The concept of wasted distribution is rather easy tounderstand but the fix is a harder problem. You are notalone in this struggle. 80% of retailers waste advertisingdollars through wasted distribution and struggle tograsp the concept that will fix the problem.

First, let’s understand wasted distribution. Everyretail store owner and every auto dealer has acommerce circle. As an example…Would you expecta customer to drive 450 miles to purchase a vehicle orproduct from your retail location?

Obviously the answer is no. This person is not in yourcommerce circle therefore if you spend advertisingdollars on them, it is wasted distribution.

Now a harder question, where exactly does thatradius stop? That is what EVERY retail operator needsto figure out. What is my commerce circle? A retailer’scommerce circle is the circle in miles around theirlocation where 85% of their business comes from,or can reasonably come from. This includes bothsingle location and multiple locationowners.

We’re not talking about the5-10% of customers that travel agreat distance to do business.We want you to figure out where 85%of your business comes from. In heavierpopulated areas that number is oftenaround 3 – 10 miles. Any farther than thatand they will be passing by 10 other storesjust like yours that are closer to their home andmore convenient. In more rural areas thatnumber may extend out 20 – 40 miles. Travelingmiles through open farm land is nothing to them anda daily ritual.

Paying for huge numbers and huge exposuresounds great, but more than likely will have little effecton your day to day sales and traffic.

Take a look at mass media coverage area. Yourradio, TV and newspapers justify prices by showing youtheir wide coverage area and all the viewership/

readership numbers. If they cover a 65 mile circle,you are essentially paying for 70% of consumerexposure that will never even consider becoming yourcustomer.

WASTED DISTRIBUTIONTheir reach can be wide and strong, but is that

what your business really needs. If your target areacommerce circle is 10 miles out from your location, thisis where you should put 85% of your advertisingbudget.

Keep pounding and pounding that circle untilevery home, business, and person within itknows your name very well.

Retail owners need to understand thisVERY QUICKLY or they will spend themselvesout of business. Don’t be swayed by pretty

magazines, huge circulation newspapernumbers or TV / radio viewershipexposure. The real question that youneed to answer is, “How do I get 85% of

my advertising dollars to fall into mycommerce circle?”

The answer… Don’t spend another dime on largemarket media advertising. Instead, buy only targetedadvertising that is focused on you commerce circle.(Not an easy task.)

Here is a great exercise for all retail stores and autodealers. This can be done for all mass media such asTV, Radio and Newspapers.

Go to your newspaper’s website and look at theirpublished rate card.

You will find on it the general circulation numbers

410 Ware Blvd. • Suite 1031 • Tampa, FL 33619Office: 813.630.5888 Ext. 512 • Fax: 813.630.1048Website: www.imperialpressdirect.com

WHY DIRECT MAIL?

DAVIDVILLAC.E.O.

“80% of retailers waste advertisingdollars through wasted distributionand struggle to grasp the concept

that will fix the problem.”

for the paper. Now, look at a specific breakdown byarea and city. (If they don’t publish it on the web, askfor a copy.) Look at the specific paid distribution toresidential / homes in your commerce circle.

The low numbers will probably shock you. Here is aspecific example.

We will call this newspaper “XPaper”, even thoughit is a real paper not far from us.

Their circulation is stated as approximately 30,000.However, when you look at the actual town the paperis from, and you look at residential paid delivery, thatnumber drops to 9400.

Yes you heard us right. The number of home ownersand residents in their own town that actually pay tohave the paper show up at their door is only 9400. Outof this number not all of these consumers may be inyour commerce circle. While a full-page ad soundslike a great price to get your message to 30,000readers, when you breakdown the actually cost perhome in YOUR commerce circle, it can often exceedmore than $1.25 per day / per home.

SO HOW DO YOU FIX THE PROBLEM?

1. Truly identify your 85% commerce circle.Remember, it is 85%, not 100%. Find outwhere most of your business comes from.

2. Use only advertising that can guarantee 85%of their coverage in that area.

WHAT IS THE TOP CHOICE FOR CAPTURINGTHAT EXACT MARKET?

