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Posts Tagged ‘Admen of Note’

David Ogilvy Continues to Teach Us – We Sell or Die

It still so true we should repeat it at the start of every new year.

Sears, Roebuck & Co…. The Facebook of 1924

When Sears, the Facebook of its era, launched its IPO it Sold Preferred Shares at $97.50. That’s more than $2,000 today.

Even people who don’t play the market thought about buying stock in Facebook’s initial public offering of shares. One hundred six years ago, Sears was its era’s version of a hot tech company. Like Facebook, Apple or Amazon, it wasn’t just a corporation–it  was a revolution. “the catalog was the internet of the day“, said James Schrager, a University of Chicago business professor. “Sears was Amazon“.  The young Chicago mail-order company selling its shares at more than $2,000 in todays dollars wasn’t for the common man. But the purchase of even one share would have been lucrative. Counting from 1924, when Sears entered the Dow Jones index, to 1996, and adjusting for stock splits, the Wall Street Journal calculated Sears shares soared 434,552 percent. The skyrocketing value was rivaled only by the young Midwesterner who founded it.

Sears retired in 1908 with a fortune estimated at $25 million. He died in 1914 more than a decade before the company he founded opened a single store.

Richard W. Sears was hailed in his Chicago Tribune obituary as a man “whose career typified the romance of Amercian business“. Mix the youthful risk-taking of Facebook’s Mark Zuckerberg and the marketing instincts of Apple’s Steve Jobs– that was Sears. It started in 1886, when Sears was a railroad station agent in backwoods Minnesota, wrote historians Boris Emmet and John Jeuck in “Catalogs and Counters: A History of  Sears, Roebuck & Company“.

A shipment of gold watches arrived for a local jeweler, who refused them. The rebuffed wholesaler told the 22-year-old Sears he could have the watches for $12 apiece. he said yes, pivoted, and offered them to agents along the line for $14. With that type of watch retailing for $25, there was room for the agents to profit, and Sears pocketed $2 for every one he sold.

Within six months he had made $5,000, and his watch business started to outstrip his railroad salary. “The tail had begun to wag the dog“, he said in a 1906 Tribune article. Sears moved to Chicago, set up at Dearborn and Randolph streets, and hired a watchmaker “thin to emaciation“, Alvah Roebuck. Their watch company grew rapidly into a general mail-order company that used high volumes to enable low prices.

It was a recipe perfect for the time, when millions of rural Americans were disgruntled with their general stores. A barrel of flour in 1899 was $3.47 wholesale, according to the company, but $7-plus at a country store. Sears, Roebuck used comforting ads to overcome farmers’ fears. “Don’t be afraid  that you will make a mistake“, read one catalog. “We receive hundreds of orders every day from young and old who never before sent away for goods“.  The company adopted a money-back guarantee and “send no money” became a famed tag line. Richard Sears delighted in writing his own ad copy and, typical of the time, often pushed the envelope. One offer advertised a sofa and chairs–“beautiful plush for 95 cents“. (By comparison, a John M. Smyth ad in a 1906 Tribune offered a single chair for $1.50.) Only when Sears furniture arrived did the customer discover it was for dolls. Later, Sears would tone down the ads and was said to have concluded, “Honesty is the best policy. I know because I’ve tried it both ways“.

By 1905, Sears’ sales had surged past $39 million, passing Montgomery Ward, the Chicago company that had invented the mass mail-order catalog. Sears needed more capital to grow. Julius Rosenwald, who had joined Sears as a partner, asked old banker friend Henry Goldman for a loan, according to Rosenwald’s grandson and biographer, Peter Ascoli. Goldman suggested an IPO instead, leading to Sears, Roebuck’s sale of its stock in 1906. It aimed to raise $40 million, which proved crucial for surviving the Panic of 1907. For Goldman, co-managing the Sears IPO is still touted as a landmark for his bank, Goldman Sachs.

Only the rich could afford to buy stock in 1906, but Americans’ disposable incomes was growing, and the company took full advantage. Its catalog the “consumers bible”, made available everything from sewing machines to Encyclopedia Britannica to ready-to-assemble houses. “The story is the coming of the middle class“, Schrager said, “and the desire of the middle class to have more things“.

Sears retired in 1908 with a fortune estimated at $25 million. He died in 1914 more than a decade before the company he founded opened a single store. Sears leapt into the retail store business in 1925, as rural customers moved to the cities. A December 1924 Tribune, in announcing Sears’ branching out into brick and mortar stores, made note that “several mail-order houses have considered” such a move, “but heretofore they have confined themselves to their own method of merchandising“. Sears promoted the new store at Homan Avenue and Arthington Street in the Homan Square/Lawndale area as “easy to shop for men” with a “whole square block of free parking“.

