Winter, wood and wool coats

It's getting colder. Jackets thicken while energy bills rise.

That's winter in Canada. Every year it comes and every year, I dread it. But it comes and I know it.

Dad was recently hospitalized with some respiratory problems. While visiting, he told me he didn't have his wood cut yet. This little setback was going to be a problem. It's his main source of heat for survival.

Come to find out, dad wasn't talking about this winter. He was talking about next winter. He's preparing for 12 months ahead of time.

Not all of us plan that far ahead.

Forget about winter and wood and wool coats.
Have you planned out your next 12 month marketing plan?
Do you know what road you're going to use and what kind of car is going to get you there?

January is still a month away but planning can be done any time. Don't wait until the new year to decide what's next.

Formulate your strategic direction. Understand what can take you there. And in the wise words of Larry the Cable Guy, "Git r done".

Someone asked me this morning, "Given the uncertainty of the economy, is it a good time to be in business".

The best time to be in business was 10 years ago. The second best time is today. Do you want to know when the third best time is going to be?

Get the jacket on. Warm up, snuggle next to the fire. Boil a cup of cocoa. And know where you're driving this business of yours.

It's easy to get wrapped up in the day to day grind.
It's easy to delay planning in exchange for doing.

You know as well as anyone, the easy stuff doesn't get the best results.
Do the hard thing. Steven Covey called it, "Move the big rocks" in his book "7 Habits of Highly Effective People".

Strategy is a big rock.

But here's the bad news.
You can't do the strategy on your own.
You're too close to it.
You're biased.
If you try to do it, it will be watered down, ineffective and a waste of money.

This isn't a sales pitch. I don't need your business.

Just trying to help out a friend in need.

I'll give you my jacket if you really need one and can't afford it.
In my experience, you'd complain about the colour and would toss it away after the first week, if I gave it to you.

A discount retailer hurts no one but himself.

As Black Friday approaches, I was thinking about my Canadian retail friends. Black Friday wasn't even a thing in Canada seven years ago. Canadian Thanksgiving is in October.

The Canadian retailers decided they needed a new reason to throw an event at its shoppers so they followed their American cousins into the Black Friday frenzy.

Just another reason to give a discount to get more sales. It's kinda funny. Canadians don't get a Thursday vacation.

My friend Bruce owns five pizza restaurants. He believes customers only come to him because of his flyers. So he runs a flyer every three weeks. He'd do them every week but he can't afford the shipping costs.

The pizza business is notorious for this type of behaviour. Once upon a time I used to work for a pizza chain. We did the same things to keep franchisees and the top brass happy.

Even 15 years ago my gut didn't feel good about it.

Here's what happened, eventually the marketing effort fizzled out. It chased the transactional customer, who wanted the best price. At that time, we had two people answering phones at a restaurant on a Friday night. Two people to handle all the calls.

Do you know what the number one question was?
Yep, you got it. "What's your special?"

Some customers ordered after hearing the specials while others promised to call back. We have no idea if they did.

Bruce doesn't understand the difference between a transactional customer and a relational one. He's dehydrating in the desert, and he doesn't realize there is a cooler filled with fresh water to his left.

He thinks the easiest path to sales growth is chasing these low margin, fickle customers who only want the best price.

I order six pizzas from Bruce's restaurant every four weeks for a gathering of friends. The first time I ordered, they gave me a $40 discount. I didn't ask for it. Didn't know about it. Didn't need it. But do you think I took it?

Of course. I like money. You wanna give it to me? I'll take it.
The interesting thing is the second time I ordered the same six pizzas, I expected the discount. If it wouldn't have been there, I may have asked for it.

He converted a loyal, relational customer into a transactional one at his own expense.

Bruce knows the restaurant business. But he doesn't understand marketing. He thinks he does so I can't explain it to him. Bruce believes in these short term sales tactics.

I can't change his mind. I've given up trying.

I've seen this re-run before. Hell, I was in it.

I was thinking of Bruce while visiting a Factory Outlet store in San Marcos, just outside of Austin, Texas.

