How do you determine which advertising medium is best for a response campaign?
It’s been almost 150 years since Philadelphia retailer John Wanamaker supposedly said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half,” and it feels in all that time we haven’t made much progress in solving this central advertising quandary. But here’s something you can try — test the channels available to you with an offer that’s “too good to be true.” For example, if you planned to spend $5,000 with a radio station, consider allocating the first $1,000 this way: Create an ad offering a “$169 pair of eyeglasses for $69 this weekend only for the first five people who come in with a secret code word.” Your costs would be $500 for ad placements and, let’s say, $500 to subsidize the product cost. If you don’t attract at least five people responding to the ad, you might have saved yourself the remaining $4,000. However, if you find a line of 20 people waiting on Saturday morning to take advantage of your generous offer, you’ve accomplished two things: First, you’ve determined that this particular media effectively reaches people and prompts action. Second, you’ve conditioned your market to pay attention to your ads, anticipating future “too-good-to-be-true” deals (though the next offer may not be quite as generous).
A new competitor seems to be trying to undercut our prices on everything from eyewear prices to exams. How can we avoid getting in a price war?
First, breathe easy and reassure yourself that not every price challenge is real. When it comes to healthcare, people will make their purchase decisions based primarily on the quality of your products and services (especially your services!), or just the relationship they have with you. If you’re an efficient, well-run business, your new competitor is going to have to cut corners to offer cheaper prices. And when those lower priced products or services don’t meet expectations, a deeper appreciation of the price/value relationship takes hold in your market. On the other hand, if your business is a little bloated, you’ve got too many under-performers on staff, you’ve grown a little slow in responding to customer demands … then you’ve got some work to do. That’s the beauty of competition. Bottom line: Know and believe in the value you provide.
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