Please answer this question…
“What is the purpose of advertising?”
Take a few moments to think about it, because the response isn’t as obvious as you may realize.
When I asked agents this question, they usually replied, “To get the agency’s or the agent’s name in front of the prospective customer.”
Was this also your answer?
If so, then to a small extent, you’re right. But there’s more to it than that.
The Purpose Of Advertising Is To Make Your Prospects Aware Of Your Products…And To Get Them To Act!
Keeping your name, your agency’s name, or the types of products or services you offer in front of your prospects is only part of the formula. If you can’t motivate your prospects to take some type of action, you’re not maximizing the effectiveness of your advertising.
It’s nice to create “top-of-mind-awareness” or to establish yourself or your agency as a brand in your prospects’ and customers’ minds. But unless you have deep pockets like some of the large national corporations you see advertising on TV, you’ll go broke trying to do it.
There Are Two Kinds Of Advertising:
The first is called image or institutional advertising. And it’s the type of advertising that makes up the majority of the ads you see in newspapers, magazines, and other media.
The biggest problem with image or institutional advertising (and what makes it so ineffective for the average agent to use) is that ads created in this format are NOT designed to sell. Their purpose is to keep the name of the agency in front of their prospects, letting them know how great, how big, and how wonderful that organization is.
The problem with this is that your prospects don’t care how great, how big or wonderful you are. They have only two main concerns:
First, what can you do for them and how can you help them solve their problems or satisfy their needs and wants? And second, what unique benefits or advantages do you offer them that your competitors don’t?
“Image” or “institutional” advertising doesn’t answer either of these questions. Large corporations, such as IBM, AOL Time Warner, Coca Cola, Nike, and GM (and most insurance companies) use this type of advertising mainly to keep their names in the buying publics’ minds after they’ve already established themselves in the marketplace.
Now, you may ask, “If image advertising is so ineffective, then why do these large companies still use it?”
Well, there are three reasons:
First, they have an almost unlimited advertising budget.
Second, since there’s no accurate way to track the results of image or institutional advertising, they (incorrectly) think the advertising is actually working because they’re making hundreds of millions of dollars a year (in spite of bad advertising).
Third, an image ad usually pleases their shareholders. Even though their shareholders really do want to see the company make more profit, they don’t know the ads are ineffective (because they’re not marketing experts). They’re just happy to see it being run because it makes them feel good to tell someone they own a part of that particular company.
It’s a shame these giant corporations just don’t realize how ineffective their image advertising campaigns are. If they did, they would have saved millions of dollars. Better yet, if they knew how to use the right kind of advertising (which we’ll discuss in a few moments), they would be making millions extra a year.
Like most agents, you may also have a limited advertising budget. So you must make every dollar produce the maximum return. And the best way to do this is to use the second kind of advertising – the one that works. It’s called direct response advertising.
Unlike image or institutional advertising, which is simply a waste of money if you use it…
Direct Response Advertising Can Make You A Fortune!
A direct response ad (or sales message) achieves three main objectives:
1. It answers the prospect’s most important question, “What’s in it for me?”
2. It asks your prospective customer to respond or take action in some way!
3. It’s trackable, measurable, and accountable!
As you can see, a direct response ad (or sales message) appeals to the self-interest of the prospects. It tells them all the benefits they’ll gain from using your product or from doing business with you.
In other words, a direct response sales message (whether an ad, a flyer, a sales letter, a postcard, and so on) allows you to identify, qualify, and then target your prospects – the ones who are interested in what you’re offering. This way, you can weed out the non-interested parties up front, maximizing your marketing dollars by focusing your efforts on selling only to those who are interested in your offer and can also afford it.
Because a lot of agents think their market is everyone, they usually make their ads or sales materials appeal to everybody. Perhaps you’ve even done this yourself.
If so, this may be the reason your ad hasn’t been working as well as it could. You see…
When You Try To Sell To Everyone, You’ll End Up Selling To No One!
Although your products or services may be suitable for everyone, there are some people who will need or want them more than others. Your goal is to find out who your most ideal prospects are (the ones who are actually interested in and can afford what you’re selling), and then target them with your most irresistible offer.
For example, if you sell homeowners insurance, your ideal prospects would be those people who own their own homes. So rather than placing an ad in a newspaper where thousands of people may see it, including renters and apartment dwellers, you’ll reduce your advertising costs and increase your chances of making a sale if you obtain a listing of the homeowners who meet the specific requirements you’re looking for, and then send your offer to them. Or, you can rent a list of the people who live in your area that subscribe to a home-improvement magazine and mail a sales letter with your irresistible offer to them.
Similarly, if you sell a special kind of auto insurance, then you want to find the names and addresses of the people who live in your town or city that own the same type of vehicle you’re insuring, and send them your offer. This is called niche or target marketing.
In short, it doesn’t matter what kind of insurance you sell, you should take the same approach. You and I simply don’t have a marketing budget large enough to reach everybody. Nor do we want to.
Here’s an important point you should always remember…
Your prospects and customers want to buy from an agent who can relate to them and who specializes in their areas of interest. If they see you try to be all things to all people, they simply aren’t going to do business with you.
For instance: If you drive a BMW, you most likely will take it in for servicing at a dealer that specializes in BMWs, and not in Hondas, Toyotas, GMs, Fords, and so on. In other words, a repair shop specializes in your type of vehicle.
Running an image or institutional ad is like operating a garage that services all makes and models of vehicles. You’ll have to place a lot of ads to find enough people who are interested in buying your product or using your service, because most of the people who see your ad simply aren’t interested in or can’t afford what you’re selling, or both.
As its name implies, a direct response ad stimulates a direct and immediate response – either a qualified inquiry, phone call or visit to your agency – or better yet, encourages an instant sale.
Interestingly, while some agents admit most of their ads usually produce little or no sales, they keep running them because they claim their advertising has probably made more people aware of their agency.
This makes absolutely no sense to me. Please understand this important point…
The Only Purpose Of Running An Ad Is To Compel The Reader To Take Some Sort Of Action Toward Making A Purchase!
I can’t emphasize this enough. If you place an ad for any other purpose, especially to tell your prospects how big and how wonderful you are, then it’s just a waste of your hard-earned money. Remember, your prospects don’t care a bit about you, they only care about themselves and getting their problems handled quickly, efficiently, and cost-effectively.
The way to get in front of your prospects to let them know about your products and services, and how you can help them solve their problems, is through marketing. And when you use direct-response advertising, instead of image or institutional, your income will shoot to new heights.
Since marketing is the engine that drives your business, if tougher competition or a poorer economic environment begins to affect your income negatively, don’t do what so many other agents and financial advisors do: eliminate or cut back on your marketing.
Instead, realize this is the best time to get aggressive and turn up the heat on your marketing campaigns. As your competition pulls out of the advertising arena, and you begin using direct-response advertising, you’ll acquire more clients and increase your market share substantially.
Remember, because marketing is an investment and not an expense, doing more of it (especially when all your competitors are cutting back) will skyrocket your agency or practice to a new level of profitability and success.
By Andrew Adams