Carts of Cash Chapter Seven – Marketing, Advertising, and PR

Chapter 7
Marketing, Advertising, and Public Relations

Let’s start by discussing “branding”.  Your brand is how customers perceive your business.  Here are some things to consider:  What emotion are you trying to convey?  What is your company color (or colors)? What is your company logo?  Do you have a slogan?  The most important thing to remember when building a brand is consistency.  Everything you do should reinforce your brand.  Have your logo on your cart, your hat, your shirt, your website, and of course your printed materials.  Keep your colors consistent.  Your branding efforts are important now, but will really pay off when you start hiring employees to run additional carts when you expand your hot dog empire across the city.

Before you start drumming up business, you need to take some time to think about your target market.  You can’t be all things to all people, so you need to decide what segment of the market you want to serve.  This is referred to as positioning. For example, some people shop at K-Mart, others shop at Wal-Mart, and others go to Target.  All three offer the same types of products, but they appeal to different segments by positioning themselves differently in the marketplace.

In the hot dog business there are two variables to play with: Quality and Price.  Quality and price are directly related.  If you want to blow away the competition by having the highest quality gourmet hot dogs, then your product costs will be higher.  That means you’ll need to charge more per hot dog to make the same amount of money, therefore you can’t compete on price.  If you want to compete on price by selling a cheaper hot dog, you will have to sell many more per day to make the same money.  Competing on price is a tough way to go if you are working alone because your thin profit margins require high volume, while at the same time your production capacity is limited. This option makes more sense if you plan from the beginning to have multiple carts and employees.  You’ll have to work like mad for a while, until you can afford to hire and train the employees.  There is one more thing to think about before you decide to compete on price.  Price shoppers are not loyal.  If all the customer cares about is price, you are constantly in danger of losing them because there will always be someone out there who does it cheaper.  Plan on high customer turnover and a big marketing program to attract a constant stream of new people.

There is a way to appeal to both types of customers by offering different price points.  For example, you could offer two different sizes of hot dogs.  Quarter pound dogs for the big manly men, and smaller eighth pound dogs for others.  One note about pricing – you’ll be working from a cash box or cash apron so price your products in 25 cent increments.  This will minimize the amount of change you will have to deal with.  Believe me, you won’t want to be counting out pennies and nickels during a rush.

The two scenarios below will help you determine how you want to position yourself in the marketplace:
1) Chuck’s Cheep Weenies advertises “$1.25 Hot Dogs”, and Chuck usually sells about 300 a day. What happens if he receives a phone order for 25 dogs from a local real estate office?  He has to turn it down because he’s already going as fast as he can.  He’s running at full capacity and physically can’t sell any more on his own.
2) Bridgitte’s Gourmet Dog Carte offers all beef, kosher dogs with top of the line, exotic relishes and condiments.  She sells a hot dog for $4.25.  Her profit margins are a lot higher than Chuck’s so she only has to sell 150 a day to make the same money.  The downside is that at that price point, it’s sometimes difficult to sell that many.  However, she can easily accept that 25 hot dog order that Chuck had to turn down.  She has reserve capacity which is another way of saying she can capitalize on the opportunities that Chuck has to pass by.  She also has a lot easier workday.

Do you employ a teenager to make free deliveries for orders of ten or more?  How about shipping frozen gourmet dogs by air mail?  Things like these factor into how you will be perceived.

Now that you know what your target market is, let’s go over some of the different marketing methods you are likely to find useful.  We’ll cover many different types of marketing, including direct mail, newspaper advertising, internet, TV and radio. Then we’ll cover the less expensive methods, including advertising with materials you print yourself, and my personal favorite (because it’s pretty close to free), internet marketing.  Experiment with all of them to find out what works best in your particular situation.

Printed Materials.  You will need business cards.  They should contain your name, your business name and/or logo, phone number, and web site address.  Keep these with you at all times.  Hand them out when you’re running errands in the neighborhood where you sell dogs.

Flyers are a good way to convey a specific idea such as the quality of your product or the fast service you provide.  An effective flyer is composed of persuasive text and catchy graphics.  It can be anything from one color to four color, or black ink on colored paper.  Try different sizes of type, combine two different fonts (typefaces), and use graphics.  The idea is to grab the reader’s attention and convey your message at a glance.  Leave these under windshield wipers, or rubber band them to mailboxes in your target neighborhood.  Don’t put them in the mailboxes – it’s illegal.  By the way, do you know what makes a great flyer?…your menu!

You should have paper menus (printed on colorful paper) and give one to every customer.  I wrap the dog in a wax paper sheet, then cradle it in a menu before handing it to the customer.  This is really helpful for holding an order of two or three dogs in one hand.  Be sure your address and cell phone number is on the menu so customers can find you again.  You’ll be surprised how many people give the menus to friends or family members, or post them in the company lunchroom.  This trick really works to bring in new customers.  Tell your printer to print them two to a page, then have him cut them in half for you.  This reduces your printing costs by 50 percent, and a half sheet is the ideal size for cradling hot dogs.

Tip: People who work together will often decide what they want to eat and then send one person out to pick it up.  On your menu just above the phone number write – “In a hurry? Phone in your order for fast pick up!”  You can make a killing this way.  It’s not uncommon for someone to call in an order for 25 dogs.  This way you have some time to prepare them instead of being blindsided by an order of 25 on the spot.