The first Sears store on State Street between Van Buren Street and Congress Parkway opened to great fanfare in March 1932. By  1950, Sears had 650 stores nationwide, including eight major department stores in Chicago and stores in Joliet, Waukegan and Gary, according to the Tribune.  By the mid-1950s, Sears would be international, with stores in Mexico, Venezuela, Cuba, Colombia, Peru and Brazil.

Sears opened mall stores after World War II as customers headed for suburbia, teaming with Marshall Field to build the Oakbrook Shopping center, which opened in 1962. “Rosenwald and others had an uncanny ability to see which way things were going to go“, said Ascoli, who lives in Hyde Park, blocks from the University of Chicago’s Rosenwald Hall. By the 1970s, Sears was still the No. 1 retailer but Wal-Mart and others were on the horizon. Today Sears Holdings is No. 10 and its CEO acknowledged recently that “you change or you die”.

Sears still will probably have fared better than a company like Amazon when all is said and done, said Schrager, who likes to ask his students why Sears built the Sears Tower, which opened in 1973. “Because they could“. he said. “They were unbelievably successful. I don’t know if Amazon is ever going to build the tallest building in the world“.

Footnote to this nostalgic article which ran in the May 11, 2012 Chicago Tribune is that when Sears decided to consolidate all their employees in one location and moved them to a Chicago suburb, the Sears Tower was renamed the Willis Tower after their largest tenant. Another interesting factoid. Sears many years ago started their own radio station which quickly became one of Chicago’s major succesful radio stations with the call letters WLS, which stood for WORLDS LARGEST STORE.

Another true story on a start up company with very little capital chose Mail-Order, as a way to build their business and whose founders became MAIL ORDER MILLIONAIRES. Can it still be done today? One of the largest and most successful On-Line companies still sells only by Mail-Order. Any guesses as to their identity……AMAZON! And speaking of Amazon if you have the desire to start a business of your own, a business you can run from anywhere in the world and one that has little cash requirements, you can get started by ordering a copy of my book HOW TO BECOME A MAIL ORDER MILLIONAIRE from Amazon. Cost is only $39.95 plus s&h, or as a reader of my blog, save $10  and order direct from the publisher. Send check or money order for $29.95 plus $3.50 (total $33.45) to SUPERIOR PRESS 333 N. Michigan Avenue, Suite 1032, Chicago, Il 60601 Book is sold on a money-back guarantee of satisfaction.

Big Fish or Little Fish – It’s Still About Getting Your Customer to Act

The topic for this weeks blog is all about ADVERTISING and since my book HOW TO BECOME A MAIL ORDER MILLIONAIRE is a guide on how to become wealthy by starting your own business it is extremely important to learn how to market your new business effectively and the best way to do that is to ADVERTISE.

Allow me to introduce you to John Boggs. He is first and foremost a sales guy. This is the rock upon which his distinguished career was built and why his advice contained within his new book ADvice By John Boggs: Common Sense Stories of Local Advertising and Sales is well worth heeding. No advertising glitz here, just battle tested and market-proven sales and advertising wisdom for those wanting to improve their sales batting average. John’s zest for life and passion for sales/advertising will put a tear in your eye and a spring in your step.

He starts his book with a quote from Stephen Grellet

“I expect to pass through this world but once. Any good therefore that I can do or any kindness that I can show to my fellow creature, let me do it now. Let me not defer or neglect it, for I shall not pass this way again.”

The following are excerpts from his first chapter

“As I was growing up, I had grandiose plans for my life and career. I wanted to be a scientist, an astronaut and a doctor. I envisioned myself as being world famous. My grandfather was a wise man and enjoyed asking me what I was going to be when I grew up. More often than not, I would begin with the phrase ‘the top, the number one, or world famous.’

Each time I shared my dream of which I would become, my perceptive grandfather would say ‘It is better to be a big fish in a small pond rather than a small fish in a big pond’. He would explain to me that if I was important in a small domain, I would have more opportunity for achievement as well as create the possibility to move to bigger domains. Still, he didn’t stifle my dreams.

As I grew and experienced the world, his words became more of a guide for me than I would have ever expected. I found myself attracted more to smaller companies where I assumed leadership roles and quickly made a difference. I was attracted to becoming a big fish in a small pond. As my achievements grew, bigger ponds (companies and opportunities) presented themselves. And so the cycle repeated.

What does this have to do with advertising? Everything! All advertisers, especially those smaller than Coca Cola and General Motors, should heed my grandfathers. It is much better to be a big fish in a small pond rather than a small fish in a big pond.

