Leading the Cause
Posted by Daniel Drouhard at 6:00 am
Sometimes, high-quality and low-price can truly co-exist.
In fact, this concept is becoming more and more widespread as concepts such as Kohl’s and Target have shown us. Here’s an example:
I used to work for a gentleman that, over the years, has made a lot of money in a multitude of business ventures. One day he told me a story of about a small jewelry store he started in the South end of Wichita. At the time, larger retail jewelers (i.e. Zales, Helzberg, etc.) dominated the landscape and those big gold chains were extremely popular. You remember those don’t you? Herringbone patterns, wide open collars, lots of chest hair. Got it?
Well, because of their widespread popularity, the big retailers were selling these chains for much-higher-than-normal profit margins and making a killing. He proceeded to tell me the story of how he started buying these gold chains straight from the source, the same manufacturers that Zales and Helzbeg were buying from, and selling them for normal profit margins. He ran ads exposing the ordeal and grew quite an allegiance of consumers that would march into the large mall retailers, not to shop, but to simply point out the travesty they were perpetrating on the public. According to him, he couldn’t keep these chains in stock after the winds changed. Zales and Helzberg were upset, no doubt. He focused on educating the consumers on the spot price of gold, the actual number of ounces per gold based on its purity level, and the total number of ounces per chain. Once they knew the formula, consumers could plainly see how much money the big stores were making, and on the flip side, how fair his pricing was.
The same kind of thing has been going on in advertising for a long time. Only there hasn’t been a little jewelry store in South Wichita to expose the scandal. Under the guise of creativity, many millions of dollars are wasted each year, all on the client’s dime. Does it really take 100 hours to develop a decent logo? Do we really need to have a multi-faceted direct mail campaign when a simple postcard mailing would do the trick? Of course, these questions are only really important if you care about your bottom line.
Many advertising agencies haven’t changed with the times. While most of us see the AMC television show Mad Men as a parodic portrayal of a bygone era, these agencies still aspire to be over-priced, over-staffed and over-officed. Sadly, this makes many of them over-rated. After all, why buy from somebody in a fancy office when you can buy from somebody who’s been-there, done-that and knows that true value shows up in clients’ financial statements, not in agencies’ furnishings. It’s kind of like refusing to buy the same gold chain for several times the price. Power to the people!
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