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How Your Small Business Can Profitably Attract New Customers

I’d like to tell you a story about Bob. He owns a modest golf practice facility — also known as a driving range — in Muncie, Indiana.

Muncie is a mid-sized college town with about 70,000 residents, smack dab between Indianapolis and Fort Wayne in rural Northeast Indiana.

At Bob’s Driving Range you can hit golf balls at colorful targets of varying distances, or chip and putt on multiple practice greens. And, cold Indiana winters are no excuse to avoid practice because Bob has heated hitting bays and variety of indoor practice areas.

Bob has a helpful staff of PGA certified instructors, he sells a mean cheeseburger (and other snacks), and offers a great assortment of local craft beer (and domestic beer).

But Bob also has a marketing challenge, and that is how to attract new customers — reliably and profitably.

He doesn’t have a big budget, just one (remote) location, and competes with several other facilities (and golf courses) who offer similar services and products.

Bob’s run ads in all kinds in newspapers, community magazines, church bulletins, little league programs, billboards, park benches, on the radio, and even took a crack at some Google and Facebook ads.

But nothing works, at least not reliably, and for sure not profitably.

Where Should Bob Start?

The first thing Bob should do is pause. Stop everything.

Cancel all contracts and advertising spending.

He should spend some reflective time away from the business and brainstorm about what makes his business unique.

Celebrated author and master direct-response marketer Dan S. Kennedy offers great advice in his book, The Ultimate Marketing Plan. He advises taking a stack of 3×5 index cards and writing down every fact, feature, benefit, promise, offer component, and idea on each card — until you have exhausted everything you know about your business and direct competitors. Then try to prioritize these items by what is going to be most compelling to your customers — and by what makes you stand out from your competition. 

Bob needs to figure out what is UNIQUE about him and his business — and if he can’t come up with anything, then create something unique. And forge this unique idea or quality into an offer (or bait) that makes him stand out from every other practice facility.

As a golfer and a fisherman, Bob knows you can’t attract fish without tantalizing bait — fish like worms, people like free stuff and/or VALUE.

And, since Bob already knows who he wants to target — Golfers — it makes sense for him to appeal to ALL GOLFERS. From the youngster with their first set of clubs to a single digit handicapper always honing their game.

And he shouldn’t dismiss the folks who are interested in learning golf, but haven’t yet for whatever reason.

So after much thought and consideration, Bob comes up with this idea:

At Bob’s Driving Range …. THIS MONTH ONLY …. all new customers get a free golf lesson from a PGA Certified Instructor …. there is absolutely no obligation we just want you discover how rewarding the great game of golf can be …. visit Bobsgolf.com and check out our free report: Top 5 Ways Anyone Can Improve their Golf Game …. and if you like what you read …. schedule a free lesson …. ALL skill levels are welcome ….. first time golfers, children, weekend duffers, and even skilled players …. You wouldn’t try learning how to swim without some help …. same goes for Golf …. so give it a try you have nothing to lose …. AND …. I’ll throw in a free bucket of balls so you can practice what you learned after the lesson!

He also came up with:

Hey You …. the guy on the couch ….YEAH you …. It may be cold outside but that’s no excuse not to practice …. Are you tired of never improving? …. And starting over from scratch every spring? …. Tired of never gaining any ground on your golf buddies? …. It’s summer ALL YEAR ROUND at Bob’s Driving Range in our heated indoor practice facility! …. And for a limited time …. you can purchase a VIP Practice Pass for 25% OFF! …. That’s right, I can only sell a limited number of these each year or I’d go out of business …. It includes unlimited practice time and golf balls …. 3 free lessons with the PGA Professional of your choice …. and if you sign up before February 28th …. I’ll throw in Dozen New Titleist Golf Balls for FREE …. Hurry and get your’s while they last …. Go to Bobsgolf.com and find out more about our VIP program AND check out…. also free of charge …. our top 5 practice tips that will dramatically improve your game.  

The only point of Bob’s bait or offer is to get a response. PERIOD. So if Bob has to give away free stuff to get people’s attention, then he should!

