The Ten Biggest Marketing Mistakes Everybody Is Making and How to Avoid Them
Jay Abraham
Introduction
Almost every business with which I have consulted is guilty of no less than ten major marketing mistakes that I had to correct immediately, before I could improve their profit performance.
You or your business are probably making these same ten mistakes. But this short primer should improve your business’s performance in just a few weeks.
I will teach you an entirely fresh, new way of viewing your marketing–a logical perspective that may seem obvious, but probably isn’t, until it’s revealed to you.
Eliminating just one or two of these ten errors can catapult your business beyond everyone else’s. Incorporate all of them and the sky’s the limit–literally.
MARKETING MISTAKE #1: Not Testing.
It is amazing how few companies ever test any aspect of their marketing, and compare it to something else. They bet their destiny on arbitrary, subjective decisions and conjecture. This is sad for a number of reasons.
First, we don’t have the right or the power to predetermine what the marketplace wants and what the best price, package or approach will be.
Rather, we have the obligation and the power to put every important marketing question to a vote by the only people whose ballot counts: customers and prospects.
How do we put a marketing question to a vote? By testing one sales thrust against another, one price against another, one ad concept against another, one headline against another, one TV or radio commercial against another, one follow-up or up-sell overture against another. I could go on and on.
The point is–and this is not guesswork–when you test one approach against another and carefully analyze and tabulate the results, you will be amazed that one approach always substantially outpulls all the others by a tremendous margin. You’ll also be amazed at how many more sales or how much larger the average orders are that you can realize from the same effort.
The purpose of testing is to demand maximum performance from every marketing effort.
If each of your field salespeople averages 15 calls a day, doesn’t it make sense to find the one sales “pitch” or “package” that lets them close twice as many sales and increases their average order by 40%-100% with the same amount of effort?
You can easily achieve immediate increases in sales and profits merely by testing.
Tomorrow, have your salesmen try different pitches, different hot-button focuses, different packages, different specially priced offers, different “bumps” or upgrades, different follow-up offers, etc.
Each day review the specific performance of each test approach, then analyze the data.
If a specific new twist on your basic sales approach out-closes the old approach by 25-50%, doesn’t it make sense for every salesman to start using this new approach?
Test every sales variable. Any positive or negative data can help you to dramatically manipulate the effectiveness of your sales efforts.
But don’t stop at merely finding those approaches, offers, prices, or packages that outperform the others. Once you identify the most successful combination, your work has just begun. Now you should find out “how high is high!”
Keep experimenting to come up with even better approaches that outpull your current “control.”
Your control is the concept, approach, offer, or sales pitch which has consistently proven, through comparative testing, to be the best performer.
Until you establish your control concepts, techniques, and approaches, you can’t possibly maximize your marketing.
Once you find control concepts or approaches, keep testing to see if you can improve on their performance, thereby replacing one control with a better one.
Price Testing
Test your prices. Different prices often outperform one another on the same product by an enormous margin.
I’ve seen $19 outpull $25 by 300%.
I’ve seen $195 outpull $245 by huge margins.
I’ve seen $295 outpull $195 on certain offers, which netted my client a cool $100 more per sale!
Why does one price outpull another? I don’t know. Probably for a lot of reasons: psychological image of value, perception of quality, etc.
Every situation is unique, so I implore you to test several different prices. You’ll be amazed at the difference in profit and total orders one price will produce over another.
Testing applies not merely to outside sales efforts but to every aspect of marketing.
If you run ads in newspapers or magazines, test different approaches, different headlines, different hot-button emphases, different packages, different rationales, different pricing, and different bonuses on top of the basic offer.
Test different directives to the reader or listener on how to respond and what action to take.
Test positioning in the front, back, right, or left-hand side of the page. Test where your commercials run.
Make specific offers and analyze the number of responses, traffic, prospects, and resulting sales for each specific ad. Then compute the cost-per-prospect, cost-per-sale, the average sale-per-prospect, average conversion-per-prospect, and the average profit-per-sale against your control. This reveals the obvious winner, the control that you will keep running until a better control beats it.
Remember, salaried salesmen cost you the same fixed amount, whether they make one sale a day, three sales a day, or more.
