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I wish I could tell you all ideas in this book were my inventions and that I’m some kind of marketing and business genius. The truth though is I’m a collector of elegant ideas. I rarely invent anything and when I do, it’s rarely
worth writing about.
An early business mentor of mine, Mal Emery would often say, “I’ve never had an original idea in my life—it’s just too bloody dangerous.” Yet he was and continues to be an extremely successful businessman and marketer. The
secret of his success and subsequently mine, was to just model things that were known to reliably work rather than trying to reinvent the wheel.
Reinventing the wheel requires you to be a genius and even then, it carries with it a high probability of failure. I’m no genius and I hate failing, so I prefer to just closely copy the things that made others successful—at least until I’ve got a very good handle on the basics. This tilts the odds in my favor and gives me a high probability of success.
While I did create the system that has become The 1-Page Marketing Plan, many of the direct response marketing concepts that make it work are the invention and ideas of other great business leaders and marketers.
Perhaps I flatter myself but the aphorism, “Good artists copy; great artists steal.” repeated by Steve Jobs and attributed to Pablo Picasso is certainly a philosophy I’ve held in mind when collecting these elegant ideas over the
years and writing this book. Regardless of whether you consider me a “great artist” or a thief, I want you to benefit from the treasure trove of the proven business building ideas that follow.
Certainly there’s a place for creativity and invention but in my opinion, this should come after you’ve first mastered the basics. This book contains many of those basics. Some come from my own experiences but most from people who’ve been “giants” in my business life and on whose shoulders I’ve stood. In no particular order I’d like to acknowledge:
Mal Emery
Dean Jackson
Joe Polish
Pete Godfrey
Dan Kennedy
James Schramko
Jim Rohn
Frank Kern
Seth Godin
Some have been personal mentors to me, while others have been mentors to me through publications and other works they’ve produced. I try and credit them in footnotes throughout this book when, as far as I know, an idea I’m
presenting has originated from them. However, I’m certain that I’ve left other people out or not acknowledged enough of the ideas of the people above. When you collect ideas over a period of many years it can sometimes become a blur when trying to recall where one originated. For that I apologize in advance.
The 1-Page Marketing Plan is to be an implementation breakthrough, rather than a new marketing innovation or concept. It’s by far the easiest way for a small business to go from knowing nothing about marketing to creating and
implementing a sophisticated direct response marketing plan in their business. The plan is literally reduced to a single page.
Please enjoy the ideas in this book and more importantly implement them in your business. Remember knowing and not doing is the same as not knowing.
Important: Download your copy of the companion resources for this book at 1pmp.com
Resources include templates and samples of the 1-Page Marketing Plan as well as links, videos and articles referenced throughout this book.
INTRODUCTION
What’s This All About?
If I had to summarize the essence of this book in one sentence it would be, “the fastest path to the money.” I’ve purposely put this as early as humanly possible in the book because I don’t want to waste your time.
I know for a certainty that this opening sentence will be off putting to a large number of people and frankly I’d much prefer they read someone else’s business book full of ear-tickling clichés like “follow your passion,”
“work hard,” “hire the right people,” blah blah blah.
If that’s what you’re after, then search Amazon. There’ll be a gazillion business books there for you on all these airy fairy concepts and much more, mostly written by professional authors and researchers who’ve never
actually built a high growth business.
This book is blatantly and unashamedly about growing your business fast and reaping the rewards of that kind of success.
Running Out Of Oxygen Really Sucks
As Zig Ziglar famously said, “Money isn’t everything…but it ranks right up
there with oxygen.”
Yup, nothing—NOTHING—kills a business faster than a lack “oxygen”
(aka money).
Why am I so unashamedly focused on the money getting? There are a few good reasons.
Firstly, there’s almost no business problem that can’t be solved with more money. Which is handy because almost every business I know of is full of problems. Money helps you solve the vast majority of things that make business a pain in the backside.
