Considering Cable

Do you hear the rumble in the market? That’s the sound of independent HME providers shaking off “that’s the way it’s been done.”

Many providers are preparing for the future with strategic marketing plans to launch new business segments, expand retail, make acquisitions, grow geographically, build new alliances and drive community and consumer visibility — or prepare for sale. Whatever their strategic direction, providers must have a defined methodology for implementation, and advertising is one of the tools at hand. Within this broad spectrum, cable television advertising can provide the exposure that many home care companies are finding they need.

Expense Is Relative

You might be under the impression that cable television advertising is too expensive. Not true. In San Francisco (my area), the fifth largest cable market in the nation, cable advertising can cost as little as $6 for a daytime spot on Fox News Channel with strong over-55 audiences to $96 a spot for CNN’s Larry King 6 p.m. slot.

There is no doubt cable advertising is less expensive in more rural areas. But using this method to reach a specific geographic and demographic audience in a larger community can still be very cost-effective. Ad-supported cable now reaches 84 percent of U.S. television homes that advertisers care the most about.

James Kempthorne, president of American Home Care in Riverside, Calif., started cable advertising a few years ago. “We started from the HME perspective that we are retailers. We are referral- and retail-based, and it was imperative that we build our name and services to our community.” The company now advertises on three cable systems and runs from three to 10 spots a week.

American’s advertising program includes collateral materials, print advertising, direct mail, yellow pages, education and newsletter insertions. But 60 percent of the company’s ad budget now goes to cable. “Cable gives us the ability to achieve our objectives and target specific demographic and geographic areas through the zones and programming. We are in total control of our message. No other medium has had customers coming in to our store saying they saw our ad.”

Across the country, Gould’s Discount Medical in Louisville, Ky., has two large, modern HME locations. But according to co-owner Ken Gould, significantly fewer people would know about the business if it hadn’t started cable advertising.

The company now runs 10 cable spots a day. “We are different than the average DME. Our goal is to build our brand and name recognition in the community. We communicate that we have exceptional personal service and extensive retail selection to build retail sales and referral business.”

In addition, Gould has been advertising on network television. “We have achieved a positive combination of cable, some network, print, in-services and day events,” he says. “Our efforts have built name recognition among consumers and referral sources and significantly stimulated retail walk-in traffic to generate revenue growth of over 30 percent a year for the past five years.”

Commercial Costs

Don’t think you’ve been led down a path on how inexpensive cable can be. There is still the commercial to produce, and this can very quickly wrap up your company ego and wallet in a knot. Talk with manufacturers about cooperative advertising funds if you will be featuring their products. Some vendors even offer a selection of 30- and 60-second commercials ready to go. They may also assist in producing a commercial, developing a media plan and placing the media order.

Talk with the cable company about alternatives. They will walk you through how to approach the ad, produce a spot that is reasonably priced and also can recommend local production companies you might want to consider. Production costs are different in every area, but can run from $500 for a “basic” commercial up to about $2,500. For example, in the North Bay, Calif., area, Comcast offers a $1,200 basic production package that includes three hours pre-production, three hours filming and four hours post-production. American’s Kempthorne says he spent $800 to $1,000 per commercial and carefully scripted and guided production himself.

Community Medical Supply in Washington, Iowa, has produced five commercials, and production was part of the media commitment. Owner Pat Smith started cable advertising five years ago when the local cable operator made a presentation to the Chamber of Commerce. The deal was to buy 300 spots on nine networks for $300 a month, production included.

Smith says he has been amazed by the success of the company’s cable program and continues the investment. “We started cable advertising to build name recognition,” he explains. “We’re in a more rural area with lots of independent businesses, and cable spots are still reasonable. When the cable zones expanded and our ads were reaching a broader geographic area, so did our business.”

The result, says Smith: “We opened another location to meet demand.”

Smith understands that home health care is not top-of-mind for most people. “Nobody needs to know our name until they have a home health need, [but] now they think of us. We had been advertising on radio and in newspaper; not a single customer ever came in and said they read or heard about us. Store traffic was non-existent.

“When we started advertising on cable,” he continues, “customers came in and told us they found out about us on TV. Now we have window shoppers and may have five or six customers or more in the store at a time. We continue to grow at 10 to 20 percent annually, and the last six months, we’ve grown 28 percent.”

Frequency and Reach

One big advantage with cable is that you can target your geographic area or cable zone (an area including a number of cable households) and specific audiences. For example, a zone could be a county such Contra Costa, Calif., of 141,000 cable households, or 14,000 in Washington, Iowa.

You can determine communities, networks, programs and time slots that are best to reach your audience based on household income, age range, male/female viewership, education and home ownership.

