Increase Your Sales With Targeted Marketing

Monday, December 27, 2010 Posted by John Tabita 2 comments

In my last post, I talked about how raising prices can actually bring you in more business, reduce your workload and make you more profitable. The reason is simple: raising prices drives away the cheapskate customers. And what’s left are the ones who spend the most.

Another way to accomplish this is to deliberately target customers who spend the most. The idea here is to clone your best customers.

I spoke with Scott Channell on this very topic last week. Scott is an author, speaker and sales consultant – and an expert on setting sales appointments. I’ve been getting his marketing emails and following his advice for the past few years. I was familiar with the concept of targeted marketing, but I never got around to it with my web business. So when I read Scott’s emails on the subject, I decided to try it with my telemarketing department.

I started off by looking at sales from the previous year, 2008, and identifying what types of businesses spent the most money with us. I gave the biggest spenders – attorneys – to my best appointment setter.

The results, shown in the graph below, were nothing short of dramatic. By the end of 2009, we had increased attorney sales by more than 660 percent over the previous year.

Looking at 2009, the next graph shows how dramatically attorney sales jumped in June when we began this strategy.

Targeted marketing works because it makes your efforts more effective. You can be super-efficient and make 150 calls a day. But if those 150 calls are random and non-targeted, your results will be less than stellar. Why not focus your efforts on calling those who buy more often and spend more? We did, and the results speak for themselves.

More Business Than You Can Handle?

Wednesday, December 22, 2010 Posted by John Tabita 0 comments

Even during prosperous times, it’s suprising to hear this. Yet, even in an economic downturn, some customers will tell us, “I have more business than I can handle.” Some think that’s a good thing… while others are overwhelmed by it. When we tell them that they ought to “raise their prices,” we often receive a puzzled stare back in response.

The website FreelanceSwitch has posted a list of the “Top Ten Signs You May Be Charging Too Little.”

10. Your clients mistake your daily rate for an hourly one.

9. You’ve won every job you’ve ever bid on.

8. Even though you work 80-hour weeks, your income level qualifies you for welfare payments.

7. New clients are always asking what “the catch” is.

6. Clients pay your invoices in cash from their wallet.

(You can read the rest here.)

The Marketing Blogspot has an interesting and informative post on the concept behind how raising prices can actually bring you more business. The author says that most people believe that raising prices equals less business because fewer people will want to do business with them – when the exact opposite is actually true.

Innovate or Die

Wednesday, December 8, 2010 Posted by John Tabita 1 comments

I read a great definition of capitalism recently:

A system in which there are winners and losers, in which someone with a brilliant idea gets rich, while most of us get by.

I think of Apple CEO Steve Jobs when I read that. He had several brilliant ideas (like the Macintosh, the iPod and Pixar, to name a few). He’s rich while I’m getting by.

Then there’s Facebook founder Mark Zuckerberg. I should have been Mark Zuckerberg. I was a web designer and my partner was a web developer. We could have created Facebook… we had the technology. But Mark Zuckerberg had the brilliant idea. He’s rich while I’m getting by.

Guy Kawasaki, one of my favorite speakers, encouraged a group of high school students to “challenge the known and embrace the unknown.” The story he shared is a telling example of innovation and the lack thereof:

In the late 1800s there was a thriving ice industry in the Northeast. Companies would cut blocks of ice from frozen lakes and ponds and sell them around the world. The largest single shipment was 200 tons that was shipped to India. 100 tons got there un-melted, but this was enough to make a profit.

These ice harvesters, however, were put out of business by companies that invented mechanical ice makers. It was no longer necessary to cut and ship ice because companies could make it in any city during any season.

These ice makers, however, were put out of business by refrigerator companies. If it was convenient to make ice at a manufacturing plant, imagine how much better it was to make ice and create cold storage in everyone’s home.

You would think that the ice harvesters would see the advantages of ice making and adopt this technology. However, all they could think about was the known: better saws, better storage, better transportation.

Then you would think that the ice makers would see the advantages of refrigerators and adopt this technology. The truth is that the ice harvesters couldn’t embrace the unknown and jump their curve to the next curve.

Challenge the known and embrace the unknown, or you’ll be like the ice harvester and ice makers.

This reminds me of the company I worked for in the mid-nineties. In the 1980’s, the company developed a large-format computer painting machine. At that time, all billboards were hand-painted, but this machine could produce signs faster, with greater consistency and with colors more vivid, than the best hand painters could. For the next ten years, they dominated the industry.

But by the late-nineties, advances in technology enabled other companies to develop large-format devices whose output began to first match, and then exceed, what the company's machines could do. So now anyone with some capital could buy a $20,000 large-format printer, produce a product superior to what the company’s multi-million dollar patented painting machines could, and sell it for much less… which they did. During the dark days of plummeting profits and subsequent lay-offs, one of the VP’s told me that they had gotten “fat and complacent.” They were in danger of becoming an ice harvester.

It also reminds me of the industry I’m currently in, the Yellow Page industry. In the mid-nineties, when companies like AT&T and Ameritech were enjoying high profits from their Yellow Page monopolies, two Stanford University students were quietly setting up shop in a garage in Menlo Park, CA. I’m sure that the multi-billion dollar telecommunications companies could never have imagined that this newly-formed company named Google, with its measly $100,000 of investment capital, would ultimately be poised to topple them as the preferred medium that consumers would use to search for local business information.

So what’s the lesson for the small or medium-sized business today? Never assume that the products and services you sell today are going to be the same ones you sell tomorrow. If you focus exclusively on the how and neglect what you do and why you do it, then you’ll find yourself in the same position. Yellow Pages have been extremely successful “connecting buyers with sellers,” but they were asleep at the wheel and didn’t see that the Internet could fulfill that role and be in position to eventually displace their print directories. With all of their capital and resources at their disposal, they could have been Google. They should have been.

Internet Marketing 102

Saturday, December 4, 2010 Posted by John Tabita 6 comments

In my previous post, Internet Marketing 101, I explained the difference between Search Engine Optimization (SEO) and Pay-Per-Click (PPC) advertising. (If you missed that, I suggest you read it first before continuing.) In Internet Marketing 102, I’ll explain the pros and cons of each to help you decide which might be best for you.

PPC Pros and Cons

Pay-Per Click (PPC) ads have the advantage of getting you instant ranking. You can create an ad today and be #1 on the search results tomorrow… provided you are willing to pay top-dollar for the search phrases you want. For this reason, many marketers use PPC to test a product. You can create a short campaign, set a limit on how much money you’re willing to spend, and quickly know if there’s an online market for your wares.

And here’s another tip for product testing. More people use Google than any other search engine. (Over 90 percent of all searches are done using Google.) That means that if you’re serious about selling online and determined that PPC is the way to go, then you’ll want to use Google’s PPC program, AdWords. But because of the high volume of traffic, Google can command top dollar for their cost-per-click prices. So smart marketers test their product on Yahoo! instead, because their prices are more affordable and their ad program simpler to use than Google’s.

