A Strategy of Growth, The Advertising Faucet

When it comes to Business Advertising, why is Advertising viewed as a Faucet?

How long can a person go without water? 7 days? 30 days?

How long can a business survive without new customers.

Notice I didn’t say customers, I said, new customers.

No matter if you provide a service or a product, the attitude and growth of your company is tied to NEW CUSTOMERS.

Before going too far into this topic I want to make a Huge point, Advertising does not always cost money.
Many times it simply means taking the time and promoting yourself, or your business.

Call it promoting, call it advertising, call it marketing, I don’t care what you call it, all I know is that we’ve seen too many companies fail because they never turned on their faucet.

Your advertising faucet is the only known antibiotic for Entropy.

Entropy is real.

Entropy says that anything man-made, or God-made, is built to go from order to dis-order. In other words, everything is continually breaking down. Your body is breaking down. Your watch is breaking down. Your business is breaking down.
Something must be set in motion directly against the Entropy and Atrophy of your business.

Let’s look at some case study.

Did you know that a town with a population over 100,000 has an average 9% annual turnover rate of it’s population. That means that 9000 people a year come in, and 9000 go out.

9000 potential customers move in every year and the average business does literally nothing about it.

Over 90% of business owners believe that word of mouth is the best form of advertising. If you want to wait a decade for results, it is definitely the best!
If I’m a business owner in that town of 100,000 people, every 3 years 27,000 people are new to my community. I need to reach them before a competitor reaches them. I need to reach them, at almost any cost, because they may move right out of town without even knowing I exist.

In today’s world, if we rely on word of mouth, we may as well close the doors.

The philosophy behind the “Faucet” model of advertising is best described by the “Model” of advertising that McDonalds uses. When franchising became very “hot” in the 1980′s, McDonalds already had their faucet wide open.
McDonalds uses a “Model” that puts a set percentage of gross sales into next months advertising budget.

To use an example, let’s say they put 2% of gross sales into a “local” ad budget and 2% into a “national” ad budget. This means that each and every month they have 4% of last months gross sales set aside to be used for this months advertising.

Their ad budget faucet is ALWAYS ON.

Their ad budget, or faucet, is always on grabbing the attention of all new residents in town, all cars driving by, and making sure that if you think of fast-food, you think of them, FIRST.

Some say the largest mistake made that causes businesses to fail is under capitalization, or poor management. Our experience shows us that one of the largest mistakes made is that management fails to turn on a consistent and well planned out faucet of advertising.

Here’s how the average company views an ad budget. Are you ready for this.

“When we have some extra money, We’ll Advertise”

OUCH!

Studies have been done that show that Pepsi can not pass Coke, and become number one. The same study suggested that just on the consistency and the size of the ad budget, Burger King can not pass McDonalds either. MickeyD’s and Coke simply have too strong and too steady an ad “Faucet”.

Take a quick second and ask yourself.

“If we took 1% of each months gross sales and set it aside for next months ad budget, would we miss it?”

Odds are pretty strong that you could go 90 days and nobody would notice or miss the 1%.

On the flip side, what kind of impact would a steady faucet of advertising of 1% of gross sales do for your company?
Think of what would happen if you took a few months, or even a year, and put 1% of gross sales towards the following:
Print ads, Radio ads, T.V. / Cable ads, P.R., Charitable Donations with front page write-ups, and Internet Advertising.

Once steady advertising takes hold, most companies are blown away at how many people come in or call them and tell them that they’ve been in town for “x” amount of months or years and didn’t even know they existed.

We are always willing to place a friendly wager with any owner or manager that has no current ad budget in place.
Our gentleman’s bet says that if a 1% ad budget was implemented, by the end of year our experience shows that your company would be considering bumping it to 2% instead of dropping it.

Turn on your faucet, you’ve got to be thirsty.

-Ken
Growth Consulting for Today