An ad costs you the same amount of space, production time, or air time whether it produces 100 prospects, 1,000 prospects, or 10,000 prospects.
Therefore, it stands to reason that you should test different ad approaches and find those that outpull all the others, then use those approaches to maximize your investment.
Test everything starting right now.
MARKETING MISTAKE #2: Running Institutional Advertising Instead of Direct Response Advertising.
Almost every print ad, mailing piece, radio, or television commercial I see is based on institutional-type advertising.
At best, that produces deferred results.
At worst–and this applies to 95% of all the advertising I look at–institutional advertising is an ineffective, vacuous, wasteful expense that accomplishes no productive purpose whatsoever.
Most institutional advertising tells you how great the company paying for the advertising is, or how old and stable they are, or some other cute and non-compelling foolishness.
Institutional advertising, as practiced by most advertisers, is wasteful folly. It doesn’t convey any compelling reason for the reader to favor your business over another. It doesn’t make a case for the product or service you sell.
The claims made by most institutional advertising are pathetic: “Buy from me instead of my competitor for no other reason except my selfishness and avarice.”
Institutional advertising doesn’t direct the reader, viewer, or listener to any intelligent action or buying decision.
It does nothing productive but take up time, space and attention and wastes enormous could-have-been-productive assets.
Direct response advertising is, by its very name, self-explanatory. It is designed to evoke an immediate response, action, visit, call, or purchasing decision from the viewer or reader.
Direct response advertising tells a complete story. It presents factual, specific reasons why your company, product, or service is superior to all others, on an analytically and factually supported basis, as opposed to the mere conjecture used in institutional advertising.
Direct response advertising is salesmanship in print or over the air. As salesmanship, it makes a complete case for the company, product, or service. It overcomes sales objections. It answers all major questions and it promises performance or results, and backs the promise with a risk-free warranty or money-back guarantee.
Direct response advertising directs people to action. It compels readers, viewers, or listeners to visit your establishment, call you, send in money, or drive their auto down to trade it in on a new model.
Used effectively, direct response advertising can produce tons of super-qualified, favorably disposed prospects. It gets people to call, write in or buy.
You can analyze the value, profitability and performance of virtually any direct response ad you run because it produces something you can track, analyze and compute.
Institutional advertising produces no results to speak of. If you are running institutional ads, change them to direct response. Give your prospects information that’s important to them, not you.
Give them facts and performance capabilities of your product or service or tell them about your guarantee. Give them reasons why your product is superior to your competitors, on a human basis that the prospect can understand and appreciate.
Direct response advertising is much more effective than institutional advertising because your prospect doesn’t care one iota about you or your motivations. All the prospect cares about is what benefit your product or service renders to him.
How will your product improve the prospect’s situation and save him effort, time and money? How will your product or service improve the prospect’s life, and why?
Tell him the answers to these kinds of questions and you’ll own your market, pure and simple.
After you’ve built your case, tell the reader, viewer or listener precisely what action to take. Tell him how to get to your business, what to look for and who to ask for. Tell him how and who to call. Tell him what to do when the salesman calls on him. Remind him of the risk-free purchasing deal, and most important of all, tell him what results he can expect from owning or using your product or service.
By merely switching over from institutional to direct response advertising, you should improve your productivity many times over.
MARKETING MISTAKE #3: Not Ascertaining and Developing Your Unique Selling Proposition and Articulating It Clearly as an Integral Part of All of Your Marketing.
Failure to develop a Unique Selling Proposition (USP) for use in all your advertising is almost as common as failing to use direct response advertising.
The Unique Selling Proposition is the distinguishing advantage you hold out in all your marketing, advertising and sales efforts.
It is the philosophical foundation of your business, and its essence should pervade everything you do.
The formulation of your Unique Selling Proposition genuinely depends on that specific market niche you have already carved, or wish to carve out.
Your USP may be that you only sell the highest grade products in the industry.
Your USP may be that you sell your products at the lowest markup in the industry.
Your USP may be that you provide more information, education, and service than anyone else in the industry.
Your USP may be that you have everything in inventory at all times–no out-of-stock, waiting, or back orders.
Your USP may be that you maintain 24-hour, 7-days-a-week service for your customers.
Or it may be that you maintain five times more service personnel than anyone else in your industry, so you can respond in three hours instead of three days.