Another advantage of PPC advertising is that it’s do-it-yourself. I say that somewhat reluctantly, however, because in Google’s world, “do-it-yourself” doesn’t mean easy. One expert describes it as “not rocket science… but darn close.”

The only reason PPC is remotely do-it-yourself is because Google offers an extensive (and free) online training course to help you learn their AdWords program. (In case you were wondering, they don’t offer one for SEO, because they want to sell advertising, after all.) And while SEO may not be rocket science, it is computer science – and Internet marketing savvy, all rolled into one.

The disadvantage of PPC is that you’ll be bidding against similar companies for the search phrases, or “keywords,” you want… and the highest bid gets the best ranking. In a highly-competitive field, such as weight loss or work-at-home jobs, the cost of your keywords may simply be too high for you to see a return on your investment. Compounding this is that, if you jump in without really taking the time to learn how it works, it’s easy to lose your shirt.

SEO Pros and Cons

If the main advantage of PPC is instant ranking, then the biggest disadvantage of SEO is that it takes a long time – too long, in fact, if you’re testing a new product for marketability. Achieving top ranking in the natural results can take several months. But the good news is, once you’ve gotten a top ranking, it cost much less to keep you there than it did to get you there. Here’s where one of SEO’s main disadvantages – its initial high cost – becomes an advantage if you’re in it for the long haul.

SEO has a much higher cost to get started – anywhere from $5,000 to $8,000 in your first year. But most experts will tell you that SEO is cheaper in the long run. Here’s why.

With PPC advertising, your costs will never decrease. In fact, they may increase as your keywords become more competitive. But that’s not the case with SEO. Most SEO companies charge an initial $2,000 - $4,000 to do keyword research and optimize your site’s code, structure and content. This is Phase 1.

Phase 2 is getting your site to begin to climb the long ladder to top ranking. To make this happen, a good SEO specialist will do things like write press releases and articles or create videos and distribute them on various sites across the web. They will also look for ways to get top sites to link back to yours. These help to improve your Page Rank. This phase may cost $300 or $400 a month for 6 to 8 months.

But once you get top ranking, they may only charge $150 a month to keep you there. So your first year investment may total more than $6,000, but Year 2 may cost you less than $2,000. And if your total online sales gross a quarter-million a year… well, you do the math.

I once met with the owner of a casket manufacturing company who was very successful selling caskets online with PPC advertising. But they were spending several hundred dollars a week to do so. In the scheme of things, even if they were spending $20,000 or $30,000 a year for PPC, they were still getting a return on investment. But if they could invest in SEO and ultimately reduce that to $2,000 a year, why wouldn’t they? (Which is why they were talking to me.)

That brings up another advantage of SEO. More people look at (and click on) the natural search results than the paid ads. So ranking high there may drive in more business over the long run than PPC.

To recap, PPC is great for achieving instant ranking and is more do-it-yourself than SEO, but it’s easy to lose your shirt if you don’t know what you’re doing. SEO takes longer and has a higher up-front cost, but is usually less expensive in the long run. But it’s much harder to learn than PPC, so it usually requires hiring an expert to do it for you.

But PPC vs. SEO is not always an either/or proposition. Many successful companies use both. The key is to measure and monitor both to be sure you’re seeing a return from each.

Internet Marketing 101

Monday, November 29, 2010 Posted by John Tabita 2 comments

My dad has been experimenting with search engine marketing and Google AdWords. The other day, he called me with a question. He wanted to know how to create an ad that would appear on Google…not the top or right section where the paid ads appear, but in the main center portion of the page.

Dad was confused; he was trying to do something that’s not even possible. Most small business owners are equally confused about search engine marketing. A recent survey revealed that the majority of small business owners feel that Internet marketing is very important. Yet, 59 percent of small businesses with web sites don’t use paid search marketing... and of those, 90 percent have never even attempted it! So if you want to know more about search engine marketing, but you don’t know a PPC from a SERP, you’ve come to the right place. Here’s my Internet Marketing 101 Primer.

(I’m going to use Google in my example, because they are currently the 1000 lb. Internet marketing gorilla. But the information here applies to all search engines.)

When you type in a search phrase in the search box, Google serves up several pages of results. This is called the Search Engine Results Page, or SERP. (There’s one acronym down.) The search results come in two varieties, paid and natural, and they appear on different parts on the page.

Paid Search Results

The search results at the very top and on the right are paid ads, as shown below:

These are called Pay-Per-Click (PPC) ads because the advertisers pay Google money each time their ad is clicked on. The advertiser who is willing to pay the most for a particular search term (such as “fishing lures” in my example) is the one who will appear at the top.

Natural Search Results

The search results that appear on the main body of the page are not ads. These are called the “natural” or “organic” results.

Where my dad got confused is that, appearing under each website listed in the natural search results, there is a short description, which looks similar to the paid ads on the right. But this description is not a paid ad… it’s a snippet of code that Google and other search engines pull from the HTML code of the website:

As I said, these are not ads. You cannot pay Google to appear in the natural search results. Google’s complex (and highly secret) mathematical algorithms determine who gets well-ranked and who doesn’t.

To achieve a top ranking (especially in a highly competitive field), you must either be very smart, or you must hire someone who is very smart to do it for you. These very smart people are known as Search Engine Optimization (SEO) specialists. Part art and part science, Search Engine Optimization is the process of making a website’s code, structure and content as “search engine friendly” as possible in order to get the search engines to rank it as high as possible on the Search Engine Results Page (SERP).

When I ran my web business, I helped clients get good search engine ranking by sub-contracting the services of these very smart SEO people. But in order to explain the benefits and pitfalls, I also had to be able to talk about it in non-technical terms. Here’s as non-technical as it gets: search engine marketing is only successful if you get a return on your investment.

Some companies choose to exclusively use Google’s Pay-Per Click to sell their products online. Others use search engine optimization. And still others use both. What you choose to do depends on many factors, and each one has its advantages and disadvantages. So it’s not a question of which is best, but which is best for you. In my next post, I’ll outline the pros and cons of each to help point you the right direction.

Using Your Voice for Maximum Impact

Saturday, November 20, 2010 Posted by John Tabita 0 comments

You’ve probably heard the saying, “It’s not what you say, it’s how you say it.” As a telemarketing manager, it used to baffle me how two telemarketers could deliver the exact same pitch and yet one would set five times more appointments than the other. I’ve come to believe that how we say it is at least as important as what we say.

The reason for this lies in the physiology of the brain, so here’s some Science 101. But don’t worry… I’ll keep it simple.

Your brain is made up of many parts, but for our purposes, I’m only going to talk about two. The first is the outer portion, or the neocortex.

