Asking your customer "where did you hear about us" is a waste of time and what to do about it…

A few days ago I was reading Michael Corbett’s The 33 Ruthless Rules of Local Advertising. In his book, he points out one of the biggest flaws I’ve seen in businesses – you cannot rely on a prospect to accurately inform you where they hear about you. In other words, a customer cannot provide you with accurate information on which of your lead sources are producing the most profit. Here’s why:

As Michael tells the story, he was working for a business that was having a big sale one Saturday. Prior to the sale they did a lot of advertising in the local market and wanted to determine which marketing project paid off. To do that Mike and his boss stood at the door all day and asked every customer where they heard about the sale. 30% said TV, 20% said Newspaper, and 50% said Radio – Good to know, right? Except they never had a TV ad. When they asked people if they were sure they heard about it on TV everyone assured them that they had.

Your prospects don’t know and don’t care where they heard about you.

So now what? To wisely invest your marketing dollars, you NEED to know where your leads are coming from. Michael suggests just watching sales to determine if the marketing worked. However, what if you’re running multiple marketing promotions at once? After all, who isn’t? You may have a direct mail piece, yellow page ad, website, a radio slot, and be sponsoring your local high school sports events all at the same time.

The internet marketing guru’s have this one figured out. They may have 100 different ways that they are marketing their products, but they always know exactly where the leads are coming from by tracking the “referral sites” to their website. (If you’re not familiar with “referral sites” your webpage can be setup to track which other webpage people visited that lead them to your site.)

In the “physical” world if you’re running multiple advertisements you have 2 options:

1. For print ads (i.e. yellow pages, direct mail, newspaper, magazine, website etc.) provide a coupon. Have each coupon be unique (preferably a different color) with a unique promotion ONLY available with the coupon (and obviously void with any other offer). The different color is useful because even if they forget the ad at home, they can generally remember the color so you’ll know exactly which one they’re talking about.
2. Simply offer a unique promotion. Your radio ad, TV ad, announcement at the high school event etc. should all include a different promotion when they go to your business and mention it.

Note: Make the yellow page ad your “weakest” promotion. In other words, if they hear you on the radio and pick up the yellow pages to find you, you want them to tell you about the radio promotion, NOT the yellow pages promotion.

What about referrals? – Well you need to incentivize (I’m aware that I just made up that word) your referrals. You need to offer something to the referrer for providing the referral. If you do that, the referrer will be sure to tell you about it. 😉

Also, make sure your promotions provide some sort of exclusivity. Generally items are made exclusive by offering a time limit, quantity limit, or “previous customer” discount. If you look at any good online information marketers, the good ones (i.e. Yanik Silver, Perry Marshall, Jim Edwards) ALWAYS make their materials “exclusive”.

Here’s the other “excuse” I hear from business owners all the time about why tracking lead sources is a waste of time. They claim that you can’t really ever know which lead source brought them in. Maybe they did hear your TV ad and radio ad and saw your newspaper ad and finally one day decided to call. I agree that in your market, having your name synonymous with your product is very important and to some extent all of your marketing projects should be helping to do that (if they’re structured properly with your Unique Selling Proposition). But here’s the thing. Who cares if everyone in the world knows that you make widgets if no one is buying your widgets??? The reason you offer promotions is because even though your prospects may have heard your name in 10 different ads, the ad that brings them in to buy something is the one you need to know about.

Do not confuse “activity” – people calling or stopping by because they heard your ad – with “profitability” – people actually BUYING something because they heard your ad. Online affiliate marketers are great at distinguishing between the 2. They don’t pay a dime to anyone for any marketing UNTIL someone buys a product! Don’t you wish you could do that in your business? Imagine setting up a deal with your local newspaper, radio station, or TV channel where you paid for the ad by giving them a percentage of sales that came directly from that ad. If you ever manage to negotiate a deal like that please let me know about it.

To your success, Bryan

P.S. The “other” way to track all of your lead sources is to offer unique phone numbers, email addresses, or web addresses with each ad and promotion. That can get a little more inconvenient for the consumer to try to remember that information however with the proliferation of the internet, VOIP phone services, and email, at some point I imagine you’ll see this happening more often. It’s already becoming popular in direct mail marketing.