MARKETING MISTAKE #4: Not Having a Back-End.
Most companies never address the back-end or residual part of their businesses. But the back-end is all-important.
In my original mailing piece I discussed how one of my clients offered to sell a collection of rare coins to his new customers for just $19. He actually lost a few dollars up-front on every sale.
“Up-front” is the key, because of the 50,000 people who bought a coin set at $19, nearly 10,000 came back and bought on the back-end for $1,000 or more. My client made $2,000,000 (yes, two million dollars!) on the back-end.
But that’s just the first step. Once every three months this client goes back to the original 50,000 people who bought the $19 coin sets and gets at least 250 people to buy at least $1,000 more in coins.
That translates into $50,000 in back-end profits every three months, above and beyond the $2,000,000 I’ve already told you about.
My client then goes back to those 10,000 people who bought something for $1,000 and gets about 1,500 of them to buy more within the first nine months. The average additional order is $5,000, which makes my client another $1,500,000.
And those 1,500 customers keep ordering an average of one and-a-half times a year. That means an additional $1,500,000 in business every year comes from the back-end.
The back-end is vital to any business.
Look at the above illustration.
If my client had only made that first $19 sale and not cultivated the back-end, he’d have missed out on many, many millions of dollars in business, and actually lost money on the customer.
Until and unless you can identify how much back-end business you can expect, you won’t know how profitable or unprofitable an ad, sale, customer or promotion really is. For example, if you run $10,000/week ads in the newspaper, and they produce $9,000 in retail sales, it looks like you are losing $1,000 or more (I’m not figuring the cost of the product sold or services furnished). But are you losing in the long run?
If you induce those new customers to purchase a similar product or service from you within 45 days, you double the value of the customer, and all of a sudden you’re far into profit instead of loss.
Induce them to come back once every three months and repeat the average transaction, and you’ve set up an annuity. All from an original $1,000 loss, which you subsidized. But within three months or less the back-end business should offset your subsidy several times over.
The same dynamics apply to salespeople and sales. If a salesperson costs you $2,000 a month in base salary and all he sells each month is $2,000 in new business, it sounds bad.
Yet, if the new customers do repeat business, or, if you develop a back-end that converts normally one-shot sales into repeat customers, you accrue fabulous future income even if your salesperson loses you money at first.
If every month you bring on 20 customers who initially spend $100, and you get them to spend $100 every three months, soon you’ll have 600 people spending $100 every three months. That’s $60,000.
Another part of back-end dynamics is harvesting the “residual value” of a customer. This takes a lot of thought, experimentation, and carefully documented analysis.
Look for logical product or service extensions to offer your customers.
Experiment with salesmen “locking clients into” an ongoing purchasing commitment.
Experiment with capturing their names and telephone numbers and mailing them a specific offer, or making a specific offer by phone and measuring the response.
If you are basically a one-product or one-service company, seek out other products, companies or services to offer your customers as your back-end.
Be open-minded about other products, services and companies that might fit, based on either demographics or areas of interest.
Religiously, work the back-end over and over again.
Ironically, most businesses rarely try to resell their current or previous customers. You should do it constantly.
MARKETING MISTAKES #5: Failing to Determine and Address Your Customers’ and Prospects’ Needs.
90% of the businesses I look at never precisely determine the needs, desires, or requirements of the people to whom they are trying to sell.
How can you expect to adequately fill someone’s needs if you never take the time to understand them? It’s laughable. But few companies seek to meet their customers’ needs.
Those companies that do understand their customers’ needs and attempt to satisfy those needs, seem to end up with all the business.
You can end up with all the business too, if you’ll take the time to learn what your customers need.
Let’s probe the problem a little.
To induce someone to favor you with their business, you normally have to offer them some need-filling advantage. Let’s review just a few of the possible needs people want filled: convenience, better quality, lasts longer, saves time, looks better, performs more functions, state-of-the-art, saves you money, makes life less difficult (saves effort), makes you more money, more effective, etc.
What do your customers want or need most in the product or service you offer?
Do they want the convenience of knowing they can go down the block and get it from you, or the knowledge that your firm stocks or offers more items, or sizes, or products than any other company?
