I recently spent a day with two Contractors who own HVAC companies. We’ll call them Harry and Ted. They live on opposite sides of the country. They met in a Facebook Group for Home Service Companies and became friends.
Ted has read our Wizard of Ads™ books and follows our blog, and decided to go fishing for customers with a net. He put his money in radio.
Smart-sounding digital marketers convinced Harry it would make more sense to target only those people in immediate need of HVAC services. Harry went fishing with a hook called Pay-Per-Click.
Harry said, “Ted, you’re hunting with a shotgun. I’m hunting with a rifle.” Harry believes in targeting, you see. That’s why he fishes with a hook and catches just one fish at a time. But you don’t build a widespread reputation by waiting until your customer needs you and then targeting them through Search Engine Optimization and Pay-Per-Click.
Ted the Radio Tortoise chose to win the public before they needed his services. Ted the Radio Tortoise wanted everyone in the city to know about him, even if many of them would never need his services. Ted the Radio Tortoise chose to win the hearts of the people 52 weeks a year.
Harry the Anxious Hare, by the way, services a trade area 22 times the potential of the area served by Ted the Radio Tortoise.
Both men are smart and aggressive. They plunged. Hard.
Harry the Anxious Hare spends $60,000 per month on Search Engine Optimization, Digital Marketers, and locally targeted Pay-Per-Click. His annual ad budget of $760,000 brings in slightly less than $4 million per year in revenue, leaving Harry the Anxious Hare with a little less than $3.24 million for gas money. Not bad.
One year ago, Ted the Radio Tortoise was spending $20,000 per month on radio. His $240,000 ad budget brought in just over $2 million in revenue, leaving Ted the Radio Tortoise with a little more than $1.76 million to spend on lunch.
NOTE: Ted the Radio Tortoise brought in 1/2 as much money but spent only 1/3 as much on ads.
And then Ted the Radio Tortoise asked us to begin writing his ads. This year we brought in $5.2 million with a $30,000 per month ad budget.
About 6 weeks ago, Ted the Radio Tortoise said he wanted me to add another $20,000 per month to his radio budget. I said, “Not yet. First, we need to improve your close rate.”
“But we’re closing 30 percent of the people who call us,” answered Ted the Radio Tortoise, “Harry the Anxious Hare is closing barely 10 percent of his online leads.”
“Ted”, I said. My Partner Roy always told me, “When you advertise 52 weeks a year on the radio at the proper frequency and reach, with the right message, you become a household name. Yours is the name the customer thinks of first and feels the best about. The leads brought in through radio are much warmer than the leads generated through pay-per-click.”
“I believe your close rate should be around 60 percent. Bring all the people who answer your phone to Austin for a day of training”, I said.
Ted the Radio Tortoise brought them to Austin for a day. They listened. They learned.
At the end of the day, Ted the Radio Tortoise drove his people to the airport and sent them home to answer the phones. Ted the Radio Tortoise then returned to my office with his buddy, Harry the Anxious Hare. As a favor to Ted the Radio Tortoise, I spent a couple of hours with Harry the Anxious Hare. Harry the Anxious Hare, of course, only wanted to know “how to choose the right radio station.”
Harry the Anxious Hare still believes that “targeting the right customer” is the secret to growing a business, and he’s right...that is, until he’s not (growing, that is).
But Ted the Radio Tortoise and I believe in building a widespread reputation with a warm predisposition in the hearts of the general, untargeted public.
What do you believe?
Common sense says targeting would be more efficient, right?
Our thirty-five years of experience say otherwise.
One last thing:
Ted the Radio Tortoise’s telephone team is now closing more than 60 percent of all incoming leads. Ted the Radio Tortoise will likely do $8.4 million in 2021 with no increase in ad budget. Up next, we are teaching his techs how to double their average sale.
Buckle up, Ted the Radio Tortoise. Things are about to get very interesting.
Written and edited together with Roy H. Williams.
Ryan Chute
Helping small businesses become BIG brands with a holistic marketing strategy that speaks the same language across all sales and marketing channels.
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