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Star Power: The Difference Between Entertainment and Knowledge

This week I hired a publicist. This may not seem like all that uncommon of a thing to do, but for me it was profound. The truth is that my book, “Testimony,” is not doing as well as it could be. I have been told that I need more “Star Power.” Sure, I have a loyal following of people, like yourself, who read my articles, subscribe to my newsletter, or follow me on Facebook. Nevertheless, today that is not enough. Today, you have to have star power or celebrity status to really get your voice heard. Our culture tells us that it does not matter what you say, what really matters is who you are when you say it.

Don’t get me wrong: I am not bitter about this, really I’m not (truly). I am, however, in all honesty, frightened by it. We will form our opinions and take advice from anyone as long as they are celebrity. Reality TV stars become experts in social science, movie stars become equivalent to PhD’s in the field of environmental science, and cable newscasters and entertainers get to tell us what our political and economic beliefs should be. Meanwhile, there is a real voice of reason, expertise, and experience sitting on the sidelines saying “If only I were famous enough, my ideas could change the world.” Instead, we learn our history from Pawn Stars, our science from Myth Busters, business management from The Apprentice, and world news and politics from The Daily Show.

There are a lot of people out there smarter and even more educated than I am, but I believe in my message. I know that my writings come from a sincere heart and a love for truth and honesty. For this reason, I am willing to do whatever it takes to help my message be heard. I don’t claim to have all the answers; however, I also don’t claim to write or speak about anything that I don’t understand. I am the first to admit when I don’t know something and I am always eager to learn. But this is really not about me (I know that’s not the best thing to say for one trying to gain a little more star power). This is about a realization that I was hit with this week, a realization that truth is being ignored or replaced by… I don’t know what. I am frightened by the fact that sincerity and honesty is outweighed by celebrity egos who can’t admit where their expertise ends or begins. I am frightened by the fact that star power commentary holds more weight than real knowledge and understanding. Mostly, I am frightened for a future in which a world looks to entertainment for facts while questioning or ignoring real insight.

People used to buy books based on the content in them and even well-known authors could enjoy a life of anonymity, focused solely on providing well-thought-out, meaningful content that could empower and impassion their readers. This allowed authors the freedom to continually learn and grow and, in turn, their books helped others do the same. Today, authors are not allowed this freedom. Their time is spent gaining star power instead of knowledge. More books are being sold than ever before. Information is everywhere, but what of the content of the books? People choose known faces over expertise, passion, and even truth.

Just in case you did not catch it, the point is that we need to reevaluate how we ascertain quality, truth, and information. Mass media has transformed the way that people learn, grow, and experience life. This is an amazing thing, but we must learn to recognize the difference between entertainment and knowledge. This is not to say that gaining new insights can’t be entertaining, but there is a huge difference between knowledge presented in an entertaining way versus entertainment presented as knowledge. We must learn to recognize the difference and challenge ourselves to look deeper than the celebrity status or star power of those tasked with shaping our minds, thoughts, and opinions.

You just may be surprised to find that the unknown authors, bloggers, and instructors are the ones that can bring real value to the table. After all, they did not set out to be a celebrity; they simply have a story, knowledge, or information to share. The work holds no secondary agenda; they don’t write just to be heard, they write because they have something worth listening too.

The Difference Between Entrepreneur and Executive

There is an unwritten rule in business that once a company goes public, the original founders must be ousted. The myth: entrepreneurs are great for getting a company started, but not so great when Wall Street is looking over their shoulder. Part of this thinking is that founders of companies are mavericks, passionate doers with a vision, nontraditional in their approach to management and outspoken – the kind of rabble rousing that makes investors uneasy. (What is rabble rousing anyway?)

Passionate in their approach, some are seen as little more than televangelists who work their corporate gospel for all it’s worth, but when confronted with real management challenges, their methodologies are revealed to be a house of cards.

To put it mildly, this is a gross generalization and highly inaccurate.

