CLAUDE WHITACRE’S UNFAIR ADVATAGE RETAIL

TOM SHERMAN INTERVIEW WITH CLAUDE WHITACRE

TOM - Hello everybody. This is Tom Sherman with the Ohio SBRT and I wanted to get some information out to you before our meeting on June 28th in Medina, Ohio and on the phone with me is Claude Whitacre. He owns the Sweeper Store here in Wooster, Ohio and he has written a book called the “Unfair Advantage Small Business Advertising Manual”. Read the book, here was a lot of good information in it that I was able use and apply to my own business and I thought it would be a great way to get him out to share some information to us at one of our meetings. So I’ve asked him to come out and speak with us about how to use advertising methods to increase our carpet cleaning restoration sales. So Claude can you take a minute to tell me about you and your store?

CLAUDE - Sure, hi Tom.

TOM - Hello.

CLAUDE - I do own the Sweeper Store. I’ve been in sales for about 24 years. I’ve been selling vacuum cleaners most of that time. For the first say 16, 18 years I cold canvassed. Isn’t that fun?

TOM – Yeah, yeah I’ve done that.

CLAUDE - I cold canvassed, knocked on doors. The joke is, somebody asked me once “Do you  sell door to door?” and I said “yeah, I used to go window to window, but I got arrested.”  And what I’ve done, over the last six years is studied marketing, I’ve studied advertising. I’ve used it here in my store myself. I’ve used the methods I teach in my store. So I’m my own best lab rat.

TOM - Right.

CLAUDE - I also publish the Unfair Advantage Retail newsletter and I have, of course, the Unfair Advantage Advertising System.

TOM – Okay. Well you’ve been advertising for a few years now so can you tell us some of your results that you have?

CLAUDE - Sure, okay. Well at first let’s just use direct mail. Let’s just use that as an example because it will save a little bit of time here.

TOM – Okay.

CLAUDE - I started advertising with direct mail with a company called the Town Money Saver here in Wooster. There’s a lot of other ones, there’s the Gold Clipper, the Penny Saver; there are a lot of other magazines that are very, very similar  to the Town Money Saver. And what we did was; about 6 years ago I started advertising with them. And the results were terrible, I have to admit, we didn’t do very well.

The reason we kept going is the rep was a really nice guy and I really liked him. So I kept buying these small ads and I finally figured; maybe I should try some different things. And he and I worked on a few things and we started realizing that this little part of this one ad is drawing in customers. So I expanded that out and I did some more studying.
I took some courses and  fortunately I had a mentor that taught me quite a lot about advertising. And for the last three or four years now, every ad that we’ve run, with the exception of one, one time, has produced at least a five to one profit. So for every dollar we put in it we get back five. I spend about, right now, about a thousand dollars a month on advertising and that’s all. So we track it very, very and we’ve found that our ads generate anywhere from  six to thirteen thousand dollars a month (in net profit) and we had one freakish month where it generated forty-four thousand dollars in sales. One five hundred dollar ad generated forty-four thousand dollars in sales. That will never happen again.

TOM – Okay, wow that’s great. I’ve done a lot of my own trial and error stuff there especially in those display ads and I’ve had some real good winners and some not so good ones. But same thing, I had some mentors that taught me to track and that’s just great information. How do you learn so much about what makes a great print ad then?

CLAUDE - I had a mentor. Years and years ago I decided to open my own retail store. I asked a lot of people in the area “if I wanted to open a retail store who should I learn from?”,  because I didn’t want to do it just cold. The franchise; what they do is they learn how something works, and what they’re doing is they’re buying the market, they’re buying the program. What I did was I went around and asked who should I learn from? Some people might know this guy. I asked a lot of people that owned vacuum cleaner stores and they all said, universally  “well, you should go see this guy or that guy but whatever you don’t go see this guy! He takes over business and he’s evil and his name is Julius Toth”. And I decided, “ well, if everybody hates him, I figured he must know something”. I went to him and he was very generous and said I said I just wanted to open a store and we had a deal.

 I didn’t want salary, I just wanted to know how to do this and he was very generous with me, and he was very generous with his time. and with his teachings. He showed me a book once, and we called it “The Book of Eternal Knowledge”. And what that was, is every ad he’s ever written and every ad he ever produced; and the cost of the ad.
So there would be the ad, it would be the cost of the ad, the number of sales, then the net profit on the sales. He showed me these things and he showed me, at the beginning of the book, he said “look at these ads”,  he said” these ads are producing and some of these are not”.  And you get towards the end of the book and they are all producing. Its all trial and error

TOM – Uh-huh.

