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"Which
Customers Are The Most Profitable?"
One of the primary objectives of
advertising is to attract highly qualified prospects. You want prospects
who really want your products and services, and can afford them.
You
want prospects who have the power to decide, and the willingness to do so.
Let's go get them.
Different Types of Ads Attract Different Prospects
The type of ad you run will
have a big impact on the number and the quality of prospects you get.
So, What quality of prospects do you want?
Maybe you really are going after
everybody. Or maybe you don’t want a huge number of “prospects”
that don’t lead to much business.
A generalized ad with a broad
focus, or an ad that features low price, will normally generate a large response. But the overall quality of your prospects will be
lower.
Your attractive offer will get lots of shoppers and low price
buyers. This is great if it’s what you want, but expect a lower
closing rate, and less repeat business from these prospects.
Also, when you calculate your
lifetime value per customer, you will find that this group of prospects is worth
less per person than a higher quality group of prospects. And your sales
staff will spend a larger amount of time sorting through these lesser
quality prospects.
And if you are selling based on
low price, remember that you are teaching people to buy on price. They will switch as soon as they see a
better deal. For more
information, please read Pricing
Strategy in Advertising.
On the other hand, an
advertisement that sells value instead of low price will
get a lower response rate, but that response will come from higher
quality prospects.
And a highly targeted ad that
features a specific problem and a specific solution will get a smaller
response still. But that response will come from prospects who have that particular problem. Your more
specific advertisement will bring in higher qualified prospects.
Example
A dentist may not want to offer a
loss-leading “Special Low Introductory Price" for a cleaning and
x-rays. Why? Because the dentist will be swamped by prospects who come
only once. The percentage of repeat customers will be very low.
Perhaps
the dentist would do better to make a different offer that would attract
fewer, but higher quality prospects. These customers are more likely to come back
in the future.
Ease Of Response Affects The Quality
Of Your
Prospects
As a general rule, you want to
make your ads as easy as possible to respond to. You print your 1-800
phone number large and clear. You make sure your coupon stands out on
the page. You include a map to your store. You offer credit.
But there
is a tradeoff. The easier it is to respond, the lower the quality of
prospects you will get.
To make it a little harder for
prospects to respond, an exclusive store or restaurant may require reservations.
If you are giving something away, you might want to make prospects send
you a self-addressed, stamped envelope. Or you might include your
address, but not your phone number in your ad. Any time you make it
harder for prospects to respond, response will decrease, but the quality of
your prospects will increase.
Multi-Step Marketing Increases
The
Quality Of Your Prospects
One
way to to get higher quality prospects is with a multi-step marketing
program. The goal is to generate a large response upfront, and then to quickly sort through the group
for the high quality prospects.
This kind of marketing starts
by giving away something for free. You might offer your prospects a newsletter,
a report, a seminar, a brochure, a catalog, or
even a consultation.
Your offer of free information should be carefully
targeted at your desired prospects. You want to offer a real,
interesting, immediate benefit that is attractive to the group.
A lot of people will come
forward for the free information, and they are all potential prospects.
But the ones you are really interested in are the people who later
identify themselves to you.
The prospects have had a chance to learn
about you, and if they are interested, they will make contact. You
benefit because the people that come forward a second time are serious
prospects.
In contrast to discount
pricing, giving away something free does not indicate poor value, nor
does it lead
to lower quality prospects.
“Free” will overcome initial objections,
skepticism, and financial concerns. Often it keeps prospects from
eliminating themselves as customers. And "free" is the way to generate a
large list of potential prospects.
By giving away something free,
you give yourself the chance to make contact with your prospects if you
choose. Many businesses are very good at closing prospects once they
have come forward the first time. Alternatively, you can let the
prospects sort themselves out by waiting to see who makes a repeat
contact.
Please note that you don’t
want to give away free or highly discounted services – that would just
attract the price shoppers. You are trying to determine how to make high
quality prospects come forward and identify themselves to you.
Note
also that your free
information does not necessarily have to be directly related to your
business. If you can find a way to talk to your target prospects about
relevant and related material, you will find that you have an attentive
audience of real prospects.
This strategy
contrasts somewhat with the idea of following up with your prospects as
we discuss in
Why
Follow Up Works. But the goal here is to generate a large pool of potential prospects,
and then let that group self-select down to the prospects that you
really want to follow up with. You want people to come to you.
What do you
end up with? You get prospects that are screened, qualified, and
pre-sold on your products and services. Your free information has
impressed them with your professional abilities, and they are ready to
do business. Multi-step marketing, when done right, will bring you a
steady stream of high quality prospects, and that is what Professional
Advertising is all about.
Ask
For Help
As always, Professional
Advertising is here to help you. We recommend that you hire a
professional designer for your ads and your other marketing materials.
We also recommend that you run your work past a marketing professional
for assistance or a second opinion. It’s a cheap investment for
something that is as important as your entire advertising program.
Please contact
Professional Advertising
for additional help.
Professional
Advertising
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