Case in point, Steve Jobs was an entrepreneur with a vision – created the greatest user-friendly computer in the world and took a byte (pun intended) out of IBM’s market dominance. Passionate and visionary, Jobs had in his corner Steve Wozniak to handle the structure of Apple. Before these guys, working on a computer required extensive knowledge of code just to do a simple task. Many a computer science major looked down at those who couldn’t understand the basics of a computer. Then Apple came along and changed all that posturing by inventing a user-friendly computer that required no code, no programming knowledge, just plug and play. With their visually intuitive interface, Apple redefined what working on a computer meant. They changed the computer business forever by creating computers for the rest of us.

So, it wasn’t a mystery why Mac became the computer of choice for graphic designers – with it’s focus on the graphical user interface and out of the box ease of operation, an Apple could be used by anyone. Before the Macintosh, all typesetting at ad agencies and design firms had to be sent out to a type house to be set into those neat rows you see in magazines and newspapers. You never knew what the type would look like until it came back. One wrong calculation could ruin a piece. Calculating typefaces was a science only doled out to designers with a propensity for math. With applications like Pagemaker and WYSIWYG (what you see is what you get) interfacing, Apple ruined independent typesetting companies overnight. Now all typesetting could be done in house from your desktop and changes could be made instantaneously. Apple was the David that slew Goliath and Apple buyers began to take on a cult-like obsession.

But all was not well at Apple. Jobs’ direction for the company seemed at odds with CEO John Sculley. A power struggle ensued and the board of directors sided with Sculley – Jobs was forced out, and the press had a field day. To an outsider it made no sense. To a seasoned businessperson, it wasn’t soon enough. The founder whose ideology was what brought the company to its current stage of profitability and notoriety was seen as a hindrance to the next phase of success. The myth of the entrepreneur, unable to take the company forward, prevailed.

At first, the executive team took Apple down a road where it had never been before, and profits were the proof that all was working. Time would tell, however, that a new CEO, several years of lack luster sales, and a low stock price are enough to make even the most seasoned board of directors realize they may have made a mistake. The Macintosh started to look like an IBM clone. Just another computer.

For obvious reasons, Jobs was asked back in 97 and the Apple brand began to make a comeback. The entrepreneurial spirit returned and Apple stopped making products that looked like grey boxes and started putting the ergonomic designs back into their industrial design. Lessons learned from Jobs’ NEXT computer system were integrated into the new PowerMac lines, and the iMac brought the Apple brand back to profitability. This was an entrepreneur with executive and strategic execution.

Jobs brought the passion back to Apple. The myth of the entrepreneur had been broken. And let’s not forget Jobs’ investment in Pixar before it was acquired by Disney. So much for the myth of the entrepreneur not understanding real business.

Conversely, executives who arose through the ranks of Wharton, Yale or Harvard learned the ropes of hard work and numbers crunching, eventually landing a key leadership position after quite a bit of seasoning, are just as valid. Many a business needs this style of management to operate and with over 50 million businesses in the United States, I’d say the majority of them operate under this management structure.

Just look at the number of law, accounting and engineering firms that must have serious systems in place to operate. This isn’t just a happy accident, it’s tried and true business 101. Many times executives are brought in to clean up the huge mess created by a founder who didn’t know any better.

One of my favorite case studies of exemplary reorganizing is Harley Davidson. AMF drove the Harley name into the ground back in the 70s by firing employees and streamlining production to such a degree that Harley Davidson became the laughing stock of the motorcycle industry. In an effort to push for greater and greater profits, AMF forgot to make a superior product. It didn’t take long for Japanese imports of better quality to flood the American market.

In 1981, AMF sold Harley to a group of investors led by Vaughn Beals and Willie G. Davidson (yes, grandson of co-founder William A. Davidson) for $80 million. In order to get back their market share and keep Japanese imports at bay, Harley Davidson worked closely with The US International Trade Commission, requesting they impose a 45% tariff on imported bikes over 700cc’s. This was a temporary measure specifically designed to protect Harley and raise the price of Japanese imports. It was the helping hand that kept the competition at bay.

