Talking-Points

What impact has the WIFI era had on fundamental marketing for dealers, VARs and other resellers?

Talking Points

Over the last few years there have been some big changes in the way we communicate. The use of PDAs, Blackberries, laptop computers with WIFI or cellular connections and GPS cell phones have enabled us to stay in touch like never before.. However one aspect of the business that hasn't changed is the need to promote your business properly if you want to expand. I've heard people say that during the 1980s many dealers and resellers succeeded because they were "in the boat when the tide came in." While there may be some shadow of truth to this statement, there was one key concept that was used by successful companies back then and it is still fruitful for many today. That concept is promoting the dealership on a broad scale.

How do you define 'broad scale?'

In the Hubbard Management System®, developed by the world-acclaimed author and administrator L. Ron Hubbard, there is a policy letter entitled "Gross Income Senior Datum." I think we all know what gross income is; it's the money that comes into the business from all sources. The term senior datum refers to the fact that this piece of data is more important than almost anything else that pertains to gross income.

So what could be so important? In this policy letter Mr. Hubbard states that the gross income of an organization is determined by the size not the quality of your mailing list and the number of letters and mailings to that list. For a frame of reference, this policy was written in 1968. In today's business world the term mailing list has been replaced by database, and letters and mailings have been expanded to include email, fax and the like.

So direct mail is still a viable method of advertising or promotion then. How does quality relate to frequency?'

The basic concept of this policy letter is as true today as it was in 1968. To truly increase the gross income of your company, you must first accumulate a large list of prospects to contact. In keeping with the first part of this policy it is important to understand that the size of your database - that is the number of prospects you've identified - is critical. It is much better to have a decent database with 10,000 names than a really awesome database with just 1,000 names. Too often people get hung up on the quality of names they add to the database and thus don't promote their company, products or services to enough prospects.

This doesn't mean you should add garbage names to your database. There are plenty of companies that sell prospect lists. These companies allow you to choose prospects geographically based on state, county, zip code, telephone area code and more. So with all of these options, it is quite easy for a reseller to have a large prospect database and have it filled with good quality names.

The second part of the policy goes on to say that gross income is determined by the number of letters and mailings to the database. Unfortunately I have seen too many dealerships that have a large database, but do not send anything out to it consistently. The "number of letters and mailings" to the database is almost non-existent. Yet they tell us with great enthusiasm about the 20,000 names they've accumulated. I often ask clients how many companies they think their sales reps contact in a month assuming that multiple calls or visits to the same company only count as one. The most common answers range from 100 to 500. Now if your reps can only contact a few hundred companies each month, you need to have a plan for really getting your name out to your market. You can't think small and still have a rapidly growing business. It just doesn't work that way.

So it really comes down to having the top of the funnel constantly loaded with new and more prospects.

Right. Here's an example. Every morning you walk into your favorite deli or coffee shop and very often you pass by the same people. As creatures of habit we stop at the same places at the same time each day. How many of these people whom you see have you actually stopped to talk to? Actually taking the time to introduce yourself and your business to them. If they answer is very few, then this is a real-world demonstration of the database that has many names but not a great deal of contact going on. In a figurative sense, you have a deli full of contacts, but no real communication going out to them. As a result, most of them probably don't even know who you are or what you sell. The chances of one of these people becoming a customer of yours are slim.

Now what would happen each morning if you made a point of telling a handful of these people what you do and handed each one a business card? Do you think you could turn some of them or their friends into customers?

What is the best way to use direct mail if you have a limited number people who can make consistent sales calls?

In order to really grow your company, you need to communicate regularly with the contacts in your dealership. Ideally each prospect should get something every month at the very least. They may not get a personal greeting like the people you meet in the deli, but they should get a communication that tells them who you are and what you do. In the 20 years I've been in this business, I've heard many people say that when they do mailiings and promotion you should never send out more than your telemarketing or sales team can follow up on. I can tell you from first-hand experience that this is TOTALLY FALSE. Of course follow up is key to every promo as that increases sales. However it is a big mistake to limit or blunt your reach far more than the 100-150 companies you sales reps touch on an average month.

As far as what to send, common methods for reaching large numbers of prospects include direct mail, email, fax (though there are limitations on that), internet banner ads, print ads, broadcast media, billboards, social media and more. Direct mail is probably the most widely used method for anyone selling to a specific audience in a certain territory or region. In our work with many business systems dealerships, we've found self-mail postcards to be highly successful.

Why is that?

In order to get your message through, your prospect has to read it. When sending promotional mail in an envelope your frist challenge is to simply get your prospect to open the envelope and read the message. A well crafted postcard in a self-mail format uses an attention-grabbing message on the front side to pull in the prospects' attention. It then directs them to read the full message on the back which leads them to call, email or land on the appropriate page on your website. The other big benefit to postcard mailing is the cost. It usually costs much less to produce a good quality postcard than a decent quality envelope mailer. Postage rates are also lower for postcards which allows you to hit more prospects, more often. This keeps in line with the Gross Income Senior Datum policy we covered earlier.

How does this compare to email marketing?

Email is probably the most effective promotional method I've seen used among the dealers and resellers we work with in terms of response rates. Unlike the standard post office mail, email is usually not screened by anyone in the office. The receptionist or secretary doesn't open the decision makers' email but in many cases does open and throw away postal mail promotion. There are two factors that contribute to success with email. First, you need to gather a list of email addresses. I've done many informal surveys of business cards collected by dealer sales reps and determined that more than 90% of the cards collected have email addresses on them. If you're collecting cards, you need to get these emails into your database. The second challnge is getting your message through the spam filters that most email systems now use. Methods for doing this vary based on the system used for creating and sending email messages. Regardless of the possible pitfalls of email promotion, I strongly recommend this method because of its successful track record with the companies we've worked with.

And what was the issue with fax-based promotion?

The FCC has a law prohibiting companies from sending unsolicited promotional faxes. If you're going to send faxes to prospects you must get their consent first. In order to be covered you should get approval in writring before sending promotional faxes to prospects. If you send unsolicited faxes the recipient has the right to sue you in civil court for $500 per fax received. However you can fax to any customer who has purchased something from you within the last 18 months. Fax promotion can be very successful. If you follow the guidelines of the law, you can turn this into a very strong part of your overall marketing campaign.

With all this said, the moral of the story is communicate with as many prospects as you can as often as possible. If you limit your reach via promotion, you are also limiting your potential gross income. And I haven't met a business owner yet who wants to limit his gross income.

with Jim Kahrs, President and Founder of Prosperity Plus Management Consulting, Inc.