CLAUDE – And eventually I would have just absorbed it. Frankly, at the time I wasn’t as a smart as I am now. So what I did is I just sort of ignored it but later on I came back, and he really mentored me and taught me quite a lot. I would have caught on eventually but it just really quickened that learning curve.

TOM – That’s the whole point of these things like these trade association is so we can all get together and find out what’s working and what’s not working.

CLAUDE – Sure, there are shortcuts. I mean there are things that can immediately work.

TOM – The information is so expensive these days, and the more that you can get just by being out and being involved in things is even better. In your book you wrote… you talked about alternatives to cold calling. How does copywriting figure into that?

CLAUDE – Well okay now Tom, we all have the ideal customer. We all have the customers that we love. We all have a few of those that we wish everyone could be like. We all have customers, I mean this in the nicest way, that are low profit pain in the neck problem children. We all have a few of those and what I do is I show people how to get the great customers calling you and not the problem children. Just separate those people and you get the ones that you really want to call you and there’s ways to do that, of course.

TOM – That’s what I’ve really been concentrating on the last few years, and the funny thing is when we get the better paying clients the house is cleaner they’re paying more often, they’re paying with a credit card there’s a world of difference. Now, who do you want to work for? Our listeners have their own ideas on how they advertise and how can we show that your way is the best way?

CLAUDE - Well best way compared to what? For example, if it’s working just do more of it. If you’re running an ad and the ad is producing a really good profit you can tweak the ad a little bit but just continue doing that for awhile. An example, “advertising a low price”,  a lot of people do that, and that’s a real common mistake, by the way, advertising at the lowest price

TOM – I’ve learned that one the hard way.

CLAUDE - That’s one of the least effective appeals you can have. It’s the least profitable and least effective, but people do it all the time. And I tell you why; that’s what they think is available. They think lowering their prices is a way to get customer, but advertising a lower price really only attracts about 20% of the population. It’s the same 20% that everyone else is after so what you’re doing is your competing with everyone else in town trying to attract the same lowest, least profitable 20% of the business.

TOM – Yeah.

CLAUDE - Now you can advertise to promote the most profitable 20% of the population.  And I got to tell you if you do that you’ll probably be the only one. You know here in town, we’re the only place (out of) sixteen places that you can buy a vacuum cleaner, sixteen places that advertise, and they’re all fighting for that seventy nine, eighty nine dollar vacuum cleaner customer.

TOM – Yeah.

CLAUDE - And our least expensive vacuum cleaner in our ads is two hundred and seventy nine dollars and we don’t drop price. But we don’t have to. What we do is we advertise things other than price that make people really, really want to come in here and buy a vacuum cleaner.

TOM – Okay.

CLAUDE - So that works really well. With our advertising, its also a really good idea to make it so that with, what your advertising, there’s enough profit there. You don’t have to have 5% of the people come in. For example, on my Town Money Saver direct mail ads, I make money if one in ten thousand people that sees the ad comes in and buys. And my average is one in a thousand so it’s very profitable even then.

TOM – I know something that a lot of guys make prominent is name, rank, and serial number. They put a lot into their logo, their ranks, or maybe their certifications and things like that and there is basically their phone number and some of the phone books you’ll have the same ad except different companies all the way through.

CLAUDE - And that’s because that same person wrote all the ads.

TOM – I’ve learned the hard way that just finding your U.S.P., your unique selling point, is where it starts. So how can we help our reps generate, our members in the SCRT, generate more sales?

CLAUDE - Well separate yourself from the other carpet cleaner’s.. For example, I put two ads in the Money Saver, two completely different ads, and they pulled twice as well as one. Of course,  send a list out to your customer, you can’t lose money doing that; at least I never have. Sending offers to your established list of customers; I mean they’re already used to buying from you, their already used to giving you money. You’ve trained them.  

TOM - That first customer costs you the most. That’s one thing I learned.

CLAUDE - In fact have you ever bought anything from an infomercial?

TOM - Yeah

CLAUDE – Yeah, I’m not talking about the Girls Gone Wild tapes there.

TOM – No, no, no, no.

CLAUDE - If you’ve ever bought anything from an infomercial. Like for example, you see late night on TV there’s “send in $39.95 and get rich in real estate”. There are people that send in that money and they’re thinking “you know, I bet when I get this back it only costs them five dollars and they’re making 35 dollars and this is a rip off” and all that. I’ve got to tell you it might cost that company two or three hundred dollars for every single time one guy pays $39.95. And the reason they want to do that is because they know on average, as long as that customer stays with them, they might average two or three thousand dollars from that person. So that $39.95 is irrelevant.

TOM - Figured that out, that’s great.