The neocortex is our “Thinking Brain.” It’s primarily responsible for things like:

  • Rational thought, Logic and Language
  • Reasoning and Problem solving
  • Judgment and Impulse control

The other portion is the limbic brain. This is our “Feeling Brain.” The limbic brain is the first part of our brain to react to anything we see, hear, feel, etc. In other words, the first response we have to any situation or event in an emotional one… because all sensory input hits the limbic brain before the neocortex. This means we feel before we think.

Now that you know a thing or two about the brain, which part do you suppose controls decision-making?

Is that your final answer?

If you picked the limbic “feeling brain,” then you answered correctly.

Does it surprise you that the feeling brain is what drives decision-making rather then the thinking brain? It doesn’t if you’re in sales, because you’re probably familiar with this well-know quote:

“People usually buy on emotion and then they justify it with logic.”
- Zig Ziglar

Science is now confirming what salespeople have known for years – and the physiology of the brain explains why it is so.

This means that, as sales people, business owners and marketers, if we want to persuade and influence others’ decisions, we must communicate to the feeling portion of the brain more than the thinking portion. It’s not that people don’t want logic, facts and figures when making decisions – they do. It’s just that logic doesn’t drive behavior and cause people to take action… emotions do.

Need more proof? Let me channel Cliff Clavin for a moment. The word emotion comes from the Latin word emovere. Here’s a word picture:


It’s also where we get the word motivation. The bottom line is, we don’t move or make any decision unless our emotions are involved.

So what does this have to do with using your voice more effectively? Well, everything… because the limbic “feeling brain” also processes vocal intonations or “tone of voice.” This means that your tone of voice is the direct link to the “emotional mixing board” in another person’s brain. Your tone of voice has a huge impact on the other person’s emotional response – for better or for worse…

Creating Value Propositions That Sell

Friday, November 12, 2010 Posted by John Tabita 1 comments

In a SpongeBob SquarePants episode, Mr. Krabs sees a group of tourists outside his restaurant, the Krusty Krab. With dollar signs in his eyes, he hurries out to entice them inside. As they scurry past, he shouts:

“Don’t you want to give me your money?”

Needless to say, they continue on without giving him so much as a moment’s notice.

Whether it’s busy tourists or busy decision makers, no one cares about what you want or what you’re selling. That’s where a strong value proposition comes to the rescue. Jill Konrath, author of Selling to Big Companies, defines a value proposition as:

...a clear statement about the tangible business results customers get from using your product, service or solution.

She goes on to say that a strong value proposition “always includes movement,” and describes that as:

increasecutimprovesavefree uprevitalize
strengthen improvegrowbalanceminimizemaximize

So what types of things can you increase, enhance, shrink, improve or revitalize? That depends on what you’re selling, and to whom. Since my company sells advertising, we can increase, improve, strengthen and grow things like:

  • revenue, profit, sales
  • prospects, leads, customers
  • customer base, market share
  • return on advertising investment

So a “winning value proposition” for us could be:

We help businesses acquire new customers and increase their market share, without wasting money on advertising that doesn’t work.

Once you’ve created a strong value proposition, use it in your phone calls, emails and voice mails, in your print and web copy, and at your networking meetings. Go ahead, you give it a try.

Can You Hear Me? Over...

Tuesday, October 26, 2010 Posted by John Tabita 0 comments

Technology is wonderful… except, of course, when it’s not. Like when my parents have something “really important” to tell us... and they call our house phone, my cell phone and my wife’s cell phone… all in a matter of minutes. (We love you, Mom and Dad, really.)

Or like the time the scoutmaster needed a permission slip for my son’s upcoming campout. He sent me a private Facebook message. Unfortunately, I hadn’t been on Facebook for several days and showed up to the meeting without the slip.

New technologies often replace older technologies. (Do you remember floppy discs? No, neither do I.) But oftentimes, new technologies merely supplement an existing one. Friends and family now have several options to communicate with me: They can call my cell phone or my landline, email me, text me, send me a private Facebook message, or post something on my Facebook wall.

It’s no different in the business world. No one is disconnecting their fax or phone line because they now have corporate email. But many companies have decided to stop all their traditional advertising because of this thing called “The Internet.” But is that really the wisest thing to do?

Recently, I needed a new printer, so I began looking at the wireless all-in-one printer/scanner/copiers on the market. My hot button was the high ink cost and the fact that most printer manufacturers combine the cyan, magenta and yellow ink into a single cartridge, forcing me to throw it out when only one color runs out. So I wanted one with four separate ink cartridges and a low cost-per-page.

I decided to research the two brands I’m most familiar with – Epson and H.P. After doing several searches on both brands and discovering that there are far too many printer models (and even more consumer opinions on each of them), I needed a YouTube break. As I’m watching a favorite video, suddenly an inkjet printer ad pops up at the bottom. Coincidence? I think not.

Later that night, a television commercial for Lexmark inkjet printers interrupts my regularly-scheduled viewing. Lexmark, it seems, claims to be one of the most ink-efficient printers on the market. So off to my computer I go for more research.

What finally completed the buying cycle for me was CNET, where I read both professional and consumer reviews on the various printer models. Yes, I did all my research online (and even made my purchase online), but it was good ol’ fashioned television advertising that got me to buy a brand I wasn’t even considering.

Advertising channels are becoming more and more fragmented, so it’s no longer possible to reach a mass market. Smart marketers are taking advantage of every advertising channel that will generate a lead. And something it takes all of them working together to generate a single sale.

As I said before, your all of your marketing should work together as a team. Pick the best players (i.e., advertising mediums and marketing methods) for your type of business, then work them to generate that one sale. And then the next one. And so on...

Yellow Page Advertising, Part 5: Google Search vs. Internet Yellow Pages

Monday, October 4, 2010 Posted by John Tabita 0 comments

I always find it interesting (and refreshing) when a search marketing company has something positive to say about the Yellow Pages. As someone who ran a web development business for over 5 years, I can certainly understand their bias. But it seems that the folks over at Search Engine People have decided to go with the facts rather than anecdotal evidence regarding the effectiveness of Yellow Page advertising.

Blogging on this topic, Tom Tsinas looked at one of his client’s year-to-date website analytics. Comparing the number of visits that came from Google to those that came from Internet Yellow Page (IYP) sites like Superpages, he found that, overwhelmingly, Google won for sheer volume of traffic: 5,504 to 1,261.

But digging deeper, he found something interesting about the quality of traffic that came from the Internet Yellow Page sites.

He found that the bounce rate (i.e., number of initial visitors who “bounce” away to a different site, rather than continue on to other pages within the site) was much higher with the Google visitors: 55.04 percent compared to 27.07 percent. He also found that the IYP visitors spent more time on the site, visited more pages, and that almost all of them were new visitors to the site. His conclusion?

Clearly Yellow Page visitors are more engaged than Google’s. They also 100% less likely to bounce, view 20% more pages, spend 12% more time on the site and, with almost 90% of the traffic being from people who’d never been to the site, reach a different audience!

