Beware the marketing death spiral

Does this sound familiar: The economy is really bad. That means we have fewer customers. So let's respond by spending less money chasing those customers. Translation: you have decided it is a good idea to get a smaller share of a smaller market. This, in turn, means you will get fewer customers, generate less profit and need to cut costs, including marketing, even more. That means more sales shrinkage, more cuts and, before you know it, you are in a marketing death spiral that can end only one way -- with the closure of your company.

So what do you do? It's impossible, you say, to increase spending. Fair enough. So start with these three tips:

#1 Improve your existing spending. That means auditing all your spending to determine what is working -- and what is a complete waste of time and money. If you can't determine ROI (Return on investment), start doing it. Now.

#2 Open your mind to other possibilities. Most companies are under marketed on the net or virtually invisible because of flawed web site content and design. This is a crime because online marketing is often the lowest cost option, easy to customize and measure, and has shorter lead times than just about anything else.

#3 Stop treating every customer the same. Chances are about 10% of your customers generate about 80% of your profit, yet the marketing spending of the average company does not reflect this reality. Most often, the most profitable customers get no more attention than the least profitable customers. Worse, many companies cannot even identify their most profitable customers. So your first job is to develop a database of your best customers and start marketing to them on a regular basis with direct mail and/or email blasts.

Next time: outstanding outdoor advertising and the all-to-common outdoor advertising that deserves to go to the outhouse.

Answering your SOS for more ROI

This has to be a quick one, but it could not be more important.

Are you getting work from an agency that has absolutely no idea whether it is giving you any return on investment (ROI)? Worse still, are you among the vast majority of agency clients who doesn't even ask about ROI? Shame on you.

In today's economic market, you can't afford to just "do advertising". You have to do advertising that delivers response. You have to monitor and measure that response, and keep making adjustments until you get a measure of your ROI. This involves some heavy lifting by you -- the client. You have to set up systems to capture and record the source of every lead -- and what happened after that lead came in. Then you have information -- and information means you can make an informed decision, which is a heck of lot better than just guessing or relying on your agency's "gut instinct".

Start by going to your web site response form (you have one, right?) and adding a field for "How did you learn about us". Put in a drop down list of every possible response and make it a mandatory field. Make sure the person answering your phones has the same list and asks the same question whenever a prospect calls. Pretty soon you will some real marketing data on what works -- and what doesn't.

Got a topic you want me to address? Send it along. I promise to respond within seven days.

First aid for dumb-as-stink, do-it-yourself advertising

So I'm going about my business and I see a bus shelter ad for a real estate company run by a man and a woman.

The woman is smiling in a goofy sort of way and making the universal symbol for "OK". Boring, dumb, but I get it. Then I look at the man, who I presume is her husband. He is not smiling. Indeed, he has this dumb look that makes him appear like he has just been lobotomized. And now I know -- this is a dumb-as-stink, do-it-yourself ad. Which brings me to the purpose of AD-Monitions -- helping the millions of small businesses avoid the classic mistakes of dumb-as-stink, do-it-yourself ads. I am going to help by tossing out some simple tips that will help you avoid dumb-as-stink, do-it-yourself ads. That's part one.

Part two is to get a discussion going on what works. Don't tell me about expensive, big-time budget stuff. I want the little stuff that produced big results. You know, like the Google campaign that allowed you to kick the ass of much bigger competitors, or the sweat equity stuff, like the carpet cleaner in Toronto, Ontario (Canada) who built a thriving business by visiting every major carpet retailer in Toronto and captured their loyalty by giving them some free coffee and donuts. Now most of those retailers is a megacustomer -- someone who refers tons of business to the carpet cleaner. Total marketing cost: a few hundred bucks. So there you have it. Advertising by walking around (and giving away donuts). And you thought advertising was complicated.

Let's get talking. I await, breathlessly, for your response.