How do you do this? Focus your advertising to a limited number of media options. Dominate the media options you choose and only expand to additional options after you become (and can maintain) being a big fish in that pond. How do you dominate? You grow and increase your ad size and even the number of ads per issue. Once you are the largest advertiser in your category, you dominate that medium.

Even the smallest circulation magazine has more readers than the average advertiser can accommodate. How many businesses could handle an influx of 30,000 or even just 10,000 new orders? Not many. It would truly be a case of too much of a good thing. Yet most advertisers focus on reaching as many people as possible with their sales message Very few advertisers write excellent sales copy, so only a few of the millions reached actually respond. How distressing would it be if every reader in every magazine or every viewer of every television program decided they wanted to take advantage of your offer? No business could hire staff fast enough to fulfill orders promptly and still maintain good customer service.

Fortunately for all of us, advertising does not work that way. Consumers (including you) go through a very rigid decision process before making a purchase. AIDA, no I’m not going to slip in a reference to an opera at this point. AIDA is an acronym for this process. Awareness/ Interest/ Desire/ and Action are the steps each consumer needs to go through before buying any product.

Many of today’s advertising salespeople are not schooled in how advertising works. Most do not know what it takes to be successful. Those who do often do have the courage to tell an advertiser the price of success. That price involves steering the potential customer through AIDA: making them Aware of your product, cultivating their Interest, creating an intense Desire to own the product, and giving them a strong incentive to Act. As you can imagine, a ¼ page ad run twice will not in most cases take the consumer as far as you need them to go.

A competent advertising salesperson can tell you the truth about how much you should spend and what your expectations should be.

Unfortunately, far too many will tell you what you want to hear, that you can get something for nothing.

There is so much more to effective advertising than the number of people you reach. Advertising is more of an art than a science. But if you apply basic scientific principles toward your advertising plan, as well as use common sense, much of the mystery dissolves.

John Boggs concludes the first chapter of his most useful book by quoting his grand father’s wisdom, once again. “It is better to be a big fish in a small pond rather than to be a small fish in a big pond”.

In my book HOW TO BECOME A MAIL ORDER MILLIONAIRE I show you how the AIDA principle can help you succeed in the mail order business and by the way it also contradicts a lot of what John says about advertising but only because John Boggs was talking about advertising to reach consumers to make a purchase at retail. There are different rules for direct response (mail order) advertising that make it very easy to grow a business quickly and with much less up front advertising expenditures, where every dollar you spend on advertising will allow you to make at least two dollars back, and even more.

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David Ogilvy an Original Mad Man Speaks Truth about Marketing

On Youtube I recently came across this video narrated by David Ogilvy. If you’ve never heard of him and are interested in becoming a MAIL ORDER MILLIONAIRE, I encourage you to view it.

Mr. Ogilvy was one of the true geniuses in advertising setting up shop in 1949. He preceded me by 4 years. My first job in advertising was in 1953. This is the same time period that the wonderful TV series MAD MEN is about and Don Draper, the main character in the show is very much like David Ogilvy.

In World War II before founding the advertising agency OGILVY & MATHER, he served in the British Intelligence Service. His company was one of the most successful agencies of that period. He was responsible for creating the advertising campaigns for ROLLS-ROYCE Here’s one of his famous headlines for them: “At 60 miles an hour the loudest noise in this new Rolls-Royce comes from the electric clock”. He resigned the account a few years later when they sent five hundred defective cars to the U.S.. Two years later he was assigned the MERCEDES-BENZ account and one of his wonderful headlines helped them increase sales from 10,000 cars a year to 40,000. Here’s one of his headlines for them: “You give up things when you buy the Mercedes-Benz 230S. Things like rattles, rust and shabby workmanship.”

Among his other clients were two very small companies at that time HATHAWAY SHIRTS and SCHWEPPES. For Schweppes he used the face of his client Commander Whitehead as the symbol of his own product and for Hathaway, he invented the man from Hathaway. Both companies are no longer small and are leaders in their respective fields.

What has all this got to do with becoming a mail order millionaire? Bear with me on this. David Ogilvy believed that only Direct Response Advertising (another name for mail order advertising) can determine whether money spent on advertising is profitable and insisted that all his executives be trained in this art before creating or managing more traditional advertising.

My book HOW TO BECOME A MAIL ORDER MILLIONAIRE will soon be available on line and from AMAZON in both hard copy as well as digital. For a free copy of one of my books chapters, 14 SURE FIRE CHECK LISTS THAT GUARANTEE SUCCESS shoot me an email. As most successful mail order advertisers say, “there’s no obligation”.

Did David Ogilvy become a millionaire? As Sarah Palin says “You betcha”. He retired to his twelfth century chateau in France and before he died was named a Commander of the British Empire and was a Member of Honor of the World Wildlife Fund.

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