In the last post I mentioned Roy Williams' Advertising Performance Equation - SoV x IQ x PEF x MPo = Sales.
We talked about how PEF stands for Personal Experience Factor. In this equation, to grow your business, a customer's personal experience must exceed her expectations. That's what creates loyalty and fandom, and is our staff-training goal every month.
Today "SoV" is the relevant part of the equation for me. Why? I just agreed to terms with Jackson Radio Works for running a year-long radio campaign next year.
Wait. Still confused?
Let me explain...
SoV stands for Share of Voice - in other words, how much of the advertising being done in your category is yours. Think of it as a percentage. If in your market and category there is $1 million being spent on advertising and you are spending $100,000 of it, then you have a 10% SoV.
So, by that definition, SoV is equal to your marketing budget as a percentage of the total ad money being spent. Therefore, the more you spend, the higher your SoV.
Most of you upon reading this are saying, "Great, Phil, but I don't have any more money. What if I want a higher SoV and don't have more money to spend? Can I increase my SoV other ways?"
Yes you can. I just did.
There are many ways to advertise - TV, Radio, Newsprint, Internet, Email, Yellow Pages, to name a few. How many of those media do you own? By that, I mean, are there any media that when people think of the media they think of you?
If you listen to radio in Jackson, you know the Toy House owns some of the stations. No other toy or baby product seller comes close to running the frequency that we do on those stations. Ask someone who is the toy store on the radio and they'll tell you Toy House. We own it. That was our goal last year and will be our goal again this year.
I don't have the budget that my competitors have. I don't have the power of national advertising, printing on a mass scale, or the clout to demand huge rate savings from the media. But I do have an understanding about perception. While all the big chains compete with each other with their multiple inserts, none of them gaining a perceptual advantage, I've got the airwaves to myself, allowing Toy House to get a perceptively larger Share of Voice than what we are spending.
Think of it this way. Most people, when thinking of advertising think (in order), Newspaper, TV, Radio, Yellow Pages, and maybe Internet. If I perceptually own Radio, I perceptually have a 20% SoV. No, it's not perfect math. Neither is the equation (I'll get to that in another post). But it is an improvement over my actual percentage of the SoV (about 5-7%).
Are you daring enough to get more out of your advertising budget? Are you willing to go for it by owning a media no one in your market is using?
Wouldn't it be better to have a nice quiet conversation alone with a client than to be part of the shouting and screaming that all your competitors are doing?
Of course it would.