Next step was for quality to increase while keeping costs low. In Japan after WWII, W. Edwards Deming created a productivity model using a simple method of only ordering inventory when needed. Before his methods, companies usually kept large amounts of product in warehouses. It was costly to store, heat and/or cool and costly to insure. And if inventory prices fell, you were stuck with overpriced goods. Assembly could be at such a loss that a company could go out of business.

Deming was the father of Just In Time manufacturing and for good reason – he single handedly helped Japan rebuild after WWII. JIT focused on ordering inventory only when needed but, more importantly, gave workers on the assembly plant floor control over product quality, even the authority to shut down the line if a part or finished product didn’t meet their standards. Quality over quantity.

Harley’s executive management deliberately returned to what made their company famous – the macho “retro” appeal of the machines, building motorcycles that deliberately adopted the look and feel of their earlier cycles with customer-requested customizations. Components like brakes, front forks, shocks, carburetors, electrical parts and wheels were outsourced from foreign manufacturers and quality increased, technical improvements were made, and buyers slowly returned.

With JIT methodologies and a return to quality, Harley Davidson’s reputation began to grow into the premium brand it is today. They even went so far as to get The US International Trade Commission to lift the previously levied tariffs. Because people were still buying Japanese imported cycles at a premium, once the tariffs were lifted, the price stayed the same, and allowed Harley to charge an even higher premium.

Today’s Harley brands encompass the traditional bikes such as the Fat Boy, and female biker focused brands like the Sportster, and the Cafe Racer inspired V-Rod with it’s retro look. Solid management brought Harley Davidson back from the edge of oblivian.

But what can we learn from both styles of management? First, let’s define the two positions. The dictionary defines the entrepreneur as “one who organizes a business undertaking, assuming the risk for the sake of the profit.” This individual many times takes on all the roles within a company until profits and/or investors allow for staffing.

And an executive is defined as “one who administers or manages matters of business of a corporation.” In other words, the executive oversees the structure and the day-to-day operations for the board, the owners, or investors. Compensation may be in the form of perks, stock options, or bonuses.

Either way it appears as if the entrepreneur is working for him or herself and the executive is working for the investors.

So what can entrepreneurs learn from executives and what can executives learn from entrepreneurs?

Entrepreneurs must understand that their business(es) should run without them. Systems and structure must be executed by management and each member of an enterprise should know his/her role. When venture capitalists and bankers invest in a new start-up, it is the first thing they look for – business structure. The passionate nature of the founder may get them to the table, but it is true day-to-day business management they look for. Look at Ray Kroc, founder of McDonalds. He created tight methods for creating every product on the menu. In a business where profit margins are very tight, Kroc showed investors that his structure assured profits, whether he was there or not.

Executives, on the other hand, should take a page from the entrepreneur by looking beyond the numbers and going with their gut. When Mazda introduced the Miata, all the marketing data out there said nothing about a little convertible sports car. It was the last thing on the American consumers’ mind. But Mazda did the unthinkable – they put passion back into driving with a fun and affordable roadster that brought back the days of British MG Midgets and weekends in the country.

The Miata made them look like geniuses. Had they anticipated some sort of market trend? The fact is they did nothing of the kind. Mazda took a chance that paid off big time. They put excitement back into driving. Period. Consumers buy because there is a an emotional reason to buy. Numbers crunching doesn’t reveal passion.

The balance between the entrepreneur vs. executive methodologies is a simple paradigm – it is right-brained thinking versus left-brain thinking. To truly take over the business world, one must integrate both. Look at the leaders you admire best. If you look closely, you will see that they operate from both a sense of passion for what they do while balancing systems, as well as integrate a structure that operates during their absence.

