Research Study: New Evidence Reveals How to Grow in Any Economy. Critical Strategies. Avoidable Mistakes. New Business

1. Research Study: New Evidence Reveals How to Grow in Any Economy. Critical Strategies. Avoidable Mistakes. New Business Approaches.

2. Why did Early Express commission a research-based study? This study was developed as a public relations effort and as a way for us to help the companies we work with to grow and prosper. When they grow… we grow! Researched and produced by

3. Do you know? What percentage of companies reach $1 million in annual revenue? How about $5 million? Source: Chet Holmes author of The Ultimate Sales Machine: Census Bureau

4. The reality… Only 5% of companies will ever reach $1 million in annual sales Only .08% will reach $5 million Source: Chet Holmes author of The Ultimate Sales Machine: Census Bureau

5. Business stagnancy in the U.S. Only 30% of businesses survive and only 10% of these businesses grow This means, 90% of all businesses become stagnant! Typically, growth is stunted when business climates change… buyer spending habits, new competition, product supply and demand Where are you? Source: Office of Advocacy of the U.S. Small Business Administration adapted from the Bureau of the Census Economic Survey

6. Major drivers of stagnancy In a review of businesses that failed to grow, the majority struggled in 4 key areas: Poor Management Poor Business Planning Poor Financial Planning Poor Marketing Source: U.S. Bank Study Business Failure 2008

7. Focus on Marketing 60% of business owners that failed to grow listed poor marketing as a critical contributor and • half of these business owners rated themselves “low” or “very low” in their marketing skills 60% of business executives surveyed lack confidence in their marketing decisions and believe their marketing could be more effective 50% are not satisfied with the time spent on marketing their companies SOURCEs: U.S. Small Business Contract # SBA-95-0403, Paper Financial Difficulties of Small Business and Reasons for Their Failure (1998); D. Bradley III & H. Moore, “small business bankruptcy caused by lack of understanding of business environment and consumer needs,” Small business advancement national center, 1997; . Redefining Business Success: Distinguishing Between Closure and Failure, Small Business Economics, August 2003, : “HP Survey Reveals Top U.S. Business Marketing Challenges,” BUSINESS WIRE, FEBRUARY 2008

8. Expertise is required in critical areas However, less than 30% of mid-sized companies feel they are competent in every marketing area Take a moment and rate yourself…. Sources: First annual midmarketer awareness survey results, 2008

9. Market share is becoming increasingly difficult to achieve In 2005, more than 156,000 products debuted in stores globally – 75% of these failed Roughly 21,000 new brands are introduced worldwide per year – 52% of these will fail Source: SDL Maidenhead – July 6th, 2007 – Companies struggle to manage brands

10. Four Major Marketing Mistakes

11. Mistake #1: Cutting Budgets… when aggressive action should be taken Ask yourself right now…. When is the best time to market aggressively?

12. During a recession! Major brands that invested in marketing campaigns weathered the effects of the 2001 recession — those that didn’t lost market share ……..or worse SOURCE: Brooks, D. & See, E. “THE SALES THREATS THAT CAN CRIPPLE MARKETING: You can't control gas prices, weather or competition-but you can react,” ADVERTISING AGE, JUNE 16, 2008: MARKETING INSIGHTS – REF. HARRIS STUDY 2008

13. Advertising can prevent stagnation A McGraw-Hill study examined nearly 600 businesses from 1980 - 1985 and found: Companies that advertised aggressively during the recession had sales 256%higher than those that did not continue to advertise Source: Advertising during Times of Economic Uncertainty.” American Business Media – Association of Business Information Companies; 2008 Forbes Magazine, June 2008

14. On the other hand…. Reducing ad spending by 50% for just one year caused revenues to drop 23% And it took two full years to recover! Percent Drop in Revenues Source: Forbes Magazine, June 2008

15. The more you cut - the more you lose! Totally eliminating ad spending caused a 75% drop in revenues Full recovery took 5 years Percent Drop in Revenues Source: Forbes Magazine, June 2008

16. A Case Study Everyone drinks milk right? Well that’s what milk producers thought! To cut costs, U.S. milk ads were pulled in the early 1990s Sales went unchangedfor 12 months Then… sales began plummeting at alarming rates Source: Marketing Daily Commentary, April 2, 2009, Wasting Money on Advertising by Gray Hammond

