Bob Sheehan’s Blog

Poor Toyota. The well-publicized problems the carmaker experienced with unintended acceleration on several of its models were headline news for months. Every time you turned around another part of the story was being revealed. Even the Secretary of Transportation said that he would not buy a Toyota. No other company been so excoriated in public since the Tylenol crisis several decades ago. 

So when automobile sales figures for March were announced, it was no surprise that Toyota suffered a significant — increase? Really? 

Really. Toyota’s March sales were up 41 percent, besting even a resurgent Ford. At a time when any rational person would think that sales would plummet, Toyota pulled out a whopping success. 

How did this happen? Toyota, instead of sticking its head in the sand and hoping the problems went away, fought back, promoting and advertising aggressively. Rather that cut back on marketing until things blew over, Toyota increased its market presence with remarkable results. 

As fast as the press was reporting Toyota’s problems, the company countered with price cuts and financing deals. They blanketed television, radio and newspapers with a heavier than average schedule, using the lure of promotions to overcome the beating the Toyota brand was receiving. 

It worked. The American public, well aware of the possibility that buying and driving a Toyota could result in injury or death, voted with their wallets and pocketbooks. 

Perhaps nature played a role. Noted science expert Marilyn Vos Savant recently noted in her national newspaper column that the human animal has not yet evolved enough to develop innate fears of modern threats. She used the example that people are afraid of spiders, which pose very little danger, yet are nonchalant about driving down the road in a steel and plastic box with potentially fatal consequences. Our “inner animal” just is not yet wired to fear death on the highway. So the desire to save money easily wins out over a threat that is perceived as minimal. 

In fact, the prices and financing terms that Toyota dangled to lure buyers back were not very different from the offers the company has offered all along. But the massive marketing campaign made the message so pervasive that car shoppers were persuaded that the deals were too good to pass up. 

Kudos to Toyota’s marketing department for having the courage to fight through the crisis, and the insight to go back to tried and true media to deliver their message.

 Are you one of those people who are waiting for Twitter to dry up and blow away? Think that Facebook is a passing fad like pet rocks? Aren’t sure that LinkedIn is going to hold up in the long run?

 Wake up and smell the espresso. Social media is rapidly taking a place at the table with newspapers, radio, television and direct mail as a legitimate marketing channel. And it is not just for teens.

 The numbers don’t lie: 

• Twitter’s audience grew from 5 million in January 2009 to more than 20 million by June 2009. And it is not just teens who are Tweeting:  Only 16 percent of Twitter users are under 25, while 64 percent of users are 25-54 years old, and 20 percent are over 55. And with the recent announcement that Google searches will now include Twitter sites, that exponential growth is poised to explode. 
• Facebook, too, is growing at a rate that is too impressive to ignore or pass off as a fad. In 2009, Facebook’s 35-54 year old demographic segment was the site’s fastest growing group, blazing to a 276.4% growth rate over the last 6 months of the year. That key demographic group is doubling roughly every two months.
•  LinkedIn, a business-to-business oriented networking site, had over 40 million registered users by May 2009. 

The popularity of electronic media is growing rapidly at a time when “traditional” media is struggling. According to the Audit Bureau of Circulations, average weekday circulation at 379 U.S. newspapers fell 10.6 percent during the six months ending in September, 2009. That was the steepest decline ever recorded. Television and radio are also struggling to maintain their audience, as the options available to viewers and listeners expand. 

What does this mean for your business? There is a clear necessity to adapt and adopt new media in order to successfully deliver your marketing message to the right audiences. As more people turn to Twitter and Facebook for their news and information, you have to be there as well. 

This has happened before. When television became more widespread in the early 1950s, many advertisers scoffed at the “newfangled” technology and continued to invest their advertising dollars in newspapers and radio. But those who glimpsed the future in the glow of a television tube and shifted their emphasis to broadcast advertising rode the wave to success. 

Which will you be?

If yours is like many businesses, you spend a great deal of time and effort trying to reach out to customers and potential customers. You might call it prospecting, outbound marketing or cold calling, and it is an important part of your business plan.

But, while traditional marketing methods remain an effective source of sales leads, there is a significant shift underway that will require you to reexamine your marketing process. 

Outbound marketing is more and more like trying to find a needle in a haystack. Except that nowadays the haystack is moving, too. Your sales people get frustrated at how soft the leads are, consumers avoid your too-frequent contact and your marketing budget is being eaten up on dial-outs that do not work and ads whose return is diminishing every time you send them.

