QUANTITY VS QUALITY
by Marty Gould
The old adage quantity versus quality is always at work when it comes to evaluating advertising and marketing decisions. And it’s also the place where business owners tend to make mistakes, some of which could be damaging, or, in some cases, even be fatal to their businesses. There are five reasons why you would rather focus on quality versus quantity to find the best prospects for your business.
#1 Overspending on Advertising
“The more people that I reach, the more customers I’m likely to attract.” That’s the mindset many local business owners use when they approach their advertising. But when reaching more people, by its nature, means spending more money. In fact, you may be putting yourself into a position where it’s difficult to profit from the transaction, because you’re actually paying more for the customer than they’re worth to you. Knowing how much you’re willing to pay to acquire each customer is the single most important step when it comes to buying advertising. If you spend $1,000 on advertising and are willing to pay $500 to acquire a customer, then getting two customers from that ad would be a success. But, if your customer acquisition target is $50 and you only get two sales, you’ve paid 10 times more to acquire those customers than you should have. That’s very expensive marketing.
And if you don’t differentiate which types of people are more likely to buy your product or service, then there’s a very good chance the people you’re reaching may not be well aligned to buy what you’re selling. And what’s the point of marketing to someone who isn’t interested in doing business with you? It’s a waste of precious marketing dollars. The end result is that you end up spending way more money to acquire each individual customer.
#2 Ineffective Messaging
If you’re trying to reach everybody, you have to make your message very broad and generalized. And when your message isn’t specific it’s much more likely that the person you’re trying to reach will ignore it because they won’t think it’s for them. You’ve heard that old advertising cliché, “for all your (fill in the blank) needs.” But when people are looking to buy something, it’s because they want or need something specific. No one thinks, “for all my furniture needs.” They think, “I need a new sofa.” Customers have lots of needs, but they usually fulfill them one at a time. A targeted message, focused message aimed at a particular group of people or on solving a particular problem usually gets more attention and, therefore, better results for that advertiser.
#3 Lower Response Rates
When you’re focused on quantity rather than quality, you will wind up getting lower response rates, because as you reach more people you’re increasing the percentage of those who will NOT buy what you’re selling. For example, fewer than 10 percent of homeowners will remodel a kitchen this year. That means, for every 1,000 people you add to your media reach, more than 900 of them are waste because they’re not in the market to remodel. A pizza parlor that increases its direct mail reach from a two mile radius to three miles is likely wasting 99 percent of the money it invests in reaching the extra mile. Why? Because, there are probably five more pizza places within that third mile ring that are more convenient for those residents. When you market to someone who you’re highly unlikely to do business with, you just end up spending much more money to acquire the customers you would have gotten anyway, which leads to point number four…
#4 Increased likelihood to quit marketing altogether.
So many businesses do this. They put out an ad campaign and say, “Well, I bought a big ad campaign, reached everybody, and the results were terrible! Marketing doesn’t work! That’s the start of what we call the Marketing Death Spiral, the cycle of unreasonable expectation and utter disappointment when you go in and out of marketing hoping to score big. A marketing plan is not a one-and-done proposition. It only works when it’s done consistently, day after day, month after month, year after year. The goal is for your name to be present in each prospect’s mind, associated with a product or service they consider important enough to keep in their heads until they need what you sell. Failing to do that almost always leads to point number five.
#5 Losing prospects to the competition
If you’re not marketing, you’ll miss out on potential customers because they will have developed a certain amount of trust and confidence one of your competitors, usually the one that’s been talking to them for many years through advertising. Think about the brands you recall in a fraction of second: McDonalds, Coke, Budweiser, BMW, Apple, Google, Verizon. These well-established and successful brands still spend billions of dollars on marketing so they can connect with their customers and prospects. If you’re not doing the same thing (scaled to your local level, of course), chances are there’s a competitor of yours who is.
If you’re frustrated with your marketing because of low response rates, before you throw in the towel and quit marketing altogether, consider reducing your reach, by targeting a smaller segment of your market. You can shrink the size of your territory, or you can narrow your focus by identifying the types of people who are much more likely to do business with you. The better the match between what you sell and what they need, the more likely that they will do business with you. By focusing on quality rather than quantity, you can increase the number of responses you get that lead to closed sales. Better response and closing rates will provide the confidence you continue marketing on a regular, long-term basis. To me it’s a no brainer; focus on quality instead of quantity.
Marty Gould is creator and founder of The Customer Store, now available on Amazon as a published book to assist you with your own Market Intelligence.
See how you can develop your own Market ESP! www.FindMyBestCustomer.com