You’ve probably heard the old marketing maxim that says 50% of all advertising is wasted.
Don’t believe it. It’s a lot more than just 50%.
Traditional mass media advertising is a monologue aimed at the purses and pocketbooks of a passive audience. No wonder more than half of all advertising is wasted. It’s amazing it’s not more.
Imagine for a moment McDonald’s actually sold a cheeseburger to even half the folks who watch their television commercials. Or imagine that half of all the television viewers who saw a Ford Motor Company commercial actually bought a Ford. Or were even interested in buying a car at all.
No way. Not even close. Well over 50% of that advertising is wasted. But Ford and McDonald’s are huge companies with huge advertising budgets. McDonald’s spends 14% of their total gross sales on advertising. They can afford the inefficiencies of mass media.
Your small business can’t.
Well-intended marketers begin each new year by carefully drafting a budget. Hours of research, arithmetic, discussion, and evaluation. They sit in a room and thrash, nit-pick and hack away until everyone exits with radiant smiles, self-adulation, and the satisfaction of a job well done.
Then POW! A key vendor goes out of business. Or a competitor suddenly introduces a rip-off of their leading product. Or a once-every-century pandemic hits. And the whole program is thrown out the window.
In small business, nothing is permanent. Special situations must be met as they occur. It is precisely this flexibility that gives small business a big advantage over big business.
For a small business, effective promotion and advertising tactics do not take careful planning. Rather, they respond to market opportunities. They focus on the needs of customers. They reflect the times in which we live. Not last year. Not yesterday. Now.
And right now, everyone is thinking about the pandemic. Many service businesses are in survival mode. The hospitality industry is on life support. Many restaurants have closed.
Yet one day, the pandemic will subside. Those small businesses that persevere, those that find ingenious, distinctive ways to market their products and services, will not just survive, but thrive.
For instance, many small restaurants found creative ways to serve al fresco, or are offering carry-out for the first time. Others are setting up street tents (with heaters) together with neighboring restaurants to offer a “food court” operation that features multiple dining options within a larger space more conducive to social distancing.
Small businesses lack the budget of their bigger brethren. They must substitute cleverness for cash. Being in the right place at the right time with the right message is more important than inundating a customer with witty phrases and catchy jingles.
The secret is to know your customer. Segment your target as tightly as possible. Determine exactly who your customers are, both demographically (age, sex, income level) and psychographically (lifestyle, buying habits). You will find that 80% of your sales come from 20% of your customers. So, if you know the buying habits and demographics of that 20%, you can target others with similar characteristics.
Then if you decide to use media advertising, you can match your customer with the media. Choose only those media that reach your potential customers, and no others. Reaching anyone else is a waste.
Most media segment their audience. Every radio station publishes a list of the demographics and the buying habits of its audience. Listeners of country and western music have very different buying habits than listeners of classical music, or rhythm and blues, or heavy metal. A syndicated cable TV show may appeal to a limited demographic; trade magazines and hobby magazines may appeal to specific lifestyle groups; some direct mail services can even predict buying habits city block by city block.
If you decide to use advertising as a part of your marketing mix, find a clever/unusual/distinctive approach. Then choose media that will help you maximize your advertising dollar, firmly establish your market niche, and avoid that wasted 50%.