Joel: Hello everybody and welcome to the show. So today we are talking, whether or not should all marketing efforts and dollars spent lead to direct sales. And with me I have Jim, and we also have a special guest, Jeff Stauffer. Jeff, how’re you doing?
Jeff: Hey, good morning Joel. Great man. Thanks for having me.
Joel: Yeah. No problem. So, Jeff is with StaufMan Marketing Group, and over the years, he’s worked with numerous brands in the B2B and consumer packaged goods industry. Jeff really focuses on branding. Correct?
Jeff: That is correct. That’s my sweet spot.
Joel: All right, cool. All right, so let’s just jump into this. So what do you guys think. Should every marketing dollar spent lead to direct sales or is there something to be said about the bigger picture of branding?
Jim: I think every dollar should lead to a sale and I certainly think it does.
Joel: Right. Okay. But-
Jeff: I don’t know. Your question Joel, has a lot of words in it. And as I break down your question, which is yes, “Should everything we do in marketing support sales lead to sales?” Sure. But, let’s face it. You went right for the marketing spend juggler right off the bat man. You sound like one of my former CFOs that’s asking me, “Hey is all this money you’re spending … Where’s the ROI on that with our sales?” So, but you said all marketing dollars lead to direct sales and in marketing, marketing covers a lot of different things. It’s everything from training to yes advertising.
Jeff: And I think in a lot of cases, when you talk about marketing dollars leading to direct sales, people think about advertising and promotion dollars more than anything else, but there’s a lot of other dollars that go into supporting what marketing does, and supporting sales and driving sales. Tracking and trying to really get the correct dollars track towards sales, can be a challenge. And it’s a conversation we’re always having.
Joel: … right. Well, I guess the way I’m looking at this is, whenever you’re spending … Let’s say that for every dollar you spend, you want to get a dollar 50 back or $2 or $3 back. Okay. But that’s not always the case. We know, for experiential marketing oftentimes, every dollar that you spend does not lead to profit the very minute that it’s spent, correct?
Jeff: Right Jim?
Jim: Right. Well, I think that’s generally the case. I mean, costs a lot of money to do an experiential tour. You’ve got to build it, you’ve got to man it, you got to get it out there. To say that you’re going to come back to a location and drive sales, I guess in some cases that could be if you were actually selling something, but if you’re out there to promote a new product or a new brand, it certainly is there, the intent is to build awareness for that brand and build some consumer acceptance for that brand.
Joel: Right. And we also know that whenever you’re interacting with consumers, you’re leaving a lasting impression that it’s creating a relationship value.
Jim: Absolutely. I mean, you’ve got to connect with the consumer at some point. And we know as brand marketers, there’s a lot of competition in these categories. I used to always say there’s more than one bag of potato chips in the aisle, and you have to fight first and foremost for your brand attention, and then people are going to try it and decide whether they like your product or not. That’s all down the road from brand marketing.
Joel: Right. Okay. All right. So Jeff share some of the other things that you hit on, that marketing dollars are spent on that maybe not always lead to direct sales but are very important.
Jeff: Well, and I think … A little history here Jim and I used to work together back in the MOOG Automotive days and MOOG Automotive is a company that’s a leading brand in the steering and suspension business for the automotive aftermarket parts. And one of the things that we did with the MOOG brand is, we did a lot of training, a ton of training. And training is a marketing spend. It’s getting, not only training your people first, but then training the ultimate end user of your product. In this case it happened to be in most cases a professional technician at a repair shop. You’re trying to get them comfortable with understanding your product features and benefits.
Jeff: But then also how to diagnose, as well as how to install your products to solve a customer need. And we spent a lot of money on training clinics. We spent a lot of money on training online programs. We spent a lot of money on providing our sales guys with what we call these cutaway kits, where they would actually walk around with our products cutaways. So internally you can see some of the features and benefits that our products had that our competitors didn’t have-
Jim: Jeff I want to jump in your here for a second, while you’re talking about that. And didn’t we always fight this issue of, we’re not just training our customers, we’re training the industry. How do you justify that when you’re doing your training emphasis?
Jeff: … well, there’s no doubt that your end users in this case are repair shop, professional technician, they have a lot of choices. And when you’re helping them figure out how to replace a ball joint on a Chevy Impala, you’re helping them do a better job, and they may or may not at the end of the day buy your product from whatever supplier they’re buying parts from. So, it is important to make sure that our professional technicians are doing the job right regardless. If they’re not doing the job right, then consumers are not going to be happy. And we already have as you guys know, a lot of bad press in our industry, about what repair shops are doing or not doing.
Jeff: And so the more we can make sure that our customers are doing the right job right the first time, so there’s no comebacks, that’s good for everybody isn’t it?
Jim: Yeah. You would think so. So and Joel’s question, does the cost of marketing such as … What we’re focused on here for a second was training, does that come back to justify the direct sale to the direct sales of the brand?
