I recently met with JD, the owner of a furniture store in Muncie, IN. He used to operate independently but now is part of a regional franchise who provides marketing, inventory and technology support in exchange for a royalty or fee.
Muncie is like many midwestern towns once reliant on manufacturing, it’s trying to figure things out in terms of economic growth. Factories that once employed thousands of workers with decent wages have closed. But — Muncie is home to Ball State University, and a large teaching hospital — Ball Memorial Hospital. Both provide a tremendous boost and stability to the local economy.
JD’s challenge is figuring out how to reach adults who own their homes and have disposable income — generally aged 35+. Not long ago he could simply put an ad in the local newspaper, The Muncie Star, and customers would respond in droves. Or, he could buy radio on the two local stations that reached 90% of the population in Muncie.
Those options still exist, but there are now thousands of other ways he can invest his marketing dollars. And JD is hearing that many of his fellow furniture store owners who are sidestepping traditional media with the latest social and digital media tactics.
But as I meet with JD, he’s frustrated and confused because every dollar he spends on marketing now seems like a roll of the dice, with no guarantee of getting a return on his investment.
So I thought about it, deeply, and here is what I would do if I were JD and this was my own money at stake: I would conduct a very thorough audit.
The Intelligent Advertiser Audit:
- The Math: Compile a list of every single marketing expenditure from largest to smallest. How much money is being skimmed out of your budget from fees or royalties tied to corporate marketing? Every dollar spent on printed signage, every sponsorship — even charitable, all digital expenditures including any fees associated with websites, search optimization, search marketing, social media, listings, and other infrastructure based spending. Do you pay for the music being piped into your store, or is it just the local radio station? How much are you paying someone to manage marketing? Perhaps it’s an agency or “consultant” — or if its none of those consider how much of your time is spent on marketing related matters. You may discover it’s such a time suck that hiring someone to do it for you makes sense. The goal here is to truly capture how much you are investing, and where — over a calendar or fiscal year.
- The Messaging: Compile a year’s worth of promotional messaging — all print ads, digital ads, billboards, circulars, in-store signage, promotions and sales, and any radio or TV. Any audio or video examples should be compiled onto a USB drive then put everything into a binder and reference it by year moving forward. Wherever you purchased media and developed an ad for that media — this is what we want to analyze. Because often the mistake is not the media, it is the messaging or promotional offer that rendered this media useless.
- The Merchandising: This relates to the physical appearance of your retail and online infrastructure — are they both optimized to help close sales? Is the carpet old, does the sign out front have lightbulbs missing? Is the arrangement of the store conducive to maximizing customer transactions? You also need to take a hard look at your salaried employees and determine who is earning their keep because the cost of just one full-time employee can easily by $50K +. That’s enough to buy a year’s worth of advertising in Muncie, IN. This is probably the toughest of all things to audit and many business owners will have a tough time objectively looking at this. However, it could be the single thing that is keeping you from being a profitable business vs. a non-profit business.
Once this is complete, and this may take a week or as long as a month depending on the complexity of the matter, we move onto the strategic phases of this process.
The Intelligent Advertiser Strategy:
- Determine from the audit what could be cut from the budget, and there should a lot in most cases. Then take those dollars and re-invest into tactics that still work and reach your target audience as follows:
- Customer Acquisition Tactics and Messaging: What are the advertising mediums that have the potential of providing the greatest return on investment? For JD in Muncie, the traditional mediums are still often the most efficient. JD will be better off having a more consistent, frequent and impactful presence in fewer mediums than having less impactful and infrequent presence in dozens of media. I would recommend one or two radio stations, the local newspaper (both their printed version and website), a sponsorship with Ball State Athletics, and some local billboards. That’s it. Those tactics will reach everyone he needs to reach. And more importantly — what messaging or bait will JD use to attract customers? Will his messaging truly break through the clutter or will it sound like every other local advertiser? The messaging is often the toughest part to tackle because it requires re-wiring the brain from “branding” the business (which is a waste of money unless you are Chevrolet) to becoming a “direct marketer” of your business demanding response from every marketing expenditure.
- Customer Retention Tactics: The audit should have uncovered a great deal of wasted spending, and some of the re-investment of those funds needs to go into improving your operation’s ability to maximize every single customer facing moment. The way your phone is answered and customers are treated should be scripted, everyone should go through some sort of customized sales training. Your employees should be seeking ways to obtain contact information from every customer who walks through your door, or calls your store, or visits your website for future follow-up. This is also where you determine what investments need to be made to improve the retail and online shopping experience. This bucket may deserve the largest allocation of your budget initially but these initial investments pay dividends for a very long time.
- Customer Maximization Tactics: Once you attracted a customer, then wowed them with your service and experience, they are likely to come back. So stay in touch with them. Send them mail, emails, a newsletter, have special events and invite them. Find out when their birthday is and send them a card. This is where having a database full of responsive clientele with key information about each customer can become your most valuable asset. If you manage this correctly over time the amount of money you need to spend on acquiring new customers should decrease because you have so many happy repeat customers.