What We Can Learn From Pepsi

For over 20 years, Pepsi bought TV commercials during the Super Bowl. This year they are abandoning it and reinvesting the $3 Million or so per commercial they’ll be saving in various online initiatives.

This is important for several reasons. For one thing, Pepsi is a huge company. It’s not like they have to choose between the TV ads and the online projects – they can easily afford to do both. By choosing to drop a strategy that’s been a staple of their marketing for decades, Pepsi is indicating that it’s simply not a profitable investment for them. The fact is that no matter how funny or clever the commercial is, you’ve got to sell an awful lot of soda to cover the millions spent to produce it and the $100,000 per second it costs to run it.

The other reason it’s important is because Pepsi falls into one of the categories that many advertising “experts” seem to think can only be marketed effectively through high-concept “branding” campaigns. In reality, what’s being discovered is that no matter how big or commoditized a product may be, the Internet provides a plethora of ways to engage in two-way dialogue with customers that is much more valuable than the dubious results of bombarding them with cute TV spots.

Chances are, your company doesn’t have the resources that Pepsi does. You may not even have the resources your competitor does. 10 years ago, that kind of thing mattered a lot more than it does today.

The most important thing you can possibly do to grow your business is earn the right to communicate directly with your customers. Build your database by creating products and experiences that people want to be a part of. Create something worth finding. Give your customers a place to talk about your brand and them let them know you are listening. All of this can now be done online for a fraction of what it costs to out-shout your competitors with boring ads promoting free consultations, low prices and convenient locations.

Pepsi is doing it. You can too.

What’s the Difference Between an Advertising Agency and a Marketing Consultant?

The simplest way to explain it is this: Advertising Agencies create ads. Marketing consultants help you determine what and how to advertise in the first place.

They also help you with other marketing issues such as pricing strategy, sales training, customer retention, referral programs, joint ventures, product development, database strategy and everything else involved in selling products to customers.

Many people instinctively believe that advertising agencies are adequately prepared to provide strategic marketing guidance in addition to making the actual “stuff”.” In some cases this is true but in our experience it is the exception, not the rule. And to be clear, this is not a slam on advertising agencies. They play a critical role in the marketing process and can be wonderful strategic partners. But you have to understand that most advertising agencies are built around art directors, graphic designers, copywriters and other creative types. Analytics, research, testing and tracking results just isn’t their thing.

For marketing consultants, advertising is just one of many tools used to execute a business-building strategy. A good marketing consultant will not just develop advertising campaigns, they will help you track them and optimize them for maximum effectiveness. They are more concerned with generating a positive return on investment than they are with winning advertising industry awards for the creative work. Marketing consultants  spend lots of time monitoring the key metrics of your business (daily foot traffic, average sale, incoming calls/leads, conversion ratios, web traffic, customer acquisition costs, profit margins etc.)  and looking for ways to improve them.

So how do you decide between hiring a marketing consultant and an advertising agency?

The first thing you need to do is to honestly assess the needs of your business. Are you attracting enough leads? Are you effectively converting leads to sales? Are you building and nurturing your customer database? Are you able to accurately track the results of your advertising campaigns? Are your profit margins where you need them to be? These are the types of issues that a competent marketing consultant can help you with.

On the other hand, if you have a good handle on the fundamentals, an advertising agency may be just the thing you need to polish up your image, enhance your brand and differentiate your business through exceptional ads and marketing materials. Advertising agencies are also good at coming up with clever positioning strategies for certain types of businesses – usually in highly commoditized industries – where unique advertisements are the primary differentiating element between brands. Examples include soda, alcohol, fashion etc.

Social Media ROI

Yesterday I wrote a post on taking action. The point was that it is very easy to get caught up in endless discussions about how and why to execute a new marketing strategy instead of just doing it. Of course you want to make informed decisions but in many cases deliberation is the enemy of progress.

Social media tools are new but the concept is as old as marketing itself. It’s nothing more than good old-fashioned networking amplified by Internet technology. Customer service. Relationship building. Communication. That’s it.

Businesses often fear new technology. The impulse is to sit on the sidelines waiting for proof that something works. Unfortunately, waiting for someone else to prove a particular strategy or tactic works often means that you’ve missed the opportunity to capitalize on it.

The fact is that many businesses are not only using social media but they are using it profitably. They are trying new things and reaping the rewards of early adoption. They are putting in the time and the effort and they are succeeding because of it.

Want to know what taking action looks like? Still looking for proof that social media isn’t just a bunch of people sharing what they had for lunch? Take a look at this:

Taking Action

Taking Action.LeapOver and over I’ve heard the old adage that knowledge is power. It’s a philosophy that has served me well.