Regarding the quality vs. quantity of traffic, Dick Larkin of WebListic, Inc., an Internet marketing firm, puts it like this:

...there are more searches on Google in a few days than there are in all the IYPs combined for a year. However, the QUALITY of users on IYPs is much higher than of general web search. I define quality as how close the searcher is to making a buying decision.

See, it’s easy to fire off a few hundred searches on Google before taking any action. However, on a typical Internet Yellow Pages, you have to enter multiple pieces of information (keywords, location, state, etc.) which is more time consuming, and also filters out searchers who aren’t really interested in finding a local business.

Someone searches an IYP when they’re serious about local information.

This makes sense. A large percentage of people using search engines like Google are likely to be in research mode rather than buying mode. But people who use Internet Yellow Pages have already decided to buy and are merely looking for a local merchant from whom to buy. In a joint study, TMP Directional Marketing and comScore found that IYP sites such as and account for 60 percent of local IYP business searches, while sites such as Google Maps, MapQuest, Yahoo! Local account for 40 percent of local IYP business searches.

This demonstrates that, when searching for local information, people tend to use IYP Yellow Pages more than search engines, making it a viable tool to reach consumers who have already made a buying decision. In a business climate where targeting the right consumer is mission critical, I ask: How much more targeted can you get than “ready to buy”?

Free Air Guitars

Wednesday, September 22, 2010 Posted by John Tabita 1 comments

Photo by sepultura

Looks like 96.3 Rock Radio is running a free air guitar promotion. Get yours while you can!

“I’ll Start Advertising Again when Business Picks Up...”

Tuesday, September 14, 2010 Posted by John Tabita 0 comments

That was an actual response heard by one of my appointment setters.

Why is it that no one says things like, “I'll pay my phone bill again when business picks up,” or “I’ll pay my electric bill once business picks up”? How do you expect business to “pick up” if you don’t advertise?

I’ve said it before and I’ll say it again: A recession is the best time to advertise, because most of your competition is cutting back on theirs.

It’s the perfect opportunity to steal their customers.

You see, the average business owner tends to think that, in a recession, no one is buying; so if no one’s buying, why advertise?

That would make sense, if it were true. But the reality is, people are buying, you’re just competing for a smaller pool of buyers. (In fact, a recent study shows that 24 percent of consumers made only minor cutbacks to their spending during this economic downturn.) Only the businesses that continue to advertise will have access to the larger percentage of consumers that did adjust their spending habits.

Since you need to compete even harder for customers, don’t just keep doing what you’ve been doing otherwise, you’ll just get more of the same. Instead, figure out what will get customers to buy from you. Just advertising in itself will not do the trick. You’ve got to advertise better. In a recession, consumers become more value-oriented. So what can you do to create more value for your customers, so that they’ll remain loyal customers?

For example, in a recession, over 80 percent of consumers surveyed say they think it’s a smart idea to pay for everything with cash, debit cards, and checks. So how about offering a discount to these customers?

That’s just one idea. The important thing you need to know is, how does the consumer’s buying habits change when the economy is down? That knowledge is power.. but only if you act on it.

Need somewhere to start? The folks at mNovack Design have written a book “to inspire intelligent recessionary marketing.” You can order a free copy, or download the pdf.

Yellow Page Advertising, Part 4: Return on Investment

Friday, September 10, 2010 Posted by John Tabita 1 comments

Anyone who’s read a business book or gone to college should know ROI is a number derived from a simple mathematical formula.

Ian Sohn over at Flagged For Follow Up made that statement on a blog post about ROI. He’s absolutely right. Here’s a simple mathematical formula:

1. How much revenue do you want your advertising to generate each month?
    Pick a realistic number. In my hypothetical example, I’ll use...


2. What is your average sale?
    If you have multiple products, think about what your average customer spends.


3. [Now divide $1,000 into $5,000.] The number of sales you need is:

      5 sales

4. How many prospects must you speak with to make 1 sale?

      6 prospects

5. [Now multiply 5 sales x 6 prospects.] The number of calls you need is:

      35 calls

So to sum it up, 35 calls a month would result in 5 sales and bring in $5,000 a month.

This is an example of what a transmission shop could expect from Yellow Page advertising.

Remember in my previous post that I said you could get significant advertising in many independent directories for less than $3,000 a year? Spending $3,000 a year to get $5,000 a month x 12 (i.e., $60,000) is a 20:1 return on your investment.

And they say Yellow Page advertising doesn’t work...

Yellow Page Advertising, Part 3: Too Expensive?

Thursday, September 2, 2010 Posted by John Tabita 0 comments

I’ve been told by older reps how sweet it was to sell Yellow Page advertising “back in the day” (that being when phone companies had a monopoly on Yellow Pages). They tell me the typical sales pitch went something like this:

I’m here to sell you Yellow Page advertising. Oh, youre not interested? Well, you will be. Here’s my card; call me when you change your mind. Oh... and the book’s closing in 2 weeks.

That’s how first half of their day was spent. The second half usually involved golf...

Those days are gone forever, mainly because the deregulation of the Telecom industry allowed for smaller, independent Yellow Page companies to publish directories of their own. Competition has forced rates to come down. As a result, companies like AT&T and Verizon can no longer charge the exorbitant prices they once did. And the independent publishers’ rates are even more affordable. (You could spend less than $3,000 and get display advertising in multiple headings for an entire year.)

Of course, any advertising is “too expensive” if it doesn’t work. And by “doesn’t work” I mean that you paid more money for your advertising than you got back in return.

So any discussion of advertising must include Return on Investment. And that’s the topic of my next post.

What Every Business Owner Can Learn From Apple

Friday, August 27, 2010 Posted by John Tabita 0 comments

I just read an interesting analysis [pdf] of the “Get a Mac” ad campaign... you know, the ones with the nerdy businessman (“I’m a PC”) and the cool hipster (“I’m a Mac”) politely bantering about which is superior.

The long-running commercials have won advertising awards, been praised by Mac users, denegrated by PC loyalists, and parodied numerous times on sites like YouTube. There's even a website where you can watch all 60+ commercials.

But the ultimate success of any advertising campaign is, How much did it affect sales? Here are the results:

  • 2006: Apple’s overall sales rose 39 percent for the fiscal year. (That rise began shortly after the first commercials began to air.)
  • 2007: Apple reported 34 percent growth in Mac sales from 4Q 2006.
  • 2008: Apple saw 38 percent growth in Mac sales from the previous year.

So what can the average business owner take away from Apple’s success? There are many factors that make a campaign successful, but here are three key components to consider in all your advertising:

Know Who Your Target Audience Is
Apple knew their intended audience... and it wasn’t the staunch PC user. (In fact, most of the backlash over the campaign came from this camp.) No, their target audience was the “swing” consumer who was not entrenched in either camp. These may have been people who didn’t actively choose a PC over a Mac, rather, those who bought a PC because they didn’t know what else to get.