Jack Welch is a prime example of someone who balances the two sides of entrepreneur and executive. He was the very outspoken CEO of General Electric for over 40 years. Passionate and strict, he became a mini-celebrity appearing on The Tonight Show with Jay Leno many times. He kept the bread and butter parts of GE (large turbines, electrical engines, stuff the consumers never see) robust, while balancing the consumer products (televisions, refrigerators, washing machines, etc.) with their financial services divisions. He truly played both roles.

Now that he has retired he is a well sought out speaker for obvious reasons – he knows how to run a business from both sides.

Look at Lee Iacocca, former President Bill Clinton, John Johnson, Mary Kay-Ash, Donald Trump, Malcolm Forbes, Warren Buffet, Tony Robbins, Hilary Clinton, HP’s former CEO Carly Fiorina, etc. All are reflections of balance between an entrepreneur’s spirit and a corporate executive’s strategy. The balance between passion and discipline is what drives all of them.

As Wolfgang Amadeus Mozart once said, “Neither a lofty degree of intelligence nor imagination nor both together go to the making of genius. Love, love, love, that is the soul of genius.”

The funny part is one of Mozart’s sons, Franz Xaver Wolfgang, was rumored to be a better, more disciplined musician than his father, but Xaver shyness only allowed him to focus on conducting – his back to the audience. Having to work in the shadow of his famous father was too hard and despite touring extensively, he faded into history. And there it is again – the passion of an entrepreneur and the logic of the executive.

The balance between the two seems to be the road less traveled, but it has the greatest rewards. In closing, my expertise in this field is extensive, so all I can recommend is that if you are an entrepreneur, learn to build structure and if you are an executive, find what is passionate about your company and reveal it. The results will astound.

Thank you for reading,

Brad

BTW: When Mac users talk about their computers, iPods and iPhones they usually use words like “I love my Mac.” Strong words for an inanimate object, but that is Apple’s target audience. They have an emotional attachment for Apple products. Most entrepreneurs dream of creating that kind of customer loyalty. How do you turn loyal advocates into cult-like zealots? Ask Steve Jobs and Guy Kawasaki. They, in my book, are the masters. Know your audience and you’ll know their passions.

Also, Apple breaks the mold as a business. They are one of the few consumer products manufacturers who also provide content. That’s like a television manufacturer providing the shows as well. But unlike SONY, who does just that, Apple’s profit margin percentages as a ratio of sales to manufacturing are much more lucrative. One of the best verticle models I’ve seen.

This article and my blogs, articles and designs etc…are created on a MacBook Pro, with a 17-inch screen and YES, I love my Mac.

Also, I am not a fan of over analyses especially when it comes to basic human nature. Entrepreneurs shoot from the hip and executives strategize. One builds start-ups, the latter maintains and builds equity. What is there to analyze?

Here’s some “lite” reading on the subject:

What’s The Difference Between CRM, DAM, ERP And MIS – And Why You Should Integrate Them With W2P

For maximum productivity in web-to-print (W2P) it’s necessary to integrate the online sales portal with other business management systems. In some cases these will already exist within the print service provider’s business, and in others they may be added subsequently, but either way, it’s valuable to understand how they function and what benefits integration with W2P would bring.

CRM:

Customer Relationship Management tools support the sales role by recording all customer contact whether it is sales or service related. From this information a CRM system can prompt follow-up calls or other contacts and generate promotional offers for both existing and prospective customers, backed by a record of previous purchase history and notes on any problems.

Feeding W2P activity information into a CRM system is an obvious move as it’s important that all customer interaction and purchasing activity should be visible within the print service provider’s organisation. This not only gives sales and management staff a more complete view of how much business a customer is doing with the printer, but also a sense of how they prefer to interact – do W2P sales follow sales visits, calls or email promotions, for example, or do they tend to occur independently of them?

This information can also provide pointers for the maintenance and development of the W2P portal itself. If initial W2P orders are followed by a reversion to phone, fax or email ordering, for example, this may mean that the portal is not sufficiently easy to use or doesn’t support the type of work that the customer wants to place.

