How Can You Hold Your Advertisers Accountable For Poor Performance and get make goods when your advertisers screw up?

Spending a huge percentage of your profits in advertising is a necessary function of daily activity required to keep your business growing.   If you are not advertising intelligently, you business is slowly getting smaller and you will eventually be gone.

You have probably heard the quote from John Wanamaker (a famous retailer from the old days) who said..

"Half the money I spend on advertising is wasted...The problem is I just don't know which half"

What if I told you there was an easy way to find out which half is being squandered, so you can fix it. This process is so powerful it literally holds all of your advertisers accountable for poor performance almost guaranteeing make-goods for those ads that fail, because for the first time in retail history you will have genuine proof of success or failure for each ad campaign...

I owned a seven store chain in Houston Texas, the 4th largest metro market at the time. I probably created 50 TV commercials over the years, ran countless full page ads in (at the time) a 2 newspaper town. I had billboards all over the city and ran radio like crazy when I was not doing TV. I spent millions and the truth is, I probably wasted more than half of what I spent because I (at the time) had not realized how to measure the effectiveness of what I was doing. Of course I would go crazy trying to calculate cumes (1000 units of audience) and costs per point...I used to study Arbitron and Nielsen ratings and spent countless hours measuring sales performance compared to ad dollars spent. IT'S ALL SMOKE AND MIRRORS...

Finally, I am ashamed to admit; that many of the ads that I ran were based on how well I liked the sales rep, or how cute she was.  I also remember running several ad campaigns based on earning enough points to win a trip to Europe or some other super freebie.  I wish I knew then what I know now.  I literally blew millions...And if you have an advertising agency, or in house employee doing your buys you may also be frittering away huge gobs of cash disguised as your ad budget.  Also if you or your company or especially your ad agency are accepting freebies...you are getting killed.  Make damned sure your ad agency is not taking free stuff from your buys.  They are steeling from you if they take one red cent.

Smart retailers already require their sales associates to fill out a guest card (5 X 8) customer info card and possibly also encourage their sales associates to create a sketch of the customers room.  If you don't You should consider it...You should create a card that helps the sales associate or designer ask what specifically brought the customer in.  It also list your Advertising Choices, General Product Categories and Why they didn't buy (Call me and I will send you a sample.) A blank card should be in each salespersons hand before they greet any new customer.

I know some of you are possibly thinking... Most customers don't even know what advertising made them come in...My response is BALONEY, and if you thought that, you probably spend too much time in an ivory tower.

I will admit a funny story that emphasizes my understanding of the nay-sayers point...When I held my first Grand Opening long ago, I stood at my front door and greeted every person who came in.  I wanted to genuinely thank them for coming in, make sure the selling process started properly and ask what advertising brought them in.  I made a huge advertising buy on radio working with 4 stations and also ran a 1/2 page ad in the Houston Post.  It was a big deal for me that it work because I spent every last penny I had that week.  I remember an older gentleman coming in and he told me that he had been watching me on TV for years and made a big deal about it.  I had never done TV in my life to that point, so obviously this fellow was mistaken (I thought he was actually a little bit nuts) and this exception is the excuse many dealers give me when I suggest measuring advertising on the sales floor.  Believe me most customers who have risked their lives on the freeway to get to you will be delighted to tell you exactly what brought them in if they are asked properly, and most will be very accurate.

The trick is asking each opportunity what advertising specifically brought that customer in TODAY...Most customers have been watching your advertising for years.  Some drive by your store every week, most have seen or heard your ads on TV, Newspaper, Radio and direct mail for years.  You want to know what specifically motivated them TODAY.  Trust me, it's easy for your salespeople to learn this and most good ones already do because it's a great ice breaker when you first meet a new prospect.  Just keep in mind that this information is like a Gallop Poll and is accurate (+ or -) 5%, but it's many times more accurate than Arbitron or Nielsen ratings or tracking cumes or cost per point.  Your salespeople are hearing this powerful information every day and up till now have had no simple method to pass the info on to you.

