Are You Missing the Trees? How Do We Really Grow Our Business?
By Rick Segel

When we look at all of the things we spend our money on in our businesses, the biggest black hole is advertising. Most of our expenses are either fixed or vary with our sales volume. For example, rent is generally a fixed expense. Packaging costs will vary with usage, i.e., the more sales, the more bags we use.

The two biggest controllable costs are still advertising and labor costs. I’ll save labor for another article. The focus here will be on our attitude about advertising. That’s right—attitude. Not gimmicks or tricks. Not some new fangled way to market ourselves. Not ways to save some money on radio time or new innovative ways to gather names for our mailing list. This is about how we look at and feel about advertising.

Most of my work today is with independent business people and many are located in downtown areas. I keep on asking myself why are some retailers successful while others are not? What is the magic pill--that magic touch that makes some succeed beyond their belief? For the past 25 years, my answer was pat and simple. I would say it’s a combination of many things: the merchandise, someone’s ability to buy better, the look of the store, the salespeople, the location, pricing, etc. My response was easy. The real merchant does so many things right. I would use the old hackneyed expression--retail is detail.

But I’ve changed my mind. I think that there is a silver bullet. It is our image. What is the feel of our store? What do we project to the general public. I have observed the phenomenal growth and rebirth of Abercrombie & Fitch. What did they do? They recognized their market and did everything to romance that market. They stand for something. It’s not low prices, and certainly not their sales. They invented a market and romanced it with expensive shopping bags that actually show the type of customer that buys their clothes. They take extra markups but no one seems to care, because they want that look, that image, and that feel.

So what does all that have to do with our attitude toward advertising? Everything. Image advertising builds businesses. Yes, it focuses on tomorrow, not today. But if we plan our tomorrows, the todays will take care of themselves. After all, this approach is easier. Why worry about the endless sales? Worry about building your image, which becomes your brand, which builds your business.

This is why Nike runs image ads. Why General Electric brings good things to life. Why Nordstrom’s has a flair. And Hallmark is about people. That is why Pontiac sells excitement and the status advertising of American Express built that brand. That is why the new VW bug is tapping into that nostalgia feeling. They are not concerned with the buy one/get one half price thinking. They are concerned with the look and image. Years ago, we called it institutional advertising. Many of those retailers that did that actually created institutions. Yet, so many of us concern ourselves with the everyday and forget that building an image, or better yet, creating the benefit to our customers will make our businesses grow.

Take some of the hard sell out of your advertising. Create the mood, and watch the tomorrows become more profitable today.