Seeds of Growth - Advertising

Buzz is Better than Ads

Dave Free — Mon, 05 Mar 2007 15:35:58 -0700

Great article in BusinessWeek about Chipotle's success without traditional advertising. If you've never been to one, Chipotle's is a burrito place. They used to be owned by McDonald's but got spun out and went public in 2006. Since then their share price has tripled. They've experienced double-digit growth for nine straight years! Here is the kicker: they don't do traditional advertising.

Actually, they do a little traditional advertising. Some billboards (see image with this post) and radio, but they spend less than 1% of their revenue on advertising compared with 4% or more for McDonald's and Taco Bell.

According to Steven Ellis, the Chipotle founder and CEO, "Advertising is not believable." When he opened his first store in Denver he had no money for advertising so he decided to let his burritos do the talking and started giving them away free. They recently opened a location in midtown Manhattan and gave away 6,000 burritos. People stood in line for two hours. It cost $35,000 (about the cost of an ad in The New York Times) and they got 6,000 promoters plus a mention in BusinessWeek out of it. Not bad.

What are you doing to get your customers talking?

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One More Chapter in a Great Story

Dave Free — Fri, 15 Dec 2006 14:55:51 -0700

About six months ago I wrote about a small, bricks and mortar business that had successfully implemented and was enjoying the fruits of an online system that increased word-of-mouth marketing for their business. You can read the original post here. In a nutshell, the business is a haircut salon for men--a Sportclips franchise to be exact. The owners, Chuck and Joan Matheny, were using Promoterz to 1) Collect feedback from their customers, 2) Establish an "opt-in" email relationship through which they could communicate directly with their customers, and 3) Give their customers an easy way to tell their friends about their store. Top line result: more than a 20% increase in revenue.

Here is a new chapter in their saga:

Corporate SportClips introduced and has been encouraging franchisees to promote a "Season Ticket" concept. Customers willing to pay for six haircuts in advance get a free upgrade to MVP service on each of those haircuts (MVP includes a hot towel and shoulder massage among other things). Because several hundred of the Matheny's customers have asked to receive updates about the store by email, promoting the Season Ticket with an email seemed like a natural. Think about the value of Chuck's email list: because he had reached out to his customers and provided a way for them to opt-in, he could now communicate with those that wanted to hear from him directly and at absolutely no cost. He didn't have to wait for them to come into the store or pay for an expensive ad.

Rather than just encouraging the customers to come in to a store and ask for a Season Pass, we decided to put the technology to the test and offer the customers a quick and simple way to buy the card directly online. The email included a "one-click" buy button. Customers could opt to have the card mailed to them or come into the store and pick it up. The test has been a great success. Several customers have purchased online and the orders continue to come in. Cha-ching! A new online revenue stream for a bricks and mortar business.

Small test--significant implications. Here is a small "old industry/bricks and mortar" business that has figured out a way to use the internet--not as a glorified yellow-pages ad, but as a tool to generate new revenue streams, increase repeat customer visits and collect new leads--all of which have a direct impact on the top and bottom lines.

The real "no-brainer?" The Matheny's used Promoterz to do all of this. The cost: $50 per month per store.

A disgruntled customer is 5 times more likely to tell their friend than you. On average they'll tell 4 friends. Wouldn't you like to be in the loop? Learn more

What if All Marketers weren't Liars?

Dave Free — Fri, 29 Sep 2006 10:02:07 -0700

Realtors are notorious for their creative use of marketing terms. "Open floor plan" means there are holes in a few walls etc. Here are a few more creatively used terms. But this morning as I was out running I noticed this real estate sign. Maybe this guy just ran out of "I'm gorgeous inside" signs and it was the end of a long day so he sighed and went with the "A Nice Place" placard. Whatever it was, it was simple enough to get my attention.

Simple and honest are remarkable. You could argue that "A Nice Place" is still stretching the truth. Wonder how many calls this sign would bring...