Facts Tell, But Emotions Sell
Apple clearly understands that facts, features (or even benefits) don’t sell... emotions do. The report noted that, if you were to distill the central theme that runs across the entire campaign, it would be:

...PCs cause trouble and grief — they’re hard to use, they’re unstable, and they’re vulnerable to malware. Macs are easy, stable, safe, and competent. Your computer problems will go away when you switch to Mac.

Words like trouble, grief, hard, easy, stable, safe and competent are all emotional; and even though the commercials didn’t directly say these things, they were certainly the message they intended to convey.

Marketing Matters!
You can reap the benefits of advertising, or suffer the consequences of not. Apple has done both.

What prompted the “Get a Mac” campaign was, in spite of consistent growth since 2001, Mac sales went south in late ‘05. In May ‘06, Apple launched the “Get a Mac” campaign. In June, sales began their upward spike. Coincidence? I think not.

You may have noticed that I didn’t post Apple’s results for 2009. In September ‘08, Microsoft launched their “I’m a PC” commercials, and shortly thereafter, Apple’s “Get a Mac” ads largely disappeared. In early ‘09, Apple’s double-digit growth in Mac sales took a sharp decline. Coincidence? Again, I think not.

Blogging on this same topic,eWeek’s Microsoft Watch summed it up nicely:

What have I been saying for months? Marketing matters. People buy products that they see advertised. Their awareness increases, as does potential emotional connection to a brand and/or product. During the worst days of Windows Vista sales, Microsoft did no marketing. But since September, Microsoft has consistently advertised Windows and supporting software, like Windows Live Photo Gallery.

The bottom line: regardless of what advertising medium you employ, all the key ingredients must be included in order to succeed.

Apple has offically announced that it’s ending the “Get a Mac” campaign but considering it’s overall success at embedding itself into pop culture, I’m sure its legacy will continue. With that thought, I’ll close with one of my favorites:

Yellow Page Advertising, Part 2: Yellow Page Consumers

Monday, August 23, 2010 Posted by John Tabita 1 comments

As the image above illustrates, consumer behavior towards any particular medium is what makes it a valuable advertising channel. For newspaper and magazines, it’s the number of people who have subscribed to the publication. For outdoor advertising, it’s the number of cars driving past a particular location each day. For television and radio, it’s their ratings. For a website, it’s the number of visits, or unique visits, each month.

Yellow Pages are no different. Yellow Page publishers create directories with useful content in order to get consumers to use it. The more people who use the directory, the better it is for its advertisers. Why advertise in a book that only 5 percent of shoppers use, verses one that 30, 50, or even 75 percent use?

Yet, there is one critical difference that distinguishes Yellow Pages from nearly all other forms of advertising.

Television, radio, direct mail, outdoor, newspaper ads, and banner ads all have one thing in common – they interrupt the consumer when they are doing something else:

  • Television/radio interrupts you while you are watching or listening to the program
  • Direct (i.e., junk) mail interrupts you while you are sorting through your mail for bills
  • Outdoor interrupts you while you are driving
  • Newspaper ads interrupt your while you’re reading the latest news.
  • Banner ads interrupt you while you’re surfing the web

Here’s what sets Yellow Pages apart: when someone is looking in the phone book, they aren’t doing anything else. Yellow Pages ads get one hundred percent of the consumer’s attention. That’s because the consumer has become a buyer who’s now looking for a seller, instead of the other way around.

Most other types of advertising have a very low response rate because only a small percentage of people who see or hear your advertisement are ready to buy at that moment. Unlike Yellow Pages, you, the seller, are looking for a buyer. This type of advertising reaches the vast majority of consumers at the wrong time.

90 percent of those that pick up the Yellow Pages are planning to make a purchase. Yellow Pages are unique because its users are buyers who are seeking a seller, instead of the other way around.

Because Yellow Page shoppers are further along in the buying process, Yellow Page ads have a high response rate. More than 80 percent of its users will make contact after referencing the Yellow Pages.¹ Of these:
  • 93 percent will make a phone call
  • 31 percent will show up in person
  • 10 percent will go online
  • 1 percent will get in touch by mail

Yellow Pages shoppers also close higher. Over 40 percent will make a purchase after looking in the Yellow Pages.¹ And over 90 percent of those will buy from same merchant seen in the Yellow Pages.¹

That’s not to say other types of advertising are inferior or ineffective. Every type of advertising has its inherent strengths and weaknesses – and Yellow Pages is no exception. Its primary weaknesses is that it’s a passive medium – it does nothing to spur your customer to action. It only provides the means of finding you once he or she does decide to act.

But... Yellow Pages can make your other advertising even more effective, because it provides a place for consumers to go after they’ve seen or heard your advertisement. So, two weeks later, when they realize they need you, they go to the Yellow Pages to look you up…

…but it they can’t find you, then your advertising has led them straight to your competitors, hasn’t it?

You see, your other advertising is great for targeting consumers and creating need, but how much more targeted can you get than “ready to buy”?

¹ Knowledge Network/Statistical Research Inc (KN/SRI). One of the top 25 media research firms in the U.S., with numerous Fortune 500 clients, including all of the major radio and television networks, Yellow Pages publishers and ad agencies.

Yellow Page Advertising, Part 1: Yellow Page Usage

Thursday, August 19, 2010 Posted by John Tabita 0 comments
It’s become an online hobby for many marketing “gurus” to diparage Yellow Pages as “antiquated” and “obsolete.” They say things like, “Who uses the Yellow Pages anymore, anyway?” or they criticize the research studies yet never provide any data of their own to prove their point.

In reality, all studies are done by independent media firms (much like the Nielsen ratings do with television). So in the interest of the truth, I present to you a joint study, conducted by two such firms, Burke and comScore, which found the following about Yellow Page usage:

  • In total, consumers referenced print Yellow Pages 12 billion times in 2009. (The average consumer turns to the Yellow Pages about once per week.)
  • When looking for local business information, 65 percent of consumers go to print and/or Internet Yellow Pages, while 58 percent use a search engine. (Flyers/coupons were 38 percent, newspapers were 33 percent, and magazines were 14 percent.)
  • The study also found that consumers have a greater trust in Yellow Pages compared to other sources. More than two-thirds (67 percent) said that print or Internet Yellow Pages is the source they trust most for finding local business information, compared to 33 percent for search engines.

A separate study [pdf] revealed that, of the total leads generated by an average Yellow Pages print ad, 44 percent come from consumers visiting the advertiser’s website after seeing the ad; while 56 percent come from phone calls. This means that advertisers who decide to cancel their Yellow Pages because of “lack of phone calls” are actual losing more leads than they realize. The study went on to say:

The study, which revealed the extent to which Yellow Pages users visit a business’s web site after reviewing their print ad data, suggests that leads from traditional print media are being underestimated and that traditional print media remains a reasonably effective way to drive people online and convert them into leads.