I am that guy that is constantly listening to educational CD’s and news programming in the car. And if I’m not meeting a client for lunch you can bet that I will be sitting alone somewhere reading a book or magazine on business, marketing or technology. One of my biggest pet peeves is being stranded somewhere i.e. an airport, restaurant, hotel lobby etc. with nothing to read.

Acquiring knowledge has always been enjoyable for me and for the longest time I believed that it was enough to propel me forward.

Now that I am old enough to have some decent life experience however I have come to the realization that knowledge alone is relatively useless, and in some cases even detrimental, unless it is accompanied by action.

It’s not like this is some profound revelation. It’s obvious. But I can tell you that the number one reason businesses suffer from slow growth or stagnation is a lack of the will to take action.

Due to the nature of my job I constantly come into contact with people searching for ways to improve their businesses. They want more traffic, increased sales, more leads, bigger margins and steady, predictable growth. Ambition is rarely an issue. Taking action almost always is.

Notice that I didn’t say that spending money is the biggest obstacle. Sure, there are plenty of people that are unable or afraid to spend money to solve problems but, again, this is not the nearly as prevalent as the lack of will to take action.

Here’s the deal. The entire world of marketing has changed dramatically in recent years. Actually, the more accurate statement would be: The entire world of what works in marketing has changed dramatically in recent years.

I could go on for days about things like inbound vs. outbound, push vs. pull, flipping funnels, permission marketing and social media but perhaps the most relevant point for business owners is this: You can no longer expect satisfactory results from the strategies and tactics that used to work and the strategies and tactics that work now require a lot more action on your part.

This is a hard pill for many business owners to swallow. Most of them are used to delegating marketing tasks to internal marketing people, advertising agencies or both and then having those people come back with a nicely produced series of ads to run on TV or in a trade magazine.

The budget is approved, the advertising is purchased and then everyone sits back and waits for sales to spike. Problem is – they rarely do anymore.

The new key to success in marketing is value creation. You must give before you get and the giving almost always comes down to creating great content. Publishing content is a lot of work and here’s the rub – you can’t outsource it. At least not all of it. If you do, you’re very likely going to end up with bland, uninspired content that will not be interesting or useful to your customers.

The new world of marketing requires action on the part of everyone involved. If you want to make exponential leaps in lead generation, sales, customer retention and other key metrics, people in your organization must learn to take action by participating reliably in the content creation process.

  • This means that the CEO doesn’t start a blog unless she can commit to creating the content on a set schedule.
  • This means that you don’t start a Twitter account unless you have a content strategy led by key marketers in your organization.
  • This means that you don’t start a newsletter unless you intend to treat it like it like a primary marketing vehicle and commit to producing it consistently, reliably and in perpetuity.
  • This means that you don’t leave the content creation process to interns and entry-level staff.
  • This means that you devote as many resources to actively listening to your customers as you do to talking/selling to them.
  • This means that you do not start a campaign unless you build in a tracking methodology and commit to vigorously monitoring the results.
  • This means that, come hell or high water, you take the time to write the ebook, produce the videos, record the audio or publish the articles that will become your primary source of new business leads.

Knowledge is free and widely available. Anyone with an Internet connection can go online and find out what they need to do to succeed in marketing or any other area of life. But no matter how much knowledge you absorb, you’re never going to get anywhere without taking action.

Chances are, you are spending too much time reading, thinking and talking about how to succeed and not enough time actually doing the things that are going to get you there. I see it constantly when working with clients and I catch myself doing it all the time as well. It’s a pervasive problem that affects nearly everyone including the most successful and intelligent leaders among us.

I can tell you from experience that breakthroughs happen when people start taking action without fear or regret. If you’ve been searching for ways to improve your business (or your life) just start taking the steps. Walk the walk. Don’t worry about getting it perfect. Don’t even worry about failing. Just start by committing and taking action. It’s way more satisfying than just coming up with ideas that never see the light of day.

Competition

Lots of other companies provide the same product or service that your company does. Many of them have been doing it longer than you. Many of them have more extensive resources than you: More people. More money. More customers. More clout.

This keeps a lot of businesses (and people) from stretching. It’s intimidating to survey the landscape and see a wall of giants. You have a hard time imagining how your business could possibly compete.

Marketing is the great equalizer for underdog businesses. You may not be able to build a bigger building or hire more people, but nothing is stopping you from dominating the space between your customers’ ears.

The trick is learning to see new opportunities within established markets. You can’t own the hill that your competitor does but chances are likely that you can build a new hill that is yours alone.

What’s Your Ideal Client?

