In the book, "Blue Ocean Strategy" it is written that Red Ocean companies are very military in alignment and strategy. They compete for market share within existing industries, almost always resulting in over saturated markets.
Buyers of these services, overwhelmed and confused by the declining differentiation between these companies often respond to these "Red Market Competitors" with less brand loyalty and awareness. Desperate to remain relevant, these companies are then forced to compete for share on the most easily differentiated common denominator - price.
The typical response when industries become threatened is to choose a strategy based in the Value-Cost Trade-Off. This is to say a company chooses to "plus" it's offering with additional value in order to justify its increased price points or to lessen it's offerings to a "reasonable point" in an attempt to win the low-price leader space in the consumer mind.
In the case of the industry we call advertising, we have seen and continue to see both strategies fiercely played out as new media companies compete with traditional media players for advertising budget both local and national, big and small.
The book also mentions Value-Innovation-based companies who do not compete in this way. Instead, they create uncontested and new market space. InstantExpert (sm) is a text book example of Blue Ocean, Value Innovation-based service.
The secret of this difference lies in the creation of an "intersection of services" that exists no where else and empowers the small business owner to easily and cost effectively create new customers.
"Easily and cost effectively create new customers."
As value propositions go, that is a pretty big one.
Additionally, InstantExpert (sm) has created a unique way of doing this being able to convert would be competitors into willing partners.
How we have reinvented advertising.
Consider how commonplace and accepted the following is for sellers of advertising and buyers of it…
In the past a small or medium sized (SMB) company desiring growth, had to engage in some or all of the following tasks just to make his sales line ring…
Research - Customers: The SMB would need to have some idea about their current clients and what made them buy. They would also need to know where others like them were located within their serviceable area and how to reach out to them.
Advertising Companies: Once deciding on the types of people that might likely be responsive to their offers of goods and/or services, the SMB would need to understand the media options available to them that were capable of reaching their target audience.
Taking into account only "main stream" options like radio, newspaper, magazines, direct mail, Internet, and even flyer distribution, the time commitment to effectively interview and understand the reach and pricing each media type has to offer, multiplied by the number of local companies selling packages within each industry, could be overwhelming even as a full-time pursuit.
Add to that most SMBs don't have any practical expertise or understanding about advertising and would be hard pressed to make an apples-to-apples comparison between any two, let alone 12 or more companies in any given market, we quickly come to the conclusion that in all likelihood those SMBs that do advertise may be doing so in an ineffective manner at best.
Understanding Return on Investment: Cost-Per-Lead, Cost-Per-Sale - What is the lifetime value of a new customer? Of course this varies widely by industry and individual company, but it is a question that must be answered to effectively craft a direct response advertising campaign offer, regardless of the media type(s) chosen.
Assume the SMB has decided to spend his advertising budget on a direct mail campaign, local radio and newspaper. What now? What will be the offer that is compelling enough to make the phone ring with new leads but not so costly to deliver as to take a loss on each new customer created? What will the SMB need to offer to win a new client?
The SMB has to understand some basic information about his business to come to such logical conclusions;
• How effective are his front-line employees at handling new sales leads?
• If the advertising produces leads after hours, weekends or holidays, how will they be processed?
• How many "leads" will it take to create a "new customer"?
• How much revenue is a new customer worth, based on the average-lifetime-value of current customers?
• How will the SMB track and measure each advertising campaign to understand what campaigns are cost effective and which are not?
Ad Creation - Assuming the actual offer has been decided upon, the SMB is still left to decide on exactly "how" to present that offer. This step is often referred to as "the creative" or "the Ad piece."
Will the SMB decide to create the piece in-house? (Surprisingly the NFIB reports that more than 70% of small business owners rely on this solution.) Putting aside issues of quality and actual effectiveness for the moment, many SMBs appear to take this path when using flyers and some direct mail pieces. But what of more complex advertising campaigns?
Most radio, yellow page, newspaper and even cable companies offer some degree of "creative services" and will provide basic ad-campaign creation at little or no cost. However, this design work is usually conducted between the SMB and the media company sales person. The sales person usually knows a lot about sizes, formats and his media's guidelines and restrictions but usually not very much about the advertisers' business or intended client targets or quality ad design or offer presentation.
