November Newsletter - Case Studies

As you may or may not know, Luce Performance Group has partnered up with In A Box Business Solutions to integrate the LPG sales tools and knowledge in their system. Recently they hosted a webinar for In A Box customers on ?Helping Retain and Grow Your Customers in a Tough Economy!?

After the webinar was over, a couple of questions surfaced, both of which were from Commonwealth Broadcasting in Kentucky. The first came from General Sales Manager Lee Ann Oliver in Madisonville....

"Our market is just like everyone else's right now, up and down. However, we've got a couple of advertisers who have been long term and are being hit pretty hard with the economic downturn, yet, they are expanding their business, but pulling their advertising because they feel they have to make every dollar count. They are adamant about pulling their advertising. How do we show the customer that it's going to take him time to rebuild his TOMA with customers and lose potential customers because of this?"

The solution to the question is really multi-faceted and it requires well trained sales reps as well as well trained clients. Let me explain the tools that will make the education of the reps and the clients easier...

The 4 Stages of the Buyers Awareness Cycle & the Buyers Awareness Cycle Top 40

Both of these documents can be found in the Blog section of the luceperformancegroup.com website and reps need to understand what they mean and where their clients fit into it. The first premise that needs acceptance comes from Target Magazine that reported 62% of consumers shop Top of Mind Awareness while 38% shop Price and Item. Radio and TV are great examples of Top of Mind Awareness mediums as the Reach and Frequency strength allows us to build that awareness that translates into recall when it is time to buy while Interactive and Print are Price and Item mediums. The second premise under the Buyers Awareness Cycle is the fact that less than 1% of your target audience is in the Buyers Awareness Cycle for any good or service at any given time and prospects enter and exit the cycle daily. From the Buyers Awareness Cycle Top 40 we learn that the time it takes for a consumer to begin thinking about purchasing a product or service to the time they actually enter the retailer to make the purchase is the cycle in months and we have compiled the top 40 business categories along with statistically accurate lengths of buying cycles. The 4 Stages of the Buyers Awareness Cycle teach your clients that each consumer goes through a pattern:

1)    Become aware of a product or service, drive awareness and image.

2)    Get familiar with the product or service, differentiate features and benefits

3)      Feel relevant connections to product or service, make meaningful connections with the company or product

4)      Feel confident in a few choices or businesses, drive businesses or products into the final consideration set

For example, if you client is a Furniture Store, the Buyers Awareness Top 40 tells us that it takes 3.9 months on average for a listener/viewer to go through the 4 Stages of the Buyers Awareness Cycle. Since people enter and exit the buying cycle daily, your clients do not want to miss any potential prospects, loose market share or share of voice. The reality is if they understand how consumer?s minds work and the Buyers Awareness Cycle, they cannot afford not to advertise. (See LPG website Blogs "Marketing Your Way Through a Recession Parts I & II" for outside sources that reinforce this concept)

The second question comes from General Sales Manager Roth Stratton again from Commonwealth Broadcasting in Elizabethtown, Kentucky who asks:

"Our local newspaper has cut full page rate from $1400 or more to $400...newspaper looks like a shopper....how do we address without publicizing the low price of the paper?????"

The answer to this requires to once again educating our reps and our clients with some of the same information from the previous answer. Key to this is the percentages from Target Magazine that 62% shop Top of Mind (Radio, TV, & Interactive) while 38% shop Price and Item (Print & Interactive). If your clients advertising spend matches these percentages I will be shocked, they are usually reversed and most decision makers are not happy with their return on that advertising spend.

We suggest positioning your properties and the advertising value they represent with a combination of tools and methodologies that differentiate you from print, the tools of choice:

The LPG Customer Marketing Profile

This is an information-driven file folder consisting of general information about the client, a marketing checklist, typical customer profile, profit center analysis, information based questions, outline of client buying influences, a current budget planner, problem related queries, an R.O.I. Worksheet, Strategic Budget Planning Calendar, an In-Store Survey form, Techno graphics survey, and Creative Strategy form. The tool is great for organizing this extensive needs analysis but the real tool is the relationship that is developed by caring about your clients enough to ask the hard questions and truly understand where their business is and how you can solve problems with marketing solutions.

