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Products and Service vs. Sales and Advertising

Jan 17th, 2014 | By | Category: Nick Kemper's Blog

Nick Kemper PhotoThe numbers aren’t all in yet, buy but it looks like 2013 will end up being the best year so far, healing financially speaking, sick for TowPartsNow. No one is retiring early and there won’t be any executive vacations from the windfall, but it’s progress, and we’re happy with that. This catalog/internet parts sales business is a tough nut to crack. In fact, we’ve stripped the nut about 17 times already, and our bolt definitely needs to be machined at this point.

So what did we do differently in 2013? To put it simply, we didn’t do different things. We were conservative. We didn’t try to create a new product that would undoubtedly be a “bestseller.” We didn’t embark on any ill-conceived sales programs. We didn’t travel to half a dozen trade shows to longingly make eye contact with the attendees strolling purposefully past our booth. We sent out a modest number of catalogs, we put a little money into web optimization, and we focused on taking care of the customers who called or ordered online.

Honestly, everything else besides taking care of customers is a distraction. Nowadays you need a Facebook page, a Twitter account and Google ads to just compete. That’s what they want you to think, anyway. We have a Facebook page, and we’ve sunk a little labor expense into it to get our “likes” up to a respectable number, but if I look at the names in our “likes” list, they aren’t the same names that are in the “received payment” ledger in our accounting software. Yes, some of our best customers “like” us on Facebook, but they “like” us on Facebook because they like us in real life, not the other way around.

Here’s an interesting statistic: in 2003, player salaries equaled 62 percent of the revenue generated by Major League Baseball teams. By 2012, that percentage had dropped to 42 percent — not because salaries have gone down, but because revenues have gone up that much. And the rise is primarily due to large television contracts. Large television contracts are funded by advertising dollars.

I’m not sure there is anything left that is not funded, in part, by advertising dollars. If you own a business, there are a myriad of industries designed to convince you to spend money on advertising. Even if the business you own is one of the businesses in one of the industries designed to convince other businesses to spend money on advertising. It’s diabolical, and I don’t use the Diablo reference lightly. For many businesses, profits have very little to do with product or service quality and very much to do with marketing, sadly, and that’s after taking out all of the financial and banking industry factors, which make the compass needle spin more than anything else.

What if the customer, the end-user as we have so tellingly named him, were not so inundated with advertising? How would be make his buying decisions? How could he buy insurance without the help of a talking gecko, or a talking pig, or Flo, or the teams of bad-joke writers employed by the companies who sell their wares to the insurance companies? If he could accomplish this, how much money would he save if the insurance company didn’t have to pay for the bad jokes?

What if you had to work 10 years in a product or service industry before working in marketing or advertising? What if you were required to consume the product or service personally before being granted the right to market or advertise it? What if you could not create a piece of junk mail, send out spam, make an unsolicited phone call, lease a digital billboard, or even buy 30 seconds of the Super Bowl broadcast without being able to truthfully personally endorse what you’re pretending to be so excited about? Just random questions that are still not interesting enough to pursue.

I’ve read a lot of business and self-help books and I can’t help it but the more I write and the more I read, the more I think about how the author’s underlying purpose is to sell books. To me, this is akin to the underlying purpose of a marketing and advertising firm – to make money. Not for the client, although that helps them with their goal – but for themselves. If you pick up a book about how to help you organize your life and lose weight and clear your mental clutter and avoid grains and find spiritual peace, the unwritten subtitle is “How to Give the Appearance of Value so I, the Author, Can Get Paid.”

Sorry to sound cynical, but I had to grind out copy, and this is what the muse gave me today.

Have a safe and profitable week.

Nick Kemper