Don't waste money on TV

At Mighty Ape, we get asked a lot when we're going to "start advertising" and we're told that "no body has heard of you" - which is kinda funny, given that over half a million people visit our website every month.

Of course, Mighty Ape does advertise on platforms such as Google Adwords and Facebook, and plenty of people have heard of us through friends and word-of-mouth. So I think what people are really asking, is "why don't you take out a few billboards? Why don't you advertise on TV?" (i.e. why don't you advertise to me while I'm busy driving my car to work, or interrupt me in the middle of the six o'clock news or my favourite TV show...:P). 

I wouldn't rule out Mighty Ape testing out traditional TV advertising at some point in the future, but there are some good reasons why we haven't done that yet. Like any small business (are we still small?) - we want bang for our buck, and we believe there are better ways to acquire customers, retain customers and build a business for the long-term.

In all the projects I've been involved with, and in particular Mighty Ape, priority and thought has always been given to how to build a better product and a better service. The theory goes like this: offer something great, and people will tell their friends. Tell their friends, and they're effectively advertising on your behalf. 

Think about it. When you stumble upon something great, you get excited and tell other people. How did you first learn about Spotify or Netflix? Was it a TV ad? Doubt it. More likely it was "...I'm sorry, you're paying HOW MUCH for iTunes? You're getting ripped off!" Or "check out all these great TV shows you can watch - for like, $10 a month - you'll never leave the house and be forced to socialise ever again!"

How about your favourite phone apps or websites? Did you first learn about Trade Me, Facebook or Twitter from a billboard or TV ad? Didn't think so. Entertaining the thought that a nationwide television campaign is going to skyrocket your company into the mainstream - is lazy thinking. It doesn't happen that way.

In Mighty Ape's case, the product we're selling is really our service. Sure, we have a website and it's pretty good - but that's the "easy" part (it's not easy), and in this day and age, and certainly in our industry, it's expected. People don't rave about pretty websites, or shopping sites with great usability. It's, unfortunately, pretty much a given.

In the early days of Mighty Ape, thanks to Simon's experience in brick-and-mortar retail, the decision was made to build a viral product based on excellent customer service. A conscious decision to put customers first and create an experience good enough to (hopefully) tell your friends and family about. That's where we invested, and we did so at the expense of flashy advertising campaigns.

Here are some ways Mighty Ape continues to invest in service:

  • 300,000 products in-stock in our Auckland-based warehouse, ready to ship overnight anywhere in New Zealand (that's a lot of products, and a big investment! Certainly it would be easier, and cheaper, to not hold stock, and drop ship products directly from suppliers). Fast delivery = great service.
  • Real-time stock statuses of any product on our website, and when a customer can expect delivery. If we don't have a product in stock - we say as much. And if a supplier does, we'll say so too. Right expectations = great service.
  • In-house customer service team that can be reached by 0800 phone, email, Twitter and Facebook. Being available when things go wrong, and not hiding behind your computer screen = great service.
  • Experienced department/product managers, expert in the products we sell. Great web stores are not just a list of products imported from a .xls supplier list. Great web stores are not a glorified search engine. Great web stores offer great merchandising and the right products at the right prices = great service. 
  • Innovation in order delivery and customer-touch points. Mighty Ape now offers "same day delivery" in Auckland, Wellington and Christchurch...and a "click and collect" service in Auckland, with other pick-up points just around the corner.

We allocate budget and resource to improving our service, and we view this as a legitimate marketing expense. We know that investment here wins new customers - something traditionally attributed to "marketing".

Of course, even the best products or service can benefit from a bit of advertising or some polite encouragement to help spread the word. And the internet, and new social media platforms such as Facebook and Twitter, have made this easier than ever.

Consider these examples:

  • Uber - no TV advertising, but offer $20 off your first ride. That's a legitimate marketing expense, and a subsidy/gift to a potential happy customer and better than lining the pockets of a TV broadcaster.
  • Spotify - again no TV advertising, but they'll give you a free Premium account for every five friends you refer. And thanks to built-in Facebook integration, your friends can also see what you're listening to - more free advertising.
  • Netflix - one month free trial. Potentially expensive, but likely to get a new customer testing the waters.
  • Dropbox - never advertised on TV, but again, do offer 1GB free storage for every friend you refer. 
  • Grab One - refer a friend and get a $5 voucher with no limit on the number of friends you can refer. These days you do hear Grab One advertising on the radio, but that can be attributed to agreeable (free?) rates their parent company - APN.

All of these companies have earned mass market recognition without advertising on television. They've all invested in great service, and then given money/value back to their (happy) customers in exchange for their referral and recommendation. That seems smarter than throwing money at TV ads and hoping traffic sticks.

In 2014, the way we discover new products and services has changed. We live in a highly connected digital world where it's easy to share with friends whatever we find interesting and useful. Television has become the expensive, lazy way to grow a business. TV ads (can) look great, they're great for ego - but unless you've got the product and the service to back it up, it's probably a waste of money.

posted by Dylan on 27 July 2014, 8:33 pm in ,