There Is No Such Thing As A Free Lunch18 Jul, 2001 By: Ian Crockett imageSource
There Is No Such Thing As A Free Lunch
Back in the mid-eighties, office equipment dealer advertising was all about generating leads. If my clients didn’t physically track their weekly and monthly lead counts (and most didn’t), they had a good sense for whether or not the advertising was producing them.
We made sure our clients’ phone number was very prominent in visual advertising and we would always close a radio commercial with the number followed by, “or look in the white pages for…” We didn’t want to direct the prospect to the yellow pages where all the competitors’ ads could also be viewed, and, of course, the yellow page ads themselves were big and splashy with the intent of producing a qualified lead.
I’ve mentioned in several columns how times have changed and it’s much tougher to generate a qualified lead, but I was reminded of this couple of weeks ago.
A client called me with a terrific marketing idea. It tied into festivities in his market and was such a bold idea that if certain things happened he would be forced to give away $250,000 worth of copiers absolutely free. The equipment only cost him 60% of that and he would make some of it up on service and supplies, but it was still a bold offer and a huge risk.
The phone didn’t ring. He got some calls, but the phone didn’t ring off the hook as one would have thought. I won’t explain the promotion to you because of confidentially issues, but if I said “I guarantee” it would cause you to say, “Wow, I wouldn’t have the guts to offer that because I couldn’t handle the downside.”
It may have been that the promotion was too unbelievable or too complicated after we got the lawyers involved, but my guess is that there are so many factors at play these days that fancy or tricky promotions to sell office technology fail.
The Prospect Issue
The first problem is not everyone is a prospect. I was told recently that the life cycle of a copier is 41 months or almost three and a half years. Even after three years, only 33% of the businesses will acquire a new copier this year. If you break that down monthly, you would discover that less than 3% of all businesses will acquire a copier this month. It’s probably slightly more than that for printers and fax machines since many of those acquisitions are for add-on product.
Even if you’re promotion is tremendous and you can get somebody to move up their timetable six months to take advantage of it, you’ve still got less than 20% of the prospects paying attention. This is a lot different than the mid-eighties when many were acquiring their first copier or fax machine. Moreover, prospects were susceptible to price because they didn’t completely understand the service that would be required. Now don’t get me wrong. I’m certainly not against promotions. I like all my office technology clients to have at least one promotion a year, but our expectations do not focus around leads because your objectives are different and you’re forced to design it differently. Instead of offering unbelievable prices or free product to make the phone ring, you need to develop ideas around your salespeople working their territories more effectively, getting prospects into your facility, making existing customers aware of your entire product and service offering, or getting rid of used stuff.
The objective of the promotion, which some would refer to as a sale, deal, or event, is to interrupt the prospect’s buying cycle. Once again, these are businesses that have already determined a need, but haven’t included you in their shopping.
Sometimes a great price will get their attention, but it’s generally other things that attract business people such as; “0% leasing,” “No payments for 90 days” or “Free accessories” and more that make sense to an educated business person. Anyone can offer a low price, but business people want their vendors to make a profit so they can stay in business even though it’s sometimes difficult to convince my readers of that point.
Ongoing or consistent gimmicks don’t seem to work either. We had a fellow in our area that advertised “Free copiers” for years and claimed it was the most brilliant marketing strategy ever devised. It was so great; he was going to sue anyone that had a similar idea.
I don’t believe truly that any intelligent or not-so-intelligent businessperson really thought they were getting a free copier. Since the word “free” is the most impactive in advertising, it probably caught their attention and interrupted their buying cycle. Since the company was sold, the strategy couldn’t have been that successful, the former owner is gone, and so are the “Free copier” ads.
Incidentally, there’s a price to be paid for an ongoing promotion, whether it’s “Free copier” ads or something else. Your brand becomes the promotion, “Oh, you’re the free copier guys” or “You’re the XYZ promotion company.” Legitimate businesses, especially in the major account arena, don’t want to trust the performance and productivity of their office technology to a promoter or a discounter.
That’s why something like 0% leasing seems to work. Since people know, they’re probably going to lease the equipment anyway, so why not include this promoter in their analysis. They may save some on the monthly payments and they haven’t succumbed to a discounter who may not be around or can’t afford to provide a high level of quality service down the road.
A good consistent advertising approach will produce leads. The difficulty in today’s environment is saying to yourself, “I get about 50 leads a month and I’m going to double those next month with this great idea.”
Of course, some of my clients don’t want advertising leads. They feel they’re mostly shoppers looking for a deal, and since there will most likely will be competitors involved, it will be a price war. I ran into a company the other day that only pays the salespeople 50% of the commission if it originated from a lead. Needless to say, the salespeople try to nurture their own prospects instead of waiting for the so-called “bluebird” or griping because they don’t get enough of them.
Leads can be a very good thing, especially if they come from your employees. Most office technology companies have lead spiffs or even commission splits with service technicians and other salespeople. I suggest having a new business incentive for every employee. Give them something to think about while they’re boating with a bunch of people or while they’re at the bowling alley or golf course mingling with other business people who may have a technology need in their own company.
When you reward them, make it very public just like you do with your sales force. Remember, recognition is sometimes more important than a financial reward. It also reinforces team spirit and reminds the other employees that they may be leaving dollars on the table.
Yes, times have changed and it’s a good thing for my client with the unbelievable offer. Based on his offer, the worst happened and he could have forked over a quarter of a million worth of hardware, but because the phone didn’t ring off the hook, he’s breathing deeply and wiping the sweat off his brow. It was a close call.