Marketing Without Advertising

Marketing

Without

Advertising

by Michael Phillips & Salli Rasberry

edited by Peri Pakroo

3rd edition

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Marketing

Without

Advertising

by Michael Phillips & Salli Rasberry

edited by Peri Pakroo

3rd edition

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This book was last revised in: April 2001.

THIRD Edition APRIL 2001

Editor PERI PAKROO

Cover Design TONI IHARA

Book Design TERRI HEARSH

Production SARAH HINMAN

Proofreading SHERYL ROSE

Index NANCY MULVANY

Printing BERTELSMANN SERVICES, INC.

Phillips, Michael, 1938-

Marketing without advertising / by Michael Phillips & Salli Rasberry.--3rd ed.

p. cm.

Includes index.

ISBN 0-87337-608-0

1. Marketing. 2. Small business--Management. I. Rasberry, Salli. II. Title.

HF5415 .P484 2000

658.8--dc21

00-056863

Copyright © 1986, 1997 and 2001 by Michael Phillips and Salli Rasberry.

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Acknowledgments

With special thanks to Soni Richardson and Michael Eschenbach,

Daniel Phillips, Tom Hargadon and Mary Reid.

Full Disclosure Note

All the businesses and business owners mentioned in the book are real. The great

majority operate under their own names in the cities indicated. However, because

some of our examples are less than flattering, and for other reasons, including pri￾vacy, we have changed the names and/or locations of businesses in a few cases.

In some cases, the businesses used as examples in the book do advertise—their

marketing ideas are so good we included them anyway. In most cases, if a business

used as an example does advertise, it is a small part of their marketing mix.

Table of Contents

1 Advertising: The Last Choice in Marketing

A. The Myth of Advertising’s Effectiveness ............................................... 1/3

B. Why Customers Lured by Ads Are Often Not Loyal ............................. 1/8

C. Why Dependence on Advertising Is Harmful ...................................... 1/8

D. Advertisers: Poor Company to Keep .................................................... 1/9

E. Honest Ads ....................................................................................... 1/12

F. Branding ........................................................................................... 1/14

G. Listings: “Advertising” That Works ..................................................... 1/15

2 Personal Recommendations:

The First Choice in Marketing

A. Cost-Effectiveness ............................................................................... 2/2

B. Overcoming Established Buying Habits .............................................. 2/4

C. Basing Your Marketing Plan on Personal Recommendations ............... 2/5

D. When Not to Rely on Word of Mouth for Marketing ........................... 2/7

3 The Physical Appearance of Your Business

A. Conforming to Industry Norms............................................................ 3/2

B. Fantasy: A Growing Part of Retail Marketing ....................................... 3/5

C. Evaluating Your Business’s Physical Appearance................................ 3/11

4 Pricing

A. Straightforward and Easy-to-Understand Prices ................................... 4/2

B. Complete Prices .................................................................................. 4/3

C. Giving Customers Reasonable Control Over the Price ........................ 4/6

D. Internet Pricing ................................................................................... 4/9

5 The Treatment of People Around You

A. Tracking Reputations via the Grapevine .............................................. 5/2

B. How Employees Spread the Word ....................................................... 5/3

C. Common Employee Complaints .......................................................... 5/7

D. Handling Employee Complaints .......................................................... 5/9

E. Finding Out What Employees Are Thinking ....................................... 5/11

F. Suppliers ........................................................................................... 5/13

G. Business Friends and Acquaintances ................................................. 5/17

H. Individuals Who Spread Negative Word of Mouth

About Your Business .......................................................................... 5/19

