According to an article I came across today from USA Today the average household only saves about 7.5% of their income. This was eye-opening to me.
Personally, I'm saving about 30% of my income between a high-interest online savings account, a SEP-IRA and a Roth IRA. To see more click on this article. In this process I'm not giving up many of the luxuries in my life such as travel, going out to eat and my gym. I'm simply cutting out many of the expenses that I don't really care about such as buying a new car every 3-4 years or buying new clothes constantly.
Let's say your household takes in the average household income of $61,937. After a 20% deduction for taxes and benefits you are bringing in a net of $49,546. If your household saved the average of 7.5% they would only be putting roughly $3,716 annually into their savings and investment accounts. We'll split this income evenly into a high-interest savings account (say a 2% annual interest rate) and buying a traditional index fund with a 7% annual growth rate. What would we have after 30 years?
Would This Be Enough to Live on?
The short answer is no using the 4% rule made popular by the FIRE movement. Not unless you believe you can live on about $10,000/year in the year 2055. Also you should be crossing your fingers that Social Security will still be there when you hit the eligibility age.
The answer to this is either playing more offense or more defense. Just like any good sports team there is a level of synergy between the offense and defense that create optimal outcomes. You should think the same way with your money.
Playing better offense means finding ways to grow your money through investments or simply increase your income. I'm a bigger fan of this route, because you're probably worth more than what you give yourself credit. You could take on a side-hustle, ask for a raise or change jobs.
Playing defense means creating a budget, cutting out things you don't need and saving more money overall. This could mean going out to eat 2x a week instead of 5x or shopping for clothes in a 2nd hand store instead of high-end stores. The little changes add up over time.
Only saving 7.5% is pathetic and keeps you on the wheel like a hamster going nowhere. The only excuse for only saving 7.5% of your income is because you're paying off debts such as student loans, an affordable mortgage, credit cards or medical bills. Saving 15% should be your absolute minimum goal. You should enjoy the ride to retirement, but have no worries once you get there.
Anyone that has ever been in a serious negotiation knows that it can be a long drawn out battle that leaves both sides frustrated by the experience. You start a new relationship with one another already bitter about working with the person across the table. This isn't a good first step for either party.
This book introduces a process with three steps:
1. Take yourself out of your shoes and put yourself in theirs
2. Create a win-win for both parties
3. Think through the problem objectively
The challenge to accomplish the three steps above are to create an environment where both parties put their objectives on the table and work side-by-side to check off as many of the boxes as possible. Instead of being adversaries in a negotiations you should work as a team.
With all of the objectives on the table it is important to verbalize the position of the other person so you understand and they are aware that you understand their position. This should put them at ease to progress further into the negotiations. This is where creating a win-win scenario becomes a possibility.
Lastly, look at the problem objectively from outside sources. What are comparable values for the items found in the deal. For example, if you're in a media deal and the sales rep says they will send your offer to 50,000 people it sounds incredible. However, if their email open rate is only 10% you're really only reaching 5,000 people. If you find another example of a different company sending out an email to 25,000, but they have a 20% open rate they are also reaching 5,000 people. Find out what the cost for their email is and bring that back to the discussion.
What Did I Learn?
1. This book has taught me to be more of a team player when it comes to negotiations. Get through all of the small talk about weekends, weather, sports teams, etc. to find out what their goals are in the deal. You tend to leave a table more satisfied with the process than you were before you started. Sometimes you will run into an immovable force or someone that won't play ball. Wash your hands of them and find someone that will.
2. To be more prepared with what we want before going into the meeting. I've usually done a pretty good job of looking up information on a company I am about to meet with and comparable companies, but I can do better.
3. The challenge when you're in a negotiation with media outlets is that their objectives are simple: get the most money for the least amount of effort. You have to be careful that the objectives they put forth aren't superficial. For this reason you have to get them to care about you as a person and the product/service that you provide. Whatever objectives they say you should hold them to and try to accomplish. If they say they want to maximize your reach put it on the board. If they say, they want to make you visible in their audience, put it on the board. Hold them to it, not only in that initial meeting but throughout the life of the deal.
