Per Inquiry Advertising Boosts Marketing Firm

Clients embrace risk-free, pay per lead strategy that yields direct responses

PHOENIX (July 31, 2006) — Showing businesses how they can spend less on advertising has propelled Higher Power Marketing (www.hpowermarketing.com) to a year of stellar growth – boosting revenue 400 percent from June 2005 to June 2006. Suddenly, the seven-year-old advertising agency finds itself billing in the low seven figures annually.

President and CEO Peter Feinstein says HPM’s emphasis on results appeals to clients who care about how well their advertising works, not necessarily when or where it runs. He says companies are accustomed to paying more for advertising because they divide the cost of expensive airtime or print space by the number of customer responses and arrive at a de facto cost per lead or sale; “Our methodology starts with a static cost per lead or sale, from which many of our clients experience returns on investment (ROI) of up to 20-to-1.”

“Clients that would benefit from our services are those that would benefit from receiving qualified leads and want to establish a stable cost per lead within their business plan,” Feinstein says. “We give clients rock-solid numbers they can count on for lead generation in exchange for the flexibility in when and where the ads run.”

How It Works

“What if you could be on TV or radio for free – pop up on movie screens across the country?” Feinstein asks. With his approach, advertising is free because clients pay for results.

HPM has relationships with media outlets across the country – radio, television, print, movie theaters and Internet – and access to their unsold inventory. “The client makes money; the station makes money; and we make money,” Feinstein says. “Everybody wins.”

The approach is called, variously, per inquiry (PI), pay per lead or direct response advertising. What qualifies as a response is negotiated between client and PI advertising agency. Packages can be structured for a variety of results: per inquiry (any response), per lead (name and contact information) – even per sale.

Feinstein calls it risk-free advertising and is willing to put his money where his mouth is. HPM not only is one of the largest players in PI advertising, but also one of just a few that offer a money-back guarantee. The Arizona-based agency agrees to generate a specific number of inquiries during the course of each campaign. If it fails to produce the number of inquiries promised, it will refund the client’s money for the unproduced leads, less production costs and a 20 percent commission.

In its seven-plus years, the agency has had to deliver on that money-back guarantee only a couple of times, but Feinstein says even those experiences weren’t all bad. “They’ve actually helped us get new clients by demonstrating that we’re true to our word. The folks at one company recognized it wasn’t a good fit for them – but referred us other clients because they recognized direct response advertising as a good business proposition and were impressed that we’d kept our word.”

Full Service Agency

Higher Power Marketing works with clients from start to finish. It wants them to start with two very different advertising concepts that to seek to arrive at the same conclusion – getting the phone to ring or a sale to occur. They do this to see which one works better.

Says Feinstein: “In our world: Test, test, test. We are always testing commercials. Then we run one for a while and test again.” The feedback, he says, is integral to staying ahead of the curve.

“We have professional copywriters that literally do nothing but write ads specifically focused on producing results,” Feinstein says. “We do not do creative for the sake of being creative. We are direct-response oriented.”

He pauses a moment, then elaborates: “In our world ‘creative’ is a noun. We are doing creative to produce measurable results – to sell products. We want the client spending their money for lead generation, not fancy, flowery ads that don’t produce results. We give them professional quality production that they own.”

The result? “We make the phone ring with qualified leads, or we persuade potential customers to visit a Web site,” Feinstein says.

Most importantly, this is trackable advertising. Higher Power provides exclusive toll-free numbers and Web addresses for potential customers to respond.

When that direct response comes, the PI advertising agency is ready with a turnkey solution for clients. It handles the call center services and details, from obtaining toll-free numbers to scripting; from testing the call center systems for functional operation to training the people who will be answering. The agency draws from the nine largest call center systems in the country, which collectively have more than 600 regional offices in place to manage calls from every corner of the United States, and Canada too.

To make things even easier for clients, the agency arranges fulfillment house solutions as well.

Low Overhead

Feinstein has a regular staff of nine, plus a couple of creative people. To keep overhead costs down, the company operates on a virtual basis, with everyone on staff remote networked from their own offices. Audio, video and graphic work is outsourced.

About 47 percent of the agency’s business is per inquiry television advertising, 31 percent per inquiry radio advertising and 15 percent per inquiry Internet advertising. Print and movie screens make up the remaining 7 percent, though Feinstein believes movie screens will be a growing sector.

He estimates that the company’s recent growth has doubled its client base to 43. Those clients fall primarily into 14 categories:

Feinstein also believes the non-profit sector could benefit from pay-per-lead advertising. “If they are spending money to generate donations, our system would be an ideal way for them to generate revenue and have absolute certainty that they would not overspend to get the results,” he says.

In fact, it was a non-profit client that spurred the longtime radio ad man’s interest in PI advertising.

He was helping the group run radio advertising campaigns in the Southwest, buying local airtime in the traditional manner. “We were doing such a good job for them, the regional director referred us to their national marketing manager,” Feinstein says. “He offered us the chance to place national advertising but asked to pay per lead.”

Thus, listening to the customer has paid off for Feinstein and Higher Power Marketing. More importantly, HPM’s systematic approach to converting an expense line item into a predictable investment that provides an ROI could pay off for companies interested in growing their businesses without the usual risks associated with advertising.

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