DIRECT MAIL:

How can you target every homeowner/residence/business within a 5 – 30 mile commerce circle and getyour message to all of them?

Look for the common factor…

Each one of these homes/residences/businesses

has one thing in common. They all have a mail boxand the USPS has a list of them all.

Mail to them and mail to them often.

We have to chuckle a bit when we first take ona new client that is struggling with advertising. Thereason we find it humorous is because they alwaysanswer the exact same way.

Q: How often do you use direct mail?A: We do a mailer about 3 - 4 times a year.

Q: How often do you use newspaper ads?A: Every week, all the dealers around here do.

Q: Have you ever had someone call 100homes within 5 miles of your store and askthem if they subscribe to the paper?

A: No, we just assume that most get it.

Q: Have you ever had someone call back thesame 100 people and ask them if they havea mailbox?

A: That would be stupid, they all have one.

Now we simply shut up andstare at them. If the light bulbdoesn’t go off, we makethem find someone to call.

We actually make them hiresomeone to call 100 – 200 homeswithin 5 miles of their store andask them if they subscribe to thepaper.

Dealers are shocked to learnthe results. Most of time the resultswill fall between 15 and 35% of the people within a10 mile radius of their store subscribe to the paper.Yet they are putting 85% of their budget there.

Dealers quickly learn from this exercise that morethan 65% of the people in a 10 mile radius of their storenever even get a chance to see their ads.

Direct mail should be used heavily by all retailers asit is the most effective way to target an exact radiusand get their message to that audience guaranteed.

“...you are essentially paying for70% of consumer exposure that will

never even consider becomingyour customer.”

Continued...

WHY DIRECT MAIL?Cont’d from page 2

WHY GUARANTEED?

Here is a great question we ask dealers when theyask us about response rates.

Dealer: What response rate should I be gettingto my direct mail?

US: A better response rate than yournewspaper.What was your response rateto last week’s newspaper ad?

Dealer: We don’t figure out response rates tonewspaper ads.

US: Why not?

Dealer: Because we don’t know exactly howmany people actually got the paper orsaw our ad.

US: Blank stare.(Waiting for light bulb to go off.)

Direct mail is the only form of advertising that isheld accountable for response rates / percentages.Why? Because it is the only form of advertising thatthe retailer actually knows exactly howmany peoplegot his message.

The real and most important question they shouldbe asking is…

What is my TRUE cost per household in mycommerce circle?

How many times have we seen this happen….

A dealer runs a 4 day, full-page ad and spends$10,000. He has 65 people respond to the ad and inhis mind the ad worked.

The next week he spends $10,000 on a mail dropand has 158 responses.

”That was less than a 5% response rate, I was nothappy with the mail.”

Understand that response rates are importantbut true, commerce circle exposure is the ultimatemeasure.

Learning how to say “no” is one of the first thingsyou need to learn. You can do it in a polite way, butyou must learn how to do it.

Here is a great method that is a very nice andintelligent way of saying no.

When approached by advertising sales people,simply use the ‘85% rule’ line….

“We now put 85% of our advertising dollars in ourcommerce circle. This means that we only buyadvertising that is limited to a 15 mile radius from ourstore. If your coverage is broader than that, wewould not consider it.”

Now remember, these are sales people. They aretrained to accept a ‘no’ as the road to the sale.If they continue with pressure to buy, take them tothis level.

“Here’s what we will consider. Tell us whatpercentage our commerce circle makes up of yourtotal distribution. We will pay that percentage. If ourcircle is only 20% of your coverage, we will pay 20%of your rate. The rest is wasted distribution.”

Stick to your guns and tell them you are serious.Sooner or later they will get the point.

Every day we hear the cry of retailers and autodealers across the nation. “My advertising is notworking.” Yet they keep repeating the samemistakesover and over.

Remember what Benjamin Franklin said, “Thedefinition of insanity is repeating the same actionover and over, expecting different results.” Forceyourself and your business to spend every dollar in theright place.

Don’t make assumptions and do yourhomework. Use real numbers andhave someone help. Defining yourcommerce circle shouldbe done immediatelyand your changesshould be swift. The results ofyour work will save youHUGE amounts of wasteddollars over many years.