You might be saying to yourself...I could NEVER get my salespeople to consistently do this.  I am here to tell you that it's not only possible but very easy.  The real question is who benefits if you are able to reduce your advertising expense and simultaneously bring in more qualified customers for salespeople to sell.  The answer is everyone, but every salesperson instantly realizes if they can get this advertising info to you, you will have the ability to absolutely improve traffic flow and increase their personal income.

This process must pass the W-I-I-F-M Test...What's-In-It-For-Me?

Once your sales team realizes that this advertising information is going to be used so they can legitimately be involved in a process that will get your advertising under better control and brings in more customers they will be delighted to help.  Just ask them properly.

My Father used to tell me..."The key to being a great executive is to get your people to want to do the things, that you want them to do."

Once you have the card system in place (one should be in each salespersons hand before they greet any customer) so that if they learn something important, they can jot it down.  The customer will see a difference and is going to realize that anyone taking notes is more likely to be a true professional and is really trying to learn and satisfy their true needs and desires.

The #1 goal is to make the sale...With that said we know statistically that the average salespersons closing ratio is less than 20% with below average salespeople writing an order closer to 10% of the time.  The tragedy here is that many times a below average salesperson will make up for a lower closing ratio by putting in more hours and talking to more customers just to keep up.  THAT'S JUST DUMB, especially if we know that a good follow-up card system properly used, more than doubles your chances of turning that prospective customer into a long term satisfied customer who will continue to return for many years to come.  What's scary is when you keep statistics from all guest cards you will see that sometimes your below average salespeople talk with three times more customers than your top performers.  So my point is that just by using this simple tool and requiring a card be turned in every time (after a customer leaves (even after overflow times)), you can realize dramatic improvement.

Everyday, you must take all cards and total the numbers.  If a salesperson talks with someone and doesn't get to first base that's ok.  You still gained valuable information.  Even if you don't get a name and phone number for follow-up, and I don't care how good you are, you can't get them all, you still can easily jot down what they looked at and what advertising brought them in today.  The key is get a card every time and hand it in before you move your name on the UpBoard or paper rotation system.

What the advertisers don't want you to know...

YOU MUST LEARN YOUR COST PER SALE AND MOST IMPORTANTLY YOUR COST PER OPPORTUNITY.  It's easy and takes only a couple hours each month.

How many people came in from each type of advertising and create a monthly total for each.

Take your total dollars spent (for example on TV) and divide this by your number of opportunities.  Lets say you spent 15K last month on TV and had 300 customers who responded from TV.  This means your cost per opportunity on this medium is $50.

THE REAL POWER IS IN THE COMPARISONS

Now lets say you spent 5K on Radio and brought in 200 customers. Your cost per opportunity for Radio is $25.  Every Radio customer compared to TV cost you exactly half.  In other words if you spent the entire add budget on the Radio you would have brought in twice as many customers as you did.  The value as a plain as the nose on your face.  It just takes a little effort to get started.  Then once you see these powerful results it becomes automatic and your salespeople (with management's assistance, fine tune this wonderful habit).

When you show this comparison to the TV rep their jaw will hit the floor.  Then they will instantly realize that they must give you a better quality product or they will lose you forever. No longer can they give you below average time slots or positions, and over a short period of time you will learn what types of ads work better than others.

This simple process is so good it holds all your advertisers accountable for poor performance and will earn you free ads and make goods when you deserve them when an ad bombs and the advertiser wants to keep a relationship with you.

The advertiser must make a profit as well, and balance and fair play are involved, but the fact will remain, you will know who to love and who to run away from as fast as possible.

Good luck and go get those cards printed today.  One last note on the cards is to make a drop down list of all advertising, product and reason categories (multiple choice) the less a salesperson needs to write, the more successful you will be at gathering quality information.

Dave Mink is a management consultant who's company specializes in measuring and benchmarking performance on the sales floor.  His front door traffic counters accurately track total hourly customer activity and his Patented Upboard system automates (first time in) customer follow-up and helps management measure and improve sales performance.

Visit www.TRAXsales.com if you want to learn more.