For example, say your average customer spends $25 with you. If you are spending $1,000 per month on advertising, you will need to attract 40 new customers per month to break even on the ad, not counting any of your other costs, such as product costs and overhead.

If those customers are one-time buyers, then you have to find a way to make your advertising more effective or less expensive. If they become regular buyers, then you can accept lower response rates.

The key here is to look at the ?lifetime value? of a customer. A customer who spends $25 a month and comes to your store only once is only worth $25 to you.

But if you can get that customer to be a repeat customer, then that customer is worth $300 a year, or $1,500 over five years!

Most business people do not understand the power of advertising; they do not realize that each new $25 customer is potentially a $1,500 customer!

Advertising brings in the customers, but it is your job to keep them buying from you.

Advertising promotes word-of-mouth

Often, a loyal customer will see your ad while with a friend or business associate. Your customer will show your ad to the friend and say, ?Hey Joe, now this is a really great company/product/service.?

Joe will come into your business, and you will ask him how he heard of you. He will say that his friend referred him and never think to mention that it was your advertising that prompted the friend to open his mouth in the first place.

I headed up a Neilson study that tracked hundreds of ads and the response rate each ad generated. Each month, a computer printout listed the ads and how much response each had generated. The first printout came and it looked like this:

• X Company????22 responses
• Y Company??...?.20 responses
• Z Company????.23 responses
• K Company???..223 responses
• J Company???.?.26 responses

In the midst of all the other ads generating responses in the low 20?s, one ad was generated more than 200 responses!

Turning to the ad, we expected to find some totally new or unique offer, product or service.

Instead, we found that the product advertised was nearly identical in price and features to four or five other products in the same publication.

Thus, it wasn?t the product that made the response jump so significantly, it was the ad! After a year of tracking the highest response generating ads, we learned that, for the most part, the ads that pulled the greatest response followed four primary rules:

Rule No 1: Is it distinctive? You must design advertising that is so distinctive looking (or sounding, if you?re on the radio) that it pops out of the clutter.

In print, the first goal of high-response-oriented advertising is that it be visually distinctive. On radio, the audio must be distinctive. Naturally, TV has both visual and audio possibilities.

I ran a TV spot advertising a free seminar I?m doing with Jay Abraham. Among other images we used in the spot, I put a shot of me throwing a double side kick (I have 23 years of karate training) to the head of a business owner (we?re both in suits).

What?s the point of that? One point. It makes you want to find out ?what the heck is going on there?? Today, 70% of TV watchers are muting out the commercials.

But if you see something really intriguing, you will UN-mute just to see what the heck is happening there.

There?s a spot running right now where this kid sprays his mother with a squirt gun and she pulls the hose out of the sink and nails the kid with it.

I saw that spot several times and it finally got my goat. I wanted to see what they were advertising.

So make your ad distinctive. Something that makes it STAND OUT.

Rule No. 2: Tell me what you want to tell me. If you page through a magazine, you will quickly notice that you do not read the ads that make it difficult for you to figure out what they are selling.

?Clever? is only better if it is ?super clever.? Clever headlines that do not tell you what they are trying to sell are simply not effective.

Most ads in most publications today don?t have headlines that tell you what they are trying to sell. In the information age, don?t hint around; say what you want to say, right in the headline.

A good headline follows these four criteria:

• It tells you what the product or service is.
• It starts with the word you or your (not always, but mostly).
• It contains a benefit to the reader. Most companies brag about themselves, rather than talk about the benefit to the reader (prospect).
  High-response-oriented advertising focuses like a laser beam on the benefit to the customer.
• It makes the consumer want to read on.

The headline is the ad for the ad. If the headline isn?t good, no one will read the rest of the ad. Responses to ads have jumped ten fold by simply changing the headlines.

Rule No. 3: The body copy should?

Be curiosity driven, unfolding the story you want to tell.

By highly benefit oriented. So many ads talk about features, when it is benefits that motivate buying.

Give you a reason to take action now! Can you offer something for free that will help you engage the potential customer?

Rule No. 4: Ask for the order. Too many ads do not give explicit instructions as to what action you would like the customer to take: ?Order today and save,? or ?Call us today and receive this free?.?. You must always ask for the order!

Summary

Advertising is a powerful tool for becoming a well-known player in any market.

Even if you take a small schedule and a small ad, by consistently letting it run in an appropriately targeted vehicle, over time that ad will have an impact. People will see your logo and it will register.

Advertising supports everything else you do in your business. But it is only part of a total package.

You must have other marketing, and you must make sure, ultimately, that you are treating the customer like gold. Happy customers will spread the word faster, and advertising will help facilitate that. Happy advertising!

Chet Holmes is President and CEO of Jordan Productions, an international training firm that helps companies accelerate growth using Chet?s proprietary techniques. See www.chetholmes.com to attend a webinar about Chet?s concepts.

About The Author

Chet Holmes is author and creator of the popular business series Guerrilla Marketing Meets Karate Master with Jay Conrad Levinson, Business Growth Masters, and Zero to $100 Million.

Chet charges $5,000 an hour and has been paid fees up to $1 million dollars from a single client. He's personally had 50 Fortune 500 clients and has 60 products selling in 19 countries.