The Fork in the Road

by Mark Dreistadt | Jan 28, 2014 | Branding

In the Road

I recently read a posting in the Monday Morning Memo by Roy H. Williams that I thought was outstanding. In the article Roy discussed the difference between “BRAND-BUILDING” and “DIRECT-RESPONSE” advertising strategies. His explanation is completely in line with what I have been telling our clients for years. I am including a significant portion of his article for you to read (I have added the text effects). The implications for your business or ministry are significant. Here’s Roy…

Everyone has a business plan. Almost no one has an advertising plan. And we are coming to a critical fork in the road. I want you to choose your fork consciously rather than unconsciously. And choose you most definitely will.

I’m talking about your choice between brand-building and direct response advertising.

When you sell a product or service with a long purchase cycle – something purchased only once every several years – your business will be best served by brand building. Do everything in your power to become the company that people will think of first and feel the best about when they finally need what you sell. Good brand-building also stimulates word-of-mouth, the original “viral.” But brand building requires patience, confidence and courage.

If you sell a product or service with a short purchase cycle – something that most people will purchase every few days, weeks or months – your business will be best served by direct-response ads. Create an extremely attractive, limited-time offer, then add an additional incentive for those who act now. Then add a third incentive. This is called “benefit stacking” and it makes a massive difference. Direct-response ads are exciting but to be really successful you need a big-gap offer.

The goal is to create a big gap between the perceived value and the asking price. The more impressive that gap, the more attractive your direct-response offer. Big-gap offers are most easily made when the public has no ability to shop and compare.

Companies that make money with big-gap offers are the ones that can sell products with a perceived value that is at least 10 times their actual cost. I’m betting you don’t have that kind of profit margin. Am I right?

Write a direct-response ad for a product with a widely known price and the public won’t be impressed unless you’re selling that product below your cost. This is known as a “loss leader.” The idea behind a loss leader is that it can drive customers into your store who might make additional purchases while they’re there. Grocery stores have used this technique since the dawn of time.

Direct response is not a style of ad writing. It is a style of offer packaging.

Businesses with short purchase cycles can jump from offer to offer, item to item, incentive to incentive indefinitely. But may God have mercy on the ad writer who is expected to generate immediate response for a product or service with a long purchase cycle.

This is indeed what we see in many ministry and business settings. Some organizations sell product — others sell vision.

Selling vision requires brand-building. Selling product can be done through direct response.

Feeding the hungry, winning the lost, changing the world are all big vision concepts. And must be supported by a brand the public perceives is capable of fulfilling the task. Offering the latest teaching series or freshly authored book are products that can be packaged into compelling offers and sold through the media. However, these are two different strategies … back to Roy’s article:

Business owner, the fork in the road is before you: brand building or direct response.

If you sell a product or service that at least 50 percent of the public will purchase within the next 12 months, you might do well to consider running direct response ads in mass media. But please be careful to make a highly impressive offer or you’ll be horribly disappointed.

If you sell a product or service with a long purchase cycle – roofing, HVAC, jewelry, boats, major appliances, etc. – you must use extreme caution when applying direct response techniques or you’ll just be teaching your customers to wait for your next “sale.”

Or you could just bet the farm on your ability to stay at the top of Google search results.

Roy ends his article by saying “I’ll be intrigued to see what you choose.” I simply add … CHOOSE WISELY.

Mark Dreistadt

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