Some companies pump up ad budget to increase sales

HARD SELL IN HARD TIMES

December 18, 1991|By Ted Shelsby

Friends and colleagues may have thought Ernie Swanson had lost his mind a few months back.

Amid a recession that has many car dealers tightening their belts and scrambling to reduce inventory, Mr. Swanson, owner of Lee Oldsmobile, a medium-size dealership in Glen Burnie, did the unthinkable.

He ordered nearly 200 more cars from the factory and started a high-spirited promotion blitz that raised his advertising budget by 40 percent.

It was a "tremendous gamble," Anthony P. Filice, Oldsmobile's local zone manager, said. But it paid off in a big way.

Mr. Swanson's Crain Highway showroom was packed with more customers than most dealers have seen since the 1986 sales boom. Sales doubled during October as 112 buyers drove off in new cars, making Lee the nation's No. 1 Oldsmobile dealer for the month. And the momentum carried into November, when Lee finished second in sales in a region that includes about 600 dealers from Maine to Virginia.

The recession that has plagued the auto industry also has been felt among advertising firms across the nation. Domestic advertising spending is expected to fall 1.5 percent this year, the first contraction in 30 years, Robert Coen, chief forecaster for the ad agency McCann-Erickson Worldwide, said recently.

But, as Lee Olds and other local businesses have shown, a major marketing campaign can boost revenues -- even in these hard times.

North Charles Press, for example, invested in a direct mail and radio advertising campaign to get the word out that it had changed its name from Quickie Press, a title that no longer reflected the nature of the commercial printing company's business. The campaign generated 35 new accounts, which have come in month after month with new orders, Vice President Thomas A. Sabia said.

Owners of the Prime Rib, meanwhile, want people to think of the restaurant at Calvert and Chase Streets first when they think "steak house." The restaurant is cooking up a new ad campaign to increase its name awareness. It involves a 60 percent increase in spending, or about $35,000, to get its message in hotel guest books, the Amtrak travel book, local newspapers and magazines.

Another example: Jos. A. Bank Clothiers. One of the first things Timothy F. Finley did after taking over as chairman and chief executive last fall was to tell company directors he wanted $6.5 million for a new ad campaign.

That was big bucks for a company operating in the red and on the verge of bankruptcy. But in Mr. Finley's mind, it was the only way for Bank to avoid the current shakeout of clothing retailers, brought on by what he called "the white-collar recession."

"It was a gamble," he said, "but that's the way we operate."

Mr. Finley, who was hired to guide the company's restructuring, added, "A lot of times companies in trouble operate just to survive. You have to operate to grow. If you don't have the funding to do that, its time to move on to something else."

The television, radio and print ad campaign was needed to give the retailer recognition as a value store for men's and women's clothing, Mr. Finley said. The campaign, directed by W. B. Doner & Co., featured Steve Landesberg, best known for his role as Sergeant Dietrich on the "Barney Miller" television show. His dry, laconic wit was used to promote the quality and value of Bank's clothing around the central theme, "There is no status in overpaying."

Mr. Finley said it is difficult to judge accurately the success of the campaign, because clothing industry sales are off 15 percent to 20 percent this year.

"It is hard to say how many customers we would have lost if we had not done it," he said. "We have been able to hold our own during these difficult financial times. Not everybody can say that. We'll be well-positioned when the turn around comes. We'll be a survivor."

While its survival may not have been on the line, Lee Olds had been feeling the pinch of lackluster new-car sales in recent years.

Its four-day SWAT (Sales With a Twist) campaign tapped the resources of Oldsmobile's zone office, which takes credit for creating the campaign, and the Leffler Agency, that implemented the program.

"Everybody was giving 200 percent," said Debra Reese, the Lee Olds account executive at Leffler at the time. "Everybody did more than their usual job. They were doing more for less money. But with the economy the way it is now, that's what it takes to survive."

The campaign was launched with a direct-mail campaign to 5,000 customers who had purchased cars at Lee four to six years earlier. Another mailer went to 15,000 domestic car buyers.

A radio blitz linked to rush-hour traffic reports began the day that a two-page flier showed up in mail boxes throughout the metropolitan region. Coordinated with those moves were half-page and quarter-page newspaper ads.

Getting the sales force involved really motivated them, Ms. Reese said. "They were at the dealership late into the night stuffing and licking envelopes."

During the sale, there were free coffee mugs for customers and a daily drawing for a television, VCR and other electronic equipment. "It was a fun time," she added. "It was not like the desperation that you can feel as you walk into some dealers at this time."

"The lesson we learned is that during difficult times, you have to do things differently," said John Fratta, general sales manager. "To get customers in the door, you need to be consistent in advertising. People need to know you are there day in and day out. Customers need to be reinforced every day."

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