I. Your Behavior in Public .................................................................... 5/20

6 Openness: The Basis of Trust

A. Financial Openness ............................................................................ 6/3

B. Physical Openness .............................................................................. 6/5

C. Openness in Management .................................................................. 6/6

D. Openness With Information ................................................................ 6/8

E. Openness With Ideas ........................................................................ 6/11

7 Deciding How to Educate Potential Customers

A. What Does Your Business Do? ............................................................ 7/2

B. Defining the Domains in Which Your Business Operates .................... 7/7

C. Providing Information on Businesses in Established Fields ................ 7/10

D. Businesses in New or Obscure Fields................................................ 7/13

E. Whom to Educate ............................................................................. 7/15

8 How to Let Customers Know Your Business Is Excellent

A. Tell Them Yourself ............................................................................... 8/3

B. Help Customers Judge for Themselves ................................................ 8/7

C. Giving Customers Authority for Your Claims ..................................... 8/16

9 Helping Customers Find You

A. Finding Your Business.......................................................................... 9/3

B. Convenience of Access ....................................................................... 9/5

C. Signs ................................................................................................... 9/7

D. Telephone Accessibility....................................................................... 9/8

E. Listing Your Services Creatively and Widely ...................................... 9/13

F. Getting Referrals From People in Related Fields ................................ 9/15

G. Trade Shows and Conferences .......................................................... 9/17

10 Customer Recourse

A. Elements of a Good Recourse Policy ................................................. 10/4

B. Designing a Good Recourse Policy ................................................... 10/5

C. Telling Customers About Your Recourse Policy.................................. 10/8

D. Putting Your Recourse Policy in Writing ............................................ 10/9

11 Marketing on the Internet

A. The Importance of Passive Internet Marketing ................................... 11/3

B. Yellow Pages Plus .............................................................................. 11/5

C. What to Put on Your Site ................................................................... 11/7

D. Designing an Internet Site ............................................................... 11/11

E. Interactivity and Customer Screening .............................................. 11/14

F. How to Help People Find You Online ............................................. 11/16

G. Active Internet Marketing ................................................................ 11/19

12 Designing and Implementing Your Marketing Plan

A. Your Marketing List: The “Who” of Your Marketing Plan ................... 12/2

B. How to Evaluate Your List.................................................................. 12/3

C. Marketing Actions and Events: The “What” of Your Marketing Plan... 12/5

D. Direct Marketing Actions .................................................................. 12/7

E. Parallel Marketing Actions............................................................... 12/15

F. Peer-Based Marketing Actions ......................................................... 12/21

13The Last Step: Creating a Calendar of Events

A. Marketing Calendar for an Interior Design Firm ................................ 13/2

B. Marketing Calendar for Jerry and Jess’s New Chiropractic Clinic ...... 13/4

Appendix

Index

T ake a look around your

community and make a

list of truly superior small

businesses—ones you trust so thoroughly

you would recommend them to your

friends, your boss and even your in-laws.

Whether your mind turns to restaurants,

plumbers, plant nurseries or veterinarians,

chances are good your list is fairly short.

Now think about all the ads for local

businesses that fill your newspaper, clutter

your doorstep, spew out of your radio,

cover the back of your grocery receipts or

reach you in dozens of other ways. How

many of these businesses are on your list?

More than likely, not many. In fact, I’ll bet

the most heavily advertised local busi￾nesses are among the businesses you

never plan to patronize—or patronize

again—no matter how many 50%-off spe￾cials you are offered.

If, like me, you have learned the hard

way that many businesses that loudly

trumpet their virtues are barely average,

how do you find a top-quality business

when you need something? Almost surely,

whether you need a roof for your house,

an accountant for your business, a math

tutor for your child or a restaurant for a

Saturday night out, you ask for a recom￾mendation from someone you consider

knowledgeable and trustworthy.

Once you grasp the simple fact that

what counts is not what a business says

about itself, but rather what others say

about it, you should quickly understand

and embrace the message of this brilliant

book. Simply put: The best way to suc￾ceed in business is to run such a wonder￾ful operation that your loyal and satisfied

customers will brag about your goods and

services far and wide. Instead of spending

a small fortune on advertising, it’s far bet￾ter to spend the same money improving

your business and caring for customers.

It’s the honest power of this honest mes￾sage that made me excited to publish Mar￾keting Without Advertising ten years ago.

Uniquely among small business writers,

Phillips and Rasberry were saying the

same things I had learned as a co-founder

of Nolo—that the key to operating a prof￾Introduction

By the Publisher

I/2 MARKETING WITHOUT ADVERTISING

itable business is to respect what you do

and how you do it. This means not only

producing top-quality services and prod￾ucts, but demonstrating your respect for

your co-workers and customers.

After many years of success, it’s a

double pleasure for Nolo to publish an￾other new edition of Marketing Without

Advertising. Yes, lots of things about small

business marketing have changed in the

interim. To mention just a few, today

many of us routinely use fax machines and

e-mail to keep close to our customers, and

some of us have learned to use the

Internet as an essential marketing tool. But

some things haven’t changed. A trustwor￾thy, well-run business is a pleasure to mar￾ket, and the personal recommendations of

satisfied customers are still the best foun￾dation of a successful and personally re￾warding business.

Marketing Without Advertising has been

updated to provide a new generation of

entrepreneurs with the essential philo￾sophical underpinnings for the develop￾ment of a successful, low-cost marketing

plan not based on advertising. But this

isn’t just a book about business philoso￾phy. It is full of specific suggestions about

how to put together a highly effective mar￾keting plan, including guidance concern￾ing business appearance, pricing,

employee and supplier relations, accessi￾bility, open business practices, customer

recourse and many other topics.

Consumers are increasingly savvy, and in￾formation about a business’s quality or lack

thereof circulates faster than ever before.

The only approach worth taking is to put

your planning, hard work and money into

creating a wonderful business, and to let

your customers do your advertising for you.

Ralph Warner

Berkeley, California

Chapter 1

Advertising: The Last Choice in Marketing

A. The Myth of Advertising’s Effectiveness ........................................................ 1/3

B. Why Customers Lured by Ads Are Often Not Loyal ...................................... 1/8

C. Why Dependence on Advertising Is Harmful ................................................ 1/8

D. Advertisers: Poor Company to Keep.............................................................. 1/9

E. Honest Ads .................................................................................................. 1/12

F. Branding...................................................................................................... 1/14

G. Listings: “Advertising” That Works .............................................................. 1/15