(By Bob McCurdy) When your prospect utters, “We tried radio before and it didn’t work, sales were flat,” it is time to go to work.
First, clarify how the prospect defines “flat.” Getting an accurate answer is important, if sales were in fact up “only” a couple of percent, the campaign did indeed “work” and, as you will see later, a campaign could be perceived a success even when sales were flat.
In marketing, there is something called “baseline” sales, which are sales that occur without any advertising support. Baseline sales typically account for 85%-90% of any business’ sales — although they do gradually decrease without any advertising support. What this means is successful ad campaigns typically only account for about 10%-15% of a business’ total sales unless there was an unusually attractive offer — usually an attractive loss leader. This is why getting sales insight beyond being told they were “flat” is helpful, as the prospect’s campaign expectations might have been unrealistically high at the outset.
Next, have the prospect identify the period in which sales were deemed “flat.” If the timeframe only coincides with the flight dates, it excludes sales that occurred post-campaign which were a direct result of the advertising. Various studies have shown that post-campaign sales can double, triple, or even quadruple initial campaign results. This post-campaign sales effect is the “carryover” or “lagged” impact.
Advertising’s influence does not end the day an ad campaign ends. Sometimes it takes a while for “life” to generate the need for the product advertised, so to gauge any ad campaign’s total impact, these post-campaign sales should be taken into consideration.
After securing this insight, it is time to delve into campaign specifics:
— The offer: Was it compelling?
— Creative: Was it strong enough to offset competitive “poaching”?
— Station selection: Were the right stations used, in the right dayparts, with enough GRPs?
— Campaign length: Was it long enough? It takes longer to generate results the longer an advertiser has been “dark” or on hiatus. Previous advertising prepares the consumer for current advertising, and if there’s been no previous advertising, it will take longer to generate results.
— Macro influences: Were there any weather or economic developments that could have influenced campaign performance?
— Micro influences: Competitive ad activity. Knowing whether an advertiser was outspent and by how much can go a long way to explaining the campaign results achieved. No business competes in a vacuum and for the most part advertising is a zero sum game, in that there are only a certain number of people in the market for a particular product or service at any given time. A competitive campaign share-of-voice is key.
We should also highlight that as much as the prospect wants revenue growth, a critical function of advertising is to “neutralize” the impact of the competition’s marketing, to ensure current customers are not poached.
Let’s use a simple analogy using two auto dealers, “A” and “B” to make this point.
Dealer “A” sold 100 cars the same month last year and is projecting to do the same this year, but 10 of the 100 prospects expected to sign this month are poached by dealership B’s advertising. Without any advertising, A’s business is likely down 10%. But dealership A is advertising as well and successfully poaches 10 of B’s prospects and ends the month “flat” with last year.
What would A’s sales have been had they not advertised? Likely down 10%. So did dealership A’s advertising do its job? It sure seems so.
The obvious goal of any ad campaign is to retain current customers and convert others but there are times when “flat” sales in the face of intense competitive ad pressure is a “win.”
This is not advertising hocus pocus but marketing reality. Just as in chess where it is much better to play to a draw than lose, the same is true in advertising, which often ensures the “worst case” will be current customer retention with the opportunity to poach effectively in the future.
Bob McCurdy is the Vice President of Sales for The Beasley Media Group and can be reached at [email protected]