Take a few moments to watch the video here:

Although produced in fun, it actually conveys a serious message. When you’ve viewed the video, come back to read the rest of this blog for some answers.

While the video obviously exaggerates the problem of outbound marketing, it does point to the fact that a transition is underway toward a new paradigm in the contact cycle with customers. Getting customers to call you is the wave of the future.

Take an honest look at your contact rate, conversion rate and close rate. Even given the profound effect of the recession, your results are probably trending lower than in the past. Advertising is fragmented, requiring a bigger investment to generate the same amount of leads. And cold calling long ago became a difficult and less efficient means of marketing.

The next generation in marketing will be web-based, and it will offer the ability to be more targeted and offer more accountability than before.

This is a natural progression. As new technologies emerge and become more widely accepted, consumers and marketers gravitate toward them. Handbills gave way to newspaper advertising, which led to radio commercials, which were overshadowed by television commercials. Now it is time for web-based marketing to shine.

Why web marketing will succeed

An inbound contact (phone call, email or web log in) is FOUR TIMES more likely than an outbound call to result in a transaction. And customers who make the first move tend to remain customers longer and spend more over the life of the relationship.

Web-based marketing gives us the ability to better target customers who are likely to respond to our message, and to measure that response. The difficult part is getting the right message, to the right people, at the right time, with enough frequency to get a positive response. Fortunately, the tools and technology are available to make this possible.

Using web-based channels, you CAN turn your marketing around and put your people to work answering customer calls instead of “dialing for dollars.”

If you don’t understand the significance of web-based marketing, think about this:  80% of the population of the United States cites the internet as their primary source for information on products or services. That cuts across all demographic groups. You need to be making an impact here if you hope to survive.

Too complicated? Too hard to get a grasp on the technology? Too much effort (and too scary!) to think about the future of your business?

Getting involved in new media and web-based marketing is no longer an option. That is where your customer are going, if they are not there already. You need to be there, too.

Call me. We’ll talk about how web-based marketing can be integrated into your overall marketing plan and become an effective method of obtaining leads and customers.

As someone who is in the driver’s seat of your business, you are responsible for steering the vehicle in the right direction. You must also judge the right speed, knowing when to apply the brakes and when to accelerate.

It’s time to step on the gas.

Nearly every indicator available points to an economy that has reached its nadir and is poised to begin a recovery. It won’t be a big bounce, and it is unlikely that we will soon (if ever) see the red hot boom times of just a few years ago. But the “dam has held” and it is time to look forward.

If you are one of those business leaders who was smart enough to keep your head up and keep moving forward (cautiously) through the crisis, your company is probably well positioned to quickly take advantage of the thaw in spending and investment that is occurring. Your commitment to steady marketing is about to pay a handsome dividend.

But if you hit the brakes during the recession or, worse, simply pulled off the road and parked, you have some serious catching up to do.

There is pent up demand among customers who have come to realize that their jobs, savings and home equity are not going to disappear. They want a new car, new roof, vacation and dinner in a nice restaurant. And their attention is focused on those companies who have maintained top of mind awareness all along.

It is not too late to accelerate your marketing ahead of the coming rebound. Careful planning, targeted spending and monitoring of results will help channel your efforts and investment into the places where they will do the most good.

But, whatever you do, don’t sit idle. Or you may find yourself being passed at high speed by your competitors.

In case you haven’t noticed, the economic dark clouds have lightened considerably in the past few weeks. Several key signs indicate improvement in business conditions, and possibly even the beginning of an economic recovery.

Cautious advisors will say, “We are not out of the woods yet.” So be it. But we can see the sunlight beyond edge of the trees, and the only way to get all the way out is to move forward.

There is evidence of pent up demand in certain segments of the economy, particularly in areas related to personal comfort and shelter. Sales of high-definition televisions, cooking supplies, personal electronics and home improvement services are strong and getting stronger. Other areas, such as clothing, travel and hard goods, are not far behind.

Will you get your share? Not if you sit there and hope for the best.

Now is the time to quicken the pace and make your move. And your current and past customers are the ones who will lead you to the daylight.

People who have done business with you in the past are the most likely to do business with you in the future. The relationship has been established, they know what to expect from you and (hopefully) have had a good experience with your company.

But they won’t come wandering in on their own. You have to reach out and invite them back. You must tell your customers that they can open their eyes (and their checkbooks) again and start to flex their still considerable financial clout.

Go after them by tapping into their need to satisfy a craving for improving and enhancing their lives that has been delayed for too long.