Secondly, when you’ve taken care of yourself, you have a chance to help others.
If you didn’t go into business to make money then you’re either lying or you have a hobby, not a business. And yes I know all about delivering value, changing the world, etc. but how much of that are you going to do if you’re broke? How many people can you help?
When you board an airplane and they’re going through all the safety procedures, the airline attendant will inevitably get to a point that goes something like this:
“Should the cabin experience sudden pressure loss, oxygen masks will drop down from above your seat. Place the mask over your mouth and nose and pull the strap to tighten. If you are traveling with children or someone who requires assistance, make sure that your own mask is on first before helping others.”
Why fit your own mask before helping others? Because if you’re slumped
over your seat suffering from a lack of oxygen;
a. you can’t help anyone else, and even worse;
b. we now have to deploy scarce resources to come and help you,
otherwise you’ll soon be dead.
Knowing What To Do
In his book titled, The Book of Survival, Anthony Greenback wrote;
“To live through an impossible situation, you don’t need to have the reflexes of a Grand Prix
driver, the muscles of a Hercules, the mind of an Einstein. You simply need to know what to do.”
The statistics vary on exactly what percentage of businesses fail within the first five years. Some estimates put it as high as 90%. However, I’ve never seen this statistic being quoted at anything less than 50%. That means that if
we’re being super-optimistic you have a 50/50 chance of still having your doors open after five years.
However, here’s where it really gets worse. The statistics only take into account businesses that completely cease trading. They don’t take into account the businesses that plateau at a low level and slowly kill or make the lives of their owners miserable.
Have you ever wondered why most small businesses plateau at a mediocre level?
At one end of the spectrum there’s Pete the plumber who works sixteenhour days, weekends and never takes holidays while barely making enough to keep his head above water. On the other end of the spectrum there’s Joe
who runs a plumbing company with twenty plumbers working for him. It seems like his primary business activity is counting the huge sums of money that keep rolling in.
It’s very common for small businesses to never grow past the point at which they generate just enough profit for the owner(s) to make a modest living. It seems that no matter how hard the owner(s) try, their efforts to get to the next level just lead to frustration. At this point one of two things happens.
Either they get disillusioned or they just accept their fate—that their business is nothing more than a low-paid, self-created job.
In fact the reality is that many business owners would probably be better off just finding a job in their industry. They would likely work fewer hours, have less stress, enjoy more benefits and more holiday time than in the prison they have created for themselves. On the flip side, there are a few business owners that just seem to have it all. They work reasonable hours, have a fantastic cash flow from their enterprise and enjoy continuous growth.
Many business owners who are struggling blame their industry. While it’s true some industries are in decline—examples such as book stores or video rental stores immediately come to mind. If you are in one of these dead or
dying industries it may be time to cut your losses and move on, rather than torture yourself to death financially. This may be particularly difficult if you have been in the industry for a long time.
However, for the most part, when people blame their industry they are just playing the blame game. Some of the most common industry complaints I hear are:
It’s too competitive
The margins are too low
Online discounters are taking customers away
Advertising no longer works
However, it’s rarely the industry that is truly to blame, after all there are others in that same industry that are doing very well. So the obvious question is what are they doing differently?
Many small business owners fall into the trap described in Michael Gerber’s classic book, The E-Myth. That is they are a technician, e.g.
plumber, hairdresser, dentist etc., and they are good at what they do. They have what Gerber describes as an “entrepreneurial seizure” and they start to think to themselves, “Why should I work for this idiot boss of mine? I’m
good at what I do—I’ll start my own business.”
This is one of THE major mistakes made by most small business owners. They go from working for an idiot boss to becoming an idiot boss!
Here is the key point—just because you’re good at the technical thing you do doesn’t mean that you are good at the business of what you do.
So going back to our example, a good plumber is not necessarily the best person to run a plumbing business. This is a vitally important distinction to note and is a key reason that most small businesses fail. The owner of the business may have excellent technical skills but it’s his lack of business skills that causes his business to fail.