17. The reality behind the cost-cutting decision Millions were lost and it took 18 months for sales to rebound! Apparently, it’s important to constantly remind buyers… “Milk Does A Body Good” Remember… sales can plummet in as little as three months for any company in any environment Source: Marketing Daily Commentary, April 2, 2009, Wasting Money on Advertising by Gray Hammond Brooks, D. & See, E. “THE SALES THREATS THAT CAN CRIPPLE MARKETING: You can't control gas prices, weather or competition-but you can react,” ADVERTISING AGE, JUNE 16, 2008: MARKETING INSIGHTS – REF. HARRIS STUDY 2008

18. Mistake #2: Not Making the Right Advertising Choices

19. Which will work? The Fournaise Marketing Group, one of the global leaders in tracking media marketing effectiveness, revealed 60% of 2008’s worldwide advertising spending failed to deliverthe results expected by their marketers and was considered wasted advertising expenditures Source: The Fournaise Marketing Group: 60% of Advertising Spending was wasted in 2008: Author: OtiliaOtlacan: January 2009

20. Costs are up… effectiveness is down Total U.S. newspaper circulation figures: 1990: 62,328,000 2008: 48,597,000 (down 22%) Yet the cost of newspaper advertising per unit of circulation has doubledsince 1990 • Source: BusinessWeek July 12 2004 http://www.businessweek.com/magazine/content/04_28/b3891001_mz001.htm, Newspaper Association of America http://www.naa.org/TrendsandNumbers/Total-Paid-Circulation.aspx

21. Commercial skipping is costing TV advertisers $4 billion dollars A staggering 90% of people on TiVo skip past ads 78% of advertisers say TV advertising has become less effective Source: “The DVR Dilemma: Managing Consumer Behavior”; www.jupiterresearch.com, http://www.ehomeupgrade.com/2006/05/05/dvr-commercial-skipping-could-threaten-8-billion-in-tv-advertising/;http://blogs.zdnet.com/ITFacts/?p=10466

22. What about print collateral and direct mail? 76% of companies are not competent in designing print collateral/direct mail - mass marketing is typically the focus "I did a mailing once and never got any business.” Experts say it takes 6 – 12 times of making repeated contact before a buyer is in a purchase-readiness mode Sources: First annual midmarketer awareness survey results, 2008

23. Email is becoming less effective 30% of email marketing is blocked by SPAM filters 69% of email is deleted based on the subject line 30% of subscribers change email addresses annually Subscribers below age 25 prefer SMS (short message service or texting) to email Source: ClickZ.com Seven Signs You Need to Revive Your Permissions Database By Jeanniey Mullen Aug 31, 2009 Convinceandconvert.com 15 Email Statistics That Are Shaping The Future author: Jay Baer

24. Mistake #3: Not Marketing to Your Buyers Like You Know Who They Are

25. Doors are being slammed shut every day! From 1996 to 2008 the number of marketing messages per day increased nearly tenfold (1,000%) Today’s over stimulated, ultra-sensitive and less affluent buyer is bombarded with 100s to1000s of options On the other hand, the more connected and inspired buyers feel, the more receptive they are to ad messages… building that emotional tie is the most difficult aspect SourceS: TalkTrack™, Keller Fay Group, 2006; UNION OF CONCERNED SCIENTISTS WEBSITE maritz dialogue marketing group

26. Buyers Pay Attention to what is Relevant to them The new buyer “now” decides what they will entertain and which companies they will tolerate messages from Increasing relevancy has been shown to increase consumer response by 500%! Source: Romano and broudy

27. Mistake #4: Utilizing Ineffective Advertising Techniques

28. Mass Marketing Companies find it hard to reach targeted groups of buyers Many companies today still rely on the ineffectiveone-way mass marketing to push a product to many buyers Source: Harvard Business Review, Rethinking Marketing, Roland T. Rust, Christine Moorman, and GauravBhalla, Jan–Feb 2010

29. So… how do you get through the maze with a series of effective messages to your target audience?

30. 3 Marketing Strategies Designed to Grow your Company

31. Strategy #1: Really Know Your Target Audience – Add Demographics

32. Adding Demos to your customer list Here’s an example: Conclusion: order lists of those with a travel interest, run ads in travel magazines, etc. Stock coaching firm adds demos expecting to find clients are largely “likely investors” Turns out, only 18% were coded as likely investors while 75% like to travel.