CLAUDE – Yeah, that’s one of the secrets. Plus, it’s far easier to sell another product to that customer than it is to find a new customer.

TOM – Yeah, you’ve talked in your book about “growing you’re herd”. Now can you tell us the idea of how that came about?

CLAUDE - Yeah remember, I was telling you about Julius Toth; when we first meet we became friends. We found out we had the same kind of sense of humor, we read the same books, we’re both advertising, marketing, and sales junkies. We bought the same books and we listen to the same seminars and the same mentors, and then he became a mentor of mine. And he sat me down once for breakfast; I was still selling in the home, and he was working at a store, and he was trying to explain to me the difference between what he did and what I did.  I put it in the book. I got permission, but I put it in the book because I thought it was amazing.

 “Claude here’s the main difference between what you do and what I do” I’m selling in the home he sells at retail he says “Lets pretend this is like the old west and we’re cowboys. Your out there, you’re a cattle herder. What you do is, you go running around out there in the hills and the prairies and you find stray cattle and you gather them up and then you sell them. And you do that everyday. And everyday and you get up and you’re sleeping on cold ground and you go out and you find the cattle. And what I do is a little bit different. I own a ranch., I have cattle. I have a Herd of cattle. And I have guys that take care of that herd of cattle for me. And everyday we feed them, we keep them warm at night, we brush them, we take care of their medical needs, we corral them in. And every year my herd gets bigger and bigger and bigger and every morning you’ve got to get up and do the same thing. Its all about the herd”……… and I thought that was just amazing.

TOM – It makes a lot of sense when you put it like that. That reminds me of the golden egg and the goose.

CLAUDE - The golden egg and the goose?

TOM - Yeah, the golden egg yeah, the farmer just keeps taking the golden eggs and eventually he thinks he can just cut this goose open and here he kills the goose and he has no more gold.

CLAUDE – Yes, very good point. In case nobody caught that, I went through that a little bit quick. The herd is your herd of customers, and its better to grow you’re herd of customers than to go out and continually finding new blood. You know, find your herd, establish your herd, figure out who you want in your herd, you can choose who’s in your herd and just work them and work them and work them. That’s where the money is.

TOM - Okay now can you give us maybe an idea on how to grow you’re herd of customers?

CLAUDE – Yeah, there’s several ways. First of all there’s advertising, advertise high end, don’t advertise low end. There’s a mistake that a lot of our listeners might be making and I have certainly made it myself. One is the headline. The headline is the single most common problem that the people have in advertising. What they’ll do is they will either put no headline in which is bad. For example you’ve read the newspaper. Have you ever read an article that did not have a headline?

TOM – No.

CLAUDE - They always have headlines. The headline is what sells the ad. Somebody will have no headline in their ad or they’ll have what they think is a headline which is the name of their company. Here is the bad news, and I hope I don’t irritate anybody with this, but nobody cares about the name of your company. The name of your company isn’t a benefit, it doesn’t establish need, it doesn’t build desire, and it doesn’t create any need to buy anything that you have. The place for your name of your store is at the bottom of the ad, because frankly nobody cares where you are, and who you are until they want what you have. The headline should always be the most important part of the ad. 80 % of result that you get is from the headline so you should really work on the headline.

TOM – Yeah, yeah

CLAUDE - Another thing is a common mistake is trying to be cleaver or funny in the headline or in the ad. That’s a real common thing and it just really doesn’t work. When you see somebody trying to be clever or funny in the ad, what they’re doing is they’re selling the ad they’re not selling their product.

TOM – Ah, I see. I got you.

CLAUDE - You’ll see ad agencies do that over and over and over again, and you’ll always see the ads that are clever on the super bowl. Well what they’re doing is they’re selling the ad to the company.. Like all those certifications in the ad; those certification are important to a small percent of the readers. You should have those in there, but those are really important to us, and not important to most customers. You know, really what the customers what to know is “how does this apply to me” and “what do I get” and that’s what they want to know.

TOM – Okay, so so let’s talk ads now. What are the most common mistakes an advertiser uses or makes?

CLAUDE - Again it’s in the headline or they’ll be too general. A real typical ad is: “We’ve been here 35 years, we’re nice people, we service what we sell, service with a smile and here’s our location”.  Those things are nice and they make you feel good and the customer says, “oh, that’s nice”. But nobody’s ever looked at an ad and said this: “Honey, we weren’t thinking about getting our carpets cleaned but, dog-gone-it, they’ve been there for 35 years.”

