Brains Over Bucks
Bruce Wisman knows when to use a soft sell.
Wisman, vice-president of Wisman Appliance Service Inc., a retail store in Ft. Wayne, Ind., with annual sales around $1 million, wanted to discourage customers from shopping at other appliance stores.
At the suggestion of Jeff Slutsky, president of the Retail Marketing Institute (RMI) in Ft. Wayne, Wisman filled a freezer with gallons of ice cream and, just before customers left the store, handed each a free carton.
Not only did the customers' hearts melt at Wisman's generosity, so did the ice cream, and people hurried home to get it in the freezer. That put an end to comparison shopping for the day and left Wisman's appliances uppermost in his customers' minds.
"Don't outspend the competition, outthink them," says Jeff Slutsky, who founded RMI in February 1981 with partner Woody Woodruff. Both men left traditional advertising agency backgrounds to start a business consulting firm that would help retailers find "alternative" ways to increase sales and traffic. They call their approach "streetfighting," and the word has caught on among hard-hit retailers around Ft. Wayne, who admit that times are tough.
Streetfighting, says Slutsky, doesn't mean abandoning traditional advertising media, such as radio and TV, or firing your advertising agency. Quite the opposite. RMI advises retailers in seminars and in its monthly Streetfighters newsletter ($96 for an annual subscription) to milk these resources for all they're worth.
One of Jeff Slutsky's favorite lines is from Michael Corleone in The Godfather, Part II: "Keep your friends close and your enemies closer." The "enemy," says Slutsky, tongue in cheek, is the local advertising salespeople working for newspapers, radio and TV stations, or billboard advertising companies -- anybody trying to get the retailer's advertising dollars.
"You have to know the salesperson's point of view and motivations in order to negotiate effectively for the best buys," notes Slutsky. "Most retailers buy advertising like they were buying a used car -- they dicker. That's backwards when you're dealing with someone working on a commission based on gross sales."
He advises clients to set the dollar amount up front, instead of whittling away at the salesperson's cut. Once the retailer has established the budget, then he or she should bargain for better air times and more commercial spots.
"If the radio salesperson wants to give you 20 spots, ask for 35," says Slutsky, who spent six months selling radio time when he got out of college. Negotiate for peak listening times, such as drive times, or for matching overnights -- late-night spots that are often sold at bargain prices.
Slutsky and Woodruff encourage retailers to supplement their regular advertising with low-cost promotional techniques, everything from publicity stunts and public-service promotions, to the distribution of discount coupons, gift certificates, and flyers.
Thinking like a streetfighter means being on your toes and taking advantage of every promotional opportunity. For example, when the movie Urban Cowboy created a stampede of mechanical riding bulls in nightclubs across the country, Brickley's Fire House, a Ft. Wayne club, decided to use the fad as a springboard for some low-cost publicity. Instead of paying $8,000 for a mechanical bull, they invested $50 in a coin-operated pony, which they unveiled on "Bourbon cowboy Night." A few days later, when another nightclub in Ft. Wayne installed a real mechanical bull, the local newspaper gave Brickley's double billing. Flanking the bull was an equal-sized photograph of Brickley's pony.
Another way to generate free publicity, used frequently by Pizza Hut franchises and local restaurants that RMI counts as clients, is through public-service advertising. By getting involved in a community fund raising effort, a local Pizza Hut not only helped build a "good guy" image, it also managed to get free advertising -- from its competitor.
The purpose of the promotion was to raise $800 for a new piece of equipment for the local fire department. The fast-food restaurant ran a promotion in which they gave 50 cents out of every dollar spent on pizza during the day to the fire department. Because it was a public-service campaign, Pizza Hut received free publicity in the local media while the fire department picked up the printing costs for flyers and posters that went up all over town -- including in the window of the fast-food restaurant down the block.
Another successful strategy increasingly used by retailers around Ft. Wayne is cross promotion, a simple but effective way to get one business promoted to another retailer or organization. For example, All Sports Fitness Center in Ft. Wayne arranged a cross promotion with Mike's Express Car Wash in order to attract new members. Mike handed out 10,000 All Sports half-price membership coupons, "Compliments of Mike's," and All Sports paid the $90 printing cost.
"Mike plugs my company at the same time that he's offering a benefit to his customers," explains Jay McClain, All Sports's general manager, who has used cross promotions since last November and estimates they have doubled his traffic and sales.McClain adds that with cross promotions, he narrows his target group of customers by attracting only those who can afford to spend $3 a week for a car wash.
A cross promotion can also protect the credibility of your regular prices. When the partially occupied Colonial Apartments complex in Ft. Wayne wanted to offer a discount -- one month free rent on a year's lease -- to attract tenants, they couldn't afford to give the discount to current occupants. Instead of offering one-month free rent certificates themselves and incurring the wrath of tenants, they passed on the responsibility for the 5,000 certificates to several local credit unions and colleges, which then made the offer only to their members.
There's nothing original about cross promotions, and Slutsky and Woodruff don't pretend to have reinvented the wheel. "We're just looking for small improvements on existing programs," they explain. "If something works, steal it."
These creative borrowers have not only won clients among local restaurants, clubs, and stores, they have also gained the attention of larger companies, including the Philco brand of N.A.P. Consumer Electronics Corp., based in Knoxville, Tenn.
One reason that Slutsky and Woodruff are so good at communicating the streetfighting attitude to local businesses may be that they, too, are streetfighters, constantly looking for new ways to promote themselves.
"Our big breakthrough," recalls Woodruff, "came when we began to take our own advice. Once of the rules of streetfighting is to get free distribution of your advertising message, and we weren't doing that."
A strategy was developed to license the rights of their Streetfighter newsletter to local "quick" printers. These printers receive camera-ready art, then reproduce and distribute the newsletters free-of-charge to customers. The printer gets an inexpensive handout for his or her customer, the customer gets ideas and information on retail marketing, and RMI gets low-cost and speedy distribution of its newsletter.
"It was like lights and bells going on," says Slutsky. "Like many marketing strategies, it was so deceptively simple, we overlooked it."