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Guys;

The rep comes in today, with a question (I've trained the company's salespeople several years ago, so she asks my advice occasionally)

She sells a coupon book with glossy paper, and the mailing is 25,000 books (8 1/2 X 11 )..maybe 20-30 pages. A full page ad is \$600, a half page ad is \$350.

She says "I can't sell more pages. Only half pages and quarter pages. I'm losing money"

Now, I know that she pays a large fee for each page up to 16 pages, and above that, it's nearly all profit. So I said.....
'Lower the cost of a full page and raise the cost of a half page. Make the half page \$425 and a full page \$499."

She said that she would lose money on the full page ads.

I said "No, you'll make far more. You want to fill up the book. They way to do it is by converting half page clients to full page. And a \$74 difference in price will do that. Then, you'll have all the pages where you get to keep almost all the money."

We did some quick math, and her net profit would go up 45%, with lowering the full page price \$100, and not selling any additional clients. Magic.

Then, she says that the local newspaper is selling a page (same size as hers) for \$200. And customers want her to lower her price to match the newspaper. It's impossible. I know her costs.

I asked what she told the customers. She said "I tell them that we have to pay postage, so our costs are more, and that the circulation figures of the newspaper are false. They throw away most newspapers, and they count the unsold ones in their figures."

I had to stop her. "We're friends. I'm going to tell you a truth. Never say again, what you just told me.....Nobody cares about your costs. Nobody cares about the fact that you have to mail the book, and it costs money. And when you talk about the newspaper fudging figures....I know it's true...you know it's true. But it sounds like sour grapes...and a lie."

Here is what I told her to say when the prospect brings up the difference in price.

"You're paying for eyeballs on your ad, right? We mail 25,000. The newspaper has circulation figures of 20,000. But Everyone in town gets The Town Money Saver (her magazine). How many of that 25,000 get the newspaper? (I told her to get a figure) Now, how many read the whole newspaper of those that subscribe? (get a figure) Now, How many find the insert, the magazine in the newspaper? (The figure we ended up with was about 4,000.) So, you are comparing 25,000 pairs of eyes to 4,000 pairs of eyes. Now, when do you throw out the newspaper (Next day). But the coupon book lasts a month (which it really does).

So .."per set of eyes" we are at 2 cents (\$500 "new price" divided by 25,000). The newspaper is at 5 cents per set of eyes. (\$200 divided by 4,000) My suggestion is that you use both the newspaper and us. They come out at different times of the month. But we also stay on the kitchen table much longer than the newspaper, and we cost less. What makes the most sense to you?".

It was off the top of my head. I really really hope she listened.

Never talk to a client from your point of view. Always from their point of view.

I sure hope this helps someone.
• Great post Claude.

I can't help myself with this though... when us 9x12'ers are overcoming the competitor who is sending out 25,000 magazines vs our 10,000 postcards:

we tell them "out of those 25,000 people who got the magazine in the mail, how many are going to open it up? And out of that many people, how many will notice your ad squished between hundreds of other ads over dozens of pages?

If you were sending a critically important message to someone, what would have the best chance of being noticed? The message on a postcard or on page 24 in a coupon book?

Sorry couldn't help myself here haha.
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•  Originally Posted by bob ross Great post Claude. I can't help myself with this though... when us 9x12'ers are overcoming the competitor who is sending out 25,000 magazines vs our 10,000 postcards: we tell them "out of those 25,000 people who got the magazine in the mail, how many are going to open it up? And out of that many people, how many will notice your ad squished between hundreds of other ads over dozens of pages? If you were sending a critically important message to someone, what would have the best chance of being noticed? The message on a postcard or on page 24 in a coupon book? Sorry couldn't help myself here haha.
Not at all. Always use what you have. If it's a postcard, it's that you don't have to open it. If it's a magazine, it's that consumers keep the magazine, and don't throw it away....If it's a newspaper, it's that people read it, and it isn't junk mail. If it's radio, people driving will get your message. A full page ad is bigger than any postcard ad, but the postcard ad is already visible........