TOM - Yeah

CLAUDE – “Maybe we should go ahead and call them.” That really doesn’t happen. It’s because when you’re writing an ad your thinking “okay, what are you interested in?. Well, what’s interesting to you because you own the company, isn’t interesting to the consumer, see?  So you’re priorities are different than the customers priorities. The customers priority is “what do I get?, why do I need to call you?, and what do I get when I call you?” Those are very important things to put in the ad.

TOM – Absolutely, okay. I remember reading in your book also you talked about the 7 myths ad reps tell you. Can you tell me a little bit more, can you elaborate on that?

CLAUDE – Okay, here’s a good example. I know you’ve heard this before because I know you’re kind of a marketing guy. “The customer has to see your ad seven times before you get a result”. I mean you’ve heard that, I’ve had print ad guys tell me that, the radio guys tell you that. Well there’s a little bit of truth to that, if you’re selling on the radio. The customer has to hear the ad over and over again because they’re not sitting there listening to the radio, with a pen and paper in hand, waiting to write down your number. They’re just not doing that. So they have to listen over and over again just so that they can kind of prepare themselves “oh it’s that ad okay. What was that number again?” Where that came from, that “seven times”, or I’ve heard fifteen times, or six times, where that came from is brand building. Somebody has, if they hear the name of your company, they have to hear it seven times before the name of your company sticks. That doesn’t mean after the seventh time they want to buy what you’ve got. That just means they remember the name of your company. See that’s one of the real common mistakes. I’ve had an ad rep come in one day, he had a newspaper ad he wanted to sell me, and I said “you know I buy a lot of advertising”, so I said “yeah, okay. I’ll try it one time. How much is it?” It was a small paper, 250 dollars.

TOM – One time.

CLAUDE - And I said “Alright I’ll go ahead and do it one time.” And he says “Well no, you need to do it thirteen times.”, because he sells a thirteen issue contract and that’s what he wanted to sell. He said “You have to buy it thirteen times.” And I said “Why? I just said I’d buy a full page ad.” And he said “Well, you need to run it thirteen times before it will work.” I said “No, no, no. I appreciate that you are looking out for me, but I’ll just give you an ad that works immediately. I mean this ad, somebody reads the ad and they’ll just come in and buy.” And he says “No, no, no, no. It won’t work. You need to run it thirteen times.” And I said “But I’ve done this before and you’re saying- how many people get this paper?” “Twenty-seven thousand.” “Are you telling me that if I run an ad and twenty-seven thousand people see it nobody’s going to call until they see the ad thirteen times?” He said “That’s the way it works.” And I said “I’m sorry. I really want to buy an ad. Are you trying to tell me that you came in to sell an ad, I’m trying to buy an ad, and now you’re going to refuse to sell me an ad?” He said “I guess.” And I said “Okay.”

You know, they’re just sort of stuck in that thinking. And here’s why it only takes one ad. If you hear a joke, is it funnier the seventh time you hear it? No it’s funny or it’s not funny. You get it or you don’t get it. You see a print ad, you can look at the ad, you can put it down, and you can look at it again. You know, print ads either live or die the first time they’re out there. And if you run a print ad, and let’s say you’ve signed a thirteen week ad, thirteen month contract or whatever it is. Don’t keep running the same ad thinking that it’s going to get better. It’s never going to get better. You change that ad. That’s what I did I signed the contract when I first started out, and I’m thinking “well I better experiment and try to get better ads because this ain’t working”. And eventually we figured it out.

TOM – That sounds like the yellow buckeyes and they decided to come with all these figures and all these reports and graphs and everything. And just recently, two years ago, we had a nice ad. It did about a seven to one return it was a bigger display ad. And we decided this year to take it out go a little bit smaller but still have something in there and I’m getting nearly a nine to ten return on that ad its not even a display ad but it’s the words that we use.

CLAUDE - That exactly right.

TOM – And how we use them and all the experience and plus I’m also kind of a student of marketing too. But testing and going back and just trying things and being a student of this you can really be successful at writing some of these ads.

CLAUDE - One of the best ways to tell if your ads going to be successful, is if the Yellow Pages guy won’t except it or the newspaper calls you up and says “You know I just don’t know if we can run this ad because it sounds a little too hypey. I just don’t know. You need a picture, why don’t you put a picture in there?” When they’re fighting you that’s a real good sign that you’re ad’s going to do something.

TOM – That’s an interesting point. So what if an advertiser uses your idea and doesn’t get a great result what then?