More happy customers. More repeat sales. More referrals. Learn more

Target Flipbook Coupons

Dave Free — Wed, 06 Sep 2006 21:01:17 -0700

Received a little red book in the mail from Target today. It was a flipbook full of coupons. Once I showed my two young children (3 and 5) they had lot's of fun with it. Will we use the coupons? Hard to say, but they are certainly getting more attention and will have a longer lifespan in our house than a typical stack of coupons. You can watch the show here:

Kudos to Target for trying something fun and new. Now to figure out a way to tear out a coupon without destroying the show.

The growth of your business will be determined by what your customers say about it. Do you know what they are saying? Learn more

Guerrilla Advertising is Not the Answer

Dave Free — Thu, 10 Aug 2006 16:17:04 -0700

Reena Jana of Business Week writes about Guerilla advertising-- a "catch-all phrase for nontraditional advertising campaigns that take the form of theatrically staged public scenes or events, often carried out without city permits or advance public hype"--and notes that as more and more companies attempt them, the effectiveness of the ads may be decreasing.

Just more evidence of the chaotic marketplace in which we live and consumers' increasing ability to ignore all types of advertising. Adam Salacuse, CEO of a Boston ad agency gets it right:

The focus needs to be on quality of consumer engagement.

The best way to cut through the chaos is to take care of your customers and turn them into promoters.

More happy customers. More repeat sales. More referrals. Learn more

The Power of the Talking Bubble

Dave Free — Thu, 27 Jul 2006 14:29:41 -0700

Remember the talking bubble from the cartoons? It occurs to me that there is a lot of power in that bubble. In fact, the whole intent of word-of-mouth efforts is to get your business in your customer's bubble.

How much money do we as business owners spend getting our ads up in lights, in a magazine, on TV, or online? Fact is, consumers are more jaded than ever and better at ignoring all that expensive advertising.

The real power is not up on the billboards or on the airwaves. The real power is in the bubble.

Find your happy customers and put a megaphone in their hand. Learn more

Consumer A.D.D. -- Is There a Cure?

Dave Free — Mon, 17 Jul 2006 18:00:02 -0700

After describing modern consumers and their desire to watch or read what they want, when they want, the current issue of Business Week concludes:

The result: a serious case of attention deficit for every business that depends on traditional mass media to reach customers.

So the question is, what is the cure? Here is an additional question that I think leads to the answer: if consumers aren't paying attention to traditional advertising, who are they paying attention to?

The answer: their friends, their colleagues, their neighbor, their obnoxious brother-in-law--frankly, anybody but an advertiser. So what is the solution for a business? Turn your customers into promoters. Your customers are somebody's friend, colleague, neighbor and yes, even obnoxious brother-in-law. Make your customers so happy they can't wait to tell somebody--that is the cure.

Your success will be determined more by what your customers say about your business than what you say about it--no matter how much you pay to say it!

Get customer feedback, generate referrals, and increase repeat sales for as little as $50 a month. Learn more

The Miracle of the Reservoir

Dave Free — Mon, 17 Jul 2006 16:52:53 -0700

I grew up in the west and now live in Arizona. There is a simple rule for growing things out here (this rule applies everywhere but is more obvious in the arid west): if it doesn't get water it doesn't grow. Early settlers fought their neighbors over water rights knowing that land without water wasn't worth a plugged nickel. In addition to fighting, they went to work and figured out ways to divert and contain spring runoffs, rainfall and the flow of rivers and creeks to use in dry times. They built dams that created reservoirs then built a network of canals and ditches to get the water to the fields. Wallah! Arid desert became fertile farmlands. Fly over the west today and the benefits of the reservoir and resulting irrigation are obvious in the green irrigation circles that dot the land.

Now think about your marketing and advertising efforts. Paying for advertising can feel like paying somebody to do a rain dance--you're not at all sure what you are going to get. But sometimes there is no choice. So you pay and with some luck some new customers fall from the sky. With a lot of luck maybe a lot of customers fall from the sky. Then comes the moment of truth: do the customers run off like a flash flood leaving only a little green in their path? Or have you built a customer reservoir that they peacefully flow into to be tapped again and again ensuring green for many years to come?