There were Bruce's everywhere. 60% off. Buy one, get one Free. Buy one, get one half price. The parking lots were full and customers were buying stuff. Looked like a good day for business.

There was one store that wasn't promoting discounts. Bruce could never work at this store.

It was the only one that had a line outside. Security had to manage the customers wanting to get a glimpse inside. No discounts. Business looked good here too.

It wasn't pizza. It was her Italian cousin: Gucci.

The pizza industry has converted itself into a commodity. It's like wheat, or salt. The prices continue to drop. A special we used to offer at the pizza chain 15 years ago has only gone up by $3.00. Inflation has gone up by more than that. The only way to make a living selling pizza is to sell a lot of them.

I'm not saying pizza has to be like Gucci. They can play a different pricing strategy and not get wrapped up in the highly competitive pricing wars.

The next time you run a sale to attract a customer, think about your marketing strategy.

This approach is hurting your longterm brand, unless you're moving old inventory or perishable stock. If you got lucky and you bought a couple of shipping containers at a discount and you want to pass savings onto your customers, that's ok too.

Just remember, a discount retailer hurts no one but himself. And if you're not sure, ask Walmart. They closed 269 stores in 2016 and just announced another 22 closures for North America in 2019.


Rick Nicholson is a multi unit business owner and partner at Wizard of Ads. He looks at marketing from the perspective of relationships, corporate beliefs and most importantly its effect on sales. If you want to know how he can help you, you can reach him at ricknicholson@wizardofads.com.

Secret of success, go after your opportunity, and five levels of respect

My eyes lifted from the computer screen to see an old friend walking to the counter to order a coffee. As he sees me, he motions that he'll be right over.

He noticed me, my insecure self whispers.

Of course he noticed you, my confident self affirms.

Nonetheless, my old friend is a professional athlete who is on national television no less than 75 times per year. He moved away many years ago. 

As he comes over to say hi, I didn't know what to say to him. I've watched him rise to be one of the best in his profession. 

I have to tell you that I brag to my son that I know you.

Haha, I'm still the same guy.

Tell me something, what's the secret to your success?

Oh I had a lot of people helping me, coaching me and pushing me to be better.

That's the bullshit answer you give the media. Tell me the real reason.

Opportunity presented itself and I went after it.

Do you ever pinch yourself that you're in a dream? You're out there with some of the greatest household names in your sport.

At first, maybe. But I'm not in awe of anyone out there, not even the superstars.

How do you do it?

It's all mental. We have psychologists we work with to keep our minds sharp. I go out everyday to be the best I can be. I can't worry about anyone else. There's one guy who makes $5 million dollars a year. He's the biggest jerk in the league. He likes to mouth off, looking for a reaction from me.

So what do you do?

I smile and tell him that a guy making that much money should be happier and quieter.

That's funny. Do you love what you are doing?

I do. But it's a job. In the beginning, I had to pinch myself to realize that I had made it. Now, it's about routine, flying and working. Last year, I flew 160 times all over North America. I live in airports and hotels. It's not ideal, but I know I'm really lucky to be where I am.

Any regrets?

I wish I could live here and still do my job. But opportunity is elsewhere and I have to go where it is.

That's great advice. Go where the opportunity is. My son said he wants to be a professional athlete. I've told him that nothing is free. He has to work for it. If he was your son, what would you say to him?
I would tell him to never give up. To work hard, but always understand there are 1500 people who compete daily for the same job that he wants. 10% are superstars with above average skill in the league. The other 90% are all about the same in the skill department. The difference between those who make it and those who don't is between their ears.

Attitude?
More than attitude. Respect.

Respect?
Respect for self, for the team, for the coach, for the league and ultimately for the game. The person who respects the five levels and has comparable skills is the guy who becomes the professional athlete.

That's great advice. Thanks for stopping by.
No problem. I've got a tee time in 15 minutes. I gotta go. See you later.

Hope, eyeballs and scrolling through garbage

I get asked a lot about the effectiveness of advertising and which ones should be used.

The buzz for entrepreneurs seems to be social media.
Boy, it is really powerful.
No doubt about it.

The John Deere 6110R (below) is also powerful but it's not the right tool for mowing your lawn.