Joel: I would say no.
Jeff: Yes, it does.
Jim: Even though you might be training the industry?
Jeff: Correct. I do believe that if you have a product that is important to understand, the correct way to diagnose an issue that will lead to this product sale and your brand, is connected to their learning and their education. At some point in time, it’s going to pay off. Okay? But tracking an exact, “Okay, we spend $1 million on training and that led to a certain number of sales of dollars.” Well, that’s hard to track. Okay. That’s where the intangible or indirect comes into play. But it’s obviously having an impact on sales, isn’t it?
Jim: Right. Well, you could say that about a lot of things. I mean, whether it’d be training, or advertising, or experiential marketing, a lot of it is hard to track right back to the bottom line sales. But you got to ask yourself, where would you be without that? Could you be effective marketers? Could you be effectively working in this category of business without some form of marketing and brand support?
Jeff: Well listen, it’s important to have disciplines in place where you can track your spend and see more of a direct ROI on that spend to sales. We all want to do that. That’s incumbent. And Jim, you can speak to this better than I can. I mean, one of the great things about marketing spend in the digital space is, there are lots of great ways to track your spend through different kinds of data elements that ultimately do lead to being able to better support that question and an answer, right?
Jim: Absolutely. Well, I mean, the Internet’s a great product for that. You follow people, get people to follow you to a website and turn them into customers, and if you sell products from there, I mean, it’s a great way to track that sales progress. But I always like to say, without marketing, they don’t find your website. They don’t know who you are. That’s the horse before the cart sort of thing. You’ve got to have something that’s going to pull that cart along. And that usually comes as a form of marketing.
Joel: Mm-hmm (affirmative) yeah. And something that we’ve come across in the last year or two is, marketing dollars also are spent on employee recruitment. Having good employees, whether if you’re in manufacturing or at the consumer level, it has an effect on your profits and bringing in revenue. Would you guys agree with that?
Jim: I mean without good people, without the best people who have very little chance of getting to those plateaus that you want, that those next levels that you’re trying to reach.
Joel: All right, so we know training, we know employee recruitment, we also know customer service. That’s also a big thing. It’s not just getting the product in people’s hands. It’s also dealing with the aftermath of what happens after the product’s in their hands.
Jim: Well, there’s no question about customer service and stuff. You can expand on this. But without good customer service, people will put up with a lot of things. They’ll pay more for a product, they’ll wait longer for the product, but they won’t come back unless the customer services is supportive.
Jeff: Yes. And we of course hear this in the customer experience, and trying to make sure that every customer has a great experience with your product and or service. And part of that is, when they do have a question, or when they do have a problem, are you taking care of their situation? And are you taking care of it quickly and to their satisfaction? And there is no question that when we look at marketing and how the various programs, we put a lot out there that at the end of the day, either our customers, our salespeople or the internal folks, they all need to be integrated into what’s going on.
Jeff: So it’s important for communications that go across a lot of different bandwidths that everybody’s aware of. What we’re doing in the brand marketing, brand advertising, brand promotion world, so that everybody’s on the same page. That can be a real frustration point for our customers.
Jim: You hear the word branding so much now. I mean, when we started out, we never really used that word did we? I don’t recall talking about our brand and our brand awareness and all that kind of stuff. We had a name for our product and you went to market with it, but now everything is focused on the brand capacity and the brand awareness. If I’m a small company that makes a product, do I have a brand? Is my product brandable?
Joel: I think the term branding encompasses the whole relationship between the product and consumer. Brand and relationship are almost a synonym now.
Jim: We work with many companies in the automotive aftermarket, and all of these companies, they have a company name and some of them make pretty … I would not say insignificant, but not … I don’t know if they’re not making tires, I don’t know if they not making brakes. Some of them are just making small widgets that go into many other components. Do these companies have brand potential?
Jeff: Well, of course they do. And the reason it is, is in many cases today, you also have a lot of retailers and go-to market entities that have their own brands. They don’t manufacture the products. So they’re buying and putting someone’s product in their branded box. And that’s a good business. Listen, I was in the Antifreeze business at Old World Industries, and we certainly had one of the best national brands in the business, peak. And we competed head to head with Preston. But we also had a thriving business in the private label sector, and we took our Antifreeze formulations and products, and worked with companies that had their own brands, and wanted to go to market with their own brands, and work with them to support their brand with our product, to the degree you do.
Jeff: So, I do think that a small company that may not be out on the national top of mind basis for things, they still have a brand because, if they don’t have their brand at least supported so that a customer can recognize their brand up against the competitive brands that are available, they’re going to be taken a back seat.