This is not meant to discourage people from starting their own businesses.
However, you must resolve to become good at the business of what you do —not just the technical thing you do. A business can be an amazing vehicle for achieving financial freedom and personal fulfillment—but only for those who understand and master this vital distinction and figure out what they need to do to run a successful business.
If you’re good at the technical thing of what you do but not knowing exactly what to do on the business of what you do is familiar to you, then don’t worry, the whole point of this book is to take you from confusion to clarity—so you know exactly what to do to have business success.
Professionals Have Plans
As a kid my favorite TV show was The A-Team. In case you’ve never watched it, I’ll give you the executive summary of 99% of the episodes:
1. Bad guys harass and threaten an innocent person or group
2. The innocent person or group begs and pleads with the A-Team to help them
3. The A-Team (a motley bunch of ex-soldiers) humiliate and drive away the bad guys
Episodes would invariably end with Hannibal (the brains of the A-Team) chomping down on his cigar and triumphantly mumbling, “I love it when a plan comes together.”
Look at any profession where the stakes are high and you’ll see a wellthought-out plan being followed. Professionals never just wing it.
Doctors follow a treatment plan.
Airline pilots follow a flight plan.
Soldiers follow a military operation plan.
How would you feel about engaging the services of any of the above professions where the practitioner says to you “screw the plan, I’ll just wing it.” Yet this is exactly what most business owners do.
Invariably when someone makes a mess of something it often becomes clear in the aftermath that they didn’t have a plan. Don’t let that be you and your business. While no one can guarantee your success, having a plan dramatically increases your probability of success.
Just like you wouldn’t want to be on a plane where the pilot hadn’t bothered with a flight plan, you don’t want you and your family relying on a business where you hadn’t bothered with a business plan. Often the stakes are almost
as high. Marriages, partnerships, jobs and more are often the casualties of failed businesses.
It’s more than just your ego on the line so it’s time to “go pro” and create a plan.
The Wrong Kind Of Plan
Early into my first business I was smart enough to identify that a business plan was going to be important to my success. Unfortunately that’s where my smarts ended.
With the help of a business consultant (who’d never actually run a successful business of his own), I ended up many thousands of dollars poorer but had a document that most business owners never bother with—a business plan.
My business plan was many hundreds of pages long. It had graphs, charts, projections and much, much more. It was an awesome looking document but essentially was a bunch of nonsense.
After it was written, I shoved it in the top drawer of my desk and never saw it again until the day we were moving offices and I had to clean out my desk.
I dusted it off, flicked through it and tossed it in the trash angry at myself about the money I’d wasted on that phony baloney consultant.
However, later when I thought about it more carefully, I realized while the document itself was a bunch of nonsense, the process I went through with the consultant was valuable in clarifying some of the key elements in my business, particularly one key section of it called “the marketing plan.”
In fact, a lot of what we did to create the marketing plan shaped the business and created much of our future success.
More on this in a moment but for now let me introduce a man and his concept that’s going to be the key to your business success.
My Friend Vilfredo Pareto and the 80/20 Rule
I never had the privilege of meeting Vilfredo Pareto, mostly because he died over half a century before I was born, but I’m sure we would have been best buds.
Pareto was an Italian economist who noticed that 80% of the land in Italy was owned by 20% of the population. Hence the Pareto Principle, commonly known as the 80/20 rule, was born.
It turns out the 80/20 rule holds true for more than just land ownership in Italy. It holds true for almost anything you care to think of. Some examples:
80% of a company’s profits come from 20% of its customers 80% of road traffic accidents are caused by 20% of drivers 80% of software usage is by 20% of users 80% of a company’s complaints come from 20% of its customers
80% of wealth is owned by 20% of people Woody Allen even noted that 80% of success is showing up.
In other words the Pareto Principle predicts that 80% of effects come from 20% of causes.
