Advertising and Air Conditioner Sales

Bear with me as we set up the facts of this story.

The people and the company involved are very real, but shall not be named. If they must have a name, call them . . . oh, let's call them Little Brother Bob's Hardware.

L.B.B.'s Hardware has several stores in southern states. Each summer they stock, and sell, window air conditioners.

The company had tradionally offered an incentive program for superior sales performance when it came to air conditioners. Each month’s quota was set at 110% of the sales from the same month a year ago. If any store outsold its quota of air conditioners, there would be a bonus of $25 per additional unit. The bonus money would be pooled, and the store's manager could distribute to employees according to their contribution.

The company started advertising sale prices on air conditioners.

They bought ads in local newspapers. They passed out flyers in the stores. They mailed those flyers to the regular customers of each store.

First month: the store in our little tale sold 16 units over quota, and earned a bonus pool of $400 for the manager to distribute to assistant managers and salespeople.

Second month: 20 units over quota. $500 bonus.

In the first week of the third month a local builder came in to the store carrying one of the flyers.

He explained that he had just been awarded a contract to remodel a local hotel. He wanted to purchase 200 identical window air conditioners, and wanted to know how quickly he could arrange delivery of such a large number of units.

The manager called L.B.B.'s Hardware's home office.

The home office took over the sale and dealt directly with the customer.

Within 48 hours a new bonus program had been implemented. Effective immediately, the bonus potential was capped at $500 per month.

In three years since the new bonus program has been in effect, Little Brother Bob's Hardware has never again exceeded quota. At least, not this store.

Most of us see a cause and effect relationship in this example.

Do you have a bonus program for your salespeople? Is the program working with, or working against your advertising?

How do you know?

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Four Media Predictions, part 3 of 3

In the last two posts I’ve made some observations of My Network TV, the new News Corporation television network, and of MySpace.com, the News Corporation internet portal.

News Corporation, as you know, is the Rupert Murdoch media conglomerate. That conglomerate exists because Murdoch has a history of recognizing opportunities. While the other networks are slugging it out in a zero sum game for the same viewers, for instance, he’s established sports programming distribution into China.

Marketing consultants shouldn't make predictions of what's to come. If we're wrong it blows our credibility.

Then again, when we're right, it tends to show that we do know what we're talking about.

Hummm.

Let’s tie my observations in parts one and two of this series into some projections, shall we?

First, younger viewers are spending more time online. And thanks to broadband (which gets faster and cheaper every year), it won’t be long before they turn to the web for longer form programming. I predict that News Corporation will develop programming content that will easily transfer from My Network to MySpace to multiple other new-media platforms.

Second, as MySpace continues to develop, among members of the emerging generation it will become more influential than MTV.

Third, I predict that as MySpace grows in influence among younger web users, Yahoo, AOL, and MSN will be negatively impacted.

And finally, earlier this year Fox used MySpace to promote the Fox TV comedy Free Ride. Without buying ads, they managed to work viral marketing to launch the show.

Watch for more. I predict this will become a textbook example of integrating content and using new media to recruit viewers for traditional media.

One last observation:

As of mid May, My Network TV already had 141 affiliates. Their combined reach is 89.9 million households, which equates to 81.6% of the U.S.

Its still waaaaay to early to recommend My Network TV and it's programming.

But shouldn't we all be watching closely on September 5 to see what happens after they launch?

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From the Department of Redundancy Department – part 2 of 3

Anyone who has been the parent of a third, fourth, or fifth grader already knows the truth: it takes a lot of repetition for long-term memory to be affected.

In most school districts students start learning the multiplication tables in the 3rd grade. How much is three times four? Right, twelve. And three times four? Good. How much is three times four? And three times four is…..?

In the fourth grade? Again, how much is three times four?

And in the fifth grade? Yep. Multiplication tables again.

Why? Because it takes a lot of repetition to affect long-term memory.

Of course, marketers know this too. Winning marketers know that it costs the same amount to reach 100% of the people 10% of the time, as it does to reach 10% of the people 100% of the time. The first strategy will fail. The second will succeed, provided, of course, that the message is salient.

McKay’s advice: when forced to choose between reach (total circulation) and frequency, always choose frequency. Frequency sells.

Why? Because it takes a lot of repetition . . .

My favorite frequency media include outdoor, radio, and direct mail.

It’s tough to get frequency in television. Or at least it has been.

People listen to radio stations, but they watch tv programs. Viewers have no loyalty to a particular television station. In the minds of viewers, television stations are similar to their electric service or their telephones. They’re only aware of the provider when the service is interrupted. When this show is over, the viewers will choose another show. Maybe on this station. Maybe not.

Historically, in television the only way to insure that a particular audience is exposed to an ad an average of three times is to buy three ads within the same program.

But My Network TV is about to change the rules. Their first season will exclusively be made up of two telenovelas – drama which is scheduled daily.

So, you don’t like much of what’s on tv these days? Too much reality programming? You like a solid tv drama but the networks have taken away The West Wing, there’s only one episode left of Commander In Chief, and they’ve killed off your favorite characters on ER?

