There are many different ways in which your business or product can be promoted. Some of those ways are more effective than others. The only way to know which methods you should persevere with is to measure outcomes. Measurement is on the basis of return on each dollar spent.

Testing headlines, pictures, sales appeals and copy should be a natural part of your advertising. That testing need not be expensive. It may be as simple as asking somebody to read your ad copy aloud to you. If they struggle with a sentence re-write it. If there are parts they are unclear on assume that others will find the same thing.

If you have a database of clients you can test different messages on different parts of the database and measure the results. The most effective copy can then be utilised in wider advertising. As an example of testing consider the appliance company which was unsure whether a new air conditioner should be sold by an appeal to getting rid of humidity or to being cool. They tested and found that “How to have a cool quiet bedroom – even on hot nights” was two and a half times more effective than “Get rid of that humidity with a new room cooler that also dries the air”. The humidity appeal was removed from future advertising.

Test, test and test again!

It is important to test on a small scale anything that you intend to use on a larger scale. Testing gets opinion out of the way and puts the focus on a core business need – what is it that appeals to the customer and will encourage them to buy.

Small business advertising, and therefore testing and measuring, should be targeted at actual sales. For a small business there is no value in any other sort of advertising. Big businesses spend significant amounts of money to brand themselves and to stay in the limelight. A small business doesn’t have sufficient  budget available to them to be able to focus on branding as a goal in itself.

Spend most of your time developing a great headline

With any ad the experts say that no matter how striking any illustration in the ad it is the headline that is critically important. If your headline doesn’t catch the reader’s attention then the rest of the ad might as well be in Spanish. Some research has suggested that the headline is 50 to 75 percent of the advertisement. So, unless your business name describes accurately your business offer it shouldn’t be at the top of the ad – a common mistake.

Good headlines appeal to self interest and are based on benefits to readers. Remember that a technical feature of your product is not a benefit. The next best headlines are those that give news followed by those which arouse curiosity. Research also suggests that headlines that paint a gloomy or negative picture should be avoided. Often business owners will feel pressured to write clever copy in ads but simple, easy to understand, ads (and headlines) have been shown by testing to be more effective.

Strangely, once an effective ad has been found, business owners can be guilty of deciding to change them after they have run for a while. But it is the customer who should choose when the ad is no longer effective by not buying. If you have a good ad, it attracts customers and sales, then keep using it.

Stephen McFarlane is a Chartered Accountant and Certified Financial Planner. He is an adviser with the One to One Group and Triplejump both of whom are based in Timaru. A Disclosure Statement is available on request and free of charge at www.one-to-one.co.nz.

As a region we seem to be holding up well in the midst of what is a significant global financial event. And, in the New Zealand context, we are doing considerably better than Aucklanders, who have been struggling for some time. In fact there may be an opportunity to attract some of them to South Canterbury to assist with our skill shortages and to position ourselves for further growth.

Some local businesses will have noticed a downturn in business opportunities. Others will see the world as unchanged. But either way it is an appropriate time for each to be considering what the characteristics of a well run business are and how they are measuring up against them. Being proactive now, even if the warnings turn out to be for nought, is hardly a bad thing.

The list in front of me runs to 20 characteristics – which aren’t going to fit into a 500 word article, certainly not with any explanation attached. Nevertheless the section headings themselves are a good self check list. I have summarised some into groups.

Personal capacity and development (leadership)

• Excellent customer knowledge and service

Excellent product/industry knowledge

• Excellent systems and analysis of results
• Excellent cash control, stock management, work In progress control, debtor control and cost control

Excellent staff management, motivation and communication

• Excellent marketing expertise/the ability to assess market place opportunities
• Ability to change with market conditions/prices review

Excellent assessment of competitors
Adequate capital base
Use of professional advisors: accountant, banker, solicitor

• Networking
• Excellent planning

Excellent quality control
Excellent management/administration

These are the nuts and bolts of a well run business. They may seem obvious. But being obvious and being completed at a high level across the board can be two different things. I asked a local business man last week why a particular strategy, which had been successful for him, was no longer being pursued. His answer was that the good times had moved their focus away from the basics. They are now revisiting them.

Marking your business out of 10 for each of the characteristics listed above might be a good start to identifying weaknesses and then beginning to address them. Some thought as to the ingredients that made your business successful in the first place and whether they are still in place, albeit in a modified or improved form, would also be time well spent.

By Stephen McFarlane

His book, called The Luck Factor, was sent to me as pre reading for a business conference. What do luck and business have in common? The habits that create what we might view as lucky outcomes are the same habits that can be successfully applied to growing a business.

Luck is generally a thing of superstition. Rabbits feet, broken mirrors, four leaf clovers, not walking under ladders and the number 13 all fit into that category. What Richard Wiseman, a psychologist, has been able to demonstrate is that luck can be the outcome of specific behaviours.

He has simplified luck into four principles. Maximise your chance opportunities, listening to your intuition, expecting good fortune and turning your bad luck into good by seeing the positives. Lucky people tend to do these things better than those who feel they are unlucky. Within each of the four principles are a number of sub principles.

A feeling from reading the book is that lucky behaviour is not rocket science. There is a logic to it. But the book did remind me that it is easy to get out of the good habits that worked for us in the past – be that in our personal or business lives. The book is an opportunity to be reminded that we can seek to control our outcomes and provides a framework for doing so. And for the doubters – Wiseman’s book backs up his principles with hard research. It’s not a superficial motivational book.

His first principle (maximise your chance opportunities) is a good example of logical outcomes. Lucky people tend to have good networks, they tend to have a relaxed attitude to life, they’re open to new experiences. People who might view themselves as not lucky, or unlucky, are not as strong in each of those areas. Logically people who make the effort to stay in contact with other people are more likely to have opportunities present themselves. Their more relaxed attitude to life increases the likelihood that they will see an opportunity and be encouraged to act on it. Others might see the positive outcomes that arise from this behaviour as luck. But it’s a natural outcome.

This same topic was the theme of a movie late last year – Yes Man. Jim Carrey stars as Carl Allen, a guy whose life is going nowhere-the operative word being “no”-until he signs up for a self-help program based on one simple covenant: say yes to everything. Unleashing the power of “Yes” begins to transform Carl’s life getting him promoted at work and opening the door to a new romance. I think we can all imagine the outcomes of saying yes more often.

The Luck Factor will never be a core business text. But if only one good idea is needed to make reading this book valuable then it’s worth a read.

By Stephen McFarlane