Jim: No question. I have a relation to a company that made a product in the electrical industry, and this thing was buried so far down in that electrical industry, that the common person wouldn’t know what that is. But we were able to take their company name, turn it into a brand, actually got them to put that name on their products, and that company’s business exploded. Because so many people out there use their product in their industry, and didn’t know that it had a name. To them, they just called it what it was. It was a transformer product for the electrical industry. And when they put a name to it, they became like the Kleenex or the Jello-
Joel: The Levis.
Jim: … the Levis, yeah, of that product. And no one else was doing that. Well now, several years later, all of the companies out of China and India and everybody else around the globe that’s making the same product, they’re all branding their product. And it’s like, “What did we do here?” Well, we created a category for something that never had one. And again, not Nike, not BMW, not Sony, but still use some of the same procedures and protocols that these companies have done to build the brands, which is what an [inaudible 00:16:56] stuff.
Jim: So, that’s something that we all try to relate to our clients, that your brand has brand potential, your brand has marketing power. You just have to unleash it and put some resources behind it. Mainly money.
Joel: Right. Yeah.
Jeff: Part of the thing that’s important is, regardless of the name that’s on your product, whether it is your company name or a brand, I mean let’s face it, a good example is AutoZone. AutoZone doesn’t sell AutoZone spark plugs, but they do sell Duralast spark plugs. So they’ve build a brand, their house brand if you will is Duralast and they’ve spent a ton of money on that brand. But AutoZone is where you go to buy Duralast products. So it doesn’t really matter what name is on your product, you better build some brand differentiation, whatever that is, over whoever is in your competitive landscape, and you better understand what your competitors are doing, saying, what features and benefits they’re talking about.
Jeff: And you better understand your end users as to what they’re looking for, and what it is that your brand can deliver, whether it’s features, benefits, performance, durability, whatever it is that they’re looking for, you better know that. And that’s what you can build into your brand proposition. We talk about the brand value proposition. Well, we don’t just talk about it. You better have a value proposition. What is your brand stand for? What does it deliver? And what is important about your brand to the end user that sets you apart from your competitors?
Joel: Yeah. All right. All right guys, any final thoughts here?
Jim: … well, I think, and sort of closing from my perspective, branding is imperative to everyone that’s in a marketing or marketable position. Whether you make products for someone else, or you’ve got a store or some kind of a retail location, or a business, a service business. Today’s consumer is very brand approachable. You got to have a name for your stuff. You got to have an awareness built of it, and you got to put it in a place where people can find it. And that usually starts with some form of advertising. Whether it’s taking advantage of all the free things that are out there, or you put some money behind it to get ahead of your competition.
Jim: But I think everyone in today’s society is very brand conscious and will continue to be.
Joel: Yeah. Jeff, you have any final thoughts?
Jeff: Honestly I did what Jim said. At the end of the day you have a brand, and what kind of personality you put around it, and how you add some excitement and some sizzle. Branding should be fun and-
Jeff: … we always enjoy putting the right spin and making sure that at the end of the day, your brand needs to win, and whatever it needs to win the consumers top of mind if you can get there. And you need to understand how to get there. And brand marketing is to me, should be top and foremost in what a marketer is doing these days, is looking at that.
Joel: Okay. So and just to summarize here, are we saying that in the world of brand marketing, not every dollar spent is always going to lead to direct sales because you’re trying to build a brand which is really building a relationship and a space in a consumer’s mind.
Jim: If you do your job well, not initially it won’t.
Jim: But eventually it should.
Jim: Think about a company like Harley Davidson. When they put that logo on something, they expect it to sell.
Joel: And it usually does.
Jim: They don’t care whether it’s a T-shirt or a motorcycle. That is intended to sell.
Jim: But they built a brand that people admire. It’s built on trust and a quality and a value that people want. And if that’s the case, it should happen. But you can’t get there from zero. You’ve got to build into it.
Jim: It’s like a bank account. You got to build it up.
Jeff: And that’s why you’ll see Jim and I have put together a lot of brand campaigns that involve launching a new brand or launching a new product within a brand. And your launch budgets are going to be a higher number at the beginning to build the connection, the awareness and interest, and then it levels out at some point in time. And it’s all different. If you’re in a B2C business, it could be a completely different thing than a B2B type of deal. And it just depends. And we’re all in a position to evaluate what it’s going to take, based on what category or customer you’re trying to reach with a new product. But-
Jeff: … it is different if you’re talking about a new brand versus a mature brand. Right?
Jim: Absolutely. You got to be able to put your arms around your audience and connect them to your product. Okay.
Jeff: I’m done.
Joel: All right. All right guys. Well, thank you for joining me.
Jim: Thanks, Joel.
Jeff: Thanks Joel. Appreciate it. Thanks for having me, man.
Joel: Yeah, no problem. And we’ll talk again soon.
Jim: All right.
Jeff: All right.
Joel: Again, a big thank you to Jeff Stauffer for joining us this week, and up next is another installment of commercial recall, and then can’t let it go.