TITLE: Brilliant Marketing 1-800-Got JUNK...
DATE: 9/17/2005 12:23:00 AM
Bang For Your Marketing Buck
NEW YORK - Rubbish Boys Disposal Service is an unsexy business with a killer--and dirt cheap--marketing strategy. Its weapons of mass dissemination: an Internet connection and the U.S. Postal Service.
Founded in 1989, the Vancouver, British Columbia, outfit hauls unwanted domestic detritus (not including deadbeat husbands) to landfills, recycling plants and, in some cases, charity organizations. As part of a nationwide push in 1999, the company changed its name to the snappier "1-800-Got-Junk?"--not least so customers could easily remember its phone number. (Rubbish Boys is still the legal entity.)
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Then the garbage guys got really fancy. Two years ago, founder Brian Scudamore e-mailed the producers of the Oprah Winfrey show asking--in all of one paragraph--to be featured on any upcoming segment having to do with home renovation, a popular topic among the show's viewers. This didn't elicit a response. Two months later, he pitched again, this time mailing a simple one-page cover letter. Still no response.
But six months later, an Oprah producer finally rang and told Scudamore to be in Los Angeles in three days for a guest appearance on a show about a woman who was hoarding junk in her house. Scudamore did not have a franchise in L.A. at the time, but he rustled up a team of eight, who descended upon the woman's house for a massive public purge.
Those simple grass-roots tactics have since landed Scudamore spots on the Dr. Phil show and The View with Barbara Walters--all without having to hire some slick outside public-relations firm that charges anywhere from $5,000 and $20,000 per month. Prior to the Oprah appearance, "1-800-Got-Junk?" had 22 franchises and pulled in $9.6 million in sales; two years later, it has 175 outlets generating $75 million. (Its in-house PR effort has grown: It now has a three-person staff, up from one person pre-Oprah.)
Marketing is the squishiest element in any business plan. That's because, unlike most other corporate initiatives, it is nearly impossible to measure the return on a marketing campaign, though a growing horde of software companies and consultants claim to be able to help.
One thing is certain, though: Peddling a product that's both good and inexpensive isn't enough. Companies have to differentiate themselves--and success has more and more to do with having an effective marketing strategy.
Look at what's going on in China, land of cheap labor. Recently, China's Haier Group made a run at established appliance maker Maytag (nyse: MYG - news - people ), which in August ended up in the hands of Whirlpool (nyse: WHR - news - people ). Earlier this year, Lenovo inked a deal to buy IBM's (nyse: IBM - news - people ) personal-computer unit for $1.3 billion. Technology grab or marketing move?
"Let's be honest, it's not hard to build a PC," says Timothy Calkins, marketing professor at Northwestern's Kellogg School of Management. "What's hard is to build a brand that people really care about."
For many large companies, building strong brands means spending money. Piles of it. Last year General Motors (nyse: GM - news - people ) and Procter & Gamble (nyse: PG - news - people ) dumped nearly $4 billion into advertising, according to Advertising Age magazine. Thirty other companies topped the $1 billion mark. And even with all that firepower, success is far from guaranteed. (New Coke or the Apple Newton, anyone?)
When it comes to marketing (and just about anything else), small businesses have to do more with less.
Of 32,195 small-business owners who responded to a survey conducted last April by VistaPrint, a custom-printing house in Lexington, Mass., 50% said they spent no more than $500 per year on marketing, while just 8% spent more than $7,500 annually.
Before you even think about pulling out your checkbook, says Calkins, ask yourself a couple of key questions.
First, what is the market you are attacking, and how is your product different from your competitors'? You should be able to write down your answer in no more than three sentences.
Second, take a hard look at the goals of your company. If it's a stable business with little growth, a slim marketing budget may be sufficient; if the company is growing or repositioning itself, be prepared to spend a bit more.
How much of your top line should go toward marketing? Calkins won't offer a rule of thumb. "It's so industry-dependent," he says. "If you're selling bottled water, you better spend a lot of money on marketing. After all, it's water."
Then again, some folks might say the same thing about trash removal.
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