It should not surprise you that my favorite business success stories are those having to do with the client’s skillful use of radio advertising.

I never tire of these stories nor fail to learn something useful when reviewing them, whether the successes involve my clients or others.  As I type these words I’m still basking in the glow of a telephone conversation with a relatively new client this afternoon.  Nik told me that his business has enjoyed three record months in a row, coinciding with the launch of a new radio testimonial campaign that we created for him (the only variable in the equation).

My colleagues know that I’ve been a devoted student and fan of Roy H. Williams (aka “the Wizard of Ads”) for the past fifteen years–devouring his weekly memos and best-selling books, audio and video recording, and more recently participating in monthly video meetings with him.  So, I was pleased to read in the January 21st edition of RadioINK magazine a piece Roy had originally published in his Monday Morning Memo of December 24, 2012.  It details a marvelous success story, specifically that of a lawyer who has built his practice using Radio. Even better, it is presented in contrast to the story of another lawyer who, instead of using Radio, chose to spend his marketing money online using pay-per-click advertising.

The contrast is not altogether one of media choice, but also one of priorities.

One attorney chose to focus on his message, rather than his audience; the other thought it more important to “reach the right people.”   Which one won?

You’re about to find out.  Enjoy the article, reprinted with the Wizard’s permission.

A Tale of Two Lawyers

I recently spent a day with two lawyers who practice the same legal specialty. We’ll call them Nick and Ralph. They live on opposite sides of the country. They met at a conference and became friends.

Nick read my books, attended Wizard Academy, and decided to go fishing for customers with a net. He put his money in radio.

Ralph thought it made more sense to target only those people in immediate need of a lawyer within his specialty. Ralph went fishing with a hook called Pay-Per-Click.

Ralph said, “Nick, you’re hunting with a shotgun. I’m hunting with a rifle.” Ralph believes in targeting, you see. That’s why he fishes with a hook and catches just one fish at a time. But you don’t build a widespread reputation by waiting until your customer needs you and then targeting them through Search Engine Optimization and Pay-Per-Click.

Nick the Net chose to win the public before they needed his services. Nick the Net wanted everyone in the city to know about him, even if many of them would never need his services. Nick the Net chose to win the hearts of the people 52 weeks a year.

Ralph the Hook, by the way, practices law in a trade area that offers 22 times the potential of the area served by Nick the Net.

Both men are smart and aggressive. They plunged. Hard.

Ralph the Hook spends $180,000 per month on Search Engine Optimization, online marketing consultants, and locally targeted Pay-Per-Click. His annual ad budget of $2,160,000 brings in slightly less than $6 million per year in legal fees, leaving Ralph with a little less than $4 million for gas money. Not bad.

One year ago, Nick the Net was spending $30,000 per month on radio. His $360,000 ad budget brought in $1.4 million the previous year in legal fees, leaving Nick with a little more than $1 million to spend on lunch.

NOTE: Nick brought in 1/4 as much money but spent only 1/6 as much on ads.

And then Nick asked me to begin writing his ads. This year he and I brought in $4.2 million with that same $30,000/mo. ad budget.

About 6 weeks ago, Nick said he wanted me to add another $20,000/mo. to his radio budget. I said, “Not yet. First we need to improve your close rate.”

“But we’re closing 30 percent of the people who call us,” answered Nick, “Ralph the Hook is closing barely 10 percent of his online leads.”

When you advertise 52 weeks a year on the radio, you become a household word. Yours is the name the customer thinks of first and feels the best about. The leads brought in through radio are much warmer than the leads generated through pay-per-click.

“Nick,” I said, “our close rate should be up around 60 percent. Bring all the people who answer your phone to Austin for a day of training.”

Nick brought them to Austin for a day. They listened. They learned.

At the end of the day, Nick drove his people to the airport and sent them home to answer the phones. Nick then returned to my office with his buddy, Ralph the Hook. As a favor to Nick, I spent a couple of hours with Ralph. Ralph, of course, only wanted to know “how to choose the right radio station.”

Ralph the Hook still believes that “targeting the right customer” is the secret to growing a business.

But Nick and I believe in building a widespread reputation with a warm predisposition in the hearts of the general, untargeted public.

What do you believe?

Common sense says targeting would be more efficient, right?

My thirty years of experience say otherwise.

One last thing: Nick’s telephone team is now closing more than 60 percent of all incoming leads. This means Nick the Net will likely do $8.4 million in 2013 with no increase in ad budget and no increase in sales opportunities.

Release the Kraken.

Roy H. Williams
PS – In case you’re wondering why I turned down the additional $20,000 ad budget per month, here are the reasons:

1. We’d picked all the low-hanging fruit with $30,000 per month. In other words, we were already buying all the radio schedules that offered us a good value.

2. An increase in the budget would elevate our frequency (repetition to the same listeners) much more than it would increase our reach (new listenership.) In other words, a 67 percent increase in the ad budget wouldn’t reach 67 percent more people, but only about 10 percent more. This is due to “cume duplication,” a fancy phrase that refers to the fact that most people listen to more than 1 radio station. If we added more radio stations to our list, we’d just be reaching the same people more often.

3. My income is not tied to the size of the ad budget, but to the percentage that my client grows each year. So my only concern is the growth of my client. What I have to do to achieve that growth doesn’t matter. Not to me. Not to my client. In this case, I could invest a day with his people and make a much bigger difference than I could make by throwing more dollars at media. – RHW