Needless to say 2020 has not been kind to the folks that work in hospitality, live events and tourism. I've spent my entire career in this niche. Tourism is really fed by hoards of people coming to town for major events and conferences. They don't come because they enjoy the local Holiday Inn Express or Super 8, they're there because something is going on that creates the necessity for an overnight stay. Restaurants depend on both locals and visitors coming to their restaurants with consistency. Live events, namely concerts, festivals and sports depend on their turnstiles for their revenue. If they're interesting enough, they might create some TV or online viewership revenue. However, these industries are battered and bruised right now, even as you see other industries essentially go untouched or even thrive in the current conditions. We have no idea when the hard news will let up. Those that haven't largely been impacted financially have a responsibility to help thy neighbor.
Shop and Eat Local
Whenever you pull through the drive-through of McDonalds, hit the buy button on Amazon or pick up a few groceries at Wal-Mart you aren't helping your local economy. Sure, they might pay some people enough to barely get by and pay their local taxes, but the bulk of their revenue is going elsewhere. You should look to eat at non-chain stores that are locally owned, employ local people and keep their money in their community.
Figures that I've heard from a variety of studies is 55%-80% of revenue stays local when you shop local, while 8%-15% stays local when you shop at a major chain store. The publicly traded major chains can shoulder the swings and the smartest communities limit their entry to the market to begin with. If you're a big proponent of "Made in the USA" do it one better. Drive by Target and Wal-Mart and put your money where your mouth is and buy local.
Buy Gift Certificates
Restaurants and locally owned stores need revenue now to cover rent, utilities and whatever staff they have left. They are frustrated by wild swings in occupancy limits and regulations sometimes with little or no runway to implement them. Just because a store's capabilities are limited doesn't mean the bills stop coming in the mail. If you love that restaurant or store because you can walk in and shake the owner's hand support it today. Don't wait until "things get better." Personally, I might go to a chain restaurant once every other week, but 80%+ of my restaurant spend stays in the local community. I love going to farmer's markets and small stores to see what kind of neat items they have. You aren't seven people removed from the maker of the good, but often chatting with them in person. You also get a feel for your destination in a way that a major chain's sterile environment won't ever give you.
Buy Merchandise from Local Sports Teams
Minor league sports and small universities are struggling mightily right now. Teams are getting cut, spectators are being left on the outside and some minor league baseball teams are never coming back. You might not be able to attend their games and they might not have a TV deal, but buy some mechandise from their websites. Not Amazon or Dick's Sporting Goods, but their own in-house websites. Also, if you can lock in future season ticket packages or voucher books do so. Buy gift cards that can be used in the park at a future date. If you care to see those teams remain a part of your community in the future, support them today.
Take a Driving Trip
When I say take a trip it is quite possible to go for a 3-4 hour drive somewhere and not encounter large crowds. Book a room or a campsite at a new location you've wanted to visit or an old favorite. If you're worried about leaving the state, then don't. There is plenty to explore in your own back yard.
Go to stores and restaurants that you can't go to at home (read: Olive Garden and Cracker Barrel) to get a unique experience. Give those businesses positive reviews online. The hotel industry is absolutely cratered right now and you can have your own private room and bathroom on any trip you're on. You probably won't get any better prices and ability to opt-out of a trip than you do right now. But.......
Wear Your Mask
This is simple. Wear your mask and avoid crowds as much as you can. Anyone can do it. What's the risk-reward to borrow from Machiavelli's "The Prince"? The potential reward is saving hundreds of thousands of lives and the sanity of the healthcare community with the risk of wearing a piece of fabric and avoiding hanging out in crowds. It's not hard. The risk of the inconvenience is well worth the potential reward.
The scene is 1893 Chicago and the city has been awarded the honor of hosting the next great World's Fair. The previous host, Paris, really set the bar by unveiling the wonder that is the Eiffel Tower. An architect and his team are expected to not only meet, but exceed the wonder brought to the stage by Paris. Oh, and they have little time and money to do so.
The book predominantly features two main characters: the architect Daniel Burnham who was famous for his work around the world at the time and also a little known con-man from New England named Herman Mudgett better know as H.H. Holmes. Each chapter jumps back and forth chronologically for the most part to each character as the 1893 Chicago World's Fair is getting ready to open and operate.
The book chronicles the killing spree of H.H. Holmes as he cons people out of money, property and their lives. The book gets in depth with his killing spree and cashing in of the benefactors he took life insurance out on. He was described as very handsome and charming and he reminded me of Ted Bundy in the way he approached his crimes. In his creepy hotel he built in a kiln, secret passage ways, pots of acid and much more. Due to its proximity to the fair many people stayed in his dark palace.
