Thread: The Advertising Squeeze

Running a storefront like I do, I require a lot of local advertising through newspapers, magazines, coupon books, direct mailing, etc.

These forms of advertising are most often ridiculous. Not in the aspect that they don't work, but the aspect of the Return On Investment. For a $250 dollar 1/4 page ad in a local 'coupon magazine'. I will maybe get 1-3 phone calls. That means if I get 1 phone inquiry it cost me $250 and if three call: $84 a piece. (These numbers are even worse if I get a phone call that is fumbled.. such as one of my employees answering and not scheduling an appointment.)

I can't go a day without hearing the phrase "well, you know how the economy is..." Especially from people who have absolutely NO clue what they are even saying.

I don't buy it for a minute that the "economy" is as poor as everyone says. Like we have discussed before, it's just America getting back to being more efficient. But... you know what... if everyone is willing to believe it, I will use it to my advantage....

I have made a new year's resolution myself. I will no longer allow these advertisers to jerk me around like they do.

You're HONESTLY telling me that a 1/4 page ad costs $250... that's the BEST price you can give me?? Now I'm sure printing charges are not too expensive, especially for these shops that do their own, or have a long term agreement locked in. Of course you have other expenses but every advertiser that comes to meet with me is usually driving up in an expensive car, a well tailored suit, and jewelry that would make Paris Hilton jealous.

From now on I will use the excuse of the economy... hell they bring it up first usually... If I don't advertise it's not the end of the world for me. So I will bite, I will scratch, I will kick and scream until they lower the price to AT LEAST 50%. If they don't want the dollars they can leave the spot empty. They get nothing with empty spots. If they can fill it with somebody else, go right ahead, I know you'll be calling and asking me again next month!

So today was my first successful first steps of how I am handling my advertising. This is a new process for me so I'm sure it will have some kinks in it.

Step 1. Get in front of the advertiser(they should be coming to you - not the other way around), make sure they know you are not the ultimate decision maker (even if you are).

Step 2. Get them to talk themselves into a discount. Usually if you say nothing they end up saying at some point "Well, you know, I'm supposed to do this but I can give you a discount on this add too". (The point is to not talk. Hard for me to do! Ha ha)

Step 3. Ask: "Is this my best price?"

If they say yes, move on to step 4.

If they say no, repeat step 3 until they say yes.

If they side step the question and start talking about how many people are going to see your ad and how valuable it is, ask again.

Step 4. Ask what other discounts are availible.

Step 5. Once they settle on a price, ask them for a bigger sized ad for the same price. OR the same size ad you have for the price of an ad smaller (PLUS the discounts).

Step 6. Ask what the PIF discount is.

Step 7. Ask for another 20% off the finalized rate.

Step 8. Let them know you have to clear it through management or your superiors, business partner, whatever.

Step 9. Write out a check for the amount finalized on minus the 20%. The check is written, it's a solid firm offer, no more haggling. Say "This is the check my business partner wrote. Can you do it for this much?" Then their answer is either yes or no. If yes, great. If no, WALK AWAY. Two things have happened. You have found their limit for the future AND you still might get them to bite after you walk away. They won't normally decline money if the check is written and being handed to them.

I did this today and it worked great. Got a 4k somethin yellow page ad for 2,300. Not bad...

Hopefully you guys feel the same way. Make sure you get your money's worth. I know I've been overpaying for advertising for a long time. Too long.

Nice Steve!

Curious, what type of return do you expect on the $2.3k you spent?

This is exactly why you need to develop "internal advertising." Leverage.

How do you follow up with your current client base?

Do you maintain an ongoing relationship with them, either personally or automated?

Are you capitalizing on the new forms of media that people use to find services, commonly referred to as web 2.0? Phone books are out, are you using what's in? (in other words)

I could go on and on, but my intent is not to bore nor insult. Point being, I ran into this problem, until one day I decided to generate my own leads and put systems in place to leverage all of my activities.

When that begins, you develop "internal advertising." YOU dictate your advertising specs and OWN a portion of the market, rather than "buying in." Not saying all forms of advertisement don't have their place.

Adding to what mtnman said, do you have referral bonuses or anything like that? What if you asked all your current students to bring friends in for a trial. For each friend that signs up they get $50, or $100 or whatever is fair in relation to your sign up fee, etc... Or you could just credit them towards their training.

Originally Posted by snowbank

Nice Steve!

Curious, what type of return do you expect on the $2.3k you spent?

Well as far as return on investment I am looking for a response of maybe 2-4. This will get me 1-2 students that will pay 1,600 for their base tuition. (1,600 - 3,200) and I would have a shot at putting them on one of my upgraded programs which can range from 8-12k. And again that is about a 50% rate. So anywhere from 0 to 24k. Plus retail sales and misc. costs.

Originally Posted by mtnman

This is exactly why you need to develop "internal advertising." Leverage.

How do you follow up with your current client base?

Do you maintain an ongoing relationship with them, either personally or automated?

Are you capitalizing on the new forms of media that people use to find services, commonly referred to as web 2.0? Phone books are out, are you using what's in? (in other words)

I could go on and on, but my intent is not to bore nor insult. Point being, I ran into this problem, until one day I decided to generate my own leads and put systems in place to leverage all of my activities.

When that begins, you develop "internal advertising." YOU dictate your advertising specs and OWN a portion of the market, rather than "buying in." Not saying all forms of advertisement don't have their place.

Originally Posted by snowbank

Adding to what mtnman said, do you have referral bonuses or anything like that? What if you asked all your current students to bring friends in for a trial. For each friend that signs up they get $50, or $100 or whatever is fair in relation to your sign up fee, etc... Or you could just credit them towards their training.

Most of my clients come from referrals. I have a couple different programs I run for referrals. Often times I just ask mom or dad or brother or sister to join in. Every once in a while they bite and sign up.

Right now I am doing another one of my big events. The "Bring a friend" contest. This whole month the kids (or adults) get to bring in a friend to try a free class. It's win/win. The new person gets to try it out and see if they like it (which 99% do) and the person who brought them gets a prize. For the kids, it's a toy or something from the dollar store, they LOOOOOOVE them. For the adults it's a T-shirt.

My school is growing so after this month is up I will more than likely be installing a permanent referral system where when someone refers someone and they sign up on a program, they will receive a $50 gift card (maybe sometimes to a restaurant or best buy, something along those lines). This has been met with varied success in the past just because the school was fairly new. That has changed dramatically since the last time we ran that program.

As far as the Web 2.0 stuff, not much. We have a myspace account, a facebook account, and a decent web page. Most of our business is through local advertising, while the web is starting to produce more results it still isn't quite where many other businesses are.

Great job Steve. I agree that newspapers, in general, are not delivering the results based on cost. Also, I agree with using the other types of media for advertising as well. This time of year ought to be boom for you considering New Years Resolutions and all that stuff. Do you mention your webpage address in you newspaper add? Is it on your window of your storefront? Are you promoting you website on your banners, business cards, signs on your cars, and any other way you can get it out to the public? I have also seen Mom and Pop stores have a business card display for other small businesses at their check out register. The small businesses agree to cross promote and give a little space on their counter for other businesses that don't compete with them head to head.

Steve I would love to be a fly on the wall when these salesmen come into your Dojo. It would make fr some entertaining vids. Good luck.