DAM:

Digital Asset Management systems have been around for a while, pre-dating widespread broadband internet, and were often used to provide access to hi-res picture libraries for graphic designers, ad agencies and magazine or catalogue publishers, with on-line interfaces for image selection. Nowadays they may also store master layout documents, images and graphics that are frequently used by customers of template-based W2P.

A value-added service that can tie customers in to their printer, a DAM system can be integrated with a W2P portal to enable the correct templates, images and graphics to be accessed during online construction of template-based jobs. For speed of display, often low resolution RGB images are used to provide the customer preview; when the job is approved for print, these are replaced with high resolution print-ready CMYK versions, a task that can be automated with the correct integration between W2P portal and DAM.

Any W2P system that includes template-based job creation will by default have some degree of DAM functionality, which should be sufficient if you’re starting from scratch. If there’s an existing DAM system, integration with the W2P portal may be possible to save duplication, or it may be simpler to transfer the relevant files into the W2P system.

ERP and MIS:

Often used interchangeably, Enterprise Resource Planning and Management Information Systems largely overlap in planning and executing jobs more efficiently, managing quoting, job numbering, planning and scheduling, allocation and use of resources – both mechanical and human – and consumables and stock replenishment, finishing, shipping and invoicing. In addition to improving customer service through more accurate quoting and job tracking, ERP and MIS help printers gather business intelligence via analysis of customer data and can play a useful role in achieving compliance with quality and environmental standards.

MIS solutions, the type more familiar to most printers, provide analysis of costs based on ink usage, production time, media use and wastage. This analysis may extend to material, equipment and operator performance, in addition to stock management and generation of invoices and delivery notes. Some MIS vendors provide CRM functionality as a module, or web-to-MIS connectivity. Sales staff are also supported via mobile access to MIS, making it possible to quote and book jobs from the customer’s site.

While MIS offerings generally provide outputs that can be used with financial systems, ERP solutions differ in that they generally provide the financial tools as well, which may include CRM, human resources and payroll. ERP proponents point out that this all-in-one approach avoids the potential difficulties inherent in connecting disparate systems from multiple vendors and can avoid problems by alerting users to situations such as customers having exceeded their credit limits or payment terms before further jobs are accepted, for example.

Close integration of either MIS or ERP systems with W2P allows online customers to benefit from automated pricing, ordering, job scheduling and status visibility, while giving the printer reliable information about work in progress for production control, profitability analysis and cashflow planning.

Difference in Working Styles Between India, US and Europe

The working styles between India, US and Europe differ widely. Many Indian corporates and multinational companies are wooing Indians settled abroad in the US and Europe to return to India and work for them. With a multitude of highly paid jobs up for grabs for the experienced professionals, many Indian expatriates are thinking of returning home to take up these jobs.

These Indians in USA and Europe would be exposed to the American and European style of work culture, which is very different from the working style in India. With many multinationals setting up branches in India, they are trying their best to incorporate the western working style in their Indian offices too. Earlier in Indian companies and corporate set ups, constructive criticism, training programs for employees, motivational meetings, teleconferences; employee bonding etc were unheard of and were considered alien and set aside for the American working style.

With the advent of multinationals, the tremendous growth of the IT sector and its allied BPO and Outsourcing services sectors, the American working style is fast being implemented in many of the offices here. But alas these are confined only to the large corporates and multinationals. Smaller and mediocre firms are still following the Indian working style.

Time management does not rank high on the priority list of Indian working styles unlike their American and European counterparts who are sticklers for punctuality and time management. Americans value their time and are keen that the employees are punctual at work and this permeates into their working environment too. In India, if an employee is late he or she always has a good convincing reason. It is common place event to find business meeting rescheduled or rather delayed by an hour or two in Indian companies.