Burham was a man under immense pressure to essentially come up with a beautiful city that is built on sand with a limited timeframe. He manages to pull it off, but not without several hitches and acts of God getting in his way.
What Did I Learn?
1. For those of you that know your history, you'll know that the Ferris Wheel was introduced at this fair and was a smashing success. Can you imagine launching the Ferris Wheel to the masses when you aren't even sure that the steel will hold up to all of the weight. I really found this to be a fascinating story within a larger story.
2. The fairs were really a spectacle in the way that Epcot's Around the World section of Disney World is set up. It is meant to give you a small taste of what other cultures are like. The organizers even brought in full villages of people.
3. I had always heard that Buffalo Bill's Wild West Show was part of the fair itself, but that turned out to be untrue. In a genius use of guerilla marketing, Buffalo Bill rented out land next to the fair and sold out show after show taking advantage of the crowd.
4. I had always assumed that H.H. Holmes was an architect himself based on the fact that he designed his hotel. The truth is he was a medical doctor and pharmacist. When designed the hotel he hired many crews to one particular job and rarely paid them all that they were owed. No one outside of Holmes had any real idea the secrets his building held.
I've always been a fan of Neil Patel dating back to his time co-hosting Marketing School. At some point throughout their short daily episodes, which I listened to for years, Neil had mentioned this book. In the book, Neil, along with his co-authors Patrick Vlaskovits and Jonas Koffler, make you question your traditional 9-5 grind. The main purpose of the book in my opinion is to light a fire under the reader's feet to start tackling the small objectives that ultimately lead up to the goal.
Remembering the book I came across it in a discount section at a Books-A-Million on a vacation in Cocoa, FL. With some time to relax and visit some old haunts from my time interning in the area I was able to complete the entire book before flying home to Pennsylvania. The point of the book did not get lost on me as I've been slowly building my skills to take on freelance in digital marketing and data analysis. I would say this book was one of the key driving forces to me getting my Tableau Certified Specialist level.
What I enjoyed about the book was it wasn't this Ra-Ra motivational speaker BS you have heard a million different places. The authors were very creative in the way they presented their points and examples in each of the chapters. Two of the lessons from the book really stuck with me: "Habits Create Identity" and "A 5-9 hustle". You see I'm a huge creature of habit. I've never been one to want to stay after my traditional hours in the office, not because I dislike the job, but because it interferes with other goals of mine. If I am not disciplined getting my work done at my 9-5, then it doesn't leave time for that 5-9 hustle. For me, that is staying in shape and learning new skills mainly through Coursera, Udemy and YouTube videos. Staying in shape is simply getting to where you want to be and then maintaining that standard. The struggle to get there is harder than staying there.
What Did I Learn?
1. Reading through the book it really stuck with me how people get stuck in their 9-5 rut, complaining about their life and get complacent in their life. They don't try to change things, but will be the first to complain about it. What are you doing to fund a profitable passion of yours?
2. It's important to set goals or even checklists. Personally, I'm a bigger fan of time-blocking otherwise others feel free to book your time for you. If I can time block my check list, then I go home feeling satisfied with everything that I have done for the day. What is even better, is if I can make a list of what I want to block off for later in the week. The bigger the task, the longer in advance you need to block off the time. You feel great when you are working towards your goals and you should be rewarded for those efforts. If you're in a company that won't reward you for the steps you make forward, then they probably aren't a good company to work for.
3. I liked the concept of manufacturing your own luck through hustle. This has been key for me over the years putting in extra work that ends up paying off 3, 6 or 12 months in advance. A current example I have is my goal of creating enough hustle income to fully fund my Roth IRA every year. It is only $6,000 and certainly worth shooting for, but 60 year old me will be thankful for 30-something me if I can do it year-in and year-out.
4. Something I need to improve on after reading this book is keeping my head up and eyes open for opportunities. I would say I've gotten better at that in the last 18 months or so, but I could always do better. In the last few months, I've had countless people reach out to me with an interest in me doing some work problem solving for them.