For example, one look around your neighborhood will tell you that many homeowners have put off home projects such as painting, siding and roofing. These are precisely the kind of expenditures that can be justified by even the tiniest glimpse of a brighter economic future.

It is time to once again fire up your marketing machine so that your business is among the first to receive the benefits of a public that is eager to get back into the game.

The Boston Globe has announced that, unless the newspaper’s unions are willing to grant significant concessions in the next 30 days, the newspaper may be forced out of business. While some people see this as a power move designed to reduce operating costs, the fact remains that the Globe — and almost every other daily newspaper in the United States — is on shaky ground.

Even if the economy were to bounce back quickly, the tide has already ebbed for many forms of traditional media. We may be facing a future without daily newspapers.

“So what?” you may ask. We can always get our news on-line without shelling out a dollar every morning for stories that are already 12 hours old.

However, even though newspaper advertising revenues have been falling precipitously over the past decade (and the drop off has accelerated dangerously in the last six months), there is still a significant portion of American businesses that rely on newspaper advertising as a primary vehicle for delivery of their marketing messages.

What if the presses stop rolling? How will these advertisers reach their customers? Some will turn to smaller, weekly newspapers, but at a huge loss of circulation, frequency and flexibility. Radio and television will fill some of the void, but without the same impact. Direct mail is still a good option for smaller, more targeted campaigns, but prohibitive for mass marketing.

New Media Takes Command

The medium that is most responsible for the damage being done to newspapers — the world wide web — is quickly becoming the best option for advertisers. But the transition will require a sea change in how advertising messages are formulated and delivered. Not to mention a huge leap of faith for traditionalists who are used to holding proofs in their hands and posting tear sheets on their bulletin boards.

The sooner advertisers begin to adapt to internet marketing, the better off they will be. In my business, we have already converted significant portions of client advertising budgets to the internet, and are seeing results from multiple channels of on-line marketing (including e-mail marketing, AdWords campaigns, blogs and enhanced web sites).

Personally, I enjoy the tactile experience of opening a newspaper and flipping through the pages. But, as a marketer, I welcome the “brave new world” of internet marketing as a big step forward in the process of communication.

If you are a smart businessperson you do not spend all of your marketing dollars in one place. Instead, you allocate your resources to cover different market segments, and reach your audience using multiple channels.

The problem is that some of your marketing efforts are working well, but some are not. Some may not be working at all. But do you stubbornly stick to the plan, even when it is proving to be inefficient? What about trying new ways of reaching your customers? Many people are reluctant to carve out a portion of their budget on “untested” media. You may miss out on a great opportunity!

How do you decide the most efficient and effective way to allocate your marketing budget? The key is “marketing intelligence” that can only be obtained by carefully tracking and analyzing key data points.

You should be keeping data on everything you do. Call data, click data, anecdotal data, response data of all sorts. It must be organized so you can easily rank the effectiveness of each marketing program in relation to the others you have tried. Then rank them according to the most important metric: call cost, click cost, lead cost, cost of sales — whichever is most likely to provide you with the best guidance. This will give you a clear indication of where you should be spending most of your marketing money.

Fully fund the most effective program before you spend a penny anywhere else. Buy everything you can in the best performing media — more ads, more mailers, more click-throughs, more outbound calls. If it works, maximize your impact.

Then do the same for the second best performing area, then the third, and continue until you run out of budget. This will help ensure that you always have the best possible media selection.

This is the cleanest and best way to run the most efficient direct marketing program. It is difficult to do because of the temptation to allocate funds to media that don’t perform as well as they should. But if you can approach your planning with discipline, results will be the best they can be.

John Wanamaker famously quipped that he knew that only half of his advertising was working, but he wasn’t sure which half it was.

Do you know “which half is working” when it comes to marketing your business?  Are you even trying to know? You can’t afford to be guessing — or hoping — when it comes to making an investment in marketing today.

Decisions about your marketing must be governed by results, which are defined by activities that actually produce sales. No more being satisfied with nebulous goals like reach, frequency and audience size. These are merely the means to an end.

The goal is very simple: To get a customer to buy something. Whatever fails to accomplish this task is not effective, not improving your bottom line, and is a waste of money.

That money needs to be redirected into activities that do produce measurable, quantifiable results. All advertising today should be “direct response” advertising, producing outcomes that can be readily calculated and tallied. That is the only way to tell if your marketing is working.

Having the discipline to say “no” to ineffective activities in order to focus on actions that provide measurable value will help you to achieve your business goals, and to focus your organization on what is important.