The SMB knows a lot about running his business but usually very little about how to craft an effective direct response offer or campaign creative. (Doubtful? Just check out today's newspaper ads for window replacement services or even bigger companies like car dealerships.)
Most can't afford or choose not to employ advertising agencies or other professional services here either.
Quality direct response ad-campaign creative requires, at the very least, the following elements;
1. A solid understanding of who the target client is, demographically and geographically
2. A well articulated offer that will be appealing to the intended target client
3. Advertising creative that is designed to break out of the clutter and appeal to the target in a unique way
presented in a clear and professional manner
4. Some form of response tracking that is unique to that particular campaign and medium
Most SMBs are simply not prepared to execute on this level. As a result, many go on buying advertising the way they always have and often complaining that it doesn't work.
Lead Processing - The ad-campaigns are live and the phones are beginning to ring and web-forms are being filled out. Now what? Many SMBs depend on overworked and undertrained front-office staff to serve as their "first-responders" for all calls, including those expensive to produce new customer sales calls.
"Thank you for calling (Any SMB), can you hold please…"
Unfortunately for most SMBs this is how potential new clients are first greeted. That's the good news. In a recent poll, we found that 96% of Sunday newspaper advertisers in the Sacramento market gave no response whatsoever when calling on a direct response offer on the same day their ad ran.
In today's market, leads are generated around the clock. Most home Internet use occurs after hours. We are a 24 x 7 consumer nation and most SMBs are simply not able to afford sales coverage during non-business hours.
Even when a lead is handled properly many SMBs use no customer relationship management software or lead management tracking. Calls come in and are simply not sourced or accounted for. This leaves an enormous gap of understanding for owners and sales managers in knowing what works, and what doesn't, in advertising.
Measurement and Evaluation - Should the SMB get through the research, the creation and launch of any number of ad-campaigns, how will he or she address the vital need to know what worked and what did not? Most simply don't know and don't have the time to put procedures into place to figure it out.
Call Tracking, "Clicks" = Not the answer.
Developing a system by which leads can be consistently input for sales follow-up at the time and later, transferred to available sales representatives at the SMBs company and tracked by individual campaign and advertising company is imperative for true ROI based advertising measurement and tracking - it is also confusing, expensive and difficult to do. Again, many, if not most, SMBs simply don't do this.
"I know half of my advertising isn't working, I just don't know which half."
John Wanamaker
All of this is currently accepted as "normal" just to find a new customer in the Red Ocean marketplace…
InstantExpert (sm) really is different.
InstantExpert (sm) does all of this for the SMB owner and often at less cost than what he was paying for the advertising he currently purchases.
Mission:We empower Small and Medium Business's (SMBs) to make expert advertising decisions, through industry-specific research and pre-configured advertising packages. We then support those efforts with results tracking and 24 x 7 professional lead processing services.
Step 1 - Finding New CustomersWe invert the advertising agency process for small business owners by doing all of the planning-work up-front & at zero cost, resulting in the creation of
• Pre-configured, Industry-specific, Advertising Packages (Direct Mail, Search Engine, Print, Radio, Etc.)
These packages are then available for purchase and activation, online, through our Media Marketplace, making purchasing advertising as easy as online banking or shopping for loans or insurance.
Step 2 - Processing Your New CustomersLead generation and advertising are expensive. Sometimes relying on the "front desk" to handle new sales calls isn't always the best route. When that advertising purchased produces a lead, we can provide...
• 24 x 7 inbound Phone & Web-based customer processing
• Actual appointment setting & Lead Qualification
• Credit application processing
• Complete data-entry of new customer information
• A no-cost customer relationship management system (CRM)
Step 3 - Measure and Report on Advertising ResultsBecause all leads generated come through us for processing, we can...
• Report on actual Cost Per Lead by Package, across all media
• Evaluate success or failure at the campaign level based on Actual Leads Created, not "call volume" "clicks' or
other meaningless data.
Step 4 - Improve Packages & Budget Recommendations Based on Performance Data• Cost Per Lead data gathered for industry, reported in real time
• Media partners assisted in improving Advertising Package contents
• Advertisers benefit from data and can buy based on performance, not possibilities.
Conclusion:InstantExpert (sm) will be available for 12 - 14 industries in 2008. Contact us for more information on your industry launch date.
I have been beating this drum for a long time. Attention local, online advertisers; Do not assume the Ad impressions you are buying from your local media are actually local.