In this new digital age of satellite radio, cable TV, mobile and Internet, advertising channels have become more and more fragmented, and there is no one “silver bullet” when it comes to maketing. When looking for ways to drive in additional revenue, the objective marketer will evaluate all the available options. Don’t be too quick to dismiss Yellow Page advertising as “old school.” The research proves otherwise.

Sorry, I just couldn't resist...

Sunday, August 15, 2010 Posted by John Tabita 0 comments
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The New Phone Book's Here! The New Phone Book's Here!

Friday, August 13, 2010 Posted by John Tabita 0 comments
I’m conducting sales training all week, and one of my students showed me this video:

The Jerk came out in 1979. Since then, however, people have become skeptical about how effective Yellow Page advertising really is:

...most of these books are a complete waste, likely only to be thrown out (if touched at all)

...local search is making Yellow Pages obsolete...

...phonebooks are obsolete. Seriously, when is the last time you used one?

Should you still include Yellow Pages as part of your advertsing mix? Or have they become fossil fuel? Stay tuned... I’m about to answer that question in a series of upcoming posts.

How to Sell Value and Make What You’re Really Worth

Monday, August 9, 2010 Posted by John Tabita 0 comments
I’m conducting sales training all this week, and one of the things I emphasize early-on is selling on value, not price.

Now that’s much easier to do because we’re not selling a product that we paid x amount of money for, or that the customer can get from the store down the street. We sell advertising, and the value in advertising rests on one thing, and one thing only: Will I make more money in additional revenue than I will spend on this advertising?

So if you sell a service, if you are an account, an attorney, a web designer, or an architect... then here’s how you can sell on value and avoid the low-cost limbo.

Value comes down to whether or not your customer thinks your widget is worth $5,000. All you need do is show him how it will make his life a little bit better. If your customer says your price is too high – he’s right. Unless you’ve proven value, any price is too high.

In order to sell on value, you must understand the relationship between price and value. Cost must be discussed and agreed-upon, but never outside of the context of achieving your client’s objectives and what he’s going to get back in return for your services.

Let me give you an example by asking a question: Is $2,000 dollars a lot of money?

To answer that, you will immediately try to contextualizing it in your mind by comparing that $2,000 to something else... like your paycheck. Or your mortgage. If you live in California, $2,000 might not seem so expensive compared to what you're actually paying for your mortgage each month. If you live in another state, you might think otherwise. The point is, we all try to put a dollar figure into context to determine if we think it’s “a lot of money” or not.

But the actual thing we should be comparing that $2,000 to is not something like our mortgage. We should compare it to what we are getting back in return. When your prospect is stuck on price (or starts talking about his “budget”), he’s looking at what he has to spend, rather than what he’s going to get. If your prospect hasn’t considered what he’ll receive in return, he’ll be forever focused on price instead of value... unless you help him see it differently, that is.

Got Value?

Friday, August 6, 2010 Posted by John Tabita 0 comments
Sales and marketing gurus are always talking about value — that in order to have a successful product or service, we must “create value” for the customer. But what exactly does that mean?

While the theory is absolutely correct, the concept of value is subjective and nebulous. What is valuable to one person may be completely irrelevant to another.

And to complicate things even more, we tend to be myopic about what we think is valuable about our product or service. It’s like trying to read the label from inside the bottle... what we think is valuable and ought to cause consumers to buy is often not the case. So it would seem that determining what’s valuable to your customer is not as easy as it sounds.

Here’s a simple definition:

If you are increasing or decreasing something that your customer wants increased or decreased, then you are creating value.

So... what value are you creating today?

Guy Kawasaki: The Art of the Start

Friday, July 16, 2010 Posted by John Tabita 0 comments
I’ll be on vacation the next few weeks, so I thought I’d share the spotlight with one of my favorite speakers and authors:

Simon Sinek: Start With Why

Monday, July 12, 2010 Posted by John Tabita 0 comments
In this video, marketing consultant/author Simon Sinek gives a great presentation based, in part, on his book, Start with Why: How Great Leaders Inspire Everyone to Take Action. Whether you’re a salesperson, business owner, marketer or entrepreneur, there’s something for everyone here.

“It Works!”

Friday, July 9, 2010 Posted by John Tabita 0 comments
Any good salesperson worth his salt knows that no one buys anything on the basis of a product’s features, that to communicate value you must translate the feature into a benefit.

“Features versus benefits” is Marketing 101. Yet, even if you master the basic skill of effectively translating features into benefits, you’ll may still fail in the final and most crucial step of the buying process – triggering the need or desire that causes your prospect to act.

You see, it’s not the benefit per se that motivates a person to buy. It’s power-packed words describing those benefits that trigger the emotions which motivate us to spend our money, time or energy. In other words, people buy because of the emotions associated with the benefits, not the benefits themselves.

Let me give you an actual example. Recently, my oldest son’s Boy Scout troop did its annual popcorn sales fundraiser. We set up (with permission) in front of a local gas station/mini-mart and arranged two-hour shifts of two scouts each. When our turn came, I instructed the boys on some basic etiquette (“Stand up straight,” “Allow people to enter the mini-mart; don’t block their path,” “Speak firmly but politely,” etc.)

Forgetting who I was for a time and what I do for a living (hey, it was the weekend), I didn’t pay much attention to the boys’ canned pitch (“would you like to buy some Boy Scout popcorn?”) to which most people politely replied, “no thanks,” or sometimes even rudely ignored them.

It wasn’t until one customer asked, “What’s this for?” to which the boys replied, “It’s for the Boy Scouts!” that my sales-trainer radar finally engaged. After telling the woman that they were raising money for a trip to Gettysburg, I took the boys aside and presented a new approach. I instructed the boys to say the following:

“Would you like to buy some popcorn to help us earn money for a trip to Gettysburg?”

You see, their original pitch did not address prospective popcorn-buyers’ unasked question: “What’s in it for me?” The additional “help us earn money for a trip to Gettysburg” provided something beyond the (questionable) benefit of over-priced, average-tasting popcorn. It triggered a desire that caused people to act. In other words, it provided a buying motivation: a desire to help the Boy Scouts. Buying the popcorn satisfied that desire with the good feelings everyone got from helping a worthwhile cause.

The result? Over the next 45 minutes, until our shift was over, every single person that walked by either bought popcorn or gave a donation towards the trip. In the words of the boys after their first sale using the new approach: “It works!”

Putting Together A Strong Marketing Team

Friday, July 2, 2010 Posted by John Tabita 0 comments
Over the years, I’ve participated in a number of online forums, where business owners gather to discuss various issues that affect them. On one such forum, someone who had just started a carpet cleaning business posted this question: “What’s the best way to get new business?” The answers that followed were typical, if not predictable:

  • The web designer said, “Get a website.”
  • The direct mail guy said, “Send out some postcards.”
  • The newspaper guy said, “Take out a classified ad.”
  • The promotional items guy said, “Get some pens and fridge magnets made.”
  • The yellow pages guy said, “Take out an ad in the Yellow Pages.”
And on it went...

