything on a small scale. Gradually expand your in-house telemarketing…but only when test results merit growth. By testing and measuring response rates you’ll know what’s working…and what’s not. For a bit more light on this subject see Half My Ad Money Wasted.
Use experience gained and information gathered from each test to expand program. Consider outside lists. But keep your resources focused. Concentrate on building enthusiasm and confidence in using telemarketing as sales marketing support. Set and achieve realistic goals. Track, tally, and trumpet each success. Let everyone know the program is working!
Customer Care Strategy
Remember before the recession — when customer relationship management (CRM) and customer care strategy were not a priority?
Now that customers are fewer, their loyalty shorter, and their demands greater, the game has changed. Up for grabs is anything that moves — including your customers. To build a stable and consistent client base and keep your customers from drifting away the following customer relationship management strategy may help your sales marketing team.
- Customers First. Focus your customer care program on what’s most important — the wants and needs of your existing customers. Sure, getting new customers is important. But so is keeping your competitors from stealing your existing customers! Telemarketing done with the right personal touch is a great way to renew relationships with lapsed clients and build your customer base. Make calls to your prospect base. Add routine emails and personalized First Class follow-up mailings to these folks. Targeted sales marketing projects like these help cultivate your customer and prospect base…spreading good will and showing them you care.
- It’s About The Customer, Stupid! The most graphically gorgeous and clever sales literature will fail…unless it appeals to valid needs of your customer. A simple letter — black and white —addressing these needs will out pull slick mailings that miss your customer’s “sweet spot”. Write your own sales letters and follow-up notes. You can do it! What’s more, by using telemarketing to follow-up those letters you’ll boost your response rates. Here’s good advice on making those sales and business letters work for you.
- Automate Your Sales Process. Is your prospect list scattered about on slips of paper, business cards or sticky notes? Get organized. Automate your sales marketing process so you can build your prospect list and have more time to contact new customers and better service the ones you already have. See the photo below? Those were the days before customer relationship management software (CRM) changed the playing field.
- The right CRM software (ACT is a popular CRM program. My favorite, however, is TELEMAGIC) will simplify everything you do.…adding speed and precision to your marketing efforts.
- EXAMPLE: Send
prospects you’ve visited or called in the last week personalized, first-class follow-up letters detailing key points of your discussions. Prompt follow up always wins…and makes YOU outshine the competition. From lead tracking to to getting appointments — crm done right will change your life and keep your customers smiling. Don’t leave home without it.
- Get Closer To Your Customers. Use your phone! No other marketing medium — not television, not radio, not direct mail, not print advertising, not email —- gives you such a powerful, persuasive, and cost efficient person-to-person selling medium as telemarketing. By speaking directly with prospects you can gauge each prospect’s interest level in your offer and thereby qualify your prospective database. Done right —without the hype or pressure of old way boiler room selling — there is real efficiency in telemarketing, efficiency you can use every day to build a targeted sales marketing database to get and keep customers. Here are a few specific suggestions:
- For Contacting NEW Prospects: Why not increase the quality, response rate, and speed of your customer care program by having one telemarketer target new prospects. From this call list cull the most qualified candidates for follow-up calls to further cultivate and qualify their interest in your offers. Never forget, building a highly targeted database is the key to generating qualified sales leads and getting new business appointments. Adding new prospects to your sales funnel is one thing. But qualifying their interest will build that list into a goldmine you can return to again and again for future business.
- For Winning New Customers: You’ll find direct mail and email shortens the sales cycle of almost any telemarketing program…especially when it comes to winning NEW customers. Test scripts, literature offers, and call back programs to improve response rates. When handled properly, outbound telemarketing can deliver sales conversion rates much higher than the response rates from direct mail or email campaigns that are not supported by follow-up calls.
- For Launching New Products: Now you can have in a well planned telemarketing program an efficient way to tell prospects and customers about your new products and services. But without any costly travel or wasted commuting time. A well executed telemarketing program will accomplish this — it’s good business because it will improve efficiency, boost sales and deliver customer care that keeps your customers from drifting away.