You can always show an advantage for your media. And you can always show that it's more economical. Always use what you have, and the advantage that you have. Is there a best mass advertising media? No idea. Whatever works. And every ad supports every other ad...so the effect is cumulative. The more places they advertise, the better total results. (Unless they are sent out the same day)

What I didn't mention to my rep friend (because I have so many times in the past) is that the offer determines the results....assuming circulation and market are equal. And the headline. Even when the ad is so small that all you have, is a headline.
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•  Originally Posted by Claude Whitacre What I didn't mention to my rep friend (because I have so many times in the past) is that the offer determines the results....assuming circulation and market are equal. And the headline. Even when the ad is so small that all you have, is a headline.
That is so true, there seems to be a real discourse between online and offline.

Online we have become used to almost giving the farm away in terms of value to make a sale, its a the more you give the more you get mindset.

Most brick and motor business owners around here don't get the concept, the merest mention beyond 10% off and they freak out, with a kind of siege mentality.

The ones that understand and bundle great value, and it does not necessary have to do with \$\$\$, are killing it.
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"It is your choice of message that targets the customer, not your choice of media. There are rare exceptions, of course. But not many."
- Roy H. Williams

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• "Most brick and motor business owners around here don't get the concept, the merest mention beyond 10% off and they freak out, with a kind of siege mentality."

Susie,

That's a great reason to qualify them out.

You can't fix cheap. I learned that the hard way, long ago.
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•  Originally Posted by Claude Whitacre Never talk to a client from your point of view. Always from their point of view. And your expenses? Your overhead? Your employee costs? As an advertiser, I couldn't care less. More eyes seeing my ad? Now I care.
That's extremely helpful. In our society, making excuses and bashing our competition is 2nd nature. I'm really trying to break myself of the very bad habit.

It would be easy to rationalize her response with the "you need to justify your cost" principle that I've heard many a sales trainer teach, but as you said, talking from your prospect's point of view makes the most sense.
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• Different areas of media are going to be thought of as more useless or more useful. When selling advertising, the key and goal is to showcase your benefits and to disclose the fact that what the business has been doing already is good; but that you know of a way to improve what they already know. All some business owners need is a push in the right direction to be forced into investing their money into your product. Every form of marketing and advertising is going to benefit the business owner.
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•  Originally Posted by Claude Whitacre "You're paying for eyeballs on your ad, right? So .."per set of eyes" we are at 2 cents (\$500 "new price" divided by 25,000). The newspaper is at 5 cents per set of eyes. (\$200 divided by 4,000) My suggestion is that you use both the newspaper and us. They come out at different times of the month. But we also stay on the kitchen table much longer than the newspaper, and we cost less. What makes the most sense to you?".....
This is such an effective argument Claude, and it made me think of this:

I'd probably tell the woman rep to go to a novelty shop and get a couple
pairs of "eyeballs"....when she's in person with a prospect, and the price objection arises, pull a set out, plop them on the counter or desk, and say,

"These are what you're really paying for, right? Lets figure out how many of these your'e buying and which media makes more sense..."

Now if you happen to have a glass eye, don;t go overboard...lol
_____
Bruce
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• Newspaper classified advertising has always worked best for us.
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That's right. When businesses try to overcome price objections by justifying their price based on their costs, it's a defensive position to take. And we all know it's better to be offensive. Oh wait, that didn't come out right.

What I mean is, when the business person says it costs them more, takes longer, have overhead, the consumer thinks, "hey I didn't tell you to go into business did I? That was YOUR choice. Besides, why should I have to pay because it takes you longer or costs you more - maybe you're simply not efficient."

If you're old enough to recall the gas price wars in the 70's... I vividly remember competing gas stations across the street from each other. Every day one would lower the price some pennies more (I know there's more to that but just to keep the story simple). The rival would follow suit. Motorists loved the deal they were getting and lined up to get gas cheaper and cheaper.

But then one day, one of the gas stations raised its price a few pennies. The rival soon followed suit. Up and up they went until they were at highs again.

Here's the lesson:

While they were lowering prices all they succeeded in doing was making less profit while working just as hard or harder. Did the motorists care that if the gas stations continued that spiral path downward the gas station would go bust? No. They just thought of their pockets.

When the gas stations realized lowering prices wasn't the answer and would put them out of business, and raised the prices again, did their need to cover their costs and turn a profit mean anything to the consumers? Again, no. No. They just thought of their pockets.