Instead of searching for the one “magic bullet,” think of your advertising mix as a “team.” By adding members to the team, you can accomplish more than just one member could by himself. This is the best way to improve the response you get from your marketing.

Direct mail, for instance, has a typical response rate of 1-3%; but you can dramatically improve that by adding telemarketing to your direct mail campaign. A rescue mission that combined telemarketing with their direct mail fundraising got a 28% higher response rate from the group that received both a phone call and a mailer than from the group that received only the phone call.

In the same manner, Yellow Pages extends the reach of other advertising – Internet, radio and television by 22%, newspapers by 19%, and magazines by 23%. That’s because, once a consumer has seen or heard your other advertising, he or she still needs to find you. And one place they look is for you is in the phone book.

To put together a strong “team,” Gill Wagner, author of Honest Selling, recommends you choose “at least three marketing activities that you believe will produce your best results.” Some of the things he recommends considering are:

  • Cold-calling to set sales appointments
  • Conducting research projects and writing case studies
  • Conducting workshops
  • Creating lead-sharing groups or strategic partnerships
  • Creating your own website
  • Helping community, government, charities or nonprofit organizations
  • Hosting exhibits at trade shows
  • Mailing items of interest to clients and prospects
  • Networking at business gatherings, association meetings and community functions
  • Offering interviews to newspapers, magazines and radio or television programs
  • Providing free advice on your website or through list-server participation
  • Sending direct mail
  • Serving on trade association or community boards of directors
  • Speaking at trade associations and conferences
  • Writing a book or books
  • Writing a company newsletter and/or e-newsletter
  • Writing articles for publication in relevant periodicals
  • Writing cold-letters to targeted markets

My advice to the carpet cleaning guy? (Despite the fact the I owned a web design business at the time, I did not recommend that he “get a website” as a means to immediately find new customers.) My advice was a combination of Yellow Pages, direct mail and, if he had the nerve, cold calling.

If you’ve just started a business and need help marketing, I’d recommend you read the follow books:

Three Sure-Fire Ways to Reduce Your Advertising Costs

Monday, June 21, 2010 Posted by John Tabita 1 comments
Everyone in business want to decrease their costs, so here are three sure-fire ways to reducing your advertising costs:

  1. Increase your close ratio
  2. Increase your response rate
  3. Decrease your cost per month

In my previous post, we looked at two ficticious business owners and compared how the cost of their advertising stacked up against these three factors. Let’s see how Advertiser A would fare by improving in these three areas.

Increase Your Close Ratio
If Advertiser A could close two people a month, instead of just one, he would more than double his return on investment and cut his cost-per-sale in half. (Although this doesn’t involve increasing the cost of your adverting, it may require spending money on sales training for yourself or your sales staff.)

Increase Your Response Rate
Even if Advertiser A’s close ratio remained the same, he could achieve the same results as above by doubling his response rate. If six people a month called instead of just three, he’d close two sales a month, increasing his return and cutting his cost-per-sale.

What most businesspeople don’t want to hear is this: the only way to increase your response rate is to increase your advertising. For direct mail, that might mean a larger mailing. On the Internet, it would mean achieving a higher ranking on the search engines. For yellow pages advertising, it means a larger ad. We know from independent research that just doubling the size of a quarter-column ad produces 5 times the response, and quadrupling its size produces 15 times the response.

Decrease Your Monthly Cost
Many people who want to decrease their advertising costs do so by decreasing their advertising. Unfortunately, this is the only method that negatively affects your bottom line, because it decreases your response rate and ultimately, your sales.

The True Cost of Your Advertising

Monday, June 14, 2010 Posted by John Tabita 1 comments
If you are doing any sort of advertising then each month, year or whenever it’s time for the next campaign, you are faced with a choice: continue with what you were doing, increase your advertising, or decrease/cut your advertising. When it comes to reducing costs, most people naturally focus on the actual cost of the thing, but you don’t cancel your phone service simply because your telecom costs are too high. You might consider a reduced service plan, but not without taking into account exactly how that might negatively affect your business, right?

Advertising is no different. The goal of marketing is to get responses and ultimately sales. So you cannot look at your advertising costs outside of the context of: (1) What your current advertising produces in terms of responses and sales, and (2) What the potential negative effects of reducing that advertising would be.

Most people decide to cut advertising because they believe or perceive that it’s not working. Assuming that’s not the case with you, here’s how to make the most from your advertising dollars.

Let’s imagine that business has taken a downturn, so you’ve decided to increase your advertising. If you’re going to spend more money on advertising, the increase must justify its cost by producing better results. This means that the basis for measuring the cost of your advertising must never be cost per month. Instead, it must be a results-oriented measurement, such as cost-per-sale and return on investment.

Return on Investment (ROI)
The first factor you must consider for any type of advertising is Return on Investment – will my return exceed its cost?

Advertiser A pays $25 a month for a bold listing in the Yellow Pages and gets an average response rate of about 3 people a month. Since he closes an average of 1 out of 3 calls, his advertising results in 1 sale a month. His average sale is $100, so by deducting the $25 cost of his advertising we see he’s made $75 from his bold listing.

Advertiser B has a Yellow Page display ad for which he pays $150 a month. Advertiser B also closes 1 out of 3 calls, with an average sale of $100. But the monthly response rate from his larger ad is 30 people, resulting in 10 sales. So when we deduct his monthly advertising cost from $1,000 in sales, he makes $850 a month.

Since both are getting a positive return on their investment, each adverting program could be considered a success. But would it surprise you to know that, although Advertiser A’s cost per month is less than B’s, his advertising is actually more expensive? Here’s why:

Cost-Per-Sale (CPS)
We said that Advertiser A’s bold listing results in 1 sale a month. This means that the cost-per-sale is $25. (One sale a month, for which he pays $25 a month.)

Advertiser B, however, is receiving 10 sales a month, for which he pays $150, so his cost-per-sale is only $15. Although both are getting a positive return on their investment, Advertiser A’s ad is more expensive, because he’s paying $10 more per sale than Advertiser B, even though he’s paying less per month. Make sense?

Remember: Cost-per-Sale and Return on Investment are the true measurement of what your advertising costing you – not cost per month!

What Not to do in a Sales Call

Saturday, June 5, 2010 Posted by John Tabita 0 comments
It’s important to know your product, as this video so amply demonstrates:

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Marketing Your Way Through a Recession

Wednesday, June 2, 2010 Posted by John Tabita 1 comments
Studies show that businesses who maintain or increase their marketing during a recession experience higher sales growth – both during the recession and immediately following.

During a recession, money gets tight and fewer people are buying. If both you and your competitors continue to advertise, you wind up competing even harder for the few customers that are left.

That’s the bad news. The good news is that, even though there are fewer customers, there are also fewer companies marketing to them, because many of your competitors will cut back their advertising. Advertising during a recession gives you a unique opportunity to win their customers and gain market share.

