Marketing Without Advertising by Michael Phillips & Salli Rasberry edited by Peri Pakroo 3rd edition An Important Message to Our Readers This product provides information and general advice about the law. But laws and procedures change frequently, and they can be interpreted differently by different people. For specific advice geared to your specific situation, consult an expert. No book, software or other published material is a substitute for personalized advice from a knowledgeable lawyer licensed to practice law in your state. Marketing Without Advertising by Michael Phillips & Salli Rasberry edited by Peri Pakroo 3rd edition Keeping Up-to-Date To keep its books up-to-date, Nolo issues new printings and new editions periodi- cally. New printings reflect minor legal changes and technical corrections. New edi- tions contain major legal changes, major text additions or major reorganizations. 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HF5415 .P484 2000 658.8--dc21 00-056863 Copyright © 1986, 1997 and 2001 by Michael Phillips and Salli Rasberry. ALL RIGHTS RESERVED. Printed in the U.S.A. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior written permission. Reproduction prohibitions do not apply to the forms contained in this product when reproduced for personal use. For information on bulk purchases or corporate premium sales, please contact the Special Sales Department. For academic sales or textbook adoptions, ask for Academic Sales. Call 800-955-4775 or write to Nolo, 950 Parker Street, Berkeley, CA 94710. Acknowledgments With special thanks to Soni Richardson and Michael Eschenbach, Daniel Phillips, Tom Hargadon and Mary Reid. Full Disclosure Note All the businesses and business owners mentioned in the book are real. The great majority operate under their own names in the cities indicated. However, because some of our examples are less than flattering, and for other reasons, including pri- vacy, we have changed the names and/or locations of businesses in a few cases. In some cases, the businesses used as examples in the book do advertise—their marketing ideas are so good we included them anyway. In most cases, if a business used as an example does advertise, it is a small part of their marketing mix. Table of Contents 1 Advertising: The Last Choice in Marketing A. The Myth of Advertising’s Effectiveness . 1/3 B. Why Customers Lured by Ads Are Often Not Loyal . 1/8 C. Why Dependence on Advertising Is Harmful 1/8 D. Advertisers: Poor Company to Keep 1/9 E. Honest Ads . 1/12 F. Branding . 1/14 G. Listings: “Advertising” That Works . 1/15 2 Personal Recommendations: The First Choice in Marketing A. Cost-Effectiveness . 2/2 B. Overcoming Established Buying Habits 2/4 C. Basing Your Marketing Plan on Personal Recommendations . 2/5 D. When Not to Rely on Word of Mouth for Marketing . 2/7 3 The Physical Appearance of Your Business A. Conforming to Industry Norms 3/2 B. Fantasy: A Growing Part of Retail Marketing . 3/5 C. Evaluating Your Business’s Physical Appearance 3/11 4 Pricing A. Straightforward and Easy-to-Understand Prices . 4/2 B. Complete Prices 4/3 C. Giving Customers Reasonable Control Over the Price 4/6 D. Internet Pricing . 4/9 5 The Treatment of People Around You A. Tracking Reputations via the Grapevine 5/2 B. How Employees Spread the Word . 5/3 C. Common Employee Complaints 5/7 D. Handling Employee Complaints 5/9 E. Finding Out What Employees Are Thinking . 5/11 F. Suppliers . 5/13 G. Business Friends and Acquaintances . 5/17 H. Individuals Who Spread Negative Word of Mouth About Your Business 5/19 I. Your Behavior in Public 5/20 6 Openness: The Basis of Trust A. Financial Openness 6/3 B. Physical Openness 6/5 C. Openness in Management 6/6 D. Openness With Information 6/8 E. Openness With Ideas 6/11 7 Deciding How to Educate Potential Customers A. What Does Your Business Do? 7/2 B. Defining the Domains in Which Your Business Operates 7/7 C. Providing Information on Businesses in Established Fields 7/10 D. Businesses in New or Obscure Fields 7/13 E. Whom to Educate . 7/15 8 How to Let Customers Know Your Business Is Excellent A. Tell Them Yourself . 8/3 B. Help Customers Judge for Themselves 8/7 C. Giving Customers Authority for Your Claims . 8/16 9 Helping Customers Find You A. Finding Your Business 9/3 B. Convenience of Access . 9/5 C. Signs . 9/7 D. Telephone Accessibility . 9/8 E. Listing Your Services Creatively and Widely 9/13 F. Getting Referrals From People in Related Fields 9/15 G. Trade Shows and Conferences 9/17 10 Customer Recourse A. Elements of a Good Recourse Policy . 10/4 B. Designing a Good Recourse Policy . 10/5 C. Telling Customers About Your Recourse Policy 10/8 D. Putting Your Recourse Policy in Writing 10/9 11 Marketing on the Internet A. The Importance of Passive Internet Marketing . 11/3 B. Yellow Pages Plus 11/5 C. What to Put on Your Site . 11/7 D. Designing an Internet Site . 11/11 E. Interactivity and Customer Screening 11/14 F. How to Help People Find You Online . 