I've always had a desire to understand another person's perspective. If you spend any time reading American history the name W.E.B. DuBois shows up a lot of the time. If this is the first time you're hearing about him, shame on you for a general lack of American history knowledge. The truth is he is pretty hard avoid, even if you're only casually looking. His work touched a lot of people over a number of generations in the United States. DuBois lived into his 90's and was well ahead of his time. You can read a little about him here.
This work, originally published in 1903 tackles a lot of issues in the black community and America as a whole. The section that was probably the most touching to me was Chapter 13: The Coming of John. It follows a young black kid named John as he travels to the north to receive his education with the hope that he will return one day. After starting his education in a lack than serious way he buckles down to complete his work. While in New York he comes across an old childhood friend, also named John, of his that is white and the son of the local judge from their hometown. The white man acts as if he doesn't know him while in public. Eventually black John returns to his home in Georgia to take up as a teacher for all of the black children in the community. Without resources he makes progress, until it is found out that he is teaching equality to his students as part of his lesson. This forces the Judge to come down and shut down the school. The story continues from there.
Many other topics and tackled within the chapters of the book including the struggle to set up education for freed ex-slaves and also the struggle to get justice after the Freedom Bureau was pulled out of the south following Reconstruction. This book is really worth the read, although it is a lot to take in and is written 117 years ago. Understanding it isn't as bad as texts like "The Scarlet Letter" however.
What Did I Learn?
1. I learned that it was a remarkably difficult struggle to set up education for newly freed slaves in the South. The Southern whites would rarely voluntarily give funds to the black schools. If they were publicly funded the ratio of funds would be anywhere from 4-to-1 all the way to 7-1 in proportion of white-to-black spending. It was difficult to find teachers, either from Northern whites coming down after the war or educated enough blacks. The black community was largely forced to create their own elementary, high schools and eventually universities. DuBois actually attended Fisk University in Nashville and Harvard, but he certainly was the normal story.
2. There was an agreement in place after the Civil War to give land and a mule to freed slaves, largely from the southern plantation owners. This didn't come to fruition for the vast majority of ex-slaves, who eventually went into sharecropping, manual labor or low level manufacturing positions. They went into these positions making a fraction of white workers, with no real hope of getting a promotion to management. This made it very hard to survive, much less build savings. There are countless people that were able to break away and finance a college education, but is often took generations to build the wealth to pay for it or to find someone who would give you funding. Basically what we refer to as a scholarship.
3. Sharecropping or tenants was a much worse relationship than I even imagined. This was for both poor white and black residents, although the whites were often given better terms. In a lot of situations you were expected to turn over half of your crop yield, pay rent for your housing and the land and also buy all of the tools and goods from the landowner at often inflated prices. This left little to nothing for the tenant of the land and really was spinning wheels.
4. DuBois went a little into the prison system, which was largely expanded after the Civil War to trap poor people and often blacks for minor crimes. They would be put on work duty for chain gangs and bid out for jobs picking cotton, agriculture, construction, etc. at a drastically low cost to the bidder. Those who died from exhaustion from working were lucky to get a proper burial and certainly weren't paid for their work. The money from the bids was often pocketed to more than cover the expenses to feed and house inmates. Where the proceeds went, no one really knows. Likely in someone's pocket.
"I Will Teach You To Be Rich" is my favorite personal finance book. Why? It doesn't treat you like you're a clueless adult like some books do and it isn't so technical that only a handful of its readers really grasp the lessons. It bridges a nice gap in the middle that anyone that is looking to get a handle on their personal finance should buy into.
I've actually read both editions of this book. The first I checked out of the Penn State on campus library, but I bought the newest edition for my own library. I will comfortably say that after reading the text the first time I made a couple of decisions that made me anywhere from $800-$1,000 in my first year. Pretty good return-on-investment, right?
I've always been pretty responsible when it comes to my finances. However, there is always room to get better. In this book, you don't have to give up your expensive activities (for me it is my gym), but you also need to find ways to achieve your financial goals before you go crazy spending or even worse borrowing through loans or credit card payments. This means investing up to your company match in your 401(K) or in my case a SEP-IRA. If you've already done that find a way to fully fund your Roth-IRA (up to $6,000 per year for those under age 50). Both are pretty sweet deals to grow your money and not make 65 year old you want to hop in a time machine and beat up 30 year old you with a cane.
