This is a great time of year, wouldn’t you agree? Holidays spent with family and friends as we wrap up another year. As we finish up 2011 and get ready to head into 2012, let’s take a look back and reflect on what went well over the past year and what we could have done better.
Have you looked at the things that could have gone better in your personal and business life? Are there some things with which you are frustrated? If not, then that’s great. If so, then maybe that’s good too. Frustration can be seen as an opportunity. It means that you’re not satisfied with the status quo. You have a desire to grow.
If you don’t mind me sharing for a moment, there is one thing that has really been causing me some frustration lately – direct mail advertising results. I wish it were easier to make direct mail advertising work for every one of our clients. I wish it were easier to figure out which direct mail pieces work best for each client. It seems like a simple task right? But in reality it isn’t. Here’s why.
That which works for one hearing aid store might not work at all for another. Since many hearing aid stores are basically providing the same kinds of products and services, you’d think that hearing aid marketing would basically work about the same for everyone. But it just plain doesn’t. I believe that there are several reasons for this. But I’m convinced that the main variable is the level of persuasive skills present in each individual hearing aid store.
Throughout the world, there are hearing consultants that have various degrees of sales skills. Some promotions work for consultants who have great sales skills while they don’t work at all for those that have below average sales skills. For example, unless you have great sales skills, it may be difficult to convert appointments to sales when those appointments are generated from free hearing test appointments or other less aggressive pieces. So, what do you do about it?
In stores staffed by consultants that have great sales skills, I would do the more aggressive promos. The objective would be to generate as many appointments as possible. Here’s my thinking. If you’re mailing to consumers who are over 60 years old, the research tells us that at least 1 out of 3 have a hearing loss. So, the worst-case scenario is that 1 out of 3 hearings tests result in 1 sellable hearing loss. Chances are that it will be more like 3 out of 4. Most consumers who receive the promo don’t want to waste an hour of their time in exchange for the freebie unless they’re experiencing some difficulty with their hearing. With these consumers, the freebie becomes the rationalization or excuse for coming in for the hearing test.
OK, so if a direct mail piece generates 4 appointments per 1000 and 3 result in a hearing loss that can be helped with hearing aids, the challenge is persuading the 1 out of 3 to purchase hearing aids. If the direct mail costs $400/m, the ASP on the hearing aids is $2200, and your binaural rate is 1.8, the cost of advertising would be 10%. Not bad right?
Now lets go to the other extreme. Let’s look at a store staffed with a consultant possessing less than average sales skills. By the way, this same consultant might be great at the technical aspects of fitting hearing aids as well as customer service in general. But the problem is that with the same scenario as described above, this consultant may only close 1 out of 10 appointments instead of 1 out 4. All other variables being the same, the advertising cost would be 22.5%.
Instead of investing in the more aggressive promotions for this store, I would do more mailings to my database. I would mail to Users 4 times a year. I would mail to Prospects 4 times a year. For direct mail to a rental list, I would choose the less aggressive promotions that tend to generate a good amount of traffic.
Any advertising piece that focuses on product and/or price may only bring in 1 or 2 appointments per 1000. But those appointments are more likely to be with consumers who have a hearing loss and are in the process of doing something about it. The challenge your consultants face with these consumers is persuading them that choosing your particular store and products is the right answer. They don’t need to be convinced that hearing aids are the answer. They’ve already crossed that threshold.
The important thing is that even though you get as low as 1 appointment per 1000, if it only takes 2 appointments to make a sale and your binaural rate is 1.8, your advertising cost will be 20%. If you’re doing mailings to Users and Prospects on a regular basis, your average overall cost of advertising will be much lower than that due to the fact that the database mailings usually carry an advertising cost of 2% to 6%.
OK, so lets talk about another factor. The first step to getting appointments on the books is to effectively answer the phone when the consumer finally takes the huge emotional leap and makes the call to your store. The result you’re looking for is an appointment booked and the consumer showing up with their spouse or other loved one, ready for a hearing test. Here are a few things that can get in the way of producing that outcome:
1. The store’s phone line is busy.
2. Store is closed (Saturday, Sunday, after hours); so they get an answering machine.
3. Call gets answered but the consumer gets put on hold.
4. Call gets answered, the consumer starts talking about the direct mail promo they just received; but the Office Assistant is not aware of the promo.
5. The consumer has questions about the hearing test, VO Exam or general questions about hearing aids. The OA does a poor job of answering the questions in such a manner that the consumer schedules an appointment to find out more.
6. An appointment is booked more than 3 days out. The consumer subsequently cancels or does not show up.
7. The consumer would like to schedule an appointment when it’s convenient for them or their caretaker, but the consultant’s schedule is full on that date. The consumer chooses not to book an appointment.
These are variables that can be either improved upon or compensated for when choosing which direct mail pieces to use. Compensating for them is a short-term solution. Hiring, training and managing your people in such a way as to produce the result you’re looking for is the long-term solution.
As you reflect back upon this year and the kind of year your store had, it might become clear to you that your store has unique strengths, and perhaps some areas that could be improved upon as well. Consider letting us get to know you and your store and make next year your best year yet.