The following article is a response from Fred Weiss, a Sign Company veteran with over 40 years business experience, to a survey posted on www.Signs101.com regarding the most effective marketing strategy.
Most Effective Marketing: A Veteran’s View
by Fred Weiss
Lake Worth, Florida
How you market and who you choose to target is certainly important … especially if you are not yet profitable. But the answers you may receive via surveys are all highly subject to the situation, perspective and experience (or lack thereof) of each respondent. I am a total believer in working from actual numbers and place little value on opinions regarding most effective marketing.
Looking down the road, are you concerned with your long term results? Are you concerned with the type of client you acquire with each marketing approach, how much is spent by the customer initially and on repeat orders, and what your costs are per client after some time has passed? If one form of marketing results in five sales of discounted items and you never see the clients again and another that focuses on being a solution for a need only brings in one client but that client ends up returning many times and pays you undiscounted prices … which option resulted in the most effective marketing strategy?
Forty years ago I went through a somewhat related experience in a different business. It was a business that depended on clients being repeat customers. I built a nice business in a major market and sold it after five years and moved to a much smaller market in Florida where I set out to build the same business from scratch against more than a dozen established competitors. We used a number of marketing approaches from Yellow Pages, radio, newspapers, direct mail, referral programs, telephone solicitors and door to door sales people. In less than a year, we built a business that was higher in sales volume than I had built in a better market after five years. To determine our most effective marketing method, we kept track of the results and costs of each effort.
Then, in 1974, the U.S. was hit with the Arab oil boycott and our area reached 25% unemployment in two months. In that same two months, we lost more than half our clients. When I wasn’t working on rebuilding our business, I took the time to pull all that data together and was able to calculate costs for each manner of client acquisition and then relate it to retained clients to determine a cost for each that survived. From those numbers came clear principles of the most effective marketing that I practice to this day.
Here are some of those principles. Keep in mind that repeat business was our number one key to success. Yet, one could and should consider that to be a good thing for a sign client as well. The products and services of the business were always presented as a solution to a need and were never sold on the basis of price.
- The greater the amount of salesmanship used to acquire the client, the less likely they were to continue being a client. The accounts with the highest attrition were those we got from telephone solicitation and door to door selling. Not only were they the highest in sales cost to acquire before the downturn (about $50 each), but they were an unacceptable cost after applying those costs to just the survivors (more than $300 each). Think of it this way. These clients were not seeking our services. We simply convinced them it was a good thing for them to buy. When business turned bad, we were out the door.
- Our highest retention was with Yellow Pages, direct mail and referrals where our initial sales costs per client were also the lowest. These clients responded to our advertising because they recognized that they had a need for our services. They then chose to buy them often picking us from among our competitors.
- The highest percentage of retained clients were also the higher spending ones demonstrating that they had an ongoing need for our services.
- Market solutions to needs, quality, service and convenience. Never market low prices.
- Spend your time with solution seekers and not with price shoppers.
- Sincerely try to be of service and deliver the best products possible.
- Accept negative results from price shoppers and focus on solution seekers willing to spend what they need to spend in order to get what they want.
- Don’t lose a potentially good client because their first order is a small one. Many of our best customers started that way.
- Watch as your business grows with a solid base of quality repeat clients.
Allied Computer Graphics, Inc.
Lake Worth, Florida