The book goes into big purchases such as cars, home, marriages and more. Setting up a savings plan to pay for those goals should be part of your strategy if you see fit. Unlike many personal finance gurus the author doesn't shove home ownership down your throat. This is ideal for me, because I work in tourism and sports where there are only a handful of such organizations per region. For me, I would rather invest those funds rather than having the urgency of home ownership.
There are so many lessons to take from this book that I am only scratching the surface.
What Did I Learn?
1. The first thing I did after reading this book the first time is quit using my debit card for all of my purchases. I found a credit card with a strong cash back program and have used that for anything that I could. Most importantly, just because I have a credit card doesn't mean my spending habits change. All that changed was the route that I pay for. I also pay off my credit card in full each month meaning I get all the perks of cash back without the inconvenience of paying interest.
2. I opened up a high-interest online savings account. Most people work with a typical brick-and-mortar bank you can walk into. It's great to say "hi" to those folks and you absolutely should have a checking account through an organization like this in my opinion simply for the support of your community. However, I wouldn't stash my money in their savings accounts, CD's, money market accounts or anything else. When you do you're paying their overhead and getting a lousy interest rate in exchange for doing so. I found an online savings account that gives me anywhere from 20x-30x the traditional bank interest rate. It was eye-opening in my first month when my interest total was greater than a full year in my traditional bank.
3. I had just a SEP-IRA through work, which functions similar to a 401(K) meaning that my money doesn't get taxed until I take it out after I turn 59 1/2 if I so choose. However, I have enough extra money laying around that I opened a Roth IRA through Vanguard recently. The difference in this account vs. the other two I mentioned is that the money was already taxed when it was paid to me and will NOT be taxed when I pull it out in my ripe old age. I can contribute as much as $6,000/year into this account.
4. This is still one I am kicking around, but I love to travel. It might make sense for me to open a travel focused credit card to pay for my travel I already do and also my going out to eat. Obviously, you pay the dollar amount in full each month and keep the rewards that come with owning the card. At the end of a year or two, what kind of rewards will I be looking at. Will it be enough to cover most of a weekend getaway? That sure would be nice.
I happened to be in San Francisco for work and had heard about a relatively famous bookstore in the city called City Lights Booksellers & Publishers, so I had to stop in. The trip to the shop didn't disappoint. I was finishing up reading another book I brought with me from home here on the East Coast and needed something else just in case.
I've always had interest in Mexican drug cartels and the elaborate system of corruption and money they have flowing. The sad part is supplying drugs to the United States for consumption is one of the largest industries within the country. Many people with minimal education have few options to stay above poverty's grip. For example in the book the average American corporation factory worker makes about $60-$75/week. These are the companies that largely popped up because corporations in the United States no longer wanted to pay living wages, deal with unions or environmental regulations. However, what they pay is only a fraction of what one could earn by joining gangs or the cartel.
Further complicating the issue is that citizens can't generally rely on the police or military to protect them. Those organizations, at least in Juarez, are more interested in lining their pockets than they are with fighting the well armed and funded drug cartels. When there is competition for money at hand murder is sure to follow. The number of murders annually in Juarez between 2007-2010, which is what the book mainly covers, is startling.
What Did I Learn?
1. I learned a great deal about how dangerous it is to do a good ethical job and live in Juarez. Rarely are names of victims released, unless they are dead. Journalists are basically told to take bribe money to not report on what is really happening. One such reporter's experience was told where he reported the truth and his life was threatened. He drove to the United States border in fear and was thrown in prison despite coming to a check point and providing the proper documents. His fear was that he would be deported back to Mexico where it was only a matter of time before he was killed.
2. Throughout the book a former Sicario (hit man) told his side of the story from his teen years when he used to drive cars across the border for $50, to be financed by the cartel through his police training, getting into kidnapping, murder and lastly finding God. His story by itself is a full book.
3. I thought the author's points on myths that the American public believe was very interesting:
-The Mexican President is fighting a war against drug cartels
-The North American Free-Trade Agreement is a success
-That the Mexican army is fighting the cartel
-That violence is spilling across the border
-That there is a river of guns heading south
-That a wall will stop illegal immigrants and drugs
Table 1: The relationship between teams total targets for receivers with at least 10 receptions vs. the rest of the league. It is no big surprise here that the majority of dominant QB's make up the coveted top left quadrant on this model. The team that might surprise everyone is the boom-or-bust passing game of the Ravens led by Lamar Jackson. Tons of TD's on minimal targets and receptions.
