michael’s posterous

While checking on the competition I stumbled upon this.

You will see this a lot where a plumber will advertise phone numbers to give the impression that they have multiple locations across the city (I am guilty of this) when in actuality all numbers go to the same place. Underneath those phone numbers you will see the locations they are trying to target. This plumber has every location covered in Philadelphia except for North Philadelphia. There is a high concentration of blacks that live in this particular area and they have one of the lowest household incomes in the city. I would like to find out if any other neighborhoods/zip codes in the city have equal or lesser household incomes than those in North Philadelphia.

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For some people this isn’t new but I am not writing this for you. I am writing this for all the business owners who feel that you must advertise in the yellow pages to make money. For years the reps from the yellow pages have done a great job in creating the illusion that we have to be in their book. Today is a new day. There are two major reasons why you shouldn’t be advertising in the yellow pages or at least reducing your spending with them significantly.

When you sign the contract to advertise in the yellow pages it is an annual contract. This means no matter what happens you have to pay that monthly amount. Business is a little slow and you need to allocate dollars elsewhere? The yellow pages will still want their money. Compare this to other forms of advertisement, direct mail, internet, billboards and etc. Those mediums do not make you sign up for the year. I know the yellow pages get printed every year so that’s why its an annual thing. That might have worked 10 years ago but now we have more efficient ways to reach our customers than soley relying on the yellow pages.

When you advertise in the yellow pages you are advertising right next to your competitors. This doesn't make much sense. Why would I spend almost $5K a month so my potential customers can see me and my competitions with a flick of the page. If you are in the middle of the particular category and want to get ahead you will have outspend the leader of that category. So you spend much more per month just to be #1 but we all know the customer will leaf through all the other companies. In the yellow pages it comes down to has the best designed ad, that’s it. You have to draw the customer to your ad and make them call you. It cracks me up when companies don’t spend money to hire an outside firm to design your ad. Yes, the yellow pages will design it for you but it looks like crap. So what if you spend $700 to have someone design, in the long run it will pay huge dividends. Just grab your yellow page book and go to the Plumbing section. The majority of the ads are done by the yellow pages and a few are done by an outside firm.

The yellow pages always had the upper hand when it came to having everybody advertise in their book. Most plumbers (I will use them because I work for a plumbing company and that category is one of the largest in the yellow pages) don’t have the time or don’t know about advertising in other places. So every year when the yellow page rep calls they look it over and sign up for year believing that they need the yellow pages. This has got to change. We are in 2009 and nobody shouldn't be thinking like this. There are tons of ways to reach your customer in more effective ways such as direct mail, billboards and internet. Ok, you are saying if I drop my advertising in the yellow pages where will I get my customers from? First, since the yellow page book comes out every year people always still hold onto previous years versions. So its not like once the new book comes out your phones will stop ringing. Before you stop advertising in the yellow pages you need to start to create your alternative marketing plan. Direct mail is the key. You can send a postcard out to your customers for around 35 cents. This will allow your message to get to the customer without interruption. They wont see your competitors, just your company. You just don’t send this out once but you keep hammering them. Do you remember America Online? They sent out those free discs to everybody and they kept doing it. This is the mentality you need to have. Increase your brand awareness. When your customer has a problem you want them to think of you not flipping through pages in the yellow pages. I am not going to go in too much detail but this is the mindset you need to have. Don’t be scared, just educate yourself so you know what to expect.

The big thing is the way the economy is right now. Everybody is looking ways to reduce their costs and one of the biggest costs in a small business advertising in the yellow pages is that cost. We spend around $9K to advertise in two yellow page books, Yellow Book and Idearc. If you read my earlier post I sat down with our Idearc reps for the upcoming year. We told them that we needed to reduce the annual budget. Of course they didn’t want to hear that. We talked and I discussed with them what other forms advertisement we were looking to divert our dollars to. They are salesmen and are very good at it. Before the meeting we wanted to reduce our spending significantly. After the meeting we left with them creating a proposal to incorporate other means of advertising other than in the yellow pages for a cheaper amount. The next meeting came and their proposal was a couple hundred dollars cheaper per month with us having a package consisting of direct mail, billboard and some internet marketing. I can’t knock the Idearc guys for creating a killer package. At first it was an awesome. I was enamored because we got all this for less money than last year. A sat on it for a few days and then it hit me. We still don’t control our advertising costs, its still an annual contract! Yes we get all these added benefits but they (Idearc) are still in charge. They are driving and we are just along for the ride.

We still haven’t had our follow up meeting since they offered us their package deal. The key is having control of your ad dollars and it is so true in today’s economic conditions. Idearc doesn’t want people reducing spending in their book. If you haven’t heard they just filed for bankruptcy. I don’t know the particulars but the word bankruptcy for a company whose majority of revenues comes from a printed paper product isn’t good. I want to educate other business owners and let them know to start thinking about reducing your spending in the yellow pages. If you don’t your competition will. I know my competition might be reading this but its ok, no other plumbing company has someone like me working for them. We are getting serious at Ingram’s. When we come never say you didn’t see it coming because if you’re reading this we just gave you a heads up.

This post was fueled by a comment from someone who read my earlier post. Thanks Bill.

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