The difference between advertising and prayer!

For most of us, advertising is a little like prayer. We're not sure it provides any benefit, but we do it anyway, just in case!

Of course, one difference between advertising and prayer is that advertising costs you money. And, as a professional manager, your job is to maximise your return on capital.

In other words, if advertising doesn't work, you shouldn't do it at all. And if it does, you should probably do more of it.

In the context of our Relationship-centric Marketing methodology, advertising can perform one of two functions:

1. It can initiate relationships with strangers.

2. Or, it can enable you to communicate with people with whom you have an existing relationship (customers, as well as potential customers).

Now, I'm sure you'll agree that both of these are worthy causes. However the fact that they are worthy causes is not reason enough to start writing cheques for your friendly ad rep.

Before you do that, you need to satisfy yourself that an advertisement is capable of performing the desired function. You also need to be sure that there isn't a more cost-effective way of producing exactly the same result.

Advertising to build a brand

Most of the advertising that surrounds us every day is designed to perform the latter of the two functions above.

Think about it: Coca Cola and McDonalds don't run advertisements to acquire new customers. Their advertising campaigns are designed to communicate with existing customers.

Even an advertisement for Nike or Mercedes isn't communicating with total strangers. Odds are, even if you don't wear Nikes or drive a Mercedes, you still know what those brands represent.

For mass marketers, advertising is simply a cost-effective communications channel. (Mass marketers call this communication 'brand building', in recognition of the fact that it is not intended to directly stimulate sales.)

However, if you serve a niche market (as most AdVerb subscribers do), advertising ceases to be a cost-effective means of communicating with those individuals with whom you have an existing relationship. It's simply more cost-effective to communicate via e-mail, direct mail (including newsletters) and other one-to-one communication tools.

Accordingly, if you serve niche markets, you probably shouldn't be running traditional 'brand building' advertisements at all. You're better off communicating directly with your customers and potential customers.

Initiating relationships with strangers

While we rarely use advertising to communicate with people with whom our clients have an existing relationship, we regularly use it to initiate relationships with their potential customers.

This can work well if (and only if) you understand that the design of an advertisement intended to initiate relationships differs significantly from one intended simply to communicate with existing contacts.

A 'relationship-acquisition advertisement' (as we call them) should be designed primarily to acquire potential customers' contact details (including their e-mail addresses).

The easiest way to do this is to 'write the book' on your area of expertise and offer it free -- in either book, or newsletter form.

This means that, if the objective of your advertisement is to initiate relationships with strangers, your advertisement shouldn't promote your service at all -- it should promote your offer of a free book (or newsletter subscription).

You might like to follow the link below to view an advertisement we run periodically in the Financial Review in order to acquire new relationships:

It's worth noting that, despite a rare absence of both quirky humour and abundant white space, this advertisement generates around 150 new relationships (AdVerb subscribers) with each insertion!

Other relationship acquisition options

More often than not, our clients don't have to run advertisements in order to identify their potential clients. That's because their clients' contact details are already in the public domain.

If you can telephone your local list broker, purchase a list of potential clients and add this list to your database, why would you want to advertise in the first place?

Even if this information isn't readily available, advertising is still not your only option. Once you've 'written the book' on your area of expertise, there is a number of alternative promotional mediums available to you. These include endorsement campaigns, broadcast fax campaigns, inserts in professional publications and offers on your Website (and on alliance partners' Websites).

Of all these options, we typically find that endorsement campaigns are by far the most cost-effective. (This is where a non-competitive alliance partner endorses your offer of a free book or newsletter to her house list — often in exchange for you doing the same.)

Measure it: then manage it!

Another benefit of using advertising (and other promotional activities) exclusively for relationship acquisition, is that it's easy to measure the effectiveness of individual relationship acquisition campaigns.

Our recommended metric for campaign effectiveness is 'cost per new relationship' (or 'cost per response'). This is simply the campaign cost divided by the number of responses.

Of course, promotional campaigns are just like any other business processes: once you can measure them, you can manage them.

We recommend our clients manage their promotional campaigns using what we call an 'activity by source' report. You can grab a copy of a sample report (in Excel format) free from our 'download' zone:

A little prayer?

In conclusion, if you are a niche marketer, you should not be using advertising to build your brand (or to 'get your name out there'). You can do that by communicating directly with your contacts (via what we call your automated communications program).

If you do choose to advertise, your advertising should be designed solely to acquire new relationships. (These new contacts should be added immediately to your automated communications program.)

And once your advertising is designed to acquire relationships, rather than to communicate with the population at large, it immediately becomes accountable.

As a result, advertising is no longer deserving of its own chapter in your prayer book.

Will a little prayer help?

Perhaps. But only as a supplement to (and not a substitute for) effective sales process design!

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