The working style in India requires employees to be dressed in semi formals unlike their western counterparts who are all dressed in formals like blazers and suits. Here the weather does not permit such dressing. In the Indian work environment, everyone addresses each other as Sir or Madam, but addressing bosses by their first name is fast catching up in India, which is so commonly found in USA and Europe where everyone addresses one another by their first names. Indians are inquisitive about others and so take a lot of interest in gossiping about others, some will even try to pry into others lives and offer unsolicited advice. Certainly, this is not found in the American work environment where everyone at the office will keep to their selves and do the work they are allotted diligently.

Those who have worked in companies and firms in the US and Europe will find coming back to work in Indian companies and Indian working conditions really different from what they were previously used to. It will present a challenging task to those Indians in USA [http://www.imrti.com/] who are seeking job opportunities in Indian companies whether they are corporate business houses or multinationals.

The Important Difference Between Marketing, Selling and Advertising

I’ve heard the same sentence from many small business owners: “I’ve tried that, it doesn’t work for my business”. The practice of advertising is a mystery to most small business owners. For them it’s hard enough trying to perfect the process of doing business with their clients; the acquisition of new clients is a whole other challenge. Most business owners aren’t fully aware of the difference between advertising and marketing.

Let’s take some of the mystery out of the practices.

One of the most misunderstood aspects of the process is the distinctions between: marketing, advertising and selling:

Marketing: is the overall collection of tools used to build your business. Marketing has one overall objective – to drive clients through the process of noticing your business, purchasing from your business, enjoying the products or services of your business successfully enough to tell their friends and family and come back for more if applicable.

Some of the tools of marketing include:

1. Advertising

2. Public Relations

3. Direct Mail

4. Personal Sales

5. Internet

6. Print Promotions

7. Education

Advertising: Advertising doesn’t sell to your audience, it is a tool similar to the male ostrich tail; its job is to get you noticed for the specific things you do well. Advertising promotes the distinguishing features, benefits and advantages of your offer to a wide market. The goal of advertising is to bring in valuable leads for the selling process to take place.

I’ve sold Yellow Page advertising to business owners who initially felt that Yellow Page ads brought a lot of callers who were just shopping around. They didn’t want to waste time with “looky loo’s”.

If someone takes the time to make a phone call or send you an email regarding your product or service, why treat them with disdain? These folks are looking for the right answers to their problems. Even more important, they each know about 250 other people personally. Each opportunity to make a connection or a sale should be treated as equally important.

Selling: Once advertising has attracted the potential buyer, the selling process takes over. This is done either by personal sales or the use of point of purchase materials (ie., a store display, video demonstration etc.). Selling should come into play after a prospect has been determined to be right for the product or service.

The mystery and confusion begins when a business owner must decide what tools to use in the process of client acquisition. To whom should you advertise? Where should you advertise and why? How do you advertise? What kind of return should I expect to make on my advertising program? When do I use the other tools of marketing to bolster my advertising program? What should my ratio be between advertising and selling?

To whom should you advertise? Let’s be very clear about this one. You should never put a single dollar into advertising until you know who you will eventually sell your product or service to. You should not even be in business if you have no clue who you want to do business with.

Marketing is used to identify your ideal market. Sure, you may not get 100% of your ideal market, but if you know who will most likely benefit from what you have to sell or service, you can get more of them.

For example, if you’re a chiropractor in a big city, your ideal market might be the couple in their late 40’s to early 60’s that’re health conscious and active. They are looking to stay fit and are open to CAM’s (Complimentary and alternative medicines.). They may have an unfavorable view of the current healthcare system and wish to take a proactive approach to health maintenance. So let’s say after determining your ideal market, you identify 15,000 of them in your market region. So now you have 15,000 likely prospects to reach on a regular basis.

Where should you advertise and why? If you wanted to find a 34 year old Buddhist from Cambodia where would you look for one? The question may seem a bit silly but you know that you wouldn’t start by going to all the mosques in the area.

Sometimes you do have to eliminate all the unlikely places to search until you get to the most likely ones.

