Understand healthy competition and why it can help your business get ahead.
Competition next to each other increases the response rate for each of them substantially.
When I started publishing an industry magazine many years ago, I called vendors and invited them to place ads in it, and many of them did. However, one major vendor surprised me by saying that he would only place an ad in the magazine if I could convince other businesses like his to be in it as well. This really shocked me because I had just assumed he would be incredibly pleased to be the only one of his kind in the magazine with no competition present, because it would give him a significant advantage in cornering the market. But I was wrong in believing he would think this way. He had an exceptionally good reason that I did not understand at the time.
The Competitor Response Rate Secret
The vendor understood a huge marketing principle: Competition next to each other increases the response rate for each of them substantially. Although this concept may seem illogical, even crazy, many studies have confirmed its accuracy, such as the soda machine experiment described below.
One Soda Machine, Now Two
A Coke machine, situated in a prime location with high foot traffic, sold approximately 100 sodas daily. After a while, they placed a Pepsi machine right next to it. Now, you would logically assume that the two competing brands placed next to each other would split the 100 sales daily, selling 50 sodas each, because they are competing for the same customers. But surprisingly, that was not the case. Each machine’s sales skyrocketed, selling approximately 200 sodas each in the same amount of time. This was a huge increase and very unexpected.
Why Was the Increase So Dramatic?
It is because having two machines there changed the question that passersby had in their heads from, “Do you want a Coke?” to “Which one do you want, a Coke or a Pepsi?” Many responded with a purchase thanks to the different question psychologically formed in their minds. This powerful marketing concept is why you see so many fast-food restaurants together rather than choosing to be far apart from each other. McDonald’s, Burger King, Taco Bell, and many others build next to each other on purpose because they all do better together. And many other like-kind businesses, like car dealerships, clothing stores, and hotels are deliberately near each other. This is also why trade shows do so well, with so many competitors selling similar products there.
How to Stand Out in a Competitive Crowd
So, now that you know that competitors near each other generate an exponentially larger response than being alone, how do you stand out in that crowd to make actual sales? Let me explain.
During my first days in the advertising industry, I took part in many marketing conferences and seminars to hone my skills in direct response marketing. I learned the most useful stuff from marketing guru Dan Kennedy, author of No B.S. Marketing, and many other how-to books on the subject. His marketing methods have made millions for many top Fortune 500 companies. At one of his seminars, someone asked him, “How do you stand out from a crowd of competitors when they are all advertising on the same pages next to each other, such as in a newspaper or magazine, and when they are all going for the same customers, especially when they are among your most steadfast rivals?” Kennedy said he followed seven basic rules that forced people to notice his ads first every time, over all the others, especially when among competitors. Here they are:
Seven Rules to Make You Stand Out from Competitors
1.Place a powerful headline at top. The biggest mistake most advertisers make is placing their company’s name or logo at the top of their ad. This is what most of your competitors do. They do not generate sales. Fixing this will, at once, make your ads more powerful than theirs. Place your name and logo at the bottom of your ad and make them small; if your ad is powerful enough, people will squint to find them. Use the space at the top of your ad for a powerful response-pulling headline that answers your customer’s most important self-centered question, “What’s in it for me?” For recycler ads, one headline I have used is, “Save 40 to 60 percent off the price of buying new with our top-quality OEM recycled parts!”
2. Show attractive photos of your beautiful products to catch their eye. I always showed great photos of engines, trannies, doors, and wheels, which are the parts many are looking for.
3. Include an irresistible offer, one that is impossible to refuse. Such as, “Mention this ad and receive an extra 10% off your order and get free delivery to your door!”
4. Provide valuable money-saving coupons with a dashed line around them and a scissors icon. Include an expiration date to create a sense of urgency. Coupons have the same value as money in their hands, making your ad a keeper. This is particularly helpful in direct mail flyers, where most people sort their mail over the trash.
5. Include an ironclad guarantee. This will take care of the fear of buying. This is especially true with used auto parts. Something like, “100% satisfaction, or your money back.” By the way, if you can’t say this about your parts and service, go find something else to sell.
6. Have a strong call to action. Tell them what to do, how to place an order, and to do it now.
7. Ad placement is very important. Remember that people read from left to right and from top to bottom. And as they read, their eyes go from top left and wander down the page at a steady slant and end up looking at the lower right corner. Therefore, when you order an ad, ask for the top left corner or bottom right corner of a single page. No one sees the top right or lower left corners on the page. And if your ad is in a magazine, request it be on the right-hand page. When people turn magazine pages, they always look at the right-hand page first.
Do not be afraid of your competitors but involve them enthusiastically. It has excellent potential to help you get further ahead, especially if you make your ads stand out among from them.
Mike French is retired after 39 years of business in the automotive recycling industry. He is an author, publisher, consultant, and speaker. Mike is the founder and executive director of the Christian Auto Recyclers and Vendors Association (CARVA) and will be at upcoming recycler trade shows and events. Mike is available to speak at your group, conference, or event. He loves to share inspirational stories that demonstrate how the Word of God actively changes lives. He can be reached at mike@carva.group. Visit www.CARVA.group and/or www.PowerPackedPromises.com.
