Wall Drug’s Success: 4 Foundational Marketing Lessons for Business

In 1931, Ted and Dorothy Hustead purchased a small drugstore in the town of Wall, South Dakota. Wall was literally referred to as the “geographical center of nowhere,” and the Great Depression had begun ravaging the town’s resources. The young couple struggled to gain traction in their new business for years. Ted watched travelers and military personnel pass right through the area without stopping.

Five years later, the business was still struggling. During a sweltering July afternoon, Dorothy had a brilliant idea while trying to nap: travelers driving across a hot, dusty prairie must be thirsty. “They want water. Ice cold water!” she exclaimed.

Ted immediately began making small signs that read, “Free Ice Water! Stop at Wall Drug.” He drove out to the road and began placing the signs every few miles. Before he could return to the store, Dorothy was already busy handing out water to the droves of people who had stopped, simultaneously selling ice cream and a myriad of other sundries.

To this day, you can see these signs along the highway. Wall Drug is now a lucrative landmark and one of a dozen bustling stores in town. You may be asking yourself, “What does this have to do with marketing?”

The story holds four essential foundational marketing lessons that apply to any business today:

 

Key Foundational Marketing Lessons

1. Increase Awareness Through Exposure

You may have exactly what people want, but until you create exposure for yourself, they will never know to look for it with you. One of the primary purposes of marketing is to increase awareness for products and services.

• • Actionable Tactics: Direct mail postcards, internet banner ads, social media postings, and paid ads all create awareness for your organization. You must actively put your offer where your audience is looking.

  • Internal Link Suggestion: Need help targeting your ideal customer online? Check out our guide on Meta Advertising: Is It Right for Your Business?.

 

2. Lead with an Irresistible Offer

Dorothy didn’t just wish people would stop; she offered them something they desperately needed for free. You may not have free water, but what other product or service can you use to generate traffic that leads to exposure?

• • The Principle: Once consumers are aware of you and receive something of value, they are more likely to return. Send out a mail piece with a coupon or offer that tempts and entices your market to try you out.

 

3. Sometimes You Have to Give It Away (Loss Leader)

In marketing, we call this technique a loss leader. You offer a product or service at such a great reduced rate (or even free) that one cannot help but take advantage.

• • The Investment: You may “lose” a few dollars (and it is a marketing investment, not a loss) to gain a lifetime of clients who purchase other, high-margin things from you later. Free water was the loss leader that led to massive sales of ice cream and souvenirs.

 

4. Go Where the People Are and Make Noise

Notice Ted and Dorothy didn’t just put a sign outside of their store. They went to the highway—the exact location of their potential customers—and ultimately created the modern-day billboard to advertise to people as they drove by.

• • Know Your Market: Do you really know where your market is located? Or are you spraying messaging everywhere in hopes you gain attention? Effective marketing requires precision in placement.

 

Frequently Asked Questions

What is a modern equivalent of Wall Drug’s highway signs?

The modern equivalent is any highly visible, attention-grabbing placement where your target audience congregates. This could be digital (e.g., retargeting ads, high-traffic industry newsletters, or strategically placed YouTube ads) or physical (billboards, event sponsorships).

How do I determine what my “irresistible offer” should be?

It must solve an immediate, high-priority pain point for your ideal customer. Look at your most valuable asset that is low-cost for you to deliver, such as a free 30-minute consultation, a valuable download, or a massive discount on a beginner service.

Is the “loss leader” strategy only for physical products?

No. For a service business, a loss leader could be a highly discounted introductory package or a free assessment that provides immediate value but requires paid services to fully implement the recommended changes.

 

Final Thoughts: Back to Basics

So, next time you begin to craft a marketing strategy and the tactics that follow, go back to the basics of a good marketing plan:

1. 1. Know the personas of your market.

   2. Know where they are located.

   3. Know what they really want from you.

Then, design a program that delivers the irresistible offer directly to them, just like the signs pointing to Wall Drug.