You must, of course choose the targets of your ad programs based on how many of your intended prospects will likely see your message. If the local health club in your area has a demographic membership of over 3,000 45 to 65 year olds, you might want to advertise in their monthly newsletter. If they don’t have a newsletter, you may want to sponsor one for them.

Remember the “The best place to go fishing is where the fish are biting”. Take the time to know about your target audience and their buying habits.

How do you advertise? Imagine that your very expensive Mercedes breaks down and the mechanic says that it’s your fuel pump. He needs to change it so he’s going to take a blow torch and cut through your hood, crack open your engine block and then replace the fuel pump. Once he’s done, he’ll weld all the parts back together and get your vehicle back to you.

Would you give this guy the OK to go to work on your vehicle? Of course you wouldn’t. Once you determine what you need to do, you have to be careful about how you execute the solution.

Coming back to our chiropractor, if he finds that the best way to reach the 15,000 couples ages 45 to 65 in his area is through the Yellow Pages; then he needs to decide if it’s cost effective, timely and competitive.

The goal now is to figure out the best way to reach all or most of those 15,000 ideal prospects.

Will he get comparable results from the repeated exposure in the health club newsletter where he’ll have a captive audience and no competition?

There’s no reason not to use both the Yellow Pages and the health club newsletter if they pull their weight economically. The goal of advertising is to gain valuable leads for the selling process to take place.

What kind of return should I expect to make on my advertising program? My answer to my clients to this question is usually a shocker; the answer is a big fat zero (0). How can a business owner spend so much money on advertising and expect no money in return?

This is the basis of the confusion between marketing, advertising and selling. Advertising’s value in the marketing mix is in lead generation. When properly used as such, the measurement of its effectiveness is in how many leads are generated.

This is why it’s so important to distinguish between the various tools of marketing. If our chiropractor had 20 leads coming in each day from his ad campaign and the front desk had a lousy conversion ratio, I bet that he’d blame his ad for not pulling in more clients.

Gauge your response rate when quantifying advertising results. Measure the number of leads coming in and adjust the ad copy to test for better results.

When do I use the other tools of marketing to bolster my advertising program? Advertising should never be used alone. Please remember that the average adult has to deal with over 2700 messages a day from all types of media.

Marketing should be seen as a combined effort to reach the minds and hearts of your target market. You should be using at least five of the seven tools of marketing every week. Depending on the age of your business and your business plan, you should be budgeting 10 to 15% of your estimated annual revenues for marketing. If you just opened your doors in the last five years, crank that up to 20%. There’s a reason that Pepsi and Coke spend over 400 million a year each to satisfy their shareholders bottom-line.

What should my ratio be between advertising and selling? Think of the relationship between advertising and sales as a complimentary one. If your advertising is generating a large number of leads, tailor your sales strategy to convert at least 30% of your leads while capturing all your leads for systematic follow-ups.

Keep in mind that at any given time, 3% of your market is ready to commit to your product or service. The goal is first to convert the 3% of your leads. Then to work on selling to the ones who are on the fence. Whether through personal sales, direct marketing, or point of purchase sales, your ratio will be determined by several factors, the offer, the product or service and the immediate need of the prospects and of course, price.

Don’t get too anal about the ratios. The most important thing to remember is that marketing is an inexact science. You will have to keep testing and trying for better results as the market changes.

Determine the value of a new client and the life time value of your clients. Once you do that, be sure that your marketing efforts are bringing in enough new business to cover the cost of getting new clients and that your sales efforts cover the cost of keeping you in business.

Tweak the numbers and track consistently. If your estimated marketing budget is $37,500 for the year, and your estimated revenue is $250,000 then you have a standard starting point.

At the end of the year your numbers should add up. If you haven’t made the $250,000 don’t simply blame your advertising, look at your leads list and determine if you’ve converted the required number into sales.

If you don’t have a leads list then we need to re-evaluate your purpose for advertising.