Wednesday, 18 October 2017
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The Jean Daum Story

Jean DaumA real life example of two companies'
approach to advertising

The Story of Two Hairdressers by Jean Daum
COFFEE NEWS World Head Office

I once had a community newspaper I called the “Suburban” and in one particular issue in 1983 I had two hairdressers—who happened to be right across the street from each other—advertise exactly the same perm special with the same quarter-page advertisement size. They also paid the same price for their advertisements.

The first hairdresser was Unisex Scissors who had been 10 years at the same location and had an advertising budget that allowed them to buy one quarter-page advertisement every three months or so.

The other hairdresser was a new franchise called Singleton’s—just two years in business before they opened up their new location in the suburb of Charleswood, right across the street from Unisex Scissors. They had been there for a month before advertising in my newspaper.

During Singleton’s two years in Winnipeg, they had advertised quite extensively on TV, radio and paid circulation newspapers, especially when they were first introducing themselves to Winnipeggers. By the time they opened their Charleswood location they already had at least eight locations compared to Unisex Scissors’ one location.

The results from both advertisements were real eye-openers for me. The graphics and context of both advertisements were equally good, so the only thing different was their previous advertising.

Unisex Scissors got 13 coupons back from their advertisement and they were thrilled with the results. The 13 perm sales not only paid for the advertisement but gave them more profit than usual since one or two people using the coupons were brand new customers.

Singleton’s got 413 coupons back and they were only mildly pleased with the results!

Of course, I published Singleton’s results in my newspaper as an example of the results you could receive by advertising in the paper. It was only years later I realised that Singleton’s did not get their 413 coupons returned from my paper alone. That advertisement just stood very, very high on the shoulders of EVERY OTHER Singleton’s advertisement read or seen by every one of my readers. Singleton’s had done an excellent job marketing their concept and now were reaping such huge rewards.

Every $100 spent on advertising returned a MINIMUM $5,000 profit to the Singleton’s corporation. Unisex Scissors—although very happy with the results—got $100 or so expense paid profit from their $100 investment, after being a neighbourhood hairdresser for TEN YEARS!

Was Singleton’s a better hairdresser than Unisex Scissors? NO! They just made people BELIEVE they were better. (In fact, I found out years later that the “Special Singleton’s Way of Cutting Hair” was the SAME training EVERY hairdresser gets. Singleton’s just made it “appear” as if it were only available to Singleton’s-trained hairdressers.)
What can we learn from this example?

Lesson One. Every new business has the potential to be a Unisex Scissors or a Singleton’s, or anywhere in between or beyond.

Lesson Two. It’s not who or what you are that determines success or failure. It’s how or what you “appear” to be in the eyes of people who are your potential customers.

Lesson Three. No advertisement works alone! All advertisements generate results compounded by all the previous advertising you’ve done. As with Unisex Scissors—even ten years of quarter-page advertisements every three months—only brought them to a level of $100 net profit per $100 spent. Too much time between advertisements robbed them of most of their “residual effects” while Singleton’s went from being unknown to $5,000 net profit per $100 spent advertising results in only TWO YEARS.

Lesson Four. Brand new businesses are starting from “square one”—no residual effects whatsoever—so yes, you are NOT going to get your investment back on your first few advertisements, especially if you allow your advertising to get too cold. This is why most small advertisers think that advertising doesn’t pay.

Lesson Five. Find your niche and make a pest of yourself! Don’t let your potential customers go even a week without saying “Hi – here I am!” in as many fun and creative ways as you can. You don’t win friends—or customers—by being a “serious, business only” person. And you don’t win friends or customers by coming on hot and heavy and then disappearing for three months—until you are hot and heavy again.

Lesson Six. When asked who are your potential customers, don’t answer “EVERYBODY”. That’s the easiest way to go out of business: trying to reach everybody with every kind of advertising that presents itself at your door. After all, how many friends would you keep if you wanted to have one hundred close friends? You would lose most because it is not possible to properly keep in touch with all one hundred on a weekly basis.

The same is true of customers—but on a larger scale. Be choosy and don’t waste money advertising to the “entire city” when your only truly potential customers live usually in a radius of “three kilometres toward and 1.5 kilometres away from your business centre” which is true for MOST stores and businesses with one location.

If there is more than one location, the same radius rules apply but, if the customer is expected to buy less than once per year, the radius must be increased. In this case, the purchase is termed a “special” purchase and the radius can be increased up to a maximum of about 45 kilometres. For example, a new car dealership can advertise high-end new cars at a “drive a little, save a lot price”.

Lesson Seven. Decide when you begin just how big you want to get and plan your advertising accordingly. Singleton’s started with one salon for about five to six months. Once they were happy with their concept’s effectiveness, they already had the potential locations, staff research, advertising and investment IN PLACE to make full use of their city-wide advertising.

They hit hard and often and didn’t let up until about three years into the business when all the salons had built up regular clientele, needing only occasional boosts to business. (Although additional salons could have been established, there is a saturation point and no salon can deal with 100 regular customers who could not get appointments at full price for all the people booking appointments on a “half price offer” from Head Office.)

Lesson Eight. Just as an update, Unisex Scissors went bankrupt in 1989. Singleton’s is still thriving although they still only have to advertise once a month or so. It used to surprise me that they hadn’t bothered spreading to other cities. I’ve since learned it’s all a question of how much of your free time you’re willing to give up in favour of much more money a couple of years from now.

Maybe it’s also important to set your limits in that way too. After all, you are working for YOU and YOUR quality of life—NOT your heirs.

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