Do they want the top-of-the-line product or service? Or, do they want highly personalized service, attention, advice and instruction?
Perhaps they merely want to acquire the kind of goods or services you sell at the lowest possible price. Or maybe price alone isn’t what they’re after. Maybe they want the best guarantee, service policy or service to support the sale.
I don’t know which need or which combination of needs your potential customer seeks more than anything else, but that customer does seek fulfillment of some singular need or combination of needs, and sometimes the customer doesn’t even fully realize his need. But once you find and fill that need, you own your business niche.
If you don’t know what needs your customer most wants you to fill, start by recognizing that no one can be all things to all people. You dilute your image as a need-filler when you try to do that.
So, first determine which needs you can fill, consistent with who you are, what your business is and how you operate.
Then talk to clients, prospects, and customers, and have your salespeople do the same. Experiment with the image you convey in your advertising and promotion.
Monitor the consensus and gauge the feedback. Let your customers tell you which specific needs they most want filled, then determine which of these needs you can actually fill.
Then, don’t merely fill those needs silently. Make sure your customers, prospects, salespeople and your entire marketplace learn that your business listened and that you finally did something to satisfy the fulfilled needs of your customers. Continuously (albeit tactfully) inform, educate and outright point out that your company is filling those needs for your customers.
Change your ads to feature these specific need-filling advantages. Have your field or in-store salespeople point out what you are doing to serve your clients’ needs. Send out letters that do the same. Phone your customers and inform them that you’re prepared to fill their needs.
Once you determine precisely what your customers’ needs are and you commit to filling those needs, then do it.
If you decide that service is the critical element, offer the best service, the fastest service, the most skilled service people, the most knowledgeable staff, etc.
If top quality is the need you decide to fill, don’t offer mediocre goods! If you claim to be the best-quality business, make darned certain you’re a regular fussbudget about what you sell.
If you promise the lowest price, keep that promise. Integrity requires it. If you don’t genuinely fill the needs you purport to fill, your customers will soon abandon you.
MARKETING MISTAKE #6 Forgetting, or Never Recognizing that You Have to Both Sell and “Educate” Your Way Out of a Business Problem. You Can’t Just Cut the Price.
I am frequently asked to help a company out of a problem. Often, it’s to bail a company out of an inventory overstock or stimulate patronage for some service or product that’s just not selling.
How do I do it? What’s my secret?
The answer is so basic, simple and obvious you’ll laugh: I tell my clients to tell their customers and prospects the truth.
For example, if you have had 9,000 widgets gathering dust in your warehouse for six months, and you have $90,000 tied up in them, but no one’s asking for widgets, write a letter, or display ad, or TV/Radio commercial that tells your customers and prospects that (1) you have a huge inventory of widgets, (2) the widgets are good for such-and-such, (3) you are interested in selling them retail, and (4) their quality composition/constructive service functions and performance criteria are such-and-such.
Then tell people what other retailers or wholesalers would normally offer these or comparable widgets for, and tell them the price you’re willing to sell a widget or a specific quantity of widgets for.
Then tell the prospects why you’re selling the widgets to them so cheaply–the real reason–but with a delightful embellishment.
For example, tell the prospect the truth: that we have 9,000 widgets in our warehouse and the real rush is over until next fall, so we’ll sell them for our actual cost, or even for our cost, less 20%. But add to that explanation a parenthetic exclusive qualifier like: “But we’re only offering this value to our best customers as a reward for your patronage.”
Or: “But we’re only making this offer to new, first-time customers who buy an equal amount of other products or services.”
Or: “We’re only making this offer available to people who buy (some other very specific product).”
An important point–in fact, it’s vitally essential–is that your customers and prospects won’t understand or appreciate a value, or a bargain, or a service, or a benefit, unless and until, you first educate them to appreciate it.
Merely offering a product or service at a specific price (even the best price) doesn’t compel excitement, or a response, until you tell people what they’re getting, what a value it is compared to other products and services, and why you can offer such value.
This applies to any problem.
When your business has a problem (say you’ve taken money or advances for a product or service) and something goes wrong, precluding you from fully or promptly or properly rendering that service, never, ever fail to acknowledge your screw-up.
Failure to tell the truth is a sure way to commit integrity suicide. Be up-front and honest, and call, write or individually approach your customers and apprise them of the problem.