Table 2: This really looks just at catch rate, where you see a pretty consistent trend line with little variance. The average is about 67.5% of balls thrown are caught by these receivers and you see that really play out in the next graph.
Table 3: This is what I call your deep ball threats vs. possession receivers. The truth is you probably want to be somewhere in the top right quadrant, because you're reliable enough to go up and get balls, but you're also getting yards as part of that. The bottom right is dominated by RB's on check down and short throws such as screens. The top left is your 50/50 ball specialist who go big or go home. The bottom left is where you don't want to be as you're below average yardage and below average catch rate.
I'm going to take you through some of the mistakes I most commonly see in marketing, media buying and tracking results. I've got 10+ years of marketing in sports and tourism under my belt and have learned some key lessons along the way. I've cleaned email lists to being a point of a strength in an organization, doubled web traffic in an established brand, quadrupled social media followers and negotiated advertising rates down to fit $88,000 in media buy into a $40,000 budget.
Note: Don't advertise in Times Square as seen above. I would get called at least once a year by someone selling the space at a deeply discounted price. It was still like $15,000. Don't fall in love with the idea of marketing somewhere, but do it because it makes sense and you will get a return-on-investment. Now onto the mistakes and lessons...
Only Investing in Branding Out of the Shoot
You want to get your name out there? Cool! The problem is that it takes years to build a reliable brand that people trust. You should worry more about conversions and being a cost-effective problem solver out of the shoot. Yes, it's nice to have pretty ads and be everywhere, but many small businesses can't afford that. Work on developing a small core of customers that you go above and beyond for. What is nice about this is that they will talk you up to friends, family and neighbors and it is also money in your register.
Not Being Clear About Your Brand and Its Ability to Be a Problem Solver
Tying into my first point you need to think about your marketing messages in a way that focuses more on how do you solve someone's problem in a more effective way than your competition. People buy things because they're trying to solve a problem or finish an errand in their life. Think through the last 10 items you paid for. I bet the moments before you bought them you thought about a problem and how it could be solved. For example, I finished up at the gym last night and wanted a quick, easy and healthy meal for a good cost. The quick, easy and good cost are low hanging fruit in a college town, but the healthy can be a bit challenging. I have a soft spot for locally owned places, so I hit up Yallah Taco for a chicken bowl in salad form.
Having No Data Before You Spend Marketing Dollars
You don't need a pile of money to develop insight into who your customer is. If you're a traditional business you can build a quantitative profile from your Google Analytics on your site, your receipts and your social media analytics. Odds are pretty good that they will align and each will give you a few more pieces of the puzzle. Your goal should be to go after the customer you already have and those most like them, not going after the customer you dream of having.
Having No Mechanism in Place for Tracking Your Success
This is super common, especially when businesses are just starting out. They will launch a website, but forget to put on Google Tag Manager, analytics tracking or tie their social media platforms to their website. They are so eager to get an ad in the market that they forget to have a clear trackable Call-to-Action (CTA) in every message they put out there. Once your money is spent you should know exactly what marketing messages and outlets created the best results for you. Double down on the best outlets and pull your money out of the bottom 25% of those that don't.
Investing in Poor Outlets
I'm going to go into some of my least favorite options for marketing that I've gained from 10+ years of marketing experience.
There is too much to worry about here and only a very small percentage of people get this right. Frankly, I think most people buy billboards so they can see their message personally and beat their chest that it is out there. The problem is you're dealing with drivers that are cruising at 65 MPH watching the road and at best you have 2-3 seconds of exposure. This is assuming the lighting on the billboard is correct and you aren't rotating with nine other advertisers. Oh and there aren't leaves on the trees blocking views.
Sports Marketing That Isn't Creative
Sports marketing with teams/leagues is expensive. I'm talking like 2x-3x what you would spend in the open market for comparable ads. Sports marketing sales teams sweeten deals by throwing in free food, a private event or some tickets to make you feel special. They'll make claims like "Oh, our fans collect the programs and hand them around to 10-12 family members." There might be one fan where this is true, but certainly isn't the normal experience. Like most businesses their goal is to make as much money and build value-added without spending any dollars out of their pockets.
