Some ins and outs of advertising that will pull customers in

``You can spend an incredible amount of money on advertising and not get anything,'' says Janet Nichols, a marketing consultant in Newton, Mass. One reason, says A. Bailey Chapin, a senior consultant at Stenrich Group, a New York City marketing firm, is that many ad agencies don't know how to write effective copy for response advertising. They know how to do awareness, education, image-building advertising very well, but not the kind of advertising that sells.

Response-advertising copy should be written like direct-mail copy, he says. Instead of ``for more information call this number,'' for instance, the ad should read, ``Call this number and talk to Jane Smith, who will give you two free tips on winterizing your home.''

Still, Mr. Chapin advises hiring a good outside consultant or agency to plan your advertising strategy. Advertising professionals who understand the business can pull a greater response from your market, and many times have a freer hand than an inside ad department to plan the campaign.

Whether you decide to seek out a good ad agency or direct your campaign yourself, you need to get the word out to your prospective customers that you have a great product or service. Getting that word out can mean the difference between bankruptcy or a booming business. It can make or break your company.

If you don't know anything about advertising, it will pay to find a good ad agency. Get recommendations from other businesses similar to yours, or find agencies through their work -- collecting ads you like from newspapers or magazines.

But if you have taken a couple of courses from local community colleges or the Small Business Administration and read current titles on advertising from the local bookstore, you may want to plan your strategy yourself.

Your advertising budget should not be based on what you spent last year, says Chapin, but on each customer's value to you. Multiply your average amount of sale by the average sales to this customer, he says. This is your customer's value. Now how much can you afford to spend to get each customer? You may actually lose money on the first sale, he suggests, if there is a probability that the customer will be buying over and over again.

The medium you choose depends upon what kind of product you are advertising, on your advertising budget, and on who your prospective customers are.

A small neighborhood store, for example, might advertise in its local suburban newspaper, distribute hand fliers with coupons within the area, or advertise on buses or subways that run through the area.

To sell a small item with more than local appeal for less than $5 to $10, you may want to advertise in the classified section of magazines read by your prospective customers. The cost is low -- less than $100 for many magazines. To reach those customers, an ad for log cabin accessories, for example, would appear in log cabin, organic gardening, and ``back to the country'' magazines.

Selling a higher-priced item takes a little more copy than a classified ad typically allows. One way to do this is the two-step plan. You can offer free information from a classified ad, then send a direct-mail package with a sales letter, order form, and return envelope, or a self-mailer to your respondents. Or you can sell directly from a more expensive display ad.

If you are selling computer software for $6,000 or more, bring in sales leads through advertising, send a direct-mail package, and follow up by telephone. This way you are using one of the least expensive forms of advertising to pull in leads (15 to 20 cents per reader), a more expensive form to give those who are really interested more information (25 cents each), and the even more expensive phone call ($7 to 10) to clinch the sale.

When searching for an advertising medium, don't forget college newspapers, theater programs, private club magazines, employee magazines, and employee bulletin boards, if they are appropriate for your product.

Radio advertising is good if you have an exclusive product that has mass appeal. Easy-listening, soft-rock, or classical stations are usually best.

TV advertising is more inexpensive during late-night periods on secondary stations, and some secondary stations can help produce your spot ad. Don't believe the prices on the rate card: You can negotiate with up-front cash. UHF stations are often less expensive, because of the smaller audience.

Talent to produce your ad can be recruited in the form of moonlighting ad agency people, broadcasting school students, and free-lance artists and writers.

Or you may want to write your own ad copy. Writing advertising copy is very different from other forms of writing. You are selling the benefits, not the product.

Typically people do not read the ads. They read the articles and scan the ads as they turn the pages. You need something that stops them from turning that page. The bookstores are full of books that tell how to write ad copy. Read several, then try it yourself.

The last step? Tracking your advertising. Did your ad work? How do you know unless you can tell the response it drew? It's amazing how many small-business owners overlook this vital step, pouring more and more money into ads every year that may be largely ineffective.

When you advertise, include a key in the ad. If the customer is to respond in writing, include a reference to, say, ``Dept. PS-10'' for Popular Science, month of October. If your customer will phone, tell him to ask for operator 21 (be sure you keep the list of which operator corresponds to which magazine). Ask walk-in customers where they heard about you.

Test each ad in a small way, inserting it into just one magazine at a time, developing it along the way, until you find the ad that pulls the best -- and that will do the most for your fledgling business.

Tenth in a series. Next: Is your sales force affordable?