CLAUDE – Well, that can happen. In fact, I pretty much guarantee that’s going to happen, but I promise you that after two hours you’re not going to become a complete expert.… if you’re training to become a doctor, in a couple of hours I can’t make you a doctor but I can teach you first aid… in a couple of hours. What I do is I teach you how to track your ad results, which almost nobody does. It’s a real famous saying of William Wrigley of Wrigley’s gum he says “half the money I spend in advertising is wasted, but I don’t know which half.” That was a time before computers, before tracking, and you can easily track, especially if you’re using coupons to easily track your ad results. And find out if the ad is paying for you or not. Or even better, find out which part of the ad is pulling and which part is not. Then you can make very, very quick, easy changes and after just a few attempts you’ll be advertising profitably, okay?

TOM –Claude will these advertising ideas work in any business as far as…..?

CLAUDE – No, no. Even in my newsletter, I’ll tell people that if you own a dollar general store, for example, you’re just not going to benefit from these ideas. Your transaction value is just so low, that if you’re selling ice cream cones you’ve got to sell a thousand ice cream cones to make a really good ad pay off. Also franchisers, if you own a franchise, and you’re working for a company that has ads that you have to use, I can’t help you. You can’t change the ad; you can’t change anything. I’ve ran into that a couple times with builders, and people that own franchises, so unfortunately it doesn’t work if I can’t help you.

TOM – Our franchise is completely different. We encourage our own people to come up with their own ads and we share because there are more people testing things that way. But I do know there are some just like that, they won’t even talk to associations because they’re so brainwashed into their system and their way of doing things, marketing, that they don’t even consider anything else.

CLAUDE - And a lot of the marketing that you get from other companies its good marketing, but they base a lot on graphic design. I get a lot of that. Where somebody will say “oh that’s a beautiful ad” and somebody will send me the ad, which people that subscribe to my newsletter will send me an ads, and they’ll say “I ran this in the newspaper” and it’s a beautiful ad, and I’ll say “that’s beautiful, but so?” Nobody ever said “We weren’t thinking about getting our carpet cleaned, but honey look at the design of this ad, isn’t that beautiful. We should call this guy.” That just doesn’t happen.

 I got to tell you, I’ve run ads that I’ve had competitors say “my ad looks better than yours”, and I say more power to you. Your ad does look better than mine. But it’s whether the ad pays off or not.

Any small business would benefit, anybody that owns their own company. If they own a small business or a company you’ll certainly benefit. Certainly carpet cleaners will benefit as long as they’re market is diverse. For example, if you’re selling hospital gowns to hospitals, maybe advertising on the radio would be a waste. But these ads apply to retail services or services that sell to the public.

TOM – Claude can you teach us everything you know at the seminar?

CLAUDE - Well I can’t teach you everything. I can teach you everything I can, in two hours. So what I’ll do is I’ll talk fast and I suggest taking notes. I know I sure would.

TOM – Okay, now Claude maybe our guys could kind of bring some ads maybe you (could) look at it?

CLAUDE - Boy that’s a really good suggestion. Absolutely. I have a better idea. Why not have them email their ads to you or me. What’s your email address by the way?

TOM – My email address is t-o-m, my first name Tom and then E as in Eric, M as in Matthew, T as in Tom, and B as in Boy. So that’s EMTB at aol.com. (tomemtb@aol.com)

CLAUDE – Okay and my email address is Claude, c-l-a-u-d-e at Sweeper Store, that’s s-w-e-e-p-e-r-s-t-o-r-e dot com. (Claude@sweeperstore.com) Email the ads either to you or to me and so that we can look at them.

TOM – That’d be great.

CLAUDE - And you can forward them to me, and then what I’ll do is I’ll look at them before the meeting and I’ll put them in a transparency. We’ll go over the ads and we’ll see all the ads and learn from the examples. Sound far enough?

TOM – Sounds great. So all you guys listening out there pull out those ads. I know I’ve got some of them in my closet. Pull out some of the deep down stuff from way back, at some of the stuff we used to do that didn’t work. You got the stuff you’re using now. Just cut it out bring it in give it to me somehow, email it to me, fax it to me whatever you got. I’ll make sure Claude gets it before the meeting. So it’s going to be an awesome meeting. So it would be great for any one who really wants to fine tune their marketing. So I hope to see all of you there. It’s in Medina, Ohio at the Hampton Inn on the 28th . We’ll be starting around six o’clock or just a little earlier than normal but so we can cover the info and get out of there a little bit earlier. So again my phone numbers 330- 262- 0936, to get your RSVP. We’re kind of limited about 30 so we’ll be open to some non-members so hopefully every one gets their RSVP’s early enough that we can get a good head count and hope to see all of you there. So thanks a lot and we’ll talk to u guys later.

CLAUDE - Looking forward to it Tom.

TOM- Thanks a lot, Claude.

CLAUDE – Alright, bye-bye.

TOM – See you.