Listen, I've worked a good portion of my career in sports and there are people that sell sports marketing opportunities correctly and those that don't. Most people fit into the second group and do what other places do, which made sense 15-20 years ago. Those that do it well look to add to the fan experience while making the sponsor feel like the key to making that happen. Think you're invited to the coolest party, but they just need another case of beer to take it to awesome.
The best way to get the most out of your sports marketing investment is to never tell the rep how much you're willing to spend, but just that it is over their minimum investment. They'll always call and say "I was thinking of you when this opportunity came up", because they know you have money and you're really like call seven after the other six turned him down. Make them go fishing over and over.
If you're going to go down this route make sure that every little piece of the deal should be a home-run if executed correctly. I had a lot of success with ticket giveaways through social media that built up my email marketing lists. Sponsor a memorable segment on the video board (i.e. official hype video), a very visible addition to the game experience that might not be possible without your investment and of course take advantage of tickets and food expenditures to woo potential clients. You'll get some pushback from sales reps telling you that this costs them money. That might be true, but it won't be nearly as much as the check you're writing.
TV Ads That Can't Be Paused To Take Down Your CTA
I'm not sure why investing in TV for homes that can't pause your message is still a thing. There are some people that can go back and watch your message again with cable, but it isn't the majority of people. It takes time to find a pen and paper to write down a CTA. This is why you should focus more of your effort into the YouTube and streaming side of things. Before you invest you should be 100% sure on the genre and audiences of the shows you will be running during. You don't want to be a meat salesman running ads during a show about vegetarians, just because you got a good rate. Clickable ads from say YouTube make tracking the easiest and allows you to refine your efforts.
Much like the TV ads, no one pulls their car over to write down the CTA from a radio ad. If you're going to spend money on radio ads it would be wiser to do so with a custom web address only used for radio ads. There is a long-standing debate on how many people actually still listen to the radio when things like iTunes, Spotify and podcasts are gaining more of the monopoly on our ears.
Print Newspaper Ads
You can do well in newspapers, but it is here one day and gone the next. When you're talking to the sales rep make sure you ask them what their circulation is and how many papers go unsold or undelivered. It isn't unreasonable to ask for a discount off the sales rate comparable to the papers not seen. For example: they have a claimed circulation of 100,000 and 5,000 come back unsold from news stands. Ask for a 5% discount at the minimum. In this day-in-age, you can probably do a lot better than that as most companies are digital heavy.
Something that news sales reps I've dealt with don't do that they should is comparing the ability to easily see and take advantage of the CTA without needing to pull over or pause an ad. When working with sales reps they often represent a family of newspapers or magazines. They'll often try to up-sell you to several days and outlets. I wouldn't enter an agreement with a newspaper unless I was confident of my data I gathered from a few steps above.
Investments in Poorly Maintained Email Lists
Email lists are valuable, if used correctly and well maintained. The lists should be earned and built honestly as well.
Here are the four questions you should ask someone selling an email marketing campaign:
1. What are your total number of subscribers and how were they added?
You don't EVER want bought lists. That goes for your email efforts or paying for advertising through an outlet. It isn't unusual to be approached by a shady character willing to sell you 50,000 names and emails for a few hundred dollars. The problem with this is they send this message to about 2,000 potential buyers and maybe get 60 dumb enough to buy into it. These poor people get bombarded with 60 emails they didn't opt into and it gives your company's reputation a bad bruise. You can legally only send to this list once and it isn't worth it to do so. Work with a company that is the right context for your audience and did it the hard way of building a loyal list slowly.
2. What is your list's open and click rate for a typical email?
You should be paying for the number of people that open an email, not their subscriber list total. If they have an incredible low click rate (think 2% or under) it is probably because their email presentation is poor and no one takes the time to read them.
3. How often do you clean your list and how do you go about it?
Traditionally, I've unsubscribed anyone that hasn't opened any of my last 10 campaigns. This keeps my open rates high, click rates high and keeps me in people's inboxes. A good email marketing relationship should be a two-way street of you providing good content and them rewarding you with engagement.
4. How many other advertisers go into this email?
You don't want the email to be too watered down with messages from sponsors. You want the email to be of value and not interruption to users.
Banner Ads That Aren't Re-Marketing or Fit That Site's Context
The only time people should see a banner ad from your brand is if they're been to your website before or your brand goes hand-and-hand perfectly with the website they're seeing it on. Don't fall in love with buying 5 million ad impressions, because it sounds awesome. That is for the big boys that already have widespread name recognition.