The same goes for social media for a lot of businesses. 

Why would you use social media for advertising your business?

Someone will say there are a lot of people there. And they are right.  But what about the message? Doesn't that matter?

And someone will say that eyeballs are eyeballs and the more people who see the ad, the more people who will be engaged.

I disagree. Social media happens fast. It's entertainment. The scrolling effect kills an ad faster than the eyeballs can catch it. 

Ads have to be engaging.

It's no longer good enough to buy eyeballs. We live in an attention economy and the potential customer won't give it to us, unless we're new, exciting or different.

And if you think about it, nothing has really changed. Except where people are spending their time.

Screen times on phones, tablets and computers have skyrocketed, while tv screen time continues to hold its own with one slight change. Streaming services are outpacing cable tv.

I drive by 42 billboards every morning. I'm a marketer so I pay attention more than the average person. And I can't remember one memorable board. It's noise.

And that's what happens with social media. It's noise. Unless it's new, exciting and different.

So please do yourself a favour. If you plan on opening an instagram account for your business, think twice about littering my feed with your garbage. It's disrespectful.

Post a facebook ad, but make it new, exciting or different. 

Adding irrelevant ads on facebook or google is worse than the paid ads on TV.

In fact, it's way worse. Because this time, it's personal. Commercials on tv wasn't your fault. You had no way of knowing who I was. But now you do.

So what media works the best?

All of them work. Some will yield better results than others depending on who you're trying to reach. But most importantly, whether you decide to use the mass media, social media or mobile media, the best way to break through all the noise is to have a compelling message.

The key to unlocking the big giant lock called persuasive advertising, is the message. The media is secondary.

But what's your plan if you do use social media? If you post once per month. You're no one in the digital world.

If you post for engagement, you're wasting your time on keyboard warriors.

If you post creative, persuasive ads that force us to think, then you have a fighting chance.

Someone offered to manage my social media this morning. She gave three examples of other businesses who were doing a great job of engaging and communicating with their audience (her opinion).

A tear came to my eye. If this is the garbage social media "experts" are pawning off to unsuspecting clients, we have a bigger problem with recycling than you think.

Reuse, recycle, repeat...

But then again, maybe this is good news. Too many still don't understand what good marketing is. Too many are wasting their money on ineffective methods that don't return a reasonable return on their marketing investment.

Last week, a participant at my marketing presentation said billboard advertising was dead. Nobody pays attention to them and they a waste of money. The 42 I see everyday would reinforce that perspective. But what if you saw this ad? Maybe billboard ads aren't dead after all, eh?

And the same goes for all media. 

If you want my attention, you have to be worthy enough to break through the noise. 

If you want my money, you have to give me hope.

And hope is all we can really strive for. Hope tomorrow will be better than today. 

Character, statues and a 1000 year promise

Thanks for meeting with me. What can I get you?
I'd like a Grande Emperor's Cloud.

Fancy name... Is it a fancy drink?
Nope. Just a medium Green Tea.

I don't get the name thing here.
You can't get Emperor's Cloud anywhere else. So if you like the branded tea, you can only buy it here. An old boss used to call this telephone branding.

You've lost me. What are you talking about?
Don't worry about it. What can I do for you?

I'm struggling with a new name of my business.
What does this business do?

We're going to make custom furniture.
What's special about this furniture?

Uh, it's custom made for the customer.
I understand. Why would someone care enough to buy from you and not from a big box retailer?

Because I'm better.
We're not getting anywhere. I apologize in advance for my candidness. Please don't take offence with what I'm about to tell you.

I won't.
Promise?

I promise.
Pinky promise?

Haha. Sure. Pinky promise.
No one gives a shit about you or your furniture, except you and the people closest to you. Once you come to the realization that quality has many definitions. And what your customer thinks is quality may not be your definition. So why do you make custom furniture?

I love it.
Why do you love it?

There's something about the smell of wood that gets my juices flowing.
Tell me a story about the first time you smelled sawdust in a shop.