11/16 G. Active Internet Marketing 11/19 12 Designing and Implementing Your Marketing Plan A. Your Marketing List: The “Who” of Your Marketing Plan . 12/2 B. How to Evaluate Your List 12/3 C. Marketing Actions and Events: The “What” of Your Marketing Plan . 12/5 D. Direct Marketing Actions 12/7 E. Parallel Marketing Actions . 12/15 F. Peer-Based Marketing Actions . 12/21 13 The Last Step: Creating a Calendar of Events A. Marketing Calendar for an Interior Design Firm 13/2 B. Marketing Calendar for Jerry and Jess’s New Chiropractic Clinic 13/4 Appendix Index [...]... possibility of a better standard of honesty in advertising, there is hope At least two nations, Japan and Sweden, encourage honesty in their advertising In ADVERTISING: THE LAST CHOICE IN MARKETINGS 1/ 1 3 1/14 MARKETING WITHOUT ADVERTISING neither country do ads have “fine print” that contradicts the main message, nor do they permit the sorts of puffery and hype we are used to and which all too often... mismanaged product recalls and took years to recover Gerber was ultimately sold to new management, and Sears even damaged its reputation with its non-auto business On the other hand, Tylenol handled a recall beautifully and made its brand even stronger For a branding strategy to be effective, a company must be vigilant about its product and service quality and be prepared for emergencies Without addressing... use fax machines and e-mail to keep close to our customers, and some of us have learned to use the Internet as an essential marketing tool But some things haven’t changed A trustworthy, well-run business is a pleasure to market, and the personal recommendations of satisfied customers are still the best foundation of a successful and personally rewarding business Marketing Without Advertising has been... on advertising, it’s far better to spend the same money improving your business and caring for customers It’s the honest power of this honest message that made me excited to publish Marketing Without Advertising ten years ago Uniquely among small business writers, Phillips and Rasberry were saying the same things I had learned as a co-founder of Nolo—that the key to operating a prof- I/2 MARKETING WITHOUT. .. the category of widely recognized and respected brands The concept of branding is that a minor brand, Electronic Product X, can become as well known as a major brand such as Sony Electronics if Electronic Product X simply spends enough in advertising to “establish” its brand name ADVERTISING: THE LAST CHOICE IN MARKETINGS The problem with this concept is that true brand identity is created when a company... MARKETING WITHOUT ADVERTISING itable business is to respect what you do and how you do it This means not only producing top-quality services and products, but demonstrating your respect for your co-workers and customers After many years of success, it’s a double pleasure for Nolo to publish another new edition of Marketing Without Advertising Yes, lots of things about small business marketing have changed... require you to re-examine some deeply held beliefs According to E magazine, advertising budgets have doubled every decade since 1976 and grown by 50% in the last ten years “Companies now spend about $162 billion each year to bombard us with print 1/4 MARKETING WITHOUT ADVERTISING and broadcast ads; that works out to about $623 for every man, woman and child in the United States” ( Marketing Madness,”... a service, don’t overstate the likely beneficial result of using it, and include a warning as to any risk F Branding “Branding” has been a catch phrase in advertising for the past decade and brand managers can now be found in the marketing departments of large companies Branding is an ingenious response to the fact that traditional advertising doesn’t work The idea is to make a product or service so... According to Marvin 2/4 MARKETING WITHOUT ADVERTISING Antonowsky, head of marketing for Universal Pictures, “word of mouth is like wildfire.” This point is well illustrated by the number of low-budget movies that have succeeded with little or no advertising and by the number of big-budget flops Like the movies, book publishing is another industry where lots of money is traditionally spent on advertising but... on a day-to-day basis? 2/ 5 • Are your financial records in order and up-to-date? • Are your employees knowledgeable about your product or service and enthusiastic about working for you? • Do you offer top-quality goods or services? • Do your customers have confidence that if something goes wrong with the products or services you sell, you stand behind them? • Is your website being kept up-todate? . Michael, 193 8- Marketing without advertising / by Michael Phillips & Salli Rasberry .-- 3rd ed. p. cm. Includes index. ISBN 0-8 733 7-6 0 8-0 1. Marketing. . Marketing Without Advertising by Michael Phillips & Salli Rasberry edited by Peri Pakroo 3rd edition Keeping Up-to-Date To keep its books up-to-date,