Bob’s offer (or bait) should make people feel like they are taking advantage of him — and maybe they are. Otherwise nobody will notice.

But that’s good, because their first experience with Bob may leave them feeling a little guilty, which may compel them to come back OR even better, buy more stuff on their first visit!

Once they become a customer — A SATISFIED CUSTOMER — Bob has their contact information, and the powerful ability to resell them for life through social media, email and regular mailings.

Mining his database of existing customers is the least expensive and lowest hanging fruit for Bob to continue growing his business.

This is the real payoff.

In golf terms, this is very much about the long game, or the lifetime value of the customer. While the short game (the first sale) is important, it is much more important new customers thoroughly enjoy their first visit so they come back again and again and again and again.

Oh, and refer their friends.

Another powerful component of Bob’s bait is his appeal to all golfers AND his low threshold ways of interacting and learning about his products and services.

Some people will be ready to buy, most won’t.

So offering extensive and helpful information through lower threshold means — like a website — will accommodate these not-ready buyers and nurture them along their buying journey.

People who aren’t ready to buy don’t want to interact with any pesky salespeople.

That’s why Bob’s website has a lot of helpful information about his offers, his facility AND guides from his PGA instructors on how anyone can improve their game.

“Any idiot can sell things to the ready-to-leap-now buyers, so it usually pays poorly and can even be a path to bankruptcy despite success at it. The wealth is in the (management, development, and ultimate monetization of the) not — yet ready buyers.”

Dan S. Kennedy, No B.S. Information Marketing Letter #86, December 2018

What Media Will Work Best?

Now we’re going to talk about how Bob can pick the right kind of media. And much of it depends on the type of business he is operating.

Bob’s Driving Range is a niche retailer for golfers and he can attract these golfers from all over the Muncie area.

This will greatly influence where he should invest his advertising dollars. If Bob operated a Heating and Cooling business, and he serviced homes in Muncie, his advertising would need to appeal to a much broader audience: Homeowners who live in Muncie.

As I described earlier, Muncie has a population of about 70,000 residents and there are PLENTY of advertising options.

They have their own newspaper, radio stations, cable system, shared mail services like Money Mailer, billboards, buses, park benches, and get their broadcast TV signals (NBC etc. and additional radio stations) from nearby Indianapolis.

And (of course) there are many digital things Bob can and should be doing — like having the basics search and social media covered, especially making sure he is listed in all directories and maps.

Here is a post where I go into this topic more in-depth: https://intelligent-advertiser.com/2018/11/11/digital-infastructure-vs-digital-marketing/

Assuming Bob has those bases covered, he still needs to reach golfers, and believe it or not, when properly executed with good bait, especially in middle America where the population skews older, incomes skew lower, and the trends and fashions of the bigger cities and coasts don’t matter: Traditional media will still be the best answer for acquiring new customers.

The local newspaper might be a smart choice. While the print circulation has dwindled the actual readership between print and online is still very robust (about 50% market penetration or 35,000 readers per day).

Bob could buy ads appearing simultaneously in the print and online edition for a reasonable investment — around $500 per day.

And in all advertising, repetition is key, so Bob should buy 3 days per week costing him about $1500 per week. More on repetition in advertising here: https://intelligent-advertiser.com/2018/12/16/how-to-beat-amazon

Problem is — only a small portion of these readers are golfers, so let’s do some basic napkin math:

Cost Per Week = $1500 allowing Bob to effectively reach 35,000 readers.

Per the graph above we estimated about 9% (or 3,150) of the total readership are golfers

A reasonable and conservative response rate to Bob’s awesome offers = 1% which nets him 31 new customers (3150 x .01).

Bob’s average sale is $25 and multiply it by 31 paying customers equals about $775 in gross sales.

So for a $1500 investment Bob gets half of it back and 31 new customers. Not bad if you consider the lifetime value of each customer, but also not great, and I think we can do better.

Muncie has good radio stations too, and luckily there are 2 stations who reach the majority of the population. Since these two stations have more reach than the newspaper, our pool of potential golfers will be larger.

