Ray worked with B-2-B and Consumer clients throughout the world ... including USA, Canada, Mexico, Asia, the South Pacific, Europe, the Middle-East, Central & South America, Africa.

This website is a compilation of Ray's 10 years on the Web.

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I'll drink to that! Too Many T-Shirts!

People in marketing are told on an almost religious basis we should think long term. So, what is this long term strategy and planning all about? Well, what it is all about is making money!

It's relatively easy to slip into cutting costs instead of promoting profits. Thinking first of how much it will cost rather than how much it's going to make. Profit is not a four letter word. Every company needs to make a profit. And those that do not are soon not with us.

Professor George Day of the Wharton School of Business has discussed the difference between being expense or cost focused vs. being investment or long term profit focused. Here is the difference:

If you are more concerned with cost, here is what you think:

What are my projected sales?
Am I spending on a comparable basis with my competition?
Am I gaining or losing market share?
How can I reduce my marketing expenses?

As you can see from this short list of only 4 concepts, if all you think about is cost you are automatically not thinking about profits.

On the other side of the ledger are those people who think long term and think profits. George Day calls them "investment focused managers". Here are 5 points for those who budget for profit:

What are our long term marketing objectives?
What kind of a return can I expect from this marketing investment?
Do I have the type of quality customers (or are they available in the marketplace) who will be with me for repeat purchases?
Which new customers should I specifically seek...and which should I not?
What can be done to maximize my return on my investment?

Assuming you are with me and you agree with George Day, as I do, now it is time for a story.This is one of those stranger-than-fiction type stories.

Looking for ways to increase sales, an Australia bar owner contacted a marketing consultant. Together they dreamed up the "I Drank My Way Around Australia" promotion to sell the 43 different beers brewed in their country.

Using a punch card to keep track, each patron who ordered all 43 different beers got a T-shirt which said, "I drank my way around Australia at __________'s bar."

After a few months the consultant asked the bar owner how the promotion was doing. "Response was terrific", he said, "I gave away 600 T-shirts before I stopped it!"

"For heaven's sake, why did you stop such a successful promotion?" asked the consultant.

"Because I gave away too many T-shirts!"

"May I point out that you sold 43 bottles of beer for each $4.00 T- shirt?" asked the consultant.

"But I gave away 600 T-shirts. They cost me $2,400. My budget couldn't afford to do that any more."

"But you sold over $77,000 worth of beer -- not to mention all the customers who participated but never completed the 43 beer promotion. Are you crazy?"

Sad, it's true

This is a true story. It really happened. It's constantly amazing to me that people will stop successful promotions. They say they're spending too much money -- rather than focusing on how much PROFIT they are making. I do not get it.

Here are some tips and guidelines for avoiding the "Too Many T-Shirts Syndrome".

  1. Clearly define your goals. Do you want more traffic? More sales? Higher profits? Your promotion should be designed to meet your objectives. If selling 43 beers is not enough to justify a $4 T-shirt expenditure, create a promotion that does work by the numbers.
  2. Set measurement standards. If you set sales vs. cost goals ahead of time, you won't care how many T-shirts you give away. You'll already know that each T-shirt equals sales of $129 ($3 per beer X 43 sold). And you'll be happy when you have to order more T-shirts.
  3. Commit to the promotion...and your customer. Especially those who've guzzled 39 beers at about the time you want to pull the cork and cut off their T-shirts. If you focus only on expenses, you're not serving the customers' expectations. You'll lose business and goodwill.

If you've planned for success and committed to your plan, your sales will grow incrementally. The longer you keep it up, the more money you'll make. And that's what business is all about.

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