As any business owner knows, you get returns from investments, not from expenses, so understanding that you're investing your advertising dollar in the hope that it will bring you a return is the only way looking at your marketing and advertising that makes sense.

Unfortunately this thought process happens too seldom because in the average business, the owner has little if any idea what the return on their investment is.

Why?

Too often the average small business owner doesn't take the time to measure the response that each marketing piece generates, leading to that uncertainty. Sure, you might think your latest radio commercial, which you spent $2500 on, is drumming up business, but what if it’s your social media, that you spend virtually nothing on, that is generating the leads for you?

If you don’t know what your resources are doing for you, how can you ever really know how to use them most efficiently?

If you were to invest your money in a stock or a piece of real estate, you'd most likely keep a very keen eye on what returns you were getting from that investment, wouldn’t you?

So why doesn’t the average business owner look at their marketing in the same way? After all, it’s a helpless feeling when you aren’t sure whether you're getting any return at all from the money you invest.
So how do you find out what return you're getting from each marketing piece?

You simply ask each customer who calls, or comes into your store how they found out about you. You then record their response, and calculate how much business each advertising effort generates.

Yes it will be time consuming and you may not get every single customer right, but it will give you an idea of what works and what doesn’t and you can move forward from there, deciding which campaigns and materials are worth keeping or updating and which can be thrown in the trash.

But most importantly, once you've worked out the marketing campaigns that are making you money, or at least paying for themselves, and the ones that are costing you money, you'll be able to stop throwing good money away and start to increase your profits.

People fall into this trap because it’s what they've learned from what they've seen, heard or read. It's what we've all been exposed to through years of advertising copy in magazines, newspapers, television commercials and radio campaigns.

That’s because all around the world advertising agencies spend thousands of dollars trying to produce award winning advertisements.

These “clever” advertisements are not designed to make sales for their clients but to impress judges presiding over major awards. The judges themselves have no interest in how successful a campaign has been. They simply look for the best play on words, the biggest or funniest advertisements to the extent that they miss the point to the whole exercise: Making Sales.

Advertising is about one thing and one thing only; getting people to buy your product or services- and “clever” advertising simply doesn't make people buy.

Think about how many ads you read, see or hear in the course of an average day. You probably won't be surprised to hear that most people are exposed to over 1,500 advertisements every day.

Of those 1500, how many do you stop and take notice of? How many can you actually recall seeing?

In many cases people would be lucky to remember ten.

It's hardly surprising we can recall only a handful because if we were to stop and pay attention to every ad we were exposed to, we'd spend the entire day reading advertisements.

When you write “clever” advertisements, people don't have the time to stop and think about what the ads trying to say. If your ad doesn't get the sales message across fast, it will fail to achieve its true purpose, generating leads that turn into sales.

So forget about being “clever” and remember the principles of “Target, Offer and Copy” when writing your ads.

Be sure you are targeting the right market, that your offer speaks to that target market and your copy educates them. By following “Target, Offer and Copy”, you can avoid writing “clever” ads and start to produce the types of ads that bring you the customers you need.

"If you think there's something fishy about this offer, you're right …"

Compared to:

"Buy one fillet of fish, get another fillet FREE!"

Now the first headline uses a clever play on words. A “fishy” offer in relation to a fish sale is quite humorous. But people have to stop and think about what it means.

Chances are that rather than reading the rest of the ad, they'll simply turn the page and keep going.

The second headline, while not as clever, gets the message across fast. Anyone who might be thinking about what they were going to have for dinner that night would be tempted to read on.

The second ad might not be as glamorous, interesting or clever, but it works.

Advertising is about getting people to read your ad, and then spurring them to take action. If people have to decipher the meaning in what you've written they'll simply pass over your ad and forget about you altogether.

Writing ads is not about making people laugh, or having them think you're a genius. It's about communicating with them in the fastest, clearest way possible.

With the majority of people, if the message is not spelled out to them, they won't be able to understand. You need to understand that writing ads is not about you the writer, it's about the customer.

If you want to be a copywriter you need to forget about beautiful writing styles and creative expression and focus instead on getting your message across in a fast and efficient manner. It might not win you any awards but it will win you a lot of satisfied clients and repeat business.

They try to impress people with their ability to write funny or inventive advertising copy, rather than simply getting the message across.

We’ve all been exposed to years of advertising copy in magazines, newspapers, television commercials and radio campaigns that were too smart or clever for their own good.

See, all around the world advertising agencies spend thousands of dollars trying to produce award winning advertisements, not generate leads.