Your costs don't matter. Only their pockets do.
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•  Originally Posted by Claude Whitacre "You're paying for eyeballs on your ad, right? We mail 25,000. The newspaper has circulation figures of 20,000. But Everyone in town gets The Town Money Saver (her magazine). How many of that 25,000 get the newspaper? (I told her to get a figure) Now, how many read the whole newspaper of those that subscribe? (get a figure) Now, How many find the insert, the magazine in the newspaper? (The figure we ended up with was about 4,000.) So, you are comparing 25,000 pairs of eyes to 4,000 pairs of eyes. Now, when do you throw out the newspaper (Next day). But the coupon book lasts a month (which it really does).
This^^part is the key.

The small area I live in has a local 'newspaper'. It's actually an 'advertiser' instead of any type of news reporting venue. I don't mind ads, but a newspaper is for news (in this case local news).

We also have local advertiser that has articles written on different topics that's of interest to the locals, but it's promoted, and received, as an advertiser, comes in the mailbox every month and is printed high quality.

The main difference is what you pointed out, that everyone here gets the advertiser, but not everyone gets the local 'rag'.

Last year I got to meet the owner of the advertiser, and he talked about how he was looking to compete with local newspaper for ad dollars. I told him that since the reason I reached out to him was the quality of what I got in the mailbox, my advice was to stop trying to compete with the newspaper and focus on maintaining the highest quality of what gets mailed out. People will notice, and appreciate it.

Long story short, he has been upping his game at every chance and more and more people are bailing on local paper to advertise with him.

Personally, I never understood the competing thing. It's like keeping up with the Jonses.
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•  Originally Posted by globalpro Personally, I never understood the competing thing. It's like keeping up with the Jonses.
It's human nature. And in business, it's soooo very easy to blame a competitor for your lack of sales "He stole my sale!".

Salespeople make a major mistake, almost universally. They trash the competition...the competition that is in the same business that they are in.

If you are selling advertising (It's the same with any product/service), the first thing you are selling is the service. In the case of advertising, you want them to be sold on advertising.

Because you are reinforcing the idea of advertising. And you are supporting a previous buying decision. And whatever they really like about their previous advertising, you make sure you incorporate that appeal in your offer.

And You're next.

About competition? I had a salesman that worked for me ask "Why don't we ever talk about the competition, and how terrible it is?" (vacuum cleaners)

I said "Because when you say bad things about a previous buying decision, you are telling them that buying a new vacuum cleaner will be a stupid decision, like the purchase they made before. And if we are talking down about our competition...we are talking about our competition. Maybe they didn't even know we had competition."

A typical thing I would say when the customer would say "What do you think of my vacuum cleaner (a door to door model)"

"You made a wise investment. The machine is durable, and was made of the finest materials. In fact, it has features that we found so attractive, that we made sure they were in our vacuum. And we then took the best ideas from several more high end machines. We wanted to make sure that, no matter what you were using now, we would have something incredible to offer you. You made a great decision based on your available choices then. Now that you see the technology that's available here today, what do you like most about it?".

And I wouldn't mention their machine again.

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•  Originally Posted by Claude Whitacre It's human nature. And in business, it's soooo very easy to blame a competitor for your lack of sales "He stole my sale!". Salespeople make a major mistake, almost universally. They trash the competition...the competition that is in the same business that they are in.
So true.

When ever I got into a situation where someone was trashing their competition (rather than focusing on the benefits of what they were selling), it always made me think they had something to hide.

Funny thing is, years ago I owned a construction business. The problem I always had was the pricing game from customers, especially where one competitor was concerned.

I knew I did a better job, and why I charged more than my competitor, but would make bids on work and get so-and-so will do it cheaper. I never played the pricing game.

Since I knew my competitor, one day I saw him and in the course of talking, I asked for some of his business cards. From there, if I got into a bid where someone would whine about my price, I would give my competitors card to them. I figured if I wasn't going to get the job anyway, he might as well. I never spoke to the quality of his work, only that he was a decent guy (was being truthful).

What surprised me was how many calls/referrals I got from people that went with price over quality (even though I always worked with 'you get what you pay for'), because of giving them the competitors' card.