Tell them precisely what you were supposed to do and tell them why you can’t fulfill your obligations. Tell them with certainty when you will be able to perform. And this is the clincher: Give them some wonderful consideration to compensate them for being put out. Give them a small gift that costs you a lot less than the profits you’ll relinquish if you’re forced to return their money.
Or, send them a discount coupon, or rebate a portion of their original purchase price. Whatever consideration you offer, tell them why you’re doing it, apologize for what went wrong, thank them for their business, and assure them honestly that you can and will rectify the problem. Let them know that everything will be put right by such-and-such a time or method.
MARKETING MISTAKE #7: Failing to Make Doing Business with Your Company Easy, Appealing, Desirable and Even Fun.
It surprises me that most companies never put themselves in their customers’ or prospects’ position. Why else would they make doing business with them so hard?
If someone calls your company and a telephone operator is their first contact, can that operator make a compelling response to the prospect or customer’s requests?
When people come into your store, how well versed are your sales clerks? How much time have you spent in preparing dialogues, phrases, questions, and advice for your people to ask or offer to customers?
How willing are you or your people to answer questions and render truly informative advice, even if it does not directly or immediately benefit you?
How easy is it to find things in your store?
How conscientiously do you follow up on sales requests, orders and inquiries?
How well do you keep customers informed on the progress of their order?
How much do you take your customers, prospects, and business for granted? By merely stepping outside your office and walking up to your business wearing the hypothetical shoes of a prospect, you should see a lot of flaws in your operation. Once they are remedied, you can dramatically improve your current and repeat business potential.
By making it inviting, easy, informative, non-threatening, educational and inspiring fun to do business with you, you’ll loft your company above your competition.
Remember:
1) You cannot service too much.
2) You cannot educate enough.
3) You cannot inform too much.
4) You cannot offer too much follow-up and follow-through.
5) You cannot make ordering too easy.
6) You cannot make calling or coming into your business too desirable.
MARKETING MISTAKE #8: Failing to Tell Customers the “Reasons Why”.
Whenever you make an offer, ask for a sale, run an ad, have a salesperson make a proposition to a customer or prospect, or offer a product or service for sale at a specific price, always tell the reason why.
Why can you sell a product or service at a lower price than your competitor? Is it lower overhead or your volume buying? Do you buy odd-lot inventories? Do you not give all the service? Why is your price so good?
If your price is high, again, tell the customer or prospect why. Do you offer a far superior product than the norm? Is your product made with demonstrably finer materials? Is your product designed to last or perform two-and-a-half times longer than your competitors? Is it handmade? Is it made twice as durable or with three times the personal stitching or handiwork of some machine-made similar product?
Why?
If your price or the package is an especially appealing value, tell me why you’re making the offer to me.
Is it because I’m going to order from you for the first time, and it’s an exclusive offer to first-time customers? Is it because you got a great purchase on all or part of the components in the package, and you want to pass the savings on?
Or, is it because you’re overstocked and you want to get your capital out of slower-moving inventory, so you’re able and willing to sell me your product this one time only at an actual loss–far less, in fact, than what any other company could or would legitimately offer the product or service for?
Please, tell me your reasons why! Why should I patronize you instead of your competitors? Tell me what you are doing, will do, or will avoid doing that makes favoring your firm better for me than dealing with someone else.
Why can your salespeople handle my purchase better than someone else?
Tell me all the reasons why.
The more embraceable, factual, believable, credible and plausible reasons you give me for dealing with your business, the more compelled I am to favor you with my business.
MARKETING MISTAKE #9: Not Sticking with Marketing Campaigns that are Still Working.
Many companies promiscuously change campaigns in mid-stream. In the process they:
1) Don’t let the cumulative effect of a winning concept work for them.
2) Don’t allow the dynamics of testing to work for them.
3) Make a patchwork quilt of their company’s image and persona.
Businessmen get tired of their advertising and marketing campaigns long before the marketplace ever tires of them.
Remember the section on testing at the beginning of this report?
Don’t violate the tenets I taught you! Test to find out which ad, marketing, or sales approach works best. Then only change or alter that approach if and when a new ad or concept outperforms your “control.”