We’ll be the first ones to tell you that we’re not right for everyone. You don’t have to poke around this site for long to see that we operate differently from most of the other advertising firms out there. We have pretty strong opinions about marketing and share them openly and honestly.

We operate this way because there’s just too much B.S. floating around in the world of advertising and lots of companies waste unbelievable amounts of money because of it. It’s a big industry with a lot of legacy players that are either unwilling or unable to break free from outdated practices in favor of new ones that are more accountable.

We don’t have any interest in developing theoretical solutions for clients. We like to build systems that create revenue in a manner that is both reliable and measurable.

Our clients come to us when they are fed up with the wish-washy stuff. They are serious about not just sustaining their business, but growing it with ferocity. They are smart enough to know that they don’t know everything and are open to learning and trying new ideas. If that sounds like you, then you’d probably fit right in.

On the other hand, we’re probably not a great fit for you if you believe that:

  • Focus groups are the best way to determine the success of an advertising campaign.
  • Great brands and great companies are built on brand advertising.
  • “Awareness building” should be the primary goal of an advertising campaign.
  • Results and spending levels always go hand in hand.
  • Advertising is largely a game of luck.
  • Successful advertising is based on choosing the right media.
  • Great marketing cannot dramatically transform a business.
  • Marketing is little more than a necessary evil.

How Do Your Fees Work?

There are several compensation structures we offer clients based on the type and scope of work they need. Here are the common arrangements:

Commission Based

For clients that utilize traditional media i.e. television, radio, outdoor, print and other offline media, our fees are usually completely covered by the discounts we receive from our media vendors. The standard agency discount is 15%. Here’s how it would work with a hypothetical budget of $10,000:

  • We purchase $10,000 worth of advertising inventory on behalf of you, the client.
  • At the conclusion of the campaign, the media vendors invoice our agency for $8,500 (a 15% discount).
  • The remaining $1,500 covers the agency fee.

Clients like this arrangement because they end up getting our services without spending any additional money. It works really well for situations where clients use us primarily to manage their media planning and placement.

Retainer Based

For comprehensive consulting services and/or situations where media commissions are impractical, we work on a flat monthly retainer. Depending on the scope of work, these fees range from $2,500-$15,000 per month.

There are also instances where clients prefer to hire us to work only on specific aspects of their marketing program. In these cases, we offer a reduced-rate retainer based on the scope of work. Typical examples of this would be pay-per-click marketing, social media consulting, email marketing management etc. The management fees for these services start at $750/month.

Retainer Plus Commission Based

For clients with full-service consulting needs and extensive media plans we often work out a flat monthly retainer plus media commission arrangement.

Project Based

Sometimes clients just need us to do a specific project i.e. build a website, design a logo, write a sales letter, etc. In these instances we are happy to quote a flat fee for the project.

Everybody’s a Marketing Consultant

Marketing Consultant

Sometimes job titles become so commonplace and broad that they lose their effectiveness for identifying the exact nature of the position. The term “marketing consultant” has definitely reached this level of ubiquity.

Anyone can call themselves a marketing consultant. There are no educational requirements, governing boards, professional designations, or other bonafide prerequisites that must be met to hang out a shingle and start advising people. And perhaps this is perfectly fine. After all, there are plenty of professions that have such requirements and oversight that are filled with incompetent practitioners. At the same time, there are a lot of fantastic painters, handymen, babysitters, graphic designers, CEO’s and, yes, even marketing consultants that learned their craft through real-world experience and may have never been willing or able to pursue it had there been significant barriers to entry.

So if you are a business owner looking for help with marketing strategy, how do you go about identifying someone qualified and able to successfully diagnose your challenges and provide effective solutions?

The obvious answer would be to do a thorough review of the candidate’s qualifications and experience. How long have they been doing this? What clients have they worked with? What is their track record of success? And while these are all important issues that should be addressed, there is actually another critical question that should be asked before any other: What are they selling?

You see, in many industries “marketing consultant” is thinly veiled code for “salesperson.” Now there’s nothing inherently wrong with this. For one thing, marketing consultants have to sell their product just like everyone else. And there’s also nothing wrong with a salesperson positioning himself as a marketing consultant; the good ones really do try to provide helpful information. But if you are a business owner looking for quality, unbiased advice about how to grow your business, you should understand that if a marketing consultant’s compensation is in any way tied to the sale of a particular advertising product, you are at risk of receiving tainted information.

No matter how altruistic the intent, a “marketing consultant” paid via commissions on the sale of billboards is always going to strongly encourage solutions involving billboards. The same thing goes for newspaper ads, search marketing, radio ads, cable TV ads, SEO programs or any other advertising vehicles represented by salespeople. If the person you are talking to earns their pay through the sale of an advertising medium, you are talking to someone that is incentivized to give you recommendations utilizing that medium.

