One of the keys to maximising the return on the investment of marketing, or alternatively reduce the cost of marketing is a reduction in the reliance on advertising or more broadly promotion. This presentation looks at the strategies used by businesses that have excelled without advertising. This presentation looks at rational, commercial and scientifically sound strategies for boosting revenue - while reducing the cost of advertising and marketing more generally. It directly addresses maximising the lifetime value of each and every customer.

1. strategies for driving sales up
and advertising costs down
D. John Carlson
25 July 2019

3. •psychology, education and business
•consumer behaviour management
•company director and strategic advisor
•private and public sectors over 25 years

4. strategies for driving sales up
and advertising costs down

6. three principles

7. 1. marketing and advertising are not the same
thing
2. profit maximisation requires much more than
just enquiries encouraged by advertising
3. few things drive profits more than focusing
on customer life time value

8. 1. marketing and advertising are
not the same thing

11. marketing is all about identifying a precise target
group and the behaviour you want that group in
order to achieve commercial and/or social
objectives

12. marketing is about encouraging your target
market to behaviour in a required manner for:
-first time
-last time
-more often
-less often

13. managing human behaviour involves a lot
more than communication – with the two
central pillars being the customer and the
product

15. Even communication involves much more
that advertising with some of the most
effective avenues now including electronic
direct mail and influencer marketing

17. and - advertising is less effective than ever
• ever-increasing level of noise with the average person viewing 8000
advertising messages per day.
• ever- increasing fragmentation of the media options and channels
• ever-increasing resistance to the hyperbole, platitudes, and half-
truths in advertising and the decline of advertiser credibility.
• Ever decreasing trust in brands and advertising – with 50% trusting
businesses, 18% trusting executives and 38% trusting brand adverts
• a growing recognition within business that the accountability of
advertising and the credibility of advertising agencies is low

18. even digital advertising is limited
• the growing use of ‘ad-blockers’. some 25% of american internet users
are now using ‘ad-blockers’ to block digital advertising.
• the growing use of advertising-free subscription services as offered by
the likes of youtube and netflix
• the growing preference among marketers and popularity among
consumers for content that informs, educates, and engages.
• the concentration of media ownership or control, with 50% of all
digital advertising controlled by facebook and google

19. internationally, while advertising budgets were
expected to increase by 4.5% in 2019, they have
actually increased by just by 3.6% - and this is
despite a booming us economy
more than 50% of advertising internationally is
now online.

20. in 2017/2018, proctor and gamble reduced its
advertising budget by $750 million and sacked 50
advertising agencies. in the first quarter after the
cut, sales increased by 3%.

21. 2. profit maximisation requires
much more than enquiries

23. zappos went from a $1.2 million turnover in 1999
to a $1.2 billion sale price in 2009
zappos has a 75% repeat business rate

24. conversion
average sale
margin
repeat sales
referral

25. • repeat customers spend up to 300% more that first time
customers
• repeat customers are a tenth of the cost to acquire than first
time customers
• repeat customers refer 50% more than first time customers
• referral customers spend 25% more than un-referred customers
• referred customers cost almost nothing to acquire
• referred customers are 5 times easier to convert due to higher
trust

26. Conversion
• understand conversion rate variables
• develop a proven strategy and system
• be first and make it easy
• fully leverage the customer journey
• engage the prospect
• educate your prospect
• demonstrate you value proposition
• build and leverage relationships

27. Average sale
• make average sales as important as conversion
• target segments with the capacity to spend
• create a comfortable environment
• understand the complexities of price
• employ people who can build a relationship
• have an optimal product with extras
• employ strategies to sell up and on
• offer an excellent customer experience

28. Margin
• identify a target market you can own
• understand what your target market is buying
• build a brand that ads value
• differentiate so comparisons are hard
• use price strategically
• select the product category with care
• ensure the customer experience ads value
• minimise advertising costs

29. Repeat and Referral
• create a sense of significance
• deliver everything that you promised
• be remarkable
• reinforce emotions
• develop relationships
• make it easy
• have a referral programme
• listen hard and respond honestly

31. building a tribe
permission marketing

32. 3. few things drive profits more
than life time value

34. amazon has a brand value a very close to that of apple
amazon has a market capitalisation very close to that of
apple
amazon has a turnover about half that of apple
amazon has a staggering customer lifetime value,
driven by largely by repeat business

36. three strategies

37. view marketing in its broadest sense
view communication in its broadest sense
view community as the future of marketing

38. marketing
• the customer – ideally a market you can own
• the product – ideally tangibly superior
• the customer experience – a part of the product
• the price – used as a marketing tool
• the distribution – making buying as easy as possible
• the brand – adding value to everything else

39. apple, with a great product has an advertising a
budget of .05%
telstra with a very average product, has an
advertising budget of 7.14%

40. communication
• content marketing
• native advertising
• search engine optimisation
• traditional direct marketing
• electronic direct marketing
• influencer marketing
• websites and chatbots
• personal communication

41. costco – one of the worlds largest retail brands
has no advertising budget, instead relying almost
entirely on direct marketing

42. community is the future
• builds loyalty and evangelism
• facilitates feedback and meaningful conversation
• significantly reduces the cost of communication
• establish a leader, followers and outsiders
• create a shared vision, values and interests
• ensure frequent and engaging conversation
• consider targeted external communication

43. brand community
61% of all us corporations have or are developing
one
general communities
a us$12 billion industry in 2019

46. recommendations
address communication last
address post enquiry strategies first

47. other marketing tools
• great products sell themselves
• differentiated products are harder to compare on price
• effective branding ads value (without advertising)
• the right price will drive demand
• an excellent customer experience will drive sales
• ease of purchase can also drive sales
• accountable communication drives costs down

48. post enquiry
maximising conversion rates makes each enquiry more
meaningful
maximising average sale makes each enquiry more lucrative
maximising margins means each enquiry contributes more
profit
maximising repeat and referral maximises life time value

49. advertising is a valuable tool in marketing, but it is
expensive and often wasteful

50. action
• change your definition of marketing – to focus on behaviour
• identify a market you can own and understand it very well
• develop a product (in the broadest sense of the word) that exceeds
customer requirements
• build a brand (through people) that differentiates and adds value
• address communication after other marketing tools
• address post enquiry strategies before addressing enquiry
• beware of advertising wankers

51. johnc@lincintegrated.com
0402 273 350

52. thank you