How do you build a customer reservoir? First let's be clear, the reservoir metaphor only goes so far. While it is possible to build a dam to trap water, trying to trap customers is a recipe for disaster. Your goal is not to trap but to create something customers want to be, and remain, a part of. Here are some suggestions:

Be remarkable-Find out what is most important to your customers and then be absolutely amazing at it.

Be inviting-Identify your customers and invite them to be part of something great. Make it easy for them to join.

Be persistent-Make the effort to stay in touch regularly, if you don't someone else will.

Be contagious-Make it easy for your customers to tell their friends about your business.

Be attentive-Ask your customers what they think, listen to what they have to say, and continue to make your business even more remarkable.

The early western settlers learned quickly that without reservoirs they couldn't survive. The same is true of business today, rain dances alone aren't sufficient.

Promoterz is the hands-free, word-of-mouth marketing service that takes care of the details so you can focus on business. Learn more

Zero to $2 Million in One Year!

Dave Free — Fri, 07 Jul 2006 07:25:47 -0700

Another example of the power of promoters. Shade Clothing sells undershirts for women that are longer than normal for those that aren't interested in showing the world their belly button. It was founded in September 2004 and in its first year of business it sold more than $2 million dollars worth of modest undershirts.

Listen to this quote from Chelsea Rippy, one of the founders:

Our main source of advertising is women telling other women.

In addition to selling through traditional retail channels, Shade focuses on finding promoters and giving them the tools, and the incentive, to spread the word. They call them "personal shoppers." From their website, here are the benefits of becoming a personal shopper:

Become a Personal Shopper and:
• Earn 15-20% commissions on all orders placed through you.
• Earn commissions on client orders placed online using your personal shopper code.
• Offer your clients access to exclusive products and discounts.
•
Additional benefits include:
• Set your own schedule
• Your parties posted on the Shade Clothing website
• Sales materials from Shade Clothing
• Discount on product
• Exclusive access to the Personal Shopper Online Management System

In return, Shade gets literally hundreds of customers that love their product, telling their friends and associates about it. Hard to argue with the results.

Find your happy customers and put a megaphone in their hand. Learn more

Will Your Customers Carry a Cello?

Dave Free — Thu, 06 Jul 2006 15:59:20 -0700

I read recently about a musician--a cello player to be exact--that moved to New York City. She didn't know anyone in the city and was looking for opportunities to play her cello. Her solution? She carried her cello around the streets of New York with her wherever she went--whether she needed it or not. It didn't take long before other musicians introduced themselves and she was given opportunities to play.

That got me to thinking, what could I carry around to let people know what I do? Even more powerful, what would my promoting customers be willing to carry around to let others know how they feel about my business?

You work hard to make sure your customers are happy. Don't waste happy customers. How easy is it for your customers to share with their friends? Learn more

Real Small Business, Real Word-of-Mouth, Real Improvement.

Dave Free — Thu, 15 Jun 2006 11:22:54 -0700

I don’t mean to bite the hand that feeds me, but I’ve noticed that we of the small business/entrepreneur blogging world talk a lot about word-of-mouth and other great business principles, but rarely do we write about actual experiences from small businesses applying the stuff. My goal is to change that with some real case studies of real businesses applying great business principles and enjoying the benefits. Here is my first attempt.

Chuck & Joan Matheny own two Sport Clips locations in greater Phoenix. Sport Clips is a hair cut place that caters to guys. Every stylist chair has a TV tuned to sports, all the décor is sports related, and they have an “MVP” service that includes a hot towel and a neck massage. Their motto is “Guys win.” If you’ve never been comfortable in the fru-fru world of hair salons, this is the place for you.

