by John Pellegrini
Something I wrote a while back created a ton of questions. Here's the explanation article. My subject was Amateur Ad Makers ("Save Big Advertising Bucks, Jan. '96 RAP) and their lack of knowledge regarding the methods of advertising. Specifically, creating a Workable Marketing Strategy for their clients.
Wouldn't you know, many folks in our biz didn't quite know what a Workable Marketing Strategy is. That's not surprising; most people in radio advertising came to it as a result of being disk jockeys and enjoying the gimmicks in the prod room without really having any training in advertising. But, if you understand what our jobs are supposed to be, you'll also know that not knowing the methods of WMS (I'm going to abbreviate for the sake of space) is eventually going to cause a lot of trouble regarding your career.
Here's what we're talking about. Remember that statistic that I quoted about an average of 82 percent of all new businesses fail in their first three years? That, by the way, comes from yearly data published by the National Chamber of Commerce. Well, the sad reason for this is the problem with most of the people who go into business for themselves. The majority of first time business owners are usually frustrated ex-employees of some company. Got cheated or missed a promotion just once too often, whatever the reason, they didn't like where they were, so they decide to go into business for themselves.
That's a noble purpose. That's Free Enterprise. That's Entrepreneurialism. They get a small business loan, get a store front, and open their doors for business. Usually it involves some form of retail. Probably they have some "hobbyist's" enthusiasm for whatever the products they have to offer. But this is the problem: almost none of them have any business ownership experience or training whatsoever.
Ask any failed business owner, especially the type I've just described, as to why their business failed, and they'll give you a variety of excuses. However, ask them point blank, "What was your Marketing Strategy?" and they'll look at you like a deer getting caught in your headlights. Marketing strategies are sorely lacking from many businesses. You can tell which ones don't have one because there's no consistency in their advertising or their sales technique. There's not any feel of cohesiveness in their presentation.
How important is a WMS? It means the difference between success and failure for most businesses. Ask the owners of any successful retail business such as K-Mart, Wal-Mart, or the other "Marts" and they'll tell you consistency, cohesiveness and a plan for sales is what it takes to make the difference between a nickel and dime operation and a multi-billion dollar business. A Workable Marketing Strategy is the first absolute necessity for any business of any size.
So how do you get one? This requires lots of homework and goal setting. What are your goals for your business? Specific dollar amounts in sales? Daily? Weekly? Monthly? Quarterly? Yearly? What do you consider to be average growth, good growth and outstanding growth in terms of profits? Where do you want to be next year, the following years, a decade from now, a century from now? These are essential questions that every business owner needs to have written down and placed all over their business so that they can see them every day.
Next, you need to have a Charted Course of Action. What do you have to do to make these goals happen? What kinds of promotions and sales should you offer? Who are your customers likely to be? Who else could be customers? How can you reach them? (Not just one medium, either, but explore all possible advertising options. The successful businesses advertise everywhere, continuously.) What kinds of services can you offer that will set your business apart from your competition? What are your strengths against your competition? How can you improve them? What are your weaknesses? How can you eliminate them or change them?
This is a vital point to remember. When I say Charted Course of Action, I mean just that. Everything must be written down! This is your business Manual of Survival. Your plan of marketing your business and services is your business' life blood. All of the successful businesses have one. Coca Cola, McDonald's, MCI, Pepsi, Ford, General Motors, Chrysler, AT&T, even CNN, all have Workable Marketing Strategies. No Fortune 500 company could make it without one.
"Wait a minute," you say, "I'm not even interested in becoming a Fortune 500 company. I just want to sell fishing poles." Okay, but how are you going to compete against your local discount department store that already has a fishing poles department and has lower prices than you can offer? What's your marketing strategy to compete? What's your marketing strategy in case someone opens a fishing pole business across the street from you (hello hamburger franchises)? What's your marketing strategy if someone opens a wholesale fishing pole warehouse? All these questions are valid and must someday be addressed. The sooner you do it, the better for your survival because you'll have a plan of action already laid out.
The point is, too many business owners somehow get the notion that all they have to do is open their door and people will walk in and buy. That's because of the lack of experience and training bit that we spoke of earlier. Maybe if you can block off the road in front of your door this strategy might work. But the fact is, you've got to have a realistic set of reasons for people to want to shop your business. This is what advertising agencies do best. This is where we, the radio advertising professionals, can really set ourselves above and beyond what our competitors (newspaper and TV) can offer...because we understand how radio works best. And if we can mold what we do to help our clients gain a better WMS, we'll be light years ahead of the pack.
For radio stations to gain any ground in the world of Home Ad Agencies and Amateur Ad Makers, along with the competition of increasing National Buy Representation, we've got to embrace the WMS for our clients. We've got to sink our teeth in and prove that we can gear ourselves to a position of education and leadership for the business owner. This is going to require a full partnership between programming, sales, and production. Stations that allow divisions between these departments are going to come up severely short. With every stay-at-home-daddy thinking that he can write funny ad copy as good as anyone else these days, the threat is greater than you can imagine. And with the prices of digital recording equipment going down, many people are discovering that they can build a home studio for under ten grand that can do all the radio production they need. Don't believe me? Check out the prices from this year's NAB trade shows. Self-contained digital recording units for under seven grand, even less. Add to that a DAT backup, maybe a hard drive, a microphone and a CD player, and you're in business.
By the way, for those of you who have your own agency or are contemplating putting one together, what's your WMS? What do you want your agency to achieve? How are you going to achieve it? Mission statements help, but if you don't know how to turn them into cash, you'd better hope it's going to be a mild winter. Ditto to the people who manage or own the radio stations out there. The philosophy advanced by Mr. Howard Schmitz of Schmitz Shoe Service (RAP April '95 interview with Scott Bourne) that "I've been in business thirty-one years and never needed to spend nickel one on advertising" is going to be as extinct as the animal leads in Jurassic Park. Wal-Mart and K-Mart love guys like him. He keeps them in the billions of dollars in sales category every year. Problem is, Wal-Mart and K-Mart are keeping all their profits to themselves and not paying Mr. Schmitz, or other store owners like him, one dime of their profits, even though he's sending them most of his customers without even realizing it. Are you going to be your competition's best friend? Or their worst nightmare?
I've heard this phrase used a lot in recent years, but I can't find any other way of stating it: We stand at a crossroads, a unique time in the history of radio. What we do to generate more business for radio advertising just may prove to be the future life or death of radio. Our current FCC Chairman, Reed Hunt, is on record as saying, "I can talk for two hours on the future of broadcasting and never once mention radio." He doesn't seem to think we have much of a future. And in certain regards, I tend to agree with him. At least we won't have much of a future if we continue doing advertising business the way we have. Sure, lots of people listen to radio in their cars, but we have yet to truly prove that this is the most effective way to reach an audience. As stated before, commercials are the single biggest tune-out factor a radio station can run. Yes, radio's cheaper, but cheaper doesn't mean effective. Unless we radically change the way we service our clients and educate ourselves to operating the "Workable Marketing Strategy" approach, we are going to lose them to anyone with a PC and some extra hours to spend.
Incidentally, radio in your car is going to change soon too, because the very same people who bring cable into your homes have been studying bringing satellite music service to your cars. No commercials, no disk jockeys, no interruptions. The technology to do this already exists (and it won't be AT&T that's going to bring it to you, either), and most market analysts think it's just a couple of years away from being reality. Think we might lose some listeners to that? Only about 70 percent of them right off the bat. Yes, some will come back, but what's the single biggest complaint people have about radio? We talk too much. And this article has gone on long enough. Nice of me to end on a positive note, eh?