If you have been in the industry for any length of time, no doubt you've attended a seminar where the speaker reminded you of a promotion or strategy that you once used but for some reason had gotten away from. Maybe the last time you tried it success didn't follow or perhaps there was no particular reason at all, you just got away from it or simply were caught up in trying new things.
I recently had one of those “Why didn't I remember that?” experiences as it relates to our company's newspaper strategy. As is the case with most health clubs, our HEALTHY INSPIRATIONS Weight Loss & Lifestyle Centers rely heavily on newspaper display ads. Typically, we run one to three ads per week, varying in size from a 4" × 5" to a 6" × 9.5." The frequency, of course, depends upon the time of year with the circulation being around 10,000 households. Because we live in an area that has a local newspaper, and has a contract that gives us the best possible rate, the cost of these ads range from $180 to $400 per printing, which is substantially less than it would cost without a contract. We are also fortunate that every other week the ads run in color if no one else has bought the color spot.
Although the response rate to any of our ads varies depending upon the time of year, the offer and the size of the ad, typically, one ad will generate six to 12 phone calls. With a solid call to appointment ratio, a 78 percent show ratio and a 65 percent average closing ratio, the center will usually net two-and-a-half to five memberships, resulting in a customer acquisition cost averaging $92. (See sample display ad on p. 43.) Because we are consistently yielding memberships at a close to average customer acquisition cost, we have been content with the outcome from these display advertisements.
A number of months ago while presenting a marketing seminar to new HEALTHY INSPIRATIONS licensees, I was discussing the successful use of newspaper inserts for open house and grand opening events. A general conversation ensued and an attendee asked, “So, if the inserts are so successful for the opening events, why don't you consider doing them more often?” It was a good question that made me stop and ponder.
It wasn't that we had never thought of using inserts for a grand opening (we have), it was more because inserts typically have a higher investment associated with them. And please notice that I didn't say, “higher cost,” but rather “higher investment.” There is a big difference. Higher investment simply means that the up-front out of pocket expense is more. Higher cost means a larger monetary amount per individual reached. Hence, because inserts require a higher investment, for cash flow purposes we lost sight of the outcome by being too focused on the short-term expenses.
Motivated by the recent conversation, I contacted our local newspaper about doing an insert. For an 8 ½" × 11" color paper with black ink insert to go out to the entire 10,000 circulation, the investment was $800. In order to make a fair and measurable comparison between the display advertising and an insert, I couldn't make any changes to the ad copy or the offer, so we simply had the newspaper increase the size of the ad to take up as much of the insert size paper as possible. In order to maximize the effectiveness of the insert we did two things. One, we used yellow fluorescent paper. Two, we coordinated with the newspaper so that the insert would go out on a Monday when there were only a couple of inserts, potentially giving the insert greater visibility. (Typically, Friday, Saturday and Sunday papers have the most sale flyers for supermarkets and department stores.)
The results are told in the numbers and, as I like to say, “numbers don't lie.” The total number of calls generated from the one insert was 37. At first glance, that seems to be much higher than the display ad and from the standpoint of calls that would be true. However, you have to take into consideration the cost of attaining those calls. The fact is that a typical $400 ad will usually generate 12 calls. Reason would dictate that if two $400 ads were run (totaling an $800 investment), the club would generate as many as 24 calls. Therefore, when comparing the two from a total investment standpoint, the insert generated a 35 percent greater number of calls. Ultimately, the club sold 16 memberships from those 37 initial calls with a final customer acquisition cost of $63, which was well below the $92 from the newspaper display ads, making this investment seem like a wise one.
Certainly, at face value you could argue that there is nothing astounding about the findings of this comparison between display advertising and inserts. Yes, the results were better but there were no unique strategies or special offers. And, if that were the only lesson I gained from this marketing experience, I probably wouldn't have taken the space to write this article. But something else happened as a result of the insert that I didn't expect. The awareness level and response rate to all our other advertising efforts increased over the next two months without doing anything else differently. Said another way, it appears from all our statistical data that the insert had a longer-term impact than any display ads ever had.
For instance, over the next six weeks the response rate to our typical display ad improved by 7 percent. The number of leads collected from our lead boxes increased 9 percent. Finally, the number of responses to our birthday card promotion increased 6 percent. You could definitely say that all these things are coincidental, but at no other time had we had such a consistent increase in response rate across every one of our core marketing activities. Personally, I think this is a substantial finding.
Of course, the question we asked ourselves was, “Why did the insert work so well?” I think there are a number of factors:
First, because it falls out when the reader opens the newspaper, there is a greater likelihood that more people will see an insert than a display ad that is buried among 25 to 40 pages of newspaper. Think about it, the reader must pick up the newspaper, turn to a page that your ad is on and then have their eyes drawn to it in order for their mind's eye to “see” a display ad.
Second, an insert can be put on colored paper to further increase the chance of a reader seeing it.
Third, although we didn't do it with this test, you can say — or show — more with an insert because it is usually larger than the average display ad that most clubs run.
Fourth, people will sometimes hold on to inserts for months. Having seen the insert and thinking about acting upon it, a reader will take the insert and put it on the counter or on a refrigerator. Even if the insert has an expiration date that readers fail to meet, often when readers “re-find” the flyer they are motivated to act. With the insert discussed in this column, prospects were showing up at the center two and three months after the promotion had ended.
Finally, as we learned from this example, inserts can give you a higher level of overall exposure simply because it is a new medium. Where a particular reader may have been “blind” to your display ads, especially after seeing them over and over again, his or her eyes may be drawn to the bright-colored insert.
Of course, there is the most recent discovery about how inserts seem to help drive response rates on future advertising in the months following the distribution. Collectively, there are many good reasons to re-visit newspaper inserts if you haven't done so recently.
Going back over my years of advertising experience, here are some tips to follow if you are considering newspaper inserts:
Inserts are certainly nothing new to the field of health club marketing but when was the last time you used this medium? Perhaps it is time to give an old strategy a new try.