Red Zebra Business Centre -Management Memos
March, 2007. Make Measurably More In Your Business!

Marking More Than 21 Years of Service to Small and Medium Business.

HOW DOES NOTHING LESS THAN AN EXTRA $15,000 SOUND?

Here is a
"Double or Nothing" offer that's no gamble.

No Dice

And no risk.

Here is the chance to make more profit out of your business, while The Red Zebra takes all the risk! Right now, we'll run you a major profit improvement plan. It can pay for itself, or it's free.

Every dollar will be refunded if we cannot demonstrate a profit improvement that is at least double the cost of the program.

Find out more about
"Double or Nothing"

Click Here




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INCREASE YOUR ADVERTISING EFFECTIVENESS


Advertising is one of the most misunderstood, misapplied, and mismanaged cost centres of Small and Medium Business.  This month we look at 6 ways to make your advertising dollar achieve more - much more - for your bottom line performance. We consider micro-marketing (Point 6) as a serious alternative to main media.


1.    How Much Should I Spend? 

Naturally, the answer is "It depends!"  Look at the table ........

If you are: Consider spending:
1 A large business, in a duopoly situation or the major supplier, having mostly trade sales, and strong trade word of mouth 0.75% of sales value
2 Any size business with many competitors, just maintaining the "status quo" 1.5% of sales value
3 Any size business trying to get significant growth 4-5% of sales value
4
Trying to establish a strong new brand or product presences 10% of sales value
(1)  Take this suggested spend seriously! Underspending will cripple what you are trying to do, and waste any money you are spending.  For instance,  don't even try Level 1 in the table ( 0.75%) unless your sales are $100M or more - there just won't be enough money!

(2)  For smaller businesses, with sales around $2M to $5M, the "status quo" spending (Level 2) needs 1.5% of sales value - that could be an ad spend of $75,000. Even that level of spending is scarcely enough to keep the pot boiling!

(3)  Building strong growth will need as much as 5% of sales (Level 3 in the table). For some, that sounds ridiculous - it could be as much as $250,000! If you feel that way, spend less.  You might grow, but growth will not be driven by advertising.

(4)  When you are new to market, or you are trying to get a new brand established (Level 4), you will need to spend a whole lot more. Almost everybody underestimates the task (and cost) of getting attention, of creating awareness, and recruiting new customers.  For a more detailed discussion, click here to see our case study on this very topic.  The solution is provided.  See if you reach the same conclusions!

Talking too much money? Consider this. At $5M sales, you should be operating at $500,000 net profit. If you're not making that much money already, you'd better find out what's wrong before trying to get any bigger. Or the problems will just get bigger.


2.    Plan Yearly, Buy Annually!
saving
If you don't do an annual buy of advertising media,  you are simply wasting money you don't need to spend.  Expect 30% to 50% savings with an annual buy.  Of course, to make a good annual buy, you need an annual advertising plan.  You can do your ad buy without an annual plan, no problem.  It just won't make the most of your money

Really effective planning is the key to advertising effectiveness!

3.    Don't Expect Your Advertising to Do Too Much!

Most people don't notice or care about your advertising. So it takes a long time for prospective customers to see your ad in sufficient numbers, and act on it. That means you'll need at least three months for each ad campaign. Notice the "Double or Nothing" ad on the left of this page? Have you read it? It's been running for three months with this issue. You are asking your ad to do too much if you want a response in less time.  (Direct response radio and TV advertising is a lot different, and too much to consider here.) Some people worry about extending the life of their ads. Most people just chop and change too frequently.

Run just four campaigns a year.  With one "corporate ad", that makes five for the year.  Any more is too many.


4.    Make Each Ad Part of a Merchandising Campaign!

campaignIt's very easy to advertise products or services.  We understand them very well, and know why you should buy them.  Problem is "advertising clutter".  You need to cut through, and touting the virtues of products just doesn't do it.

That's why you need a very attractive offer. Any offer over three months or more is a "campaign".  Then advertise the offer, and plan the advertising strategically.  Just like a military campaign.

The offer gets the attention you need, triggers the desire to try the offer, and gives you the chance to sell the product.  The rest is up to you!

5.    Don't Dilute Your Campaign!

It's very common for radio and TV stations to offer free filler spots to bulk up their offer. These are usually sold as spots for "unscheduled brand building". Don't do it!! When you're running a campaign - keep it focussed!  Every ad you run must be the campaign ad when the campaign is on.

There is time enough for "brand building" in between your planned campaigns.


6.   Make "MicroMarketing" a Feature of Your Planning!
micro
After all these considerations about main media advertising, it's worth thinking seriously about micromarketing. Often just consigned to the sidelines as "let's do a mail-out on that" knee jerk re-action, micromarketing can be a very potent force when applied properly. For lots of capital city small businesses, it's the only affordable medium you can use. In most cases, your own database has enough hidden potential new business to make it your most effective source of new profit.

MicroMarketing is more difficult than arranging a "free make TV" ad, but it's potentially much more profitable.



 If you'd like to find out more about MicroMarketing and Advertising Planning, talk to us, or submit a question here!  Remember, there's no charge or obligation, and you get a whole hour's consultation free.


 Miss out on your own customised, laminated copies of the Customer Charter last month?  Don't worry! Click Here to see it, and Click Here to email your order. Remember it's free. There is still time.