This week, we’re going to tackle a subject that some people get confused about. And if you prefer to listen to the podcast version of this article instead of reading, here you go:

Marketing and Advertising are not the same thing.

A dozen years ago, a friend of mine in Fort Wayne declared he was not going to advertise his business anymore using the methods he’d been using for over 30 years.  Instead he was going to reward his current customers to spread the word about his company.

Two years later, he was nearly out of business.  Instead of having 6 thriving locations, he had just one that was still open and barely alive.

He sold his last storefront, the new owners were able to revive it for another 5 or 6 years with advertising, but they eventually shut it down completely.

What mistake did my friend do that caused his well established thriving business to go under?

He confused marketing with advertising thinking that one was equal to the other.

The marketing tactic he decided to try instead of advertising was to take the money he spent buying ads and create a loyalty program for his current customers.  The $10,000 he was spending each month was reallocated to give customers rewards and incentives to spend more money with him.

But it backfired.  Most of his customers actually started spending less money.  They were now using discounts for the stuff they were paying full price for in the past. His cash flow started decreasing and so he began shrinking his $10,000 marketing budget too.

For the first 30 years of his successfully run business, his stores offered a unique service and his employees were experts in their fields.  But the overall market changed and his service wasn’t exclusive to his stores anymore.  Walgreens and CVS began competing with his unique service.  Sure he still had other uniqueness’s, namely the expertise that his employees could share with customers but what he had hung his hat on that built his business for at least the last decade of his success was ripped away by the drug stores that offered the service for less money.

As his business declined he had less money available to promote either thru marketing to his current customers or going back to the advertising he used to do and his fate was sealed.

Let me be clear.  There is nothing wrong with marketing, but it’s not the same as advertising.

Advertising is the intentional tactic of inviting people to spend money with you via paid advertisements.

Marketing can include advertising, but marketing is how you present your business overall to your target market.   Marketing includes the uniforms your employees wear, the graphics on you company vehicles, the way you handle phone calls and other interactions with customers and potential customers… all of this falls under the marketing umbrella.

The loyalty program my friend tried could have worked in conjunction with an advertising program if it was well thought out.  But the way my friend did it wasn’t well thought out.

You and I can learn from his experience.  It’s better to learn from someone else’s mistakes than to have to suffer through them ourselves.

By the way, that’s why I’m writing these articles and sharing this podcast, as an ongoing series of lessons to help us be better.

What ever happened to my friend?

He reinvented himself and is a success.  He had to dig down to his core and rediscover what his passions, talents and skill sets were and he has applied them to a new line or work that I’ve helped him promote with both marketing and advertising.

Want help sorting this out for you and your business?  Let’s connect.