Anyway, last September Chuck was looking for a way to improve the performance of one of his locations. It had a great staff and a good location but wasn't performing like he hoped it would. Rather than pay for traditional advertising, Chuck decided to focus on encouraging his existing clients to spread the word. Four months later, without spending a dime on advertising, Chuck’s weekly sales were up well over 20% and have continued to grow.

From the client's perspective, Chuck's program starts with a simple invitation received at the conclusion of their service. The invitation is the size of a business card. It includes the stylist's name and offers a free service upgrade in return for visiting a web site to provide feedback. "Our feedback survey is extremely short," says Chuck. "It literally takes our clients less than sixty seconds to complete. Our goal is not to get feedback on every little thing, but to learn if the client is happy with the service and start an ongoing dialogue."

The ongoing dialogue is initiated with the last question of the survey that asks if the client would like to receive additional information and specials from Sport Clips. Nearly 90 percent of those that provide feedback choose to receive additional information. That’s a pretty good “opt-in” rate. Once customers opt-in, Chuck uses technology to stay in touch with them. First-time customers automatically receive reminders via email, including a discount coupon, every three weeks to encourage loyalty. Every customer that signs up receives a birthday greeting from Chuck including a discount on their next hair cut and Chuck regularly sends out email specials associated with holidays or other events.

The Sport Clips client experience is remarkable and worth talking about in and of itself, but Chuck also takes extra steps to encourage his clients to tell others about their experience. Each time a client completes a survey or receives an email from Chuck they are given the opportunity to forward online discount coupons to their friends along with a personal message. Thirty percent of the clients that join Chuck’s program take advantage of the opportunity and send an invitation to their friends.

Chuck's efforts have paid off in many ways. His stylists love the customer feedback and take greater pride in their work. He knows who his most loyal customers are and can contact them without paying for advertising. And, most importantly, his customers are actively telling their friends to try Sport Clips. All of which have lead to healthy growth.

Time, effort, and money required? The invitation cards that Chuck’s stylists hand out are business cards ordered from Vistaprint. They run about 4 cents a piece--four color both sides. Chuck uses PromoterZ for his online survey, opt-in list management, outgoing email and online referral generation needs. Cost: $50 a month. In terms of time required, Chuck spends a few minutes each day responding to customer feedback. Once a week he shares feedback with his managers as part of his manager meeting. He also spends some time each month deciding on a special offer to send out to his loyal customers. This month? Fathers and Sons that come in together get a Free MVP upgrade for Dad and a half price haircut for son.

The average American consumer discusses brands 56 times a week. Are they discussing yours? Learn more

Are You Holding Your Bathroom for Ransom?

Dave Free — Mon, 12 Jun 2006 13:38:35 -0700

I was on the road over the weekend and found the stupid business idea of the week--no make that century. Driving on the interstate to Flagstaff, Arizona (beautiful place if you have never been there) and needed to stop for a bio break. Sign on the business establishment's front door: "Our Bathrooms are for Paying Customers Only!"

Now I know exactly where that sign came from. An employee, maybe the manager, maybe even the owner got tired of trying to keep the bathroom clean and seeing people walk in and out without buying anything. Simple conclusion and solution: "No more free loaders! The bathroom is a benefit reserved only for those people that buy! Toilet paper doesn't grow on trees! Let's get a sign up, that will save us some money and some time!" So up goes the sign telling potential customers that they are an annoyance and if they want relief, they've got to pay.

I would love to compete with the guy that made that decision. I'd make my bathrooms glisten and smell of sweet things. I'd hire a teenager to stand outside the bathroom door and hand road-weary travelers a warm towelette to refresh themselves. I'd invest in some big signs on the interstate that say "Come use our sweet smelling bathrooms--absolutely free!" Then I'd sit back and watch my suppliers try to keep up with the demand.