Famous Advertising Quote
“Half the money I spend on advertising is wasted.
Trouble is, I don’t know which half.”
.….John Wanamaker
From internet advertising to print ads to direct mail, do you know which of your ads are pulling the most business? John Wanamaker— an advertising and merchandising genius — struggled with this same problem.
In 1876 — a full century before Wal-Mart or internet advertising — he created the first Superstore in America. Calling it “the largest space in the world devoted to retail selling on a single floor”, he focused on high volume and low costs. Indeed, before Wanamaker invented the “price tag”, most buying was done by haggling!
Realizing the power of advertising on consumers, Wanamaker wrote many of the ads himself…filling them with conversational language that discussed the bargains of the day. He was a man of integrity and insisted his ads be honest, with absolutely no stretching of the truth. He used money back guarantees…fixed pricing (no haggling—-ever!)…and in January 1878 launched the first ever White Sale. Although he was the first retailer to place a full page newspaper ad (1879), he advertised outdoors on billboards and on specialty items such as pencils and balloons. His message got through. By 1881 his flagship store in Philadelphia had almost three acres of selling space on one floor, 46 departments and more than 2000 employees!
But newspaper advertising was where Wanamaker poured it on . He used bold, consecutive full-page ads which were like news items themselves. So dominant and unprecedented was this method of advertising that it became known as the “Wanamaker Style” of advertising. The style was copied by other retailers…and played a major role in the rapid rise of independent city daily newspapers.
Whether your advertising is online or print, there’s lots to learn from Old John. But his quip “Half the money I spend on advertising is wasted. I just don’t know which half” is perhaps the most valuable lesson. Heed his words. Then read Scientific Advertising. After only a few chapters, you’ll have a leg up testing which ads are working…and which ones are wasting your money.
Sales Leads Business Marketing Method
Here from the real world of business marketing is straight talk on sales leads by telemarketing. 
Q: Does Telemarketing For Appointments Still Work?
A: Because the information age has leveled the playing field, the days of getting appointments on the first call are over. Business marketing by phone today is about qualifying prospects for future contacts. Getting appointments from a single cold call does happen. But a sales lead strategy built on that foundation will fail.
Q: What Goals Are Realistic For Sales Prospecting?
A: Once you realize that appointments are not the goal of your first call, the monkey is off your back. You are calling to get information. That means finding out if a particular prospect is suitable for being added to your sales funnel. Picture a crowded room. Your goal: find the folks interested — more or less — in what you offer. How to do it? Ask for a show of hands. There, that’s the goal of your cold call — (1) finding the right prospects; (2) separating them from the crowd: then (3) qualifying their interest level. My goodness — now you have three goals! Also, phone prospecting is a form of direct marketing. And building a highly targeted database is the key to any successful direct marketing campaign. Therefore, view each call as a means for fine tuning your sales funnel database. It’s a work in progress that never ends!
Q: How Do I Pitch My Call?
A: Always use a script. It keeps you focused and in control of the call. Make your introduction short, simple, to the point — something you can deliver in twenty seconds…without being rushed.
Q: Does Hard Sell Work ?
A: Avoid scripts that force you to speak and act in a manner that makes you uncomfortable. Relax and be yourself. After that, the rest is easy! Remember, the phone is a great way to build prospect lists, increase customer loyalty and win sales. The secret is to keep your call relaxed, almost informal tone.
Q: How Do I Qualify Prospects?
A : Conclude your introduction with a simple “yes” or ““no” question. How your prospect answers will indicate if they are a qualified prospect…or a prospect you want to drop. Used early in your call this simple question helps you spot good prospects from the not so good prospects. Remember that crowded room example? Your question is asking for a show of hands. Some folks will raise their hands, some will not.
Q: How Do I know My Script Is Working?