Here’s some napkin math:

A schedule on just 2 radio stations will reach 75% of adults or 52,500 people and cost $2,400 per week.

Per our research earlier we assume 9% of those adults play golf or 4,725 golfers.

1% of those golfers respond to Bob’s offers (48 golfers) who spend an average of $25 per person equaling $1200 in sales

So Bob earns back about half of his investment and 48 new customers. Again, not bad, but not great.

I hope you see a pattern here, mass media won’t be a profitable investment for a niche retailer like a driving range. In fact, Bob would be LUCKY to recoup 50% of his investment in most cases.

However, if Bob should have a big annual blowout sale where manufacturers from all of the major golf manufacturers were present (Calloway, Taylor Made, Adidas, Titleist) and a famous professional golfer like Tiger Woods (doesn’t need to be Tiger) was doing a demonstration for the public — THEN — Bob should pull the trigger on some mass media like radio and newspaper. The appeal and potential to profit would be much broader beyond his smaller target of golfers.

Another option is SHARED direct mail. Bob could insert a coupon in a Money Mailer or Val Pak in Muncie for about $700 per month and reach 30,000 homes. Again here is the napkin math:

For $700 Bob reaches 30,000 homes — of which 9% are golfers (or 2,700 households). Of those golfers, 1% respond to his ad (2700 x .01) or 27 new customers who spend an average of $25 each for a grand total of $675.

This is actually worth doing as he’s breaking even. Bob should employ this tactic regularly if he continues to get this kind of response.

Now let’s consider actual direct mail, meaning Bob sends his offer via post card to a verified list of golfers, a list he procures from a list broker who knows the addresses of all the Muncie area golfers based on their magazine subscriptions, google search history, credit card transactions, travel etc.

Bob’s own research (based on a simple Google search) concluded about 9% of the 70,000 adults in Muncie are golfers, and when Bob talked to a mailing list broker, sure enough — they too had about 6,300 golfers (or 9% of the population) on their rentable list.

By the time Bob pays for the list, and the printing, the stuffing of envelopes and the postage, the cost per letter will be around 40 CENTS PER PIECE (conservatively), or a total cost PER MAILING of $2,500 (40 cents x 6300 = $2520).

Let’s again assume Bob gets a 1% response meaning 63 new customers spend an average of $25 resulting in $1575 in sales.

Bob realizes for a niche business like his, direct mail is an expensive customer acquisition tool — just like mass media.

Another option is Cable TV, and like Bob’s business, Cable TV is a very niche business.

They have channels devoted to every conceivable hobby including cooking, history, tennis, basketball, nature, news, science, animals, football, soccer, home remodeling, and GOLF!

Thank you cable television and thank you Golf Channel!

With help from the cable folks — and for free (or for very little cost) — Bob produces two different :30 commercials featuring each of his amazing offers — then buys a bunch of commercials on the Golf Channel.

He ignores the conventional wisdom from his well-meaning sales rep and only buys commercials in LIVE PROGRAMMING or LIVE EVENTS.

Why? Because Bob is a golfer and he knows live events are exciting, and they have the highest ratings, and most viewers don’t tape or record or DVR live programs.

Bob knows the most popular events are live coverage of PGA golf tournaments, and live news programs like Golf Central (The Golf Channel’s version of Sportscenter).

Bob is able to buy 3 commercials per hour (a dominating presence) in ALL (and just) the live programs for about $600 per month.

Now for some napkin math: In any given month, the Golf Channel reaches 80% of all golfers in Muncie (verified by our friendly cable salesperson).

Since we established there are roughly 6,300 golfers, 80% equals 5,040 golfers.

If, very conservatively, Bob garners a 1% response, he will win 50 new customers spending an average of $25 each for a total of $1250 in gross sales.

That’s 50 new customers, $1250 in gross sales, for a cost of $600 AND a 108% return on investment!


DING DING DING DING DING! We have a winner!

This is how Bob, a small town driving range in a cold winter climate can determine where to invest his advertising money, by doing the math ahead of time. And most importantly, developing really good bait — with offers appealing to buyers in every step of their purchasing process.


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