why your advertising fails! (branding VS direct response marketing)

Hey, everyone, it's Mike Andes. And today I'm talking about how the stock market is actually a lot like running your small business when it comes to marketing and advertising.

Now, before we start talking about advertising and marketing, I would just say, in general, running a small business is like the stock market. People have said that the stock market is simply charting out the emotions of humanity. Ups and downs, ins and outs and up 50%, then down 30% up and then down. I truly believe that running a small business is the same way. One day is good, the next day is horrible. Then that one week you're on top of the world. You got great employees, everything's going great. The next week, employees leave, customers are mad at you, leaving bad online reviews. It's like up and down and all over the place. And the way that you beat the market in the stock market, when you talk about beating the s and P500 or being the average index is you need to buy the dip. You need to invest money. And in your business, it's time, energy, and just effort when you're actually at the lowest point. So if you want to beat the market in stocks, what do you do? You buy when things go down, when there's a bear market, when there's a crash. If you put money in, the most outsized returns are going to happen. If you can invest at the lowest points in the stock market, in your small business, if you're wanting to have a very profitable and have outsized returns when it comes to your industry and your competition, you need to emotionally invest. When things are the worst and when things are so you're overloaded and employees are leaving and you just feel alone and deserted and a partner's gone and there's misunderstandings happening, all this is happening. The person that can invest in more emotionally shove all of that energy in when they're at their lowest point in the small business, they're the ones that will have the greatest outsized returns in their small business. Let's step back, though, and talk about marketing and advertising, because I feel like the same thing is true when it comes to the stock market versus your small business. Because in the stock market, we traditionally think of two different kind of general sectors of stock picking. One is gonna be growth stocks that go really fast and they can literally double over the course of a year or two. Then you have more traditional stocks been around for a long time maybe. And these are gonna be dividend stocks. These stocks pay a dividend, which means if you just own one share of them, you're gonna get a piece, a couple percent usually return in the form of money back to you as just for being a shareholder. It's like, hey, you get a dividend, you get a piece of the cash, you get a piece of the pie. Every single quarter or every single month or every single year, we're gonna give you a dividend just for being a shareholder. Now I look at marketing as the same way. Now when, when we look at branding and we look at marketing and we look at advertising, all these different words, there's really two things you gotta know. Branding and then direct response marketing. Now how I look at this is just like the stock market. Branding is like those dividend stocks that are tried and true and tested and they're usually kind of boring. Been around for a long time, take a long time to see the real value of the appreciation of that stock price go up. It takes a long time. Usually these are not gonna, these stocks that are dividend stocks are not gonna triple in the next three weeks. They're not going to double. Like, they don't move very fast, but they also don't, they don't go down 95% if it's a really good, tried and true dividend stock that's giving a dividend to the investors. The same thing is true about branding. Branding is the holy grail when it comes to advertising. Because branding means that I have ownership of a space and a category in the mind of the customer. Which means when they think of a certain industry, they think of my product. When I think of a cell phone, I think of Apple, I think of an iPhone. What does it mean? They've done branding over the course of years, long, long time, They've built up a brand that I now associate their product with a certain industry, with a certain category. Now what they do not do at Apple is do advertisements like door hangers or flyers. They don't try to do click funnels or lead pages to try to get me to a funnel to buy their phone. They just know that if they could own the mind space of cell phone in my brain, I will buy an iPhone the next time I need a cell phone and next time mine breaks, I'm just gonna go buy it. That's branding. Now direct response marketing is what most of us as small business owners spend our money and time on. And that's not a bad thing. Let me be very clear and I'll explain in just a moment. But the reason we spend money on direct response marketing is because we need the sale. We need to actually Get a customer. We can't just, oh yeah, in five or ten years, if I keep spending money on advertising, hopefully one day I'll own the category in the mind of the customer. I'll have a brand and people will know who I am and then they'll buy from me. Most of us don't have the money to do that. We don't have the time or money or, or energy to spend years in our business losing money. And then one day a customer buys from us. Cause they see us all over the town or they saw one of their friends told them about us. We can't wait years. We need direct response. And that's why traditionally most of our advertising and marketing budget when it comes to small business is not spent on branding. Things that really don't drive sales. We usually spend our money on direct response marketing, which is like call now, buy now, click here, learn more. And there's a buy button, there's an estimate request form. We try to get them to take some sort of action. Direct response response marketing. And when I look at those direct response marketing tactics, a lot of it's kind of