The LPG EFS Generator

This macromedia downloadable tool goes step by step through the value that a new prospect and customer means to your clients. You are asked to fill in 10 blanks with answers from your clients. Once you go through the process once, your clients will understand that each of their profit streams needs to be tracked and evaluated on a Return on Investment basis. The questions are simple:

The Advertising Investment amount (We recommend OES schedules)

The duration of the Investment in weeks (Think longer term to match Buyers Awareness Cycles)

The realistic percentage of Return on Investment (we suggest 20%)

The Average Sale

Incremental Customer Value

Lifetime Customer Value

Total Average Sale (the above 3 values added together to give you this amount)

Profit Margin (not markup, but the profit margin percentage, most businesses require at least a 35% margin unless they have 100% closing ratios like restaurants and movie theaters)

Number of Listeners (this is your total cume Monday through Sunday 6am-midnight)

Clients Closing Ratio % (out of 10 that come through the door, how many do they close?)

Inside the application we have question marks beside each line item, you click the question mark with your mouse and a simple explanation rolls over on the screen with a real life example to help your reps and your clients understand the terminology. Once you fill in the 10 items, hit calculate and the numbers come through the equation and show your clients what to expect from the information they have given you.

Unique Selling Proposition, Great Production, and Effective Scheduling

Great copy that focuses on the client?s unique selling proposition and consistent schedules are keys to making the Equation for Success (EFS) Generator predictions come true. For a true call-to-action flight of commercials we always recommend Optimum Effective Scheduling (OES) which generates a 3.29 frequency with 50% or more of your listeners over the period of a week. 

Execution: Schedule enough commercial messages to effectively reach approximately 50% (46%) of a station's cume, 3 or more (3.29) times, each week.

Here are the specific calculations necessary to determine the number of spots necessary for an OES plan:

1. Determine your station's Turnover by dividing Demo Cume by Demo (AQH, and multiply that Turnover figure by 3.29)

Demo Cume                                                     750,000

Demo AQH=Target Demo Turnover                45,000 =16.66

Multiply Turnover by 3.29               16.66 x 3.29 = 55

?        Your OES advertising schedule will require 55 commercials.

(For unrated markets, the daily number of commercials needed to reach OES standards could range from 8 to 13)

2. To calculate your station's Effective Reach, simply multiply your station's Demo Cume by .46.

750,000 x .46 = 345,000

Your OES schedule will effectively reach 345,000 demo-targeted persons.

In-Store Tracking

The EFS Generator results are only as good as a tracking tool that the client is responsible to tally after each visit from a prospect. They need to ask what brought the prospect in today. Supply your clients with a simple tracking sheet with your stations that they advertise on listed on top followed by any other media they advertise with below. Review the results from each campaign with your clients and how the tracking is working, don't be afraid to send a mystery shopper into your clients to make sure they are tracking their prospects.

Offer to Run the EFS Generator on other media

They have seen how it is supposed to work with your media, now put it to the test against print. The metrics of print, outdoor, and yellow page advertising translate into the EFS Generator and you can lead your clients through it if you can translate the number of listeners into the methodology that is used by each of those mediums. Once they track the prospects and their own results, don't be surprised as they share with you what changes they make in their advertising spend to bring their numbers in line with standards and what isn't working for them. That is exactly the kind of relationship you want to have with them.

A Note From Sean: I have talked with very few properties that are not going through a struggle right now as revenues are down and the scramble is on for solutions.  We feel the best way we can provide solutions is for you to submit your real-life sales issues to the Luce Performance Group website blog section to this post, we will post one in our newsletter each month and the best response from the readers will get $25.00 for the advice. 
Now is the time to use every bit of knowledge you can to help your clients.