Continually experiment with new ideas, ads and concepts without abandoning the one that works best.
If an approach works, don’t arbitrarily abandon it. Only replace an approach when you’ve verified and validated a more successful and profitable successor.
Most ads, commercials, etc., produce only a modest percentage return every time they are run.
Direct response ads usually produce a .5% to 3% response. You may have to run them 200 times before you even begin to saturate your market.
Just because you are sick of seeing, hearing, or watching the same marketing does not mean your marketplace is also sick of it.
The only vote that’s relevant is the marketplace.
Test, test, test. Test different concepts, approaches, and ideas, but never, ever abandon your control until you find something that pulls better.
Reread the section on testing. When you are tempted to abandon a winning, producing, profitable approach that you are tired of, try to develop new approaches using a related or similar view.
If you’ve found the combination to your customers’ responsiveness, keep going until the combination stops working.
MARKETING MISTAKE #10: When Preparing Ads, TV and Radio Commercials or Direct Mailings, Forgetting to Focus on the Intended Customer and No One Else.
How many times have you scanned an ad in a newspaper or magazine and not had the slightest idea what it was all about, or who the information was intended for?
Ads, mailing pieces, or commercials, all need a headline. A headline is an ad for the ad.
It’s purpose should be to cull out only those who are most qualified to be a prospect for your proposition.
Without exception, humorous, abstract, or circuitous ads or commercials are a waste.
If you run ads in general interest publications, TV, and radio, and your product is pest control, you should not, use headlines or opening statements like, “Got the bug to clean the house?”, or “This problem affects every homeowner.”
Instead, fashion a headline or opening that states the purpose of the ad and qualifies the reader. For example: “If Your Home is Plagued by Ants, Roaches, Mice or Rats, We can eliminate the Problem with our Exciting, New Monthly Maintenance Service.”
If you sell plumbing supplies to the contractor market and you run ads in Contractor magazine, you shouldn’t run ads that begin, “The best source of them all.”
Instead, craft a headline that states your proposition, such as: “If You are Looking for a Source of Quality Plumbing Supplies, We Sell Them Exclusively to Contractors at 15% over our Cost, with 45-day Invoicing and an added Discount for Orders Over $2,500.”
Address your target audience in the headline with teaser copy or the opening line. If you want to reach people over 45, for instance, say: “If You’re 45 or Over and Thinking of Adding to, Replacing, or Acquiring Life, Health or Disability Insurance, this Information…” or “Insurance Coverage for People over 45 with No Physical, No Waiting, No Restrictions.”
If you’re trying to reach health or weight-conscious people for membership in your health club, use a headline or opening line like this: “Here’s a Way to Become Tight, Lean, Attractive, Radiant and Remarkable Healthy in Just 45 Minutes, 3 Times a Week.”
\If you want to reach people interested in furniture, don’t use a cutesy headline. Instead, try: “Looking for a $1,500 Sofa Value for Just $475? We’ve got 150 in Stock Right Now.”
Or, “We Sell Expensive Furniture at Deep Discounts. Our Average Price is 45% Less Than the Manufacturer’s Suggested Price.”
Whatever you sell, and whoever you want to reach with your story or message, be specific. Telegraph your message directly to your prospective customers, and tell them what you’re offering.
If you want to reach working women who don’t have time to cook, say: “Here are 24 Fast, Easy, Inexpensive Dinner Ideas, Especially Created for Working Women who Don’t Have a Lot of Time to Cook.”
I could go on and on, but remember these points:
1) Attract the attention of your target audience in your headline or opening remarks.
2) State your proposition or offer.
3) Use the rest of the ad to develop, support and present your offer and your reasons why the prospect should embrace it.
4) Finally, tell that prospect how to act.
From now on, always telegraph your message only to the people who are your primary prospects. Never again be content with humorous, non-specific, or abstract headlines or ads.
Copyright 1989 Abraham Publishing Group, Inc. All rights reserved.
The booklet The Ten Biggest Marketing Mistakes Everybody is Making and How to Avoid them written by Jay Abraham, Abraham Publishing Group, 1989.
This article may not be written by an Apostolic author, but it contains many excellent principles and concepts that can be adapted to most churches. As the old saying goes, “Eat the meat. Throw away the bones.”