like honestly, growth stocks in the stock market, which go up really fast, you can get a lot of sales. You can run a really good ad campaign on Facebook and target people and get a really good click funnel going, or you can get a really good door hanger campaign, or every door direct mail campaign just takes off. That's all direct response marketing. And that's why you get an injection of leads the day after in every door direct mail campaign. That's why you get an injection of leads. If you turn on a Facebook ad campaign and start running it and you have a high budget, you're gonna immediately get leads. That's direct response marketing. That is not branding. Now I don't want anyone to think that you have to have just branding. Oh, Apple and Google, like when you see their ads, they're not like, call now to get your next iPhone. It's just like literally it's like people out in nature on their iPhone. It's grandmas talking to their grandchildren smiling. It's people at weddings using their iPhone. It's all branding. It's not like, click here, buy now. Only 9.99, 64 gigabytes. It's not advertising any of that because about branding. But, but for small businesses, we cannot afford that. You should not be trying to do that in the short term. And for most of us, we can't hold our breath for five or 10 years to create the Brand awareness to spend money today on branding. So what should you be doing? Well, it's like any great portfolio that's well diversified, you gotta really ask yourself, what is my risk tolerance? And you've gotta determine, okay, do I want growth stocks, do I want dividend stocks? But usually the answer to that question is you have a blend of both of them. And that's just truly how I look at small business marketing. And that is I'm going to use direct response marketing to get customers today, and I'm going to do that over the course of time to the same demographic, the same customer base, in order so that over time my direct response marketing actually starts to elevate the brand awareness in the mind of the customer to the point where maybe in a few years, because they see my trucks all the time, because they've seen a lot of my advertisements, because they've seen my website, because they have heard me, heard about me from their neighbors and their friends and their family. Now I start to achieve branding, which means they think of, for example, lawn care, Augusta lawn care. My goal one day is that when people think lawn care, think Augusta lawn care. Now they might not even have an Augusta lawn care near them, but they'll think of that because of brand awareness. But that doesn't come easily. That takes years to achieve. And so in your small business, your goal should be in the short term, I'm going to focus on those quote unquote growth stocks to grow quickly. I'm going to get those outsized returns. I'm going to invest into door hangers and every door, direct mail and a website, and running Facebook ads and Google Ads. And these are all direct response. But over time, because I'm concentrating all of that direct response marketing towards the same demographic, the same customer base, the same neighborhoods, a very specific city name or zip code. Because I'm going after them over and over and over. Over time, they're gonna start seeing my vehicles, they're gonna start seeing my employees, their friends and family will have done business with us and will be able to refer them to our business. That will be the long term branding that pays dividends over and over and over and over. Because I don't need to keep spending money on advertising as long as my brand is constantly sending me dividends, that is leads. And that's what a brand does, is you don't have to keep spending money on marketing, you don't have to keep spending money on advertising. You simply are getting the dividends just passively of a brand that's been built. You just get those leads automatically. People go to your website automatically. They find you just natively off of Google search or they see your trucks, they see your employees, they see, see and hear about you in their local community because you've been around for a long time and that traditionally takes three to five years. And that's why I so often say the first three to five years you're spending money on marketing. You're trying to grow the business. That's all direct response marketing. That's short term, like growth stocks. Go, go. It's risky. That's why most small businesses don't get to five years in business. It's because it's risky. You could crash. But also in doing that, if you stay focused on a very tight market, you stay focused on a specific target demographic. Over time, usually between years three and five you start to actually achie branding. And now you get those quote unquote stocks that are giving dividends that constantly are giving just a lead here, a lead there and oh so and so I got a referral here that is creating brand awareness and that is the long term game and it's much more steady. I don't know if my direct response marketing campaign tomorrow, if it's an every door direct mail campaign, it could literally land on a really rainy day and no one call me for lawn care. But with branding I don't need to rely on timing, I don't need to rely on on the market fluctuations. I know that when there's demand there's going to be supply to me in the form of leads because I own the mind of the customer when it comes to my category and that's branding. And those dividends are beautiful. It's passive. You don't have to do anything for them. So in the short term keep focusing on direct response marketing. But if you stay focused on a specific demographic, you will achieve brand awareness usually between three and five years in a specific market. I'm Mike Andes. If that was helpful, check out this video here. Because most of you have a seasonal business and this is very, very important if you're seasonal businesses. For most small businesses that are seasonal, they will not achieve this and they will fail. So check this video out here. It's very important.