The Great Dilemma in a Recession: Spend on Advertising or Save?
McGraw-Hill Research study of over 600 Businesses found that:
1981-1982 – businesses that maintained or increased their ad spend during this time averaged higher sales growth during the recession and in the following 3 years!
By 1985 – sales of the businesses that maintained or increased their ad spend during that recession had risen 256% over those who cut back on advertising.
Likewise in 2001 – another study found that aggressive recession advertisers increased market share 2 ½ times the average for all businesses in the post-recession.
In 2002, the Strategic Planning Institute illustrated that during economic expansion – although 80% of businesses increased their advertising spend – there was NO improvement in market share! Why? – because everyone had increased ad spending!
“Innovating through a Recession” by Professor Andrew J. Razeghi
Kellogg School of Management at Northwestern University.
The most obvious method of increasing your number of paying customers is to advertise – get the word out about your firm and its offerings to as many potential clients as possible.
Now, we all know what advertising is…
You only have to open the newspaper, turn on the TV or crack open a copy of your favourite magazine to be exposed to advertising.
However, advertising can be either good or bad for a business, depending on what it says and how people perceive it.
My biggest beef with advertising is where a business owner tries to brand themselves with it, rather than SELL!
We’ve all seen those fancy schmancy branding ads for some up-market snooty product or brand that says little more than how clever or mysterious they (think they) are…
Given the high cost of most advertising, why waste a single cent on anything that does NOT produce results (sales leads or paid orders)?
The true definition of advertising (just in case you didn’t know it) is:
“Salesmanship in print”
Back in 1905, Canadian Policeman John E. Kennedy changed the face of advertising forever with those three words. His style of advertising is typically called direct response advertising and is designed to elicit a response from the reader, rather than just try to make them feel good about the advertiser/product.
Most likely you came across this Special report due to someone receiving a direct response postcard. Notice that the postcard asked you to take an action to get this free report. It did NOT try to make you feel good with a stupid photo and self-indulgent slogan that has no bearing on whether you should buy anything from us or not…
Advertising is the way in which you extend the reach of your business to let more prospective clients know who you are, where you operate from, and what you offer. If done correctly, it can work 24x7x365 anywhere in the world, or in the next suburb over from your office/store.
By advertising, you are aiming to fulfill those options mentioned earlier, when I was discussing 3 ways to make more money in your business.
If more prospective clients know of you and can contact you when they’re looking to buy, your chances of increasing sales go up.
However, if you cut back on your advertising as a way to save money in these tough times, you WILL lose market share to those businesses who are willing to advertise and keep advertising.
As for ways to advertise, here’s just a small selection to get your creative juices flowing:
- Newspaper advertising (classifieds and display)
- Magazine advertising (classifieds and display)
- Coupon advertising
- Radio advertising
- TV advertising
- Online advertising (SEO, PPC, Banner, etc)
- Billboard advertising
- Joint Ventures
- Press Releases
- Trade Shows
- Sponsorship of public/popular events
- Direct mail
There are many more ways to advertise, but let’s see if you can get through these 13 different options first.
However, it’s fair to say that many businesses that try these kinds of advertising don’t really get a very good Return on Investment (ROI). In many cases, they either just break even or get zero results for their investment.
Now, this report doesn’t have the space to explain WHY this happens (although it’s definitely a topic I will touch on via email in more detail another day). It just acknowledges that advertising hasn’t worked too well for many businesses (not all, of course).
In the meantime, if you agree with me and realise that you do NEED to advertise, but think you need some help with your advertising, why not purchase a 1 or 2 hour consultation from me, to help you get started. I’ll review your current and past advertising efforts (if any), give you feedback on them, and suggest effective ways of improving your advertising results from this day forward.
I will conduct the consult over the phone or via Skype on your computer (if you’re local to my office, you’re welcome to come in and have your consult in-house, but an appointment must be made first). Our entire conversation will be recorded for your benefit – you’ll be able to refer back to everything we discussed at any time you need to refresh yourself on the details.
No Risk Guarantee: If, after the first 15 minutes, you don’t feel the consultation has been of any value to you – if I haven’t given you at least 2 different suggestions for ways to effectively advertise your business – and if you don’t feel you’re going to get full value for money by sticking around for the rest of the consult, just tell me to stop at the 15 min mark and I’ll refund your money in full!
WARNING: Please don’t take me up on this offer if you’re easily offended by straight talking feedback. No, I am NOT obnoxious, rude and arrogant, but I will be honest and straight with you about your situation, and if you’re overly sensitive to feedback, you might get upset. Pay me to be STRAIGHT with you, not to lie to you to appease your ego…
If you prefer, I can even create your new direct response advertising for you, but that takes a lot longer than 1-2 hours, and will be priced accordingly. Ask me for more information if you’d prefer to hand the task over to a specialist rather than get help doing it yourself.
OK, that’s Chapter 3. Next, we’ll look at various advertising mediums.