These “clever” advertisements are not designed to make bring in customers for their clients but rather impress judges presiding over major awards. The judges themselves have no interest in how successful a campaign has been. They simply look for the best play on words, the biggest, the brightest or the funniest advertisements.

They miss the real point of advertising, making sales.

The problem with “clever” advertising is that it doesn't make people buy.

Consider how many ads you read, see or hear during an average day. If you consider the number of billboards, in-store displays, window signs, taxi-backs and outdoor signage you go past, you may not be surprised to hear that most people are exposed to over 1,500 advertisements each day.

How many can you actually recall seeing?

In many cases people would be lucky to remember 10, a very small number out of more than 1,500. It's hardly surprising we can recall so few. After all, if we were to stop and pay attention to every ad we were saw or heard, we'd spend our entire day reading advertisements.

So the problem with “clever” advertisements is that people simply don't have the time to stop and think about what the ads trying to say. If your ad doesn't get the sales message across fast, it will fail to achieve its true purpose, bringing customers to your business.

Say a local butcher wants to place an ad. Not being the smartest businessman, he simply writes his name at the top and his phone number at the bottom. He sits back, looking over his ad - this will bring in heaps of customers' he mistakenly thinks. Of course, nobody bothers to look at his ad because it's completely uninteresting.

He's obviously missing a strategy, so let's work one out for him.

What is he trying to achieve? He wants to encourage people to come in and buy their meat from him. But we have to be more specific when we say 'people'. He's really interested in the people who do their weekly grocery shopping in the local area.

So, how's he going to encourage these people to come in? They're probably already quite satisfied shopping at the supermarket four minutes down the road so he needs a good reason for them to come in and see him.

How about a special offer?

For every $10 spent on meat, the new customer might get a $3 credit. People would probably go out of their way to claim that. Throw in a larger choice of meats, cheaper prices, higher quality and friendly service and you're developing something that looks like a strategy.

Once people have come in and taken up his special offer, they're more likely to come back again next week. He may not make a killing on the first ad, but he will see some customers, as opposed to none and over time, this strategy will pay off with repeat and referral business.

So give it some thought - what is your strategy? WHO do you want to do WHAT and HOW are you going to encourage them to take that action now?

The truth is, the very best ads work because of the strategy behind them.

Think about it this way, if you've prepared a delicious meal and your dinner guests are hungry, they probably won’t care what kind of plates you serve the meal on. Put another way, if your message and offer appeals to the people you're writing to, it barely matters how you present it.

Of course, there are things you can do to make your ad clearer, more direct and more interesting, but these are definitely secondary concerns. If your strategy is wrong, the best penmanship combined with the best graphic design in the world won't save you.

Imagine trying to encourage teenagers to invest $200 a week for their retirement. On the surface, it sounds like a reasonable idea, but realistically, you'd be lucky to get a single interested adolescent. The strategy is completely wrong. First, you're going after the wrong group of people and second, the amount you're asking for probably exceeds their weekly income.

That's an extreme example, but a good one to highlight the problem with most advertising - it's saying the wrong thing to the wrong people, or, even worse, saying nothing to anyone at all.

If you've been writing the kind of ads that just say “hi there, my business name is x, and my phone number is y”, then you shouldn't be surprised if your ads haven't led to the success you want.

Those ads rarely do anything but fund a newspaper or magazine. People will NOT read generic ads like that, which is why you have to promise to give them something.

Behind all of this is a strategy. So let's define the word “strategy” - it means a plan, what you want people to do and how you're going to get them to do it.

What do you do with an expense in your business? More than likely, you write it off. Your phone and electricity bills, your rent and your taxes, are all written off at the end of the financial year.

So to view your advertising as an expense would mean you write it off as soon as you place it.

So if you're simply going to write it off, why pay for it in the first place?

The key is to have your advertising pay for itself, by turning each and every customer into an investment unto themselves.

You get returns from your investments but you do not get returns from expenses.

So why is it that in the average business, the owner has little if any idea what the return on their investment is?

The reason is the average business owner doesn't take the time to measure the response that each marketing piece generates.

If you were to invest your money in stocks, you'd most likely keep a very keen eye on what returns you were getting from that investment, so start doing the same with your marketing and you’ll see a tremendous improvement.

Jack Welch, the former CEO of General Electric, used to get rid of the bottom 20% of his employees each year. While some see this as a harsh way to handle business, Welch had both strategic and practical reasons for following this mandate.

First, he realized this type of “pruning” was necessary for GE’s success. So he made it part of the overall company plan. He knew that in order for GE to be the best, he had to have the best people on the job for him – and room to replace those who didn’t work out.