An example I have is I worked with a blogger that was a perfect fit with my brand and my click-through and conversion rate was as good as anything I invested in. Within a couple of years this blogger switched over to a Google AdSense style of banner ads to save time. Now their visitors were seeing ads for Tide, Quilted Northern and my brand which diluted my message and took away from the credibility of their site.
With re-marketing you are just sending them a reminder to keep top of mind. It is a really affordable option and gives you another touch point to bring people back to your website. The equivalent of these kind of ads is the subtle wave from across a busy street when you see someone that you know walking the other way. They probably won't come and talk to you, but they'll be thinking about you for a minute or two.
Not Replacing the Weakest Link in Your Sales Funnel
There should be clearly defined steps in your buying process. Most people consider it "awareness", "research", "consideration"and finally "purchase".
Awareness should be your audience built by the demographics that you compiled from every data source that you have available to you. The truth is most people won't get beyond awareness. If you have a monster drop-off between awareness and research you might have a problem in your messaging or outlets.
Next comes research. This means they're likely on your website gathering information on your brand. If they aren't satisfied with the information they're presented or the experience they aren't coming back no matter what you do. However, this is when you get people into the re-marketing funnel using banner ads (if your click rate is low, they probably got what they needed or had a bad experience) that hopefully gets them to return to do some more digging and get them to the next step of....
Consideration. You're in the finalists for where they want to spend their money. They're looking at individual items or prices to see if it fits in their budget. In most eCommerce businesses this leads to very specific product re-marketing and why you see that pair of shoes you were looking at on Dick's Sporting Goods show up 10 minutes later on Facebook. This step is pretty easy, because if people are on your product page and not adding it to a cart or they're leaving an abandoned cart or they get frustrated with the payment process you can look to fix that.
Lastly, you have the sale, which gives you a true return-on-investment (ROI) on your advertising spend.
You should know what step causes the greatest damage to a potential conversion and look into fixing it.
Eliminating the Bottom 25% of Your Marketing Investments
A lot of times businesses go on auto-pilot doing the same thing every single year and never audit how their marketing is going. Either they get busy with other tasks or they don't know how to track their marketing efforts into sales. Sometimes the lowest performing marketing outlet might be the nicest man/lady you know and you feel bad pulling your business. Sometimes it is as simple as saying "Hey, it didn't work this way, what other opportunities do you think would work better? Always look to cut your bottom 25% of marketing ads and double down in your top 10-15%, but leave some cash open for new opportunities.
You Should Be Able to Trust Your Sales Rep
Trust comes with time, just like anything. I've always been suspicious of companies that send me a new sales rep every six months. What this tells me is the company either pays poorly, treats its employees poorly or is just badly managed. Basically the Donald Trump White House Administration. When I have to introduce myself to a new sales rep every year, I'm not investing with that company, because it is a red flag. When you see your sales rep coming you should recognize them and be excited to see them.
The sales reps that last the test of time are the ones that do what they say they are going to do, go to bat for you with their organization and check in with you regularly. It isn't about the short-term what money can I get from you now feel, but the I want a lifetime relationship that we can evolve.
Negotiate, Negotiate, Negotiate
I grew up in spending a ton of time in flea markets as both and buyer and seller. By the age of 18 I was an absolute veteran of the wheel-and-deal. To this day I love negotiating, but not everyone is like me and thinks finding the best terms is a confrontation. What I've learned is that both parties need to be relatively honest in their approach and have their interests on the table. Most times the seller is trying to maximize the money they can take from me, where I'm wanting maximum media value and ROI.
An example of something I do is I will email 8-10 sales reps that I have some interest in working with and tell them "Hey, I have $10,000 to invest what is the best package you can put together for me? I've emailed a handful other finalists I think could be a good fit. You have until Friday at noon to email me your proposal." What is often the truth is I really have about $30,000-$50,000 and I'm looking to take the best 3-5 deals of the 8 or 9 I get back. This is an example of how I would regularly get $75,000-$90,000 in media value for the price of $30,000-$50,000. You can do this at a lower scale and frankly it is kind of fun.
About the Author
Andy Rupert is a Penn State (B.A. John Curley Center for Sports Journalism 08') and a Southern Miss (M.S. Sport Management 09'). He has spent his whole career working in sports and tourism digital marketing and metrics.