Ouf, I don't know. I remember when I was a kid I used to help my grampy in his shop. I'd spend all day with him sanding, plaining, and setting the boards to make these living room tables.
Did he teach you anything over the time you spent with him in the shop?

Oh my, yes. He used to say the quality of the table depended on two things: the choice of wood and the character of the carpenter.
I've heard chefs say the same thing about food.

Oh it's true. He said if you treated the wood properly, it would show you its soul.
Nice. Do you know what you're selling?

Custom made furniture.
God no. That's the product. Do you know what feeling you're selling?

Peace of mind that the customer has a custom made furniture?
Oh my. No. You're selling nostalgia. You're selling a memory of grandpas and their simplistic view of the world (filled with honour and integrity).

Honour and integrity...those are good words.
No. They're terrible words. Promise me. Never use those words again.

Why?
Because they're cliche. And no one will believe you if you use them. They've heard that bullshit before.

So I sell the memory of my grandpa?
No, you sell the memory of all grandpas, using yours as the example. You got business cards?

Yes.
What's the name of your company?

GLM custom woodworking and construction.
I thought you did custom furniture. Nothing about your name tells me the one thing you do really well.

I do other things as well to pay the bills.
Who gets paid more money, the family practitioner or the surgeon?

The surgeon.
Why?

Because he's specialized.
And he does one thing extremely well, right?

Right.
So which do you want to be?

The surgeon.
Then make sure your customers knows what you do really well. Of course you'll do the other stuff when you have time. I get it, you want to put food on the table.

Exactly. So my name is bad.
Yes.

Why did you ask me about my business cards before the name of my company?
Business cards are one of those simple tools in marketing that most people screw up.

Don't I just put my name, address, email, website, phone number....
Whoa. Stop. When you get a business card from someone, what do you do with it?

If it's relevant, I put in my contact list.
And if it's not?

I throw it out.
And how do you ensure your business card is relevant to the people who get one from you?

I don't know.
Be different.

Like a different size or shape.
Maybe. But what about smell?

Smell? Don't they smell like paper and ink.
Yup. They all do. But what if you could get "Ode de Sawdust" and spritz a little bit on every one you handed out? Just like the smell you remembered in your grampy's shop.

That's really good. I wonder someone makes that.
They do, I just googled it.

Holy crap. I love it.
And then you can spritz a bit on yourself for cologne. Smell is one of our senses that helps reinforce memory. You'd be increasingly different that customers would be more apt to remember you. Hence your business card may have just become relevant...

What about my name?
Let me ask you something else. What is so special about handcrafted furniture versus big box furniture?

The care and attention to detail is the big thing.
Why is that so important?

The more a furniture maker pours his heart into his work, the greater the quality of the piece.
You're talking craftmanship.

Yes. Craftmanship.
So what I've heard from you today is the character of the carpenter and the passion for the word with output a better product.

Yes. That's it. Character plus passion equals Better.
No. Well yes, but you can't say that. It's expected and no one will trust you. Plus any furniture craftsman can say that. You got to go deeper.

Deeper?
Yes, what's deeper than passion and character?

I dunno.
Your grandpa used to say it.

He did.
Yup. You know this. You get it, but you've never thought about this way.

Ok I give up.
Have you ever heard of comfort food?

Oh my god. I get it comfort furniture.
Uh, no. What's another word for comfort food, used primarily in Black communities?

Soul food.
Now you're talking. And how do you translate that to furniture?

Soul furniture?
How about Furniture for the Soul.

My grandpa used to say that?
I know, you've already told me. What's a soul worth?

There's no price.
Right, now the expensive furniture that you want to sell has extreme value. No more price comparing to the big retailers. A customer has a choice to buy the mass produced, cheaply made table a fraction of the price or get a piece that reminds them of their grandpas that changes the energy in their homes. Do you offer a warranty on your furniture?

Yes, I'll offer a limited time warranty for one year.
Is that all a soul is worth? Are you familiar with Tilley hats?

No.
Their warranty has a lifetime warranty.

So what if someone takes advantage of them?
They probably do. But that's the cost of being different. They stand behind their workmanship. Do you stand behind yours?