33. Effective marketing has 5 specific traits It Must Be Distinctive • Catches and holds the eye The Copy Must Educate and Focus on Your Prospects, not on you. Captures Attention With a Screaming Headline Strategy #2: Use Best Practices Marketing Techniques Seven Things You Can Do Today to Improve Your Health Source: The Ultimate Sales Machine author: Chet Holmes pg. 119-122

34. Continued… Your body copy has to keep them reading. Tell your prospect what you want them to do. Give them a Call to Action. Source: The Ultimate Sales Machine author: Chet Holmes pg. 119-122

35. Strategy #3: Use tactics you can target AND measure Targeted and measurable are the hallmarks of any effective marketing campaign. New low-cost technology can create highly individualized direct mail that can be easily targeted and measured.

36. 7 Musts of Marketing for Top of Mind Awareness a McGraw Hill Study Advertising Personal Contact Direct Mail Public Relations Internet Trade Shows Corporate Literature Source: McGraw Hill: Chet Holmes: The Ultimate Sales Machine, Nash, Edward L., ed. The Direct Marketing Handbook, 2nd ed. McGraw-Hill, 1992

37. Why use Direct Mail? It’s still producing. Direct Mail’s ROI is increasing even in today’s climate an investment of $1 in direct marketing advertising, on average, across all industries, produced in incremental revenue … even in a downturn of: $11.61 - 2008 $11.65 - 2009 $11.73 - 2010 (projected) Source: DMA: Power of Direct Marketing Report December 29, 2009: 2009 Direct Marketing Association: Response Rate Report: March 3, 2009

38. Why use Direct Mail? It’s still preferred. A CMO study asked the following question: What are your preferred methods for companies to contact you about product or service promotions? 51% Traditional Mail 43% Email 5% Online Banners 1% Phone Source: The Chief Marketing Officer (CMO) Council 2009 Why Relevance Drives Response and Relationships

39. Use Direct Mail to Drive Online Traffic According to the 2009 Channel Preference Study by ExactTarget “Direct mail influences 76% of Internet users to buy a product or service online."

40. 7 Steps to Revenue Producing Marketing

41. Step #1: Right Audience Add demographics to current client list to determine your target market Add ways to gather information about your target via in-store, online, direct mail surveys, etc. Explore mailing list options Develop “Dream Prospect” list

42. Step #1: Right Audience cont. Dream Prospect definition: Ideal prospects that make your company profitable. Prospects who buy often, in large quantities and at higher margins. Telephone Equipment Company Businesses (30,000) Businesses with older systems (9,000) Businesses with older phone systems that have over 100 employees (600)

43. Step #2: Right Messaging You only have 3.5 seconds to get their attention! Describe and emphasize what makes you different from your competition We have a chair for you. Teacher to Principal in 5 Quarters Teacher to Principal in 5 Quarters

44. Step #3: Relevancy 85% of the information taken into the brain enters through the eyes Global research shows drastic differences in the Visual Desires of different demographics; countries, states, ages, genders, occupations, education and income levels • Recent research in neuroscience proves our eyes know what we will choose before we realize our decision Source: The Ultimate Sales Machine author: Chet Holmes pg. 148: Business Wire Press Release Source: Visual Targeting April 17, 2010, 5:22 pm EDT

45. One-to-One Marketing Gets Noticed Each piece can be customized based on demographic/firmagraphic data

46. Step #4: Offers Your ‘Offer’ can have a 500% impact on response rates, up or down It can make the difference between a 2% response rate and a 10% response rate Source: Conversion Multiplier: 2008 Survey

47. Step #5: Tracking and Measurement New Personalized URL technology can track which prospects hit your website. www.Top4Reasons.com\Test.Person

48. The amazing results of a PURL According to the article “PURLs of Wisdom”, “Personalization allows direct mail, to obtain returns greater than 5 percent. Some of the more effectively designed programs can achieve returns of 20 to 30 percent.” According to the Direct Marketing Association (DMA) 43% of buyers prefer to respond to an advertisement online. Source: Direct Marketing Association 2009

49. Two Studies Put Together From: 51% preferred traditional mail 43% prefer to respond to an advertisement online We would conclude that providing a PURL site for interested buyers would produce the greatest return. Source: Direct Marketing Association 2009

50. Step #6: Repeated Campaigns Consistent marketing messages and multiple repetitions over at least a year will help increase long term sales Builds awareness Builds credibility Creates a level of trust Conveys that your business is established Keeps you fresh in their minds Source: Cahners Business Information Study and Vistage Survey cited by DMN3