The advantage of hiring a marketing consultant that is un-tethered to a specific product or service is that they are free to advise you based on what the best solution is rather than the one that will generate a sales commission for themselves.

True marketing consultants should be paid for their knowledge and experience. This could mean that they receive an ongoing monthly retainer, hourly fee, or a flat fee for a particular project. It could also mean that they generate income from the training and seminars they conduct or educational products they produce. There are myriad ways that experts can be fairly compensated for their services. The important thing for you as a business owner to determine is if your prospective marketing consultant is absolutely free to recommend any valid solution or if they are directing you towards specific advertising products or vehicles they have a financial interest in selling.

Become a Part of the Process

Some products are designed to be bought on impulse – chewing gum, magazines, and keychain flashlights for instance. But unless your product or service is an inexpensive commodity available at the checkout counter of your local convenience store, your customer’s buying process is probably a little more complex.

Most people do some research before they buy. They look on the internet, read product reviews, scan catalogs or brochures, and ask friends, family, and co-workers  for recommendations.  Depending on the price and complexity of the product, they may drag this process out over weeks, months, or even longer. By the time they call or come in to your store for the first time, they’re probably 90% sure of what they want and whom they plan on buying it from. At this point in the process, the negotiation will be centered on price and there will be very little that you can do to influence the buyer’s decision.

Although most business owners are aware of this process, many continue to focus the bulk of their marketing efforts on the last stage, where the costs are highest and the success rate is lowest.

Why not approach things differently and direct 90% of your marketing efforts towards customers that haven’t already made up their minds? Why not become part of the buying process instead of hoping that the process leads to you?

Change

“If you do what you’ve always done, you’ll get what you’ve always gotten.”

Marketing a business is not about tactics. If you simply look around at what your competitors are doing and then try to do the same things, only better, you’re going to keep struggling. Chances are, most of your competitors are doing the same thing you are – looking around the marketplace trying to find the right combination of tactics and messaging that will make a difference. The ads all look and sound the same. Everybody talks about their great customer service, or discounted prices, or their years and years of experience. All the while, no one is able to track what they are doing or tell you what kind of return they are receiving. They just keep writing checks each month and hoping for the best.

There are, of course, some businesses that do not operate this way. Your doctor’s office is probably one of them. Have you ever received a direct mail piece from your doctor soliciting exams for sick patients? And when is the last time your doctor called you in the middle of dinner to offer you a special, one-time discount on treatment for sinus infections?

The reason your family doctor doesn’t actively solicit you is because they don’t have to. When you get sick, you find them. They already have your trust and when you are sick, that’s who you call. The medical profession has been very successful at positioning themselves as gurus. They don’t come to you – you come to them.

What if your business operated that way? Instead of salespeople spending countless hours making cold calls trying to set appointments with people that do not want to see them, they could spend their time in front of interested prospects with real problems and a sense of urgency to solve them. Wouldn’t it be nice if customers found you instead of you trying to interrupt them constantly with expensive ads that generate little or no response?

The businesses that succeed in today’s environment are those that draw customers in because they are the perceived experts in their field. They know how to position themselves in such a way that it is impossible to make a direct price comparison between them and their competitors. They know exactly how much revenue they generate for each dollar they spend on marketing and advertising. They know that cold calling for new business is a waste of precious time and resources. And they know that trying to compete by running pricey ads that do nothing more than list features, benefits, and price promotions is best left to inexperienced competitors.

You can change your businesses dramatically – starting today- by making the decision to become the obvious expert in your niche. Here’s how:

  • Write education-based articles, tutorials, and other content that your customers would value and consult when making a buying decision.
  • Create special reports or whitepapers that highlight your expertise.
  • Develop workshops or seminars to train and educate your customers.
  • Collect short testimonial videos from your best customers and assemble them into a DVD that all new prospects receive.
  • Start a subscription newsletter.
  • Create an online forum where customers and prospects can exchange ideas, best practices, support tips etc.
  • Start a blog. Today.
  • Start cultivating relationships with local publications, trade journals, and news outlets – offer to provide tips, quotes, articles, or any other help they need.
  • Team up with complimentary service providers and start a referral program.
  • Create a detailed follow-up plan that happens automatically whenever a lead is generated.
  • Advertise your content, not your product features and benefits.
  • Provide value. Stop peddling your wares.

You have a choice. You can keep running the same ads, in the same places, writing the same checks to same sales reps, and receiving the same results. Or, you can start out on a new path. Are you afraid of change? Is it any scarier than doing nothing?

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