Paul Burri: Cut Advertising; It’s Too Expensive

I remember when I was first starting out in business and began to place advertising in various magazines. I would get calls from the sales representatives telling me that I needed to advertise at least three times before I should expect any results. Being a cynic, I dismissed that advice as simply their way of generating more business.

But after being in business for several years, I finally realized they were right. The first time your ad appears, no one sees it; the second time, a few people might notice it but they don’t take any action; the third time, they may start to remember you and maybe — just maybe — go so far as to buy something from you. It is a sad truth that you cannot ignore.

The most dramatic confirmation of people not seeing your ad the first few times happened to me one day shortly before I sold my business. I got a call from a customer who said, “Hey, I just (my emphasis) saw your ad in Fine Woodworking.” We had been advertising in that magazine for over 16 years when I got that call!

Now here’s another lesson from the advertising experts. Do not cut your advertising budget when things get slow. That’s what many businesses do but it is exactly the wrong thing to do. Henry Ford was supposed to have said, “A man who stops advertising to save money is like a man who stops a clock to save time.” Another bit of wisdom is, “Trying to run a business without advertising is like winking at a girl in the dark.”

But when business is tight you must spend every dollar wisely and effectively. To do that you need to track the effectiveness of your advertising. That means knowing which ads work well and which ones don’t. How do you do that? There are several ways and the most effective one is to simply ask every new customer, “How did you hear about us?” If you are doing magazine advertising in several magazines, you can add a different department number to each magazine. You can even code each magazine to see which month is the most effective. Department FS could stand for the September issue of Fine Woodworking.

Another helpful way to have customers tell you which ad is most effective is to offer a “coupon code number” to certain ads and not others. (You’ve seen these ads: “Mention this coupon code number for an additional 5 percent discount.”) Or you could try a technique used in the billboard industry. Every billboard ad has a phone number different from other advertising media. When that phone rings in your office, you know it’s from a billboard ad.

But it’s not enough to do all that clever coding if you don’t keep track of it with a simple log of some kind. I had my sales reps keep a log near their phones on which they would jot down where the customer heard about us. Then we would periodically tabulate the results and use that information to determine where to put our advertising dollars.

Keep on advertising.

Paul Burri is an entrepreneur, inventor, columnist, engineer and iconoclast. He is not in the advertising business but he is a small business counselor with the Santa Barbara chapter of the Service Corps of Retired Executives (SCORE).