I suppose I could do a lifetime warranty. It wouldn't be that big of deal to fix something that would go wrong.
Even if the dog chewed off the leg?

To fix the leg wouldn't be that big of a deal. I would fix that for free as part of my warranty.
I knew I liked you. That would be awesome. You can market the shit out of that. But let's not say lifetime warranty. Let's say something more ridiculous. Something that would get attention.

Like what?
Do you stand behind your work?

Yes, absolutely.
Then give a 1000 year warranty on your furniture.

I won't even be alive.
No you won't, but the confidence that your company will be here speaks loudly about your offer. Future generations will write songs about your furniture. Future marketers will pray to your golden statues and your grandpa will be a demi god.

I like the way you think.
Enough coffee. You got a lot of work to do.

We go fishin' when the fish are runnin'

I went bass fishing with my 12 year old son last week.

We sat there on the edge of the ocean, casting our lines anticipating a "bite".

Waiting, and casting.
Talking, and enjoying the crisp ocean breeze.

And I thought of an old colleague.
Morris was Vice President of Marketing of a $50 million business and his favourite saying was, "We go fishin' when the fish are runnin'."

What he meant was we should market heavily when potential customers are most apt to buy. And we should slack off when it's too hard to convince them otherwise.

Morris was smart. I learned a lot from him.

Cast the line when everyone else are casting their lines.
Fish when everyone else is fishing.
Sell when customers are most apt to buy.

I call this noise elevation.

Morris was worried about ROI (return on investment) of the marketing dollars he was spending. His children's bellies depended on him proving his marketing prowess.

I was casting my line and thinking about Morris when I realized that he was wrong.

Marketing is nothing like fishing.
It can be about timing, but that's the lazy route and too competitive.
It's not about ROI. It's about business growth.

And most marketers don't talk about business growth because they think marketing is a department within a business. And there are too many variables they have no control over.

Pareto's Law, or 80-20 rule, loosely states that 80% of outcome will come from 20% of inputs.

Marketing is 80% internal and 20% external.

Marketing internally includes every sales call, collection notice, conversation with a potential hire, potential supplier, internal discussions, weeds on the front lawn, rats in the basement, dirt on the delivery truck, logo on the letterhead, misspelling, attitude, crooked chairs, cracked windows, employee uniforms, etc.

You understand external marketing. But then again, you know the internal marketing too.

The internal marketing should be easy. You're dealing with the human element.

Now we're talking Culture.

Don't spend another dollar on external marketing until you fix your culture problem. Then you won't have to fish when the fish are runnin'. They'll always be runnin'. And when you're ready to cast your line, the fish will jump in your lap.

Sales, smoke screens, and seduction

I'd like to grow my business, but I don't know how to do it. Do you have any suggestions?

Wow, that's a loaded question. But before I answer your question, let me ask one of my own. Are your sales the same as last year, better than last year or worse than last year?

We're about the same as last year. 

And did you do any advertising you really felt worked for you?

Not sure. We spent some money on different things. Some customers came in but it didn't really move the needle longterm.

Are you going to do those things again next year?

We did get some clients. I don't know if it was worth the money, but it did bring in some customers that we hadn't seen before.

And your business is flat.

Yeah.

So despite some of your marketing initiatives, your business is relatively flat. Would you agree that some customers you had last year no longer come to you?

We do a really good job with customer retention.

Sure, but do you agree that some lost customers has nothing to do with you? Let's be objective. Some people die, move away, or have a change in lifestyle.

Ok, when you put it that way, yes.

So despite, you losing some customers, your business is flat, which means new customers have filled that void.

Right, so our marketing is working for us.

Maybe. But answer another question for me. Did you take a price increase on your products due to inflationary demands?

Yes. I have to protect my margins. So each year, we increase prices between 2 and 3 per cent.

Ok. So to be clear, you've raised prices about 2-3%. Some customers are no longer with you. But your sales are about the same as last year. 

Are you saying my sales are down? My accountant doesn't say that.

Sales are flat. But a bigger indication that business is in trouble is customer count. Accountants usually don't track that number. Your average check is a bit higher, giving a smoke screen that your business may have lost market share this year. Which means you're actually losing customers.