One reason is that Jack, as CEO of one of the world’s largest conglomerates, was responsible every 90-days for continually improving numbers.

Second, Jack believed in a company culture that rewarded performance. As others have pointed out, a lot of Jack’s “firings” were mutual. Some employees simply didn’t like his aggressive style, his penchant for numbers and details, his vision for the company or his standard of accountability for every department.

Sometimes company culture clashes with an employee’s value system. Sometimes the employee is constantly at odds with the overall culture and ultimate mission of the company.

Despite the wishes of some government and union types, owners need to free up unproductive workers with people who can actually to the job – sometimes so the company can survive.

So let’s say you’ve decided to raise company standards. You’ve developed a clear mission, you’ve established the rules of a positive company culture and you’ve got a new attitude toward your customers and suppliers.

But some of your team aren’t with the program. Some never will be. What do you do?

The best thing to do is stay the course. If you’ve ever segmented your customers into A’s, B’s, C’s and D’s, you could also apply the same rationale to your employees. Some may not you’re your standards, but others will be attracted to a company that knows what it wants and where it is going.

For those of you who haven’t set standards, you need to. Take a cue from Jack. Not only will you benefit long-term, you will also allow others to achieve success in their own right.

1. Establish your own Vision, Mission and Culture for your company. What’s your company culture currently based on? Anything? Nothing?Jack was a big believer in a culture based on innovation, efficiency and continuous improvement. He also believed in rewarding results, from awarding employee bonuses based on innovation to allowing staff to participate in stock option compensation. Does your company have incentives or reward employee performance?

   In my experience, every company gets the staff they deserve. If you want to improve your team, work on improving your approach to your overall business. It begins by creating a Vision and a Mission for your company. It continues by sharing both with all your team.

2. Develop strong leadership. Without strong direction, your business will be like a ship without a rudder. This doesn’t mean you need to be an autocrat or a dictator. Just the opposite. I’m talking more in terms of “quality” here. Passion and the ability to take total responsibility are important keys.At GE, Jack was a fiery leader who was incredibly passionate about the direction he wanted for the company. He let people know what the goals of the company were, and gave his team the direction and resources needed to get the job done. He also took personal responsibility for GE results. That’s an important point to make. Jack didn’t operate in a vacuum. He had his own bosses to whom he was accountable. They were called his shareholders.
3. Have a common goal. Both you and your team need to know what the goal of the business is. When Jack ran GE, he had 12 businesses under the GE umbrella. All had their own goals and objectives – but each operated under the overall GE Vision and Mission. That helped all team members to see the “big picture,” one they could be part of and adapt to their specific situations.
4. Set the rules of the game. Team members need to know what they can and can’t do. Everyone must know what game your company is playing, as well as the rules of the game. It’s up to you to create the rules and the playing field. If you don’t, your team will be without direction, and will set their own guidelines for you.
5. Have an action plan. All your team members need a position description that spells out their duties in clear and unambiguous terms. This helps define responsibilities and also helps limit jurisdictional disputes about what a person should or shouldn’t be doing.Ideally, all of this is done in a systemized way, one that can be written down, replicated and repeated. Do this by department and you’ll have an operations manual for your entire business.
6. Support risk taking. You must be willing to take risks. If not, your team will lag and not want to push boundaries. If you don’t push your team to take business risks, your company will push conservatively towards its goals. Know that risks and rewards are two sides of the same coin – and make sure your team knows that, too.
7. 100% involvement and inclusion. Practice the art of inclusion. Ask your team for their opinions and listen. The key is to make sure everyone is involved and everyone gives their all to their respective jobs. In Jack’s view, “every person counts.” Every person does. And you really want them to count in moving the whole team toward the company’s objectives.

Just remember, Jack increased GE turnover six-fold from the time he started to the time he left. He couldn’t have done it with people who didn’t buy into his vision for the company – and he had a pretty big vision for GE.

Nor could he have done it with employees who underperformed and resisted change.

Can you?

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

I want to teach you how it is that the very best companies and the very best salespeople NEVER worry about having a higher price.

In fact, if you’re great at sales, and great in business, you want a higher price.

You want to have to sell, rather than just accept orders.

You see, anyone who can only make a sale when they have the best price has, in my opinion, missed the whole point of selling.

Let me give you an example from my own life …

I needed new tires for my car. I opened the yellow pages and picked three companies to call.  Of course these companies had invested big dollars to have their advertisements placed, so you’d want their people to do a great job at answering the phone.