Punch cards are a highly effective way to keep existing customers coming back again and again.  Simply take your business card and add the numbers one through ten along the top and bottom edges.  Whenever a customer buys a hot dog, you punch one number.  When they get to ten, they get a free hot dog. People really like the punch cards!  Be sure to get a punch that makes an unusual hole so that dishonest people don’t just go home and punch their own.  I use a heart shape because everyone loves my dogs!

If you get a good location, menus and punch cards may be all the marketing that you’ll ever need.  However, let’s discuss some other ways to bring in customers, which is especially important if you want to expand someday.

Postcards are an effective marketing tool.  They are one of the more expensive ways to market your business but they are 35 percent cheaper to mail than a standard letter.  Many large printing houses specialize in postcards and can print your job very reasonably by “gang printing” your small job with many other small jobs, thereby gaining economies of scale.  Many online printers allow you to upload your artwork files to their computer.  They will then send you a digital proof via email.  If you approve it, they will print the job and ship the postcards to you.

After your marketing materials have been designed and printed, you need to come up with a plan for delivering your pitch to the local community.  The biggest mistake most newbies make is not contacting enough prospects.  They spend a month waiting for the world to come to them – the result being an under producing hot dog cart that just breaks even.  That’s not a lot of fun, and it doesn’t have to be that way.

Marketing is nothing more than a numbers game.  The number of customers that you land is directly related to the number of prospects that you contact.  The number of customers that you keep however depends on your quality, consistency, and service.  I have found that getting new customers takes work, but it is a lot easier to keep existing customers coming back.  Keep your regulars happy!

Before you can make these initial contacts, you have to know who they are.  How do you get your list of potential customers?  If you have a bit of money to start with, you can buy a mailing list from a list broker.  If you don’t, we will cover some highly effective, free methods shortly.

There are companies called list brokers that specialize in collecting huge lists of people from all demographics, and sorting them to meet the requirements of the list purchaser.  You could request the names, addresses, phone numbers, and fax numbers of 1000 families with incomes over $35,000 whose homes are located within a 20 mile radius of Fifth Street and Oak Lane in Applesauce, Nebraska (if that’s where you are located).  The list broker could give you the list on paper, disk, or CD-ROM, or on pre-printed stick-on mailing labels.  The only catch is that you can only use the list one time.  How do they know if you use it more than once?  They “seed” the list with a few fake names in order to monitor the use of that list.  If the “seed” receives two mailings from you, you’re busted.  Some companies, called letter houses, do the whole job, designing and printing your flier, sorting the list to your specifications, and mailing out the marketing pieces.  All you have to do is pay for it.

Most communities have coupon booklet advertising.  They mail envelopes stuffed with coupons for local businesses.  The next time you receive one of these, call and ask about their rates.  They can be quite reasonable.

Newspaper advertising is great at building your brand recognition.  I recommend running a four inch display ad in the entertainment section about once a month.  This keeps you in the public eye without costing you an arm and a leg.  Run an ad with a coupon or “special” every now and then.  People love bargains.

Another strategy is to use your website as a supplement to your print advertising.  Put your web address in your newspaper ads, and on your menus, punch cards, and flyers to direct the prospect to your web site, where you have much more room to provide photos and get your message across.

Paid television and radio advertising is too expensive to consider when you are just starting out, unless you go with the local cable access channel which can work really well because of it’s narrow targeting.  These forms of marketing are more cost effective for a multiple cart operation.  However, we will discuss ways to utilize these methods for free in the next section.

Now let’s talk about the most powerful form of advertising on the planet.  Grass roots marketing.  The whole idea is to use your creativity in order to get others to promote your business for free.  By others I mean both regular folks and also the media including newspapers, magazines, radio, and television.  The goal is to spark positive word of mouth or “buzz” about your wonderful hot dogs.  I’ll list a few examples to get you started.

Walk in to a local business office, store, or factory and tell the receptionist who you are and what you do.  Be polite and respectful.  Don’t demand to talk to the boss, they are probably busy (making money) and don’t want to be interrupted.  The receptionist is the one with the real power.  As the “gatekeeper”, they decide who gets access.  Ask the receptionist if she would post your menu in the company break room.  Stress that you are located nearby and offer a fast, fun and economical meal.  If the answer is yes, give the receptionist your menu along with your business card and say thank you.  If the answer is no, thank her for her time and leave.  Being pushy will backfire on you because you’ll be remembered as a pain in the rear.

Contact local businesses (other than restaurants) and set up a deal with them.  Offer to refer clients to them by letting them leave a stack of business cards on your cart.  In return, leave a stack of your cards on their countertop for their customers to take.  This is referred to as building reciprocal relationships.

Try to get your local paper, radio, or television station to run a story about you.  You can’t just ask them to run a story about your food business.  They will see it as simply a lame attempt at free advertising.  You have to come up with an “angle”.  Let them know about a special event you have planned such as donating a percentage of next Saturday’s sales to a children’s charity.  It helps to think in terms of headlines.  “Dave’s Hot Dogs Big Charity Event Saturday”.  Come up with a special hot dog named after your local mayor or other popular figure.  “Have you tried the Mayor Jones Red Hot?”  The more imaginative the better.
Here’s a winner.  Buy 20 cheap plastic wallets from Oriental Trading Company on the internet.  You should be able to get them for a buck apiece.  Put a coupon for one free hot dog in each.  Make the coupon look like paper currency and call it something like “Weenie Bucks”.  Now walk around near your cart location early in the morning and “lose” the wallets in creative places where people will be sure to find them.  I guarantee that each person who finds a wallet will tell everyone they know about their good fortune – and mention your hot dog cart in the process.

I’m sure that if you use your imagination you can come up with dozens of great ideas to generate word of mouth.

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