That's not good. I want to get customers. So back to my question, how to grow my business?

It starts with the internal first. I've heard you say that you're doing a good job keeping customers. So keep doing that. However, do you remember how you met your wife?

I met her at my first job. We were friends for 2 years before we went on our first date. 

So what attracted you to her?

She was beautiful. She had long curly hair, with an air of confidence.

So physically... But after being friends for two years, did you just go to her and say, "Hey we've known each other for 2 years, we should get married to lower our combined living expenses"?

Are you nuts? No after two years, I fell completely in love with her. She was funny. I watched her take care of her mom. She loved camping, swimming and going to movies. We watched sunsets and interpreted cloud formations.

Then you asked her to marry you?

No. Then we went on our first date.

And how long did you date?

Two more years.

So you knew this woman for 4 years before she married you?

Yes, but I knew I wanted to marry her the first day I met her.

You worked slow. 

I didn't want to scare her off.

Right, so let me explain where I'm going with this. This woman was really important to you. You handled the relationship delicately. There are nine ways we become attracted to another person.

1. Beauty

2. Persistence

3. Make us feel great

4. Dangerous

5. Natural, simple

6. Flirting

7. Charming

8. Charisma, great with words

9. Be a star

You started your attraction to her based on beauty, but complimented the attraction with natural and how she made you feel. 

What's that got to do with my business?

Well, if we talk to your wife, to find out why she married you, I bet she'll have a different reason why she was attracted to you. And once we know those qualities, we can use those same qualities to promote your business.

I'm not looking to getting married again.

Physically, no. But metaphorically, you're looking to find customers who will be seduced by your business. I'm willing to bet your business is just like you. Once you understand what gets customers excited about you, then you go find more customers just like them.

Not all customers will like us.

Exactly. Just like not all women wanted to be with you. But does it matter?

No. I love my wife. She's everything to me. A wonderful mom. A caring wife. A listening ear. She's my best friend.

Now imagine if you could say the same thing about your customers. Do you think, business would grow or stay flat?

Are you saying not all customers are the right customers?

That's exactly what I'm saying. As business owners, we chase the customer because they have the money. But we're using the wrong strategy. We need to communicate who we are so the customer falls in love with us. And when they do, their money follows.

But not all customers will like us, just like not all girls liked me.

Now you get it. You don't need all customers to love you. Your operation couldn't handle it all anyways. 

So what do we need to do to get new customers?

Do you need new customers in the next 9 months to stay in business?

I don't think so. But I do want new customers so we stop this decline you brought up.

I get it. But just like your wife, this is going to take time. The communication is going to take time to seduce the customer. In my experience it takes about 9 months. 

What if I want it faster?

What would've happened if you would've moved extremely fast on that 20 year old girl who became your wife or for any 20 year old girl for that matter?

I may have scared her away or may have attracted the wrong women.

See. It relates exactly the same way to to business.

I get it. So after 9 months. I'll see 3-4% increases in sales?

If you grow 5%, will you be happy? 

Yes.

If you grow 10%, how would you feel?

I'd kiss you. But I don't believe you.

Your wife might get jealous. Let's say this. I'm not promising you 10%. You're a good guy. You have a good business. Your strategy is non existent. With a strategy that effectively communicates and seduces, your business will grow. I would expect that in three years, your business will be much bigger than it is today. You've told me your business is in decline. Any growth would be welcomed. And I think 2-3% increases in sales is a joke. If I only get you 2-3%, you should fire me immediately. 

What are you going to do?

Does that matter? 

Not really.

So if you're ready, let's get to work.

I'm ready. How much is this going to cost me?

You haven't learned yet. I'm not chasing your money. I need to see if we are compatible. I'm going to get you to do some homework before I charge you anything further.

But I want to get started.

Trust me. This is an important step in my process of customer acquisition.

Are you seducing me?

Haha. You're smart. I like you.

Send me the homework. I'll get it to you in the next few days.

Rick Nicholson is a Wizard of Ads partner. You can reach him at ricknicholson@wizardofads.com to discuss development of your marketing strategy.