Here’s an actual example from our nation’s worst economic downturn. In 1929, rival cereal makers Kellogg and Post fought to dominate the packaged cereal market. When the Great Depression hit, Post did the predictable thing – they cut back on advertising. But Kellogg doubled their advertising spending and aggressively marketed their new cereal, Rice Krispies. By 1933, as the economy tanked, Kellogg’s profits had risen by nearly 30 percent. By the end of the Great Depression, Kellogg was the dominant player – and remains so to this day. Post never regained what it lost.

Don’t Base Your Advertising Budget On Last Month’s Sales – Or Lack Thereof
A research study by McGraw Hill/American Business Press revealed that companies who maintained or increased their marketing and advertising during the 1981-82 recession experienced an average of 256% higher sales than their competitors who reduced their marketing over the same period.¹

What’s more, these sales figures continued for the next three years after the recession had ended!

A similar study conducted over same period by research firm Meldrum & Fewsmith concluded that aggressive advertising did not only grow revenues; it even increased profits.²

In 2001, a study comparing marketing practices during the 2001 recession determined that aggressive recession advertisers increased market share 2½ times the average compared to all businesses in the post-recession.

Missing The Boat For Fear Of Sinking It
When hard times hit, however, most companies behave more like Post than Kellogg. They batten “down the hatches” and wait for better times to return:

Uncertainty is always a part of business, but in a recession it dominates everything else: no one’s sure how long the downturn will last, how shoppers will react, whether we’ll go back to the way things were before or see permanent changes in consumer behavior. So it’s natural to focus on what you can control: minimizing losses and improving short-term results. And cutting spending is a good way of doing this…

Unfortunately, you can become so focused on not “sinking the boat” by cutting spending that you end up “missing the boat” by not seeing the opportunities that a recession can bring – opportunities to:

  • Experience higher-than-average sales
  • Grow profits
  • Increase market share
  • Leap from the bottom of your industry to the top

Advertising during a recession provides a unique window of opportunity to… equity, solidify your customer base, gain new customers; and make inroads on your competitors who have cut their advertising during the recession period. This window of opportunity is created by the understanding that advertising is an investment, not an expense.

Do you have the nerve to try? Most companies don’t.

To paraphrase the Harvard Business Review³, If you’re courageous enough to stay in the fight when everyone else is playing it safe, you can bring about dramatic changes your market position. Your advertising should not be regarded as a drain on profits, but as a contributor to profits. It’s not an unavoidable expense – it’s a means of achieving your objectives.

At the risk of being redundant, I’ll say it again: Your advertising budget should always be based on your company’s goals, not last month’s sales.

¹The McGraw-Hill Companies’ Laboratory of Performance Report 5262.1: “Business-to-Business Companies that Maintained or Increased Their Advertising Expenditures during the 1981-1982 Recessions Generated Higher Sales Growth than Firms which Eliminated or Decreased Advertising,” June, 1987.

²American Business Press, Inc. “How Advertising in Recession Periods Affects Sales,” ABP/Meldrum & Fewsmith Study, 1979.

³Dhalla, Nairman K. “Advertising as an Antirecession Tool,” Harvard Business Review, Jan/Feb 1980.
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Facts tell, but stories sell... well, most of the time

Saturday, April 17, 2010 Posted by John Tabita 2 comments
They say that, in sales, “facts tell, but stories sell.” In this classic scene from the movie Tommy Boy, Chris Farley does a great job telling a story to demonstrate the superiority of his company’s brake pads. Unfortunately, he takes it just a little too far...

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Is Cold Calling Really Dead? (Part 2)

Tuesday, April 13, 2010 Posted by John Tabita 1 comments

In my last post, I took issue with a particular sales consultant on what I considered to be blanket statements he made regarding the so-called ineffectiveness of cold calling.

In all fairness to his expertise, the author did outline an effective alternative to cold calling:

Once I’ve identified a company to approach about any of my services, I do my homework. I call three or four of the company’s salespeople. My hope is to speak to a salesperson that has been with the company for only a short time, to another who is an old hand with the company, and one who is a top producer.

When I speak to these individuals, I am upfront with the purpose of my call. I let them know who I am, why I’m calling them, what my intentions are regarding calling the company about my services, and request their permission to ask them some questions about the company and their experience with the company.

After asking a series of questions, he gains permission to mention their name. Typically, he says, the individuals not only give permission but will encourage him to call, turning it from a cold call to a warm call to a referral. He goes on to say:

When I do call the company, I use the introductions provided by the salespeople to break the ice and gain credibility. Those introductions turn the call into a conversation about their needs and observations rather than a sales pitch.

This approach works well for him because he is selling a relatively high-dollar service (sales training) to large companies. But what if you are selling a lower-cost item to smaller companies that don’t even have a single sales person, much less three or four, to contact? What works for the author cannot be applied across-the-board to every industry. Having only a hammer doesn’t automatically make every problem a nail.

To illustrate, the company I work for is a small, independent Yellow Page publisher. Our average sale is less than $1,200 and our typical customer is a mom-and-pop shop. Besides selling new business, our sales reps are expected to call on several hundred existing customers to renew their advertising. Our sales cycle is short (about a week-and-a-half from appointment to signed contract). It would be too time-consuming and not cost-effective enough to spend time researching every potential company that we call on. Incorporating the author’s method into our sales process would be sales suicide.

For companies such as ours (and maybe yours), cold-calling and cold-canvassing are the only available options our reps have for prospecting new business. Our short sales cycle doesn’t afford time for networking and relationship building. Even for businesses that can afford to try other methods, cold calling is still an effective tool to include in your marketing arsenal.
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Is Cold Calling Really Dead?

Friday, April 9, 2010 Posted by John Tabita 1 comments

In case you didn’t get the memo, it appears that cold calling is offically “dead” – at least according to one expert. In an article entitled No, You Don’t Have to Cold Call – Ever, sales consultant Paul McCord had this to say about cold calling:

In my opinion, there is hardly a more worthless use of time and energy than cold calling.

Cold calling is time consuming for the salesperson and it immediately signifies to the recipient of the call that the person making the call isn’t an expert in their field because most prospects assume that true experts aren’t sitting at a desk pounding the phone.

Really, Paul?

He goes on to suggest that, while cold calling may generate some business, it's not the most effective way to find prospects.

There’s just one problem with his statement: My department generated nearly half-million dollars in revenue last year... strictly by cold calling.

In one particularly good (pre-recession) month, here’s how 3 appointment setters did:

  • Decision-makers spoken to: 230
  • Appointments set: 86
  • Appointments sold: 27, resulting in $43,000 in revenue

That means we set 1 appointment for every 2.7 decision-makers we spoke with, and our sales team closed 31% of those appointments.

Admittedly, that was an above-average month. But on average, my best telemarketer sets 1 appointment for every 33 dials, and he sets over 60 appointments a month. Pretty good results from something that’s such a “worthless use of time and energy,” wouldn’t you say?
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