But you cannot run a commercial one time and expect a response, just as you cannot make one sales call and expect to close (although it does happen), or send out one brochure or direct mailer. Generally, results from cable advertising will begin to be seen over a few weeks to the first few months. Advertising needs to be run with frequency, or enough spots to repeat your message over and over — and over.

Repetition is key. Remember, with a monthly commitment, your company could run 30-second commercials for as little as $5, $10 or $20 a spot. What is the optimum number of spots? It depends on your marketing objectives, area, competition, ability to get the right eyeballs watching your commercial, programming selection and budget. Consider the goal of reaching the same people per week, at the same times, on the right channels, with the same message.

American’s Kempthorne says he initially used manufacturer-supplied commercials, but when he did not get the results he wanted, he wrote, directed and guided the production of his own commercials to cover several cable zones. “We’ve done everything — new products, holiday, gift and company-branding commercials. We not only target over-55 adults but also women 35-plus to reach family members and daughters of parents in need of care.”

And remember your local cable community channel. There could be opportunities for a special feature on your business or on a specialized service your company offers such as diabetes care, asthma care or mastectomy services. You might be able to host your own show. A local cable channel is also a good way to list local events like new store openings, health fairs or seminars.

Watch cable channels for local business commercials. Many feature customers, key products and services, the owner and staff and business location. Felicia Kaminker, a Comcast account rep, advises: “If you use a manufacturer’s prepared commercial, make sure you can run your company’s tag continuously along the bottom of the ad, and open and close the ad with your personalization.”

MROI

Marketing return on investment is the bottom line for cable advertising. The challenge is to make sure that it works in conjunction with other marketing tools, such as print, in-services or fairs, etc., to achieve your strategic objectives. Due to the cumulative effect of advertising with other methods, many businesses monitor their resulting revenue increases in specific product categories, or business overall, in addition to gathering anecdotal feedback.

Establishing relative metrics will assist in the basis for understanding customer value, as well as the cost to acquire the new customer. It will help you measure, refine and optimize your marketing mix. If you are running cable advertising for a new product or service, for instance, set up a separate 800-number to field inquiries (that become leads). Or, provide a specific piece of educational information or another incentive for the viewer to take action.

Additionally, require employees to ask and log the question, “How did you hear about us?” or use a call center. Then track the leads to determine conversion to sales or new business to figure out the cost per lead using cable compared to this cost for other marketing methods. Tracking can be an internal challenge, but with this information, you will be in a better long-term position to make trade-off decisions in your marketing investments.

Follow-through also is crucial to cable advertising success. Service and customer satisfaction must deliver on what you portray in the commercial. Emphasizes Discount Medical’s Gould, “Personalize your message. Stay with cable [because] you won’t see an immediate response. And deliver on everything you say in your commercial, and more.”

No matter what size your business, it is at least worth investigating cable advertising to determine if it is a tool that can help to accomplish your strategic objectives. Combine advertising with other programs to drive market impact and build increased revenue and profitability. Show the community your voice, your service, your professionalism.

Colette Weil, MBA, is managing director of Mill Valley, Calif.-based Summit Marketing, a firm specializing in strategic marketing, branding and program development for manufacturers, wholesale distributors and retailers. She may be reached at [email protected] or 415/388-5303.

Assess Cable Opportunities for Yourself

Take this strategic direction “test” to help assess whether cable television advertising could work as part of your marketing efforts.

• Does your community know what services you provide? Should they?
• Are you an HME retailer targeting specific markets?
• Has your retail business faced increasing competition and new market entrants?
• Should you be building your brand and differentiated services to the public?
• Are you launching new programs and products that set you apart from your competition?
• Are there components of your business that are discretionary purchases? If so, are these experiencing industry growth, but your firm is not?
• Are you thinking about selling your business? Is your “brand” distinctive, respected and well recognized?

If you answered “yes” to any of these questions, consider Step 2.

2. Define what you want to accomplish, when, how, to whom and for how much.

3. Find out what cable systems cover your geographic area. You can visit the Cable Advertising Bureau’s online cable system directory, which includes the names and contact information for local cable systems in key markets, at www.onetvworld.org.

4. Contact your local cable company to discuss your objectives. Be specific, and tell them what you want to accomplish. Describe in detail your business, your customers, your product and service efforts and your expected outcome from the advertising.

5. Ask about commercial production costs and get recommendations for production companies. If your company employs an advertising agency, talk to your agency rep as well. Consider any cooperative advertising monies — or commercials — that could be available from your vendors.

6. Stay in close contact over the commercial content and how your company will be portrayed. Advises Kent Bjugstad, a Comcast regional manager: “Your message and visual should communicate compelling, differentiating information about your business, and ask for the order with a call to action on the part of the viewer.”

7. Work with your cable account executive to select networks, programs and time slots that will reach a significant portion of your target audiences, and that will keep you within your budget.

8. Be pragmatic, and define measures for this business investment.