A: That’s easy — delivering your “pitch” without interruptions from your prospect is a sign that your script is working — keeping you and your prospect focused on you.
Q: OK to Read The Script…or Memorize It?
A: Reading is fine. The secret is making your delivery appear unrehearsed. Follow Winston Churchill. His speeches are among the greatest in the English language. He toiled endless hours over their every detail. Yet when delivering them he appeared completely at ease… almost casual in his presentation. Hence, his quip that “The very best impromptu speeches are the ones written well in advance.”
Get more straight talk about cold calling, getting appointments and sales prospecting at Marketing Direct website.
Telemarketing Script
Stay on course and use a script
An effective telemarketing script is a navigational chart that helps you control the progress and content of your call. Done right, it elevates your call.…transforming it into pleasant, interactive dialogue.
OK, I hear you — all the telemarketing cold calls you receive, you say, are not that way at all. The caller sounds “stiff”…the pitch awkward and the cold caller’s persistence becomes obnoxious. That’s the norm. Telemarketing done wrong. What follows will help you avoid that train wreck…and make you a cold calling champ.
- Say exactly who you are: The prospect you are calling is at a disadvantage. He or she does not know your name or anything about you. Prospects will refuse to speak with you unless you immediately confront these issues. State the exact reason you are calling. Make your introduction specific and brief…twenty seconds or less.
- Immediately hit upon a benefit to your prospect. A benefit can be a key word or phrase. It should trigger an interest in your prospect — i.e., make your prospect want to learn more about you.
- Be provocative. Ask open ended questions that cannot be answered “yes” or “no”. Your goal is to promote interaction…and get your prospect to reveal information.
- Don’t interrupt. Let your prospect do most of the talking.
- Take “No” for an answer. The number one complaint of telemarketing prospects is that salespeople will not take “no” for an answer.
- Qualify your prospect for future contacts. Ask them to suggest what they would like you to to —- “when do you want me to contact you again?”. Drop those prospects who will not suggest a call-back date.
Direct Response Marketing
Has the recession forced you to rethink how you get and keep customers? Slick ads are out. Frugal marketing is in. Which means the tested principles of direct response marketing are once again in favor.
- These tested principles are not “stylish”.
- They are not “trendy”.
- And they are not “new”.
Developed by advertising giants like David Ogilvy (see video below), John Caples, Claude Hopkins, and Max Sacheim these techniques are the result of spending billions of dollars over the past hundred years testing the selling power of different kinds of direct response ads, catalogs, sales letters, direct mail and e commerce.
From these years of testing come the methods of successful direct response marketing .
To conclude this post, a surprise guest —- Sir David Ogilvy. His comments will interest you.
Why Test Marketing?
Fed up with the risks and bottlenecks of “traditional” marketing methods?
I’ve been in marketing and advertising for forty one years. Mail order and direct response is my niche. Writing ads and testing how they pull is what I know how to do. Radio…TV…direct mail…print ads — I’ve done it all. But to each medium the same cardinal rule applies —- test everything on a small scale before spending money on a large scale.
Research proves that one ad can sell 151/2 times more than another…that with small differences in copy or headline one ad can pull FIVE times more orders than its competitor.
The Depression changed everything!
But it wasn’t always so! In the early days of advertising there was almost no research. Then came the depression……when cost-conscious advertisers DEMANDED to know the factors behind the success or failure of advertisements (now do I have your attention?)
This is when meaningful, scientific advertising really began. This is when WISE advertisers learned how to test and measure the efficiency of their selling efforts.
They learned what kinds of headlines attract the most readers…why copy under pictures gets higher reading…which kinds of pictures get attention…how split-copy advertising works…which appeals succeed…which fail.
They learned that almost any question about the effectiveness of their advertising could be answered cheaply, quickly, and finally by a test campaign. And that’s the only way to answer them — not by arguments among corporate decision makers.
Make sense? Or still not convinced?
Keep checking back…I’ll have more to say about this in future posts.