Direct Response Marketing For Small Business
Mark Hale ‐ June 1, 2016
There are so many ways for you to advertise your small business, but which way is the best? Do you emulate the way large businesses advertise? Do you put all your money into Internet marketing? What is the best way to advertise and get a return on your advertising for your small business?
First, it is usually a fatal mistake to emulate the advertising of fortune 500 companies. Why? Because most of the fortune 500 companies invest heavily in image advertising. They hire Madison Avenue advertising agencies to create those big beautiful ads that win awards and make their board of directors happy. With these large advertising budgets, if you throw enough money against the wall, something will stick, eventually. The problem is a small business cannot afford to keep throwing money against the wall until something sticks. You need leads. You need the return on the money you invest. Image advertising does not create direct sales, never has and never will.
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The fact is 80% to 90% percent of those beautiful ads you see do not drive sales into stores. The only thing that works for small business advertising is direct response marketing. You spend a dollar. You should get 5x return for the dollar you spend.
Let me go out on a limb here by saying I am sure that you do not have unlimited advertising funds to promote your business. And the money you spend has to produce a return. So any and all of the advertising you do has to produce a result. It has to be direct response advertising. The postcard you mail has to get someone to call. The full-color brochure you have has to cause someone to buy. Period.
What is direct response marketing? Simply, you run an advertisement with a fantastic offer, give them a deadline to respond and offer them something special if they respond by that deadline. That is all direct response marketing is.
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Having said that, you have to know your customer and whom you are marketing to. You need to know what they find valuable and what they are most likely to respond to. You should also know what your completion is offering in your marketing area.
If you want someone to respond to your advertising, do not skimp on your offer. You are buying customers. The offer you are presenting is an investment in buying that customer.
What is a customer worth to your business? The value of a customer can be calculated by looking at what this customer will potentially spend with you in the next 12 months and over the next five years. Very seldom is the value of a customer calculated by a one-time purchase.
Why do you need to know what a customer is worth to your business? You need to know this information because you are going to be making marketing decisions on this information. Decisions like, how good to make your offer and how calculating what your return on your advertising investment should be.
For example, we had a dental client who wanted to run a $179 new patient special. He thought it was a good deal. It was for him, his prospective patients had a different opinion on it. However, his competition was running $69 new patient specials. When we got him to look at what a new patient was worth to his practice he decided to change his special to $49. A new patient was worth on average $1500 to $2000 per year. Patients usually stayed with him for 5 to 7 years. So that meant that an average new patient was worth $7500 on the low end and $14,000 on the high end. So the question became would you offer a $49 special to get $7500 to $14,000 in business? “All day, every day,” was his response!
Direct response marketing is a lot like fishing. Where you fish and what bate you put on the hook will determine how many fish you catch. Know what the fish you are looking for will bite on is the first step to creating effective direct marketing for small business.
Direct mail is the most usual and most effective way for a small business to use direct response advertising. Direct mail put directly in the hands of your best prospects and they will get your message. Where direct mail fails is the mailing list was bad or the offer was not compelling. Tell them what it is. Why they need it. How they can get it. Why they should buy it now. And, what is in it for them to buy it now.
Direct response advertising is very simple to do if you do the above things. You will drive business into your door.
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