Hummm. Maybe you’ll be curious about My Network TV’s Desire or Secret Obsessions. And if you like either, you’ll be tuning in night after night after night… Monday through Friday, with a weekly summary show on Saturday (in case you missed an episode this week).

I’m thinking that three or four weeks into either show, we’ll all know who’s watching. We can also predict that they’ll be around until the end of the show’s 13-week run. And, I see this as an opportunity to build frequency on television.

Don’t misunderstand, I’m not endorsing My Network TV. It’s too new a concept, and way too many great ideas were stillborn in the marketplace. Plus, we have no idea yet how many people will be watching either program.

But I will be watching closely September 5 when the new network launches.

Will you?

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Television and the Short Novel – part 1 of 3

Normally, I don’t get excited about the announcement of new programming, or of new programming sources. And don’t get me wrong, I’m not excited now, either.

But I am intrigued with Fox’s new My Network TV, which will launch September 5 of this year.

When UPN (owned by CBS) and the WB (owned by Time Warner) announced they would merge to form the CW this fall, it left all ten of Rupert Murdock’s News Corporation stations in major markets facing a future with no programming.

News Corporation also owns the Fox network, who quickly announced the formation of My Network TV.

A year ago News Corporation purchased MySpace dot com, a web destination that reportedly has eighty-five million users. So far, MySpace is known as a young people’s social networking site as well as a good vehicle for selling new music.

So, it’s really no surprise that My Network TV is going to be targeted to the eighteen-to-thirty-four crowd. However, it appears to me that My Network TV is targeted to an even narrower (and faster growing) demographic: the eighteen-to-thirty-four Hispanic market.

Across the US Hispanics represent just over 10% of all households. But in the cities that make up My Network’s initial affiliates Hispanics account for over a third of all homes.

In markets like Southern California, nearly half of the Hispanic residents are under 25. And all across America the vast majority of younger Hispanics are bilingual.

In many of those markets, the local Spanish language TV stations lead the market in ratings, and identify themselves as “Nuestro Canal” or “Tu Canal” (Our Channel or Your Channel).

The new network is called My Network. Hummm. You be the judge.

Let’s look at the programming.

My Network will broadcast only twelve hours per week. There will be two serialized hour-long dramas for the first season called “Desire” and “Secret Obsessions.” New episodes will air every weeknight, with a weekly recap on Saturday.

Each story will run for 13 weeks, and be replaced with another telenovela (Spanish for Short Novel). Univision and other Spanish language broadcasters have found this format to be a hit with their viewers. With the popularity of such television drama as Lost, Gray’s Anatomy, and Desperate Housewives, don’t be surprised if the English speaking market warms up to the telenovela format as well.

Other shows in the works include a fake psychologist who falls in love with a patient; a reality show searching for top models; a contest show with prizes for trivia knowledge; the story of a pilot and an heiress who survive a plane crash; and a Fox-developed investigative crime series.

Yup. I’m intrigued by My Network TV, because it appears to target young English-speaking Hispanics.

And, just as Spanish words have become part of mainstream America, just as Mexican dishes have become regular American fare, the telenovela will become a staple of younger Americans, too.

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Waiting For Your Cat

I was first exposed to Persuasion Architecture ^TM in a Wizard Academy class taught by Bryan and Jeffrey Eisenberg. From my hotel that evening I phoned my son, the retailer.

“Think about it, Chad,” I said, “you identify the personalities of your customers, and then you anticipate what they’ll want to know, or to do, in order to do business with you.

“How much more money could you make if you could be planning ahead to give your customers exactly the shopping experience they want? What would happen to your word of mouth if they all left knowing with certainty that you understood them?”

We brainstormed the possibilities for well over the next hour.

You, Dear Reader, now have the advantage.

You don’t have to travel all the way to Wizard Academy, near Austin, Texas on those rare occasions that the Eisenbergs have been available to teach that class. (Although if you ever get the chance, believe me, you won't want to pass it up).

No, you can simply pick up a copy of their new book, Waiting For Your Cat To Bark: Persuading Customers When They Ignore Marketing, for only $19.99 (or $14.39 if you’re a member at BN.com; $12.99 at Amazon.com).

As Jeffrey says in his introduction, “We explain the principles and framework … for tying all the communications your company makes into a coherent persuasive system.”

He goes on to explain that chapters one through six explain how and why marketing has permanently changed. Why customers respond differently than they used to (chapters seven through thirteen). That chapters fourteen through twenty-two address anticipating what your customers require, and how Persuasion Architecture ^TM bridges the marketer / customer gap in chapters twenty-three through twenty eight. And finally, how you can start implementing Persuasion Architecture ^TM in your business.

Bryan Eisenberg and Jeffrey Eisenberg, with Lisa Davis have written one of the best business books of this decade in Waiting For Your Cat To Bark.

If you deal with customers, and you’ve noticed that they don’t react as they used to, you need to understand Persuasion Architecture ^TM.

If you haven’t yet noticed, you definitely need to understand Persuasion Architecture ^TM.

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