Would some travelers come and go without buying anything? Sure, but I would smile and thank them for using my bathroom. Why? Because I know there is no way they are going to be able to keep my remarkable bathroom a secret. When a person asks how their trip went, they are going to say, "It was long, but we found the greatest place to stop. They actually give you a warm towlette and then they thanked us for using their bathroom--and we didn't even buy anything!" And when it is time to make the return trip, where do you think they are going to stop? At my remarkable sweet-smelling bathroom and chances are this time they are going to buy a tank of gas, a bag of jerky, and a 32 oz soda!

Here is the point, whether your business is on the interstate, the internet or any location in between, the name of the game is traffic. The more people that walk through your door, the more you are going to sell. The best way to build traffic is not to hold free services for ransom. Have you ever seen anyone happy after paying a ransom--even if they get what was promised? No! More likely they feel violated and manipulated. So don't do it! Be the good guy and make more money at the same time. If you've got something free and remarkable you can offer, don't hold it ransom, get it out in front and use it to get more customers to walk through your door then make sure they have a remarkable experience. Soon your sweet-smelling bathroom will be world famous...

Get customer feedback, generate referrals, and increase repeat sales for as little as $50 a month. Learn more

Best Post of the Week, Anywhere!

Dave Free — Mon, 29 May 2006 10:18:10 -0700

One of our posts from last week got some recognition and we couldn't resist tooting our horn a little.

Innovation 101, an entry posted on May 22nd was selected from multiple small business and entrepreneurship blogs to be included in the Carnival of Entrepreneurship hosted by Pam Slim's Escape from Cubicle Nation. Pam selected seven posts from all those submitted. Of our post she said, "The lead picture is worth the visit!" Check out the lead picture and rest of the post here here.

In addition, the same post was selected as the "The Best Post of the Week, Anywhere!™". This is from a blog called Political Calculations that does a review of the 10 business blog carnivals each week. Here is what they had to say:

"Dave Free shows off the process of innovation in a home drywalling project he took on with his son. The engineer, economist and entrepreneur in me all agree that this is, hands down, The Best Post of the Week, Anywhere!"

Like I said--tooting our horn just a little. You can visit the Political Calculations blog here.

Find your happy customers and put a megaphone in their hand. Learn more

5 Steps to a Sales-Doubling Buzz Force!

Dave Free — Tue, 23 May 2006 13:46:33 -0700

Interested in doubling your sales? That is exactly what Proctor & Gamble did with their Dawn Direct Foam dish detergent. How did they do it? With a word-of-mouth marketing program called Vocalpoint. According to a recent article in BusinessWeek, this is how it works:

Procter and Gamble looks for customers that match their target criteria, in this case moms and particularly those with large social networks. They find most of them by advertising online and through referrals. Participants are asked to talk to their friends about new products. In return, P&G promises a stream of new product samples, "a voice that is going to be heard," and specific messages to share. So far 600,000 moms are participating.

According to Steve Knox, the CEO of Vocalpoint, the most difficult challenge with word-of-mouth marketing is making it predictable. His solution: find a strong reason why a person would want to share product information with a friend. The article goes on to say--and this is very important--that the message given to the participants is always different from the one P&G uses in traditional media.

For example on the Dawn campaign, traditional ads stressed the grease-cutting power, But the message sent to the Vocalpoint mom's focused on how fun the foam was for kids to use--so fun they would be asking to help wash the dishes. They also received a sponge shaped like a foot and a dozen $1.50 coupons. The result: sales in the three test markets were double those in markets where Vocalpoint was not used.

Sound expensive and difficult to manage? I don't think it has to be. Here are five simple steps to get your Buzz Force going and your sales increasing:

Make it worth their while. Proctor and Gamble offers two things: product samples/discounts and a sense of empowerment. Both make their participants feel like a VIP or an "insider." That is your goal. Price the coupons such that you will be happy to see your "buzz force" using them and remember the pay-off is not just your participant coming back in with the coupon but the friends they are talking to and the feedback they are giving you.
Invite your customers. The need to invite is obvious, the method can vary. Proctor & Gamble places ads to attract those interested. That can be expensive. Why not just invite your customers as you complete your transaction with them? There are several ways to do it. You can start by asking for feedback and then follow that up with an invitation to stay in touch. Another option is to invite them to join a birthday or some other kind of club and then develop the relationship from there. Finally, is the direct approach. "Interested in joining our fan club? You get discounts and sneak previews you can pass along to your friends."
Give them a message worth telling. Hopefully your business is so remarkable that your customers will be anxious to tell their friends about you, but don't leave it to chance. Remember Proctor and Gamble always gives their buzz agents a specific message that is easy to share with friends. Put yourselves in your customers' shoes--what would be an easy way for them to tell their friends about you? Maybe it is "privileged" information: "Did you hear Subway is coming out with a new sandwich?" Maybe it is a great deal. "Hey, next time you need a hair cut let me know, Sport Clips gives me great coupons." Or maybe it is something just plain remarkable, "I got two movie tickets today from my insurance guy!"
Give them another message worth telling. This shouldn't be a one time campaign. Stay in touch regularly. Those who have "opted-in" want to hear from you. The more ideas you give them to talk to their friends, the more likely one will work for them and you'll start seeing their friends.
Listen and Learn. Perhaps this one should have been first rather than last, because it is very important. Those who join your buzz force can become your best source of market intelligence. They know and like your product, they know how people react to your product, and they are willing to put some effort into your product. Ask them what they think and listen carefully. Look to their feedback for message ideas and ways to improve your offering. How do you think the Proctor and Gamble folks figured out kids like the foam? It didn't happen in a board room.

Still sound like a lot of work? There are tools that can be used to greatly streamline the time and effort required to manage a word-of-mouth marketing program (Caution: shameless plug approaching). PromoterZ is one such tool. In simple terms, it gives users a quick and inexpensive way to invite participants, gather feedback, send messages (including online coupons), and even includes an easy online way for the buzz force to pass the word to their friends. It handles the logistics so that you can focus on the message. Check it out at www.promoterz.com.

Get customer feedback, generate referrals, and increase repeat sales for as little as $50 a month. Learn more

Listen First!

Dave Free — Tue, 16 May 2006 13:46:31 -0700

Listening is hard. Let's face it, we are all problem solvers. If we weren't, chances are we wouldn't be in business for ourselves. We don't have a lot of time to spend listening to long stories. So we quickly pick out the "important facts," develop (or should I say jump?) to a conclusion, and move on to the next problem. According to Laurent Flores , the founder and CEO of, crmmetrix not listening enough to customers is exactly what is wrong with most marketing today. Here are his steps to go from marketing to consumers to marketing with consumers:

First: Listen to conversations. Learn from consumers and leverage the words consumers "recognize themselves in": a message is about an idea, and the words that support it best.

Second: Listen and engage the consumers who matter in your category. Leadership is not universal, but category related. Look at natural touch-points with your customers, such as the brand website, to find the influencers who want to engage with their favorite brands.

Third: Test the words. As stated earlier, evolving the message with influencers is key. Indeed, rather than just testing the message idea, test the words consumers will recognize themselves in. Let them have a say with a simple online VIP vote, for example.

Fourth: Seed trials and give them the ability to spread. Engage influencers further in trying and testing your product during an exclusive special VIP invitation. Give them the means to spread the word by making samples and campaign materials available (that they actually developed themselves, remember), and they will drive sales for you.

Fifth: Continue listening and keep involving them. Because markets are conversations, continuous listening to consumers during and after the campaign is key. Listening will not only provide the necessary measurement to better manage WOM, but will also naturally boost consumer engagement and relationship with your brand for your next campaign.

Some really great ideas here. When was the last time you asked your influencers or promoters (you know who they are don't you?) to vote on one of your advertising ideas? Modern technology makes the logistics easy. How about exclusive previews and samples for your promoters? You want them talking? First listen and then give them something to talk about.

A disgruntled customer is 5 times more likely to tell their friend than you. On average they'll tell 4 friends. Wouldn't you like to be in the loop? Learn more