(Just as an aside, try calling your company and buying something, see if it’s hard, easy or somewhere in between.)

So I make the call, first company, what do I ask … “How much for a set of tires ... ?”

That’s what everyone asks, why …?

Because that’s how we’ve been trained - and even more importantly, what else do we know to ask about?  When I call to ask about airline tickets, do I ask about the pilots’ experience? No. I ask about price.

So, his answer … “That will be $X per tire plus fitting and balancing.”

I said, “Thanks, I’ll call you back.”

Of course I did, same line we all use, what other option did he give me?

Second call was the same, third guy must have been trained by me or Jeff.  He used my “magic line.”

“Yes sir, thanks for your call, just so I can help you best, would it be OK to ask you a couple of questions … ?”

How great is this? He makes me feel good, and then gets my permission to sell to me.

He then went on to ask VALUE based questions.  What type of driving I planned to do, how many passengers I carried and so on, until I blurted …

“So, what does all this have to do with a price … ?”

“Well sir, if I don’t understand your driving habits, I couldn’t possibly recommend the right tire with the right tread pattern, the right tire compound and that would mean your tire wouldn’t be safe and wouldn’t last as long as it could, and you wouldn’t want that would you sir … ?”

BANG … I’m shot dead, I can’t go anywhere …

Suffice to say he got the sale, but the whole point is …

Price only matters if you don’t educate your buyers …

If you let them think price is important, if your questions lead to price objections, if your sales literature focuses on price and if your sales skills are lacking …

Turn yourself into a performer …

Use questions rather than answers, let them show themselves why they should buy, design questions that lead to value answers not price answers …

You see, if you have a higher price, it must be because you are better. So find out why you are better and ask the customer questions about how important those things are to them …

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

Hiring an employee is kind of like dating. The interview can be all roses, but then on date #1, you really start to understand who it is you’ve hired.  And “Oh no,” you got it wrong.

In a big business, one bad employee won’t really kill them. But in small business, we need basically everyone to be a great performer if we are to build our revenues and profits.

So, how do we get and keep good people … ?

I remember when I was 21 and hiring people for my business right at start-up phase and I turned to my Dad for some wisdom and hopefully encouragement.

I said, “You know Dad, I just can’t seem to find any good people.”

To which he ever so bluntly replied, “You know son, you get the people you deserve.”

“Gee, thanks Dad, so motivational.”

Motivation I didn’t get, but a reality check I did.  The really great people didn’t want to work for me, yet.

So, over the years, I’ve come to realize that even though I probably wouldn’t be quite as blunt as my Dad, I would have to agree with him.  I have noticed that with my own companies and just as often with the business owners I’ve coached, Dad was right.

When you run a great company, you get great people.  When you are a great leader you get great people, and vice versa.

At the time I wasn’t a leader, I would have been lucky to be seen as an average manager, and thus I was rewarded with the type of employees who like working for a manager who really wasn’t any good.

So, how did I go about fixing it.  Pretty simple really.

I started to look at what sort of company a great employee would want to join, what sort of leader they really want to work with and learn from.  Then, and only then could I go to work to build a company that they would want to be employed by.

So, just to get you started, great team members (not staff) want to work in a positive, rewarding, successful organization where they have the ability to give input, get the job done and be recognized for their work.

They want a company that is going places where they can learn, grow and build a career.  If that’s not you yet, then keep building.

So, step one is building a great business they want to work with, step two is becoming a great leader who they want to learn from and work with.

I read every book, went to every seminar, got myself a mentor and went to work on becoming a much better leader of great people.

Finally I started to get the people I needed and wanted to help build a great company.

That said, even with all of that, in today’s market place, it’s getting tighter and tighter.  We are running out of great people.  With the labour market as tight as it is, we have to think of our help wanted ads as more of a marketing piece than ever before.  We have to almost sell people on why they would want to come work with us.

And they say the new IR laws are making it tough on employees. Crazy.

As small business owners right now, we’re paying the highest wages we ever have on average, we’re finding it harder to get good people.  That is if anyone will even show up for an interview and as I’ve always thought, when business is booming, the employees have it the best they ever can.

At least we do business in a country now where as a business owner you are allowed to let people go without the fear of them suing you and taking your whole business, or at the very least wasting hours of your time defending yourself anymore.  Across the ditch, the Kiwi’s only wish they had our Industrial Relations laws.

Yes, getting and keeping great people is vital, and yes it’s harder now than it has been in a long while.

But, the next time to feel yourself saying, “I just can’t get good people,” take a look in the mirror and ask yourself, what sort of company do the great people want to join, and go do it.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.