Q: A
few years ago, I advertised a Memorial Day sale, and business that
weekend was better than ever. Soon I was advertising sale after
sale. Now it seems like I can't get a customer through the door
unless I'm aggressively advertising deep discounts, so I'm
making less money than ever. Can you tell me how to advertise so
that my customers will let me make a profit?
A:
I'm afraid you made the classic mistake of targeting
"transactional customers" because they're the ones
who respond most quickly to ads. Only the rarest of advertisers
will ever dip into the ocean of profits offered by the relational
customer.
Transactional customers care only about today's transaction,
and their only fear is of "paying too much." Relational
customers, on the other hand, are looking for a brand or a store
they can trust. Their only fear is of making a poor
decision--"buying the wrong one." Are you an expert I can
trust? Convince me so in your ads, and I'll remember you when I
need what you sell.
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Transactional shoppers will go to whichever store is advertising
the lowest prices. These are the shoppers you've been reaching,
right? But customers who go back to the same stores over and over
are shopping "relationally." In other words, there is
something, or an assortment of somethings, that draws them back
time after time. Other than your prices, are there any compelling
reasons to do business with you? Tell me so in your ads, and
I'll remember you when I need what you sell.
The goal of the transactional shopper is for you to make no
profit on them. But the relational customer is happy for you to
make a profit as long as you meet their needs. Are you going to
meet my needs? Convince me so in your ads, and I'll remember
you when I need what you sell.
Ads for groceries, furniture, electronics and cars would seem to
indicate these retailers believe in attracting only the
transactional shopper. Yet aren't these the same categories
that crave strong "branding" and the relational customers
it brings? Think about it. What are the odds of building a
long-term relationship with ads that shout "You Must Act Now!
Limited Time Offer! Tomorrow May Be Too Late!"
Am I suggesting that you abandon transactional advertising? In a
prior day, I may have said yes, but that would have been unwise.
Today I am suggesting only that a portion of your budget be
diverted from the transactional effort and directed toward
relational selling using an entirely different medium, probably TV
or radio. Relational customers will switch to you, but only if you
say the right thing and keep on saying it. But above all, you must
deliver the experience you promised, because relational customers
hate hype.
Moving from transactional to relational advertising is like
turning a battleship in the Panama Canal. It can be done, but only
if you know what you're doing. The wisest course of action
would be to hire an ad firm that specializes in relational selling
to develop your relational ad plan.
Note: The advertising professional who claims to be good at both
transactional and relational selling will probably also claim to be
an expert in both advertising and public relations. Yet the truth
is that one precludes the other.
So which will it be? Business as usual, or loyal, high-profit
customers? Keep in mind that relational advertising may require you
to be patient before you begin seeing results. But if making a
profit were quick and easy, everyone would be doing it.
Nicknamed "the Wizard of Ads" by an early client,
Roy H.
Williams and his staff have often been the unseen, pivotal
force in amazing come-from-behind victories in the worlds of
business, politics, and finance. Williams is the author of The Wizard of Ads, Secret Formulas of the Wizard of Ads, Magical Worlds of the Wizard of Ads, Accidental Magicand Free the Beagle.
The opinions expressed in this column are those
of the author, not of Entrepreneur.com. All answers are intended to
be general in nature, without regard to specific geographical areas
or circumstances, and should only be relied upon after consulting
an appropriate expert, such as an attorney or
accountant.