So what I did isn't taken wrong, I NEVER recommended him for his work, but referred for his low pricing. When he finished a job, the work spoke for itself.
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•  Originally Posted by globalpro What surprised me was how many calls/referrals I got from people that went with price over quality (even though I always worked with 'you get what you pay for'), because of giving them the competitors' card.
Not sure if I followed 100%. Do you mean that the people you gave his card to went with him but referred people to you? That's how I took this.
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•  Originally Posted by Aaron Doud Not sure if I followed 100%. Do you mean that the people you gave his card to went with him but referred people to you? That's how I took this.
I started giving out his card after quite a few times of going out, giving a price and they would say so-and-so would do it cheaper. I knew what kind of work he did (quality of job, materials used, etc.) and at first I would try to explain difference between what I did, what he did and why I charged more.

Almost always, it was all about 'how cheap can I get this job done?'.

So, rather than doing the 'low ball' dance, I would give them his card because I liked the guy and figured what the heck.

The calls I would get were from people that were referred by ones I had bid on and gave card out. The reason they gave for calling was they needed work done, asked their friend who just had same work done and friend told the 'what ever you do, don't call so-and-so (my competition), he made a real mess of my job'.

Reference was made to me trying to 'warn' them (being honest in pointing out difference) and they remembered that.

I stopped giving out card after a while, but still got calls in reference to it.
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• Also Globalpro, when you gave them your competitor's card, you gave off a different "scent", so to speak. You weren't needy. Non-needy attracts, just as neediness repels. Working with your competitor in this way was absolutely inspired. Great share.
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•  Originally Posted by Ron Lafuddy Also Globalpro, when you gave them your competitor's card, you gave off a different "scent", so to speak. You weren't needy. Non-needy attracts, just as neediness repels. Working with your competitor in this way was absolutely inspired. Great share.
Since I would never play the pricing game, I had no problem walking away form a job if I couldn't make money with it. I did need the work, but couldn't lose money doing it.

Interesting side note to what you are saying.

I started out doing sales one day a week. Would put on (casual) dress clothes and take my personal vehicle to go to contractors offices to bid.

Went to one of the top/best builders in the area one day, did my sales pitch, then when done the contractor asked who would actually be doing the work. I said I would.

The he made a suggestion that changed my whole approach to making new contacts.

He said rather than dressing as a 'salesman' (he hated salesmen), he said I would do better to dress in work clothes, use my work truck loaded down with equipment, then make my stops like I was passing through on way to another job. Made reference (in so many words) to not look like I was 'hustling' work, but stopping by between jobs.

Started doing this and it worked so much better (kind of like 'walking the walk' instead of 'talking the talk').
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•  Originally Posted by Claude Whitacre A typical thing I would say when the customer would say "What do you think of my vacuum cleaner (a door to door model)" "You made a wise investment. The machine is durable, and was made of the finest materials. In fact, it has features that we found so attractive, that we made sure they were in our vacuum. And we then took the best ideas from several more high end machines. We wanted to make sure that, no matter what you were using now, we would have something incredible to offer you. You made a great decision based on your available choices then. Now that you see the technology that's available here today, what do you like most about it?". And I wouldn't mention their machine again. How could you use this in your business?
OK, I'll tell you how.

Based on that and also on a couple of other things you've posted in the past, I've deconstructed a strategy at work here you may or may not be doing consciously.

For lack of a better name, I'm calling this strategy "But What You Really Need Is This."

For example, when you wrote about selling your video marketing services to a guy who contacted you regarding his web site, you pointed out a web site's a good start, but what he really needed was to dominate Google's first page and get traffic.

1. You take a matter which could be commoditized (such as building a website or a vacuum cleaner's features), and

2. Add what more should really matter (dominating SERPS / having high end vacuum features), which in turn

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•  Originally Posted by misterme OK, I'll tell you how. Based on that and also on a couple of other things you've posted in the past, I've deconstructed a strategy at work here you may or may not be doing consciously. For lack of a better name, I'm calling this strategy "But What You Really Need Is This." For example, when you wrote about selling your video marketing services to a guy who contacted you regarding his web site, you pointed out a web site's a good start, but what he really needed was to dominate Google's first page and get traffic. 1. You take a matter which could be commoditized (such as building a website or a vacuum cleaner's features), and 2. Add what more should really matter (dominating SERPS / having high end vacuum features), which in turn 3. Refocuses on your USP.
You know, I never consciously made that connection. But you're right.
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