Maybe it’s just my laziness talking, but this gets me seriously excited.
It’s often said that necessity is the mother of invention but I’d argue that laziness is and my friend Vilfredo is my mentor in that pursuit.
So essentially you can cut out 80% of the stuff you’re doing, sit on the couch eating nachos instead and you’ll still get most of the result you’re getting.
If you don’t want to sit on the couch chowing down on nachos 80% of the time, then doing more of the 20% stuff is your fast track to success. And in this context success = more money with less work.
The 64/4 Rule
If you think the 80/20 is exciting, the 64/41
rule will blow your mind. You see we can apply the 80/20 rule to the rule itself. So we take 80% of 80 and 20% of 20 and end up with the 64/4 rule.
So 64% of effects come from 4% of causes.
Put another way—the majority of your success comes from the top 4% of your actions. Or put yet another way 96% of the stuff you do is waste of time (comparatively).
The most surprising thing is that the 80/20 rule and 64/4 rule still hold up in a remarkably accurate way. If you look at wealth distribution statistics from the last century you’ll notice that the top 4% own about 64% of wealth and the top 20% own about 80% of the wealth. This is despite this being the “information age.” You’d imagine that a hundred years ago only the wealthy had good access to information, hence it’s understandable why they held 80% of the wealth. Yet this wealth distribution statistic still holds up today, an age where information has been democratized and where even the poorest people have pretty much the same access to information as the wealthiest people.
This proves that lack of information isn’t the issue holding back the bottom 80% of business owners—it’s human behavior and mindset. That certainly hasn’t changed in the last 100 years.
The Best Kept Secret Of The Rich
In my observation of and work with numerous business owners around the world there’s one thing which differentiates the wildly successful and wealthy ones from the struggling and broke.
Struggling business owners will spend time to save money, whereas successful business owners will spend money to save time. Why is that an important distinction? Because you can always get more money, but you can never get more time. So you need to ensure the stuff you spend your time on makes the biggest impact.
This is called leverage and leverage is the best kept secret of the rich.
These big impacting, leveraged activities are the things that make up the key 20% of the 80/20 rule and the 4% of the 64/4 rule.
If you want more success you need to start paying attention to and expand the things that give you the most leverage.
There are various areas of your business where you could start looking for leverage points. You may look at getting 50% better at your negotiation skills. This in turn may help you re-negotiate with key suppliers and get an incremental improvement in your buy price. While this is great, at the end of the day after all that time and effort you’ve still just improved your bottom line incrementally. This is not what I’d call massive leverage. We want exponential improvement, not incremental.
By far the biggest leverage point in any business is marketing. If you get 10% better at marketing, this can have an exponential or multiplying effect on the bottom line.
Willie Sutton was a prolific American bank robber. During his forty-year criminal career he stole millions of dollars, and eventually spent more than half of his adult life in prison and also managed to escape three times.
Sutton was asked by reporter Mitch Ohnstad why he robbed banks.
According to Ohnstad, he replied, “Because that’s where the money is.”
When it comes to business the reason we want to focus so heavily on marketing is the same—because that’s where the money is.
Applying The 80/20 and 64/4 Rules—Your Marketing Plan
Back to my earlier story about the wrong type of business plan. While my business plan document ended up being a useless mess of management speak and nonsense, the part of the business planning process that proved hugely valuable to me was creating the marketing plan.
The marketing plan ended up being the 20% part of the business planning process that produced 80% of the result.
This has been the case in every business I created and ran since then.
With this in mind when I started coaching small business owners, a large part of my focus was getting them to create a marketing plan.
Guess what? Very few of them ever carried through with it. Why? Because creating a marketing plan was a complex, laborious process which most small business owners simply won’t do.
So again laziness becomes the mother of invention. I needed a way to take the core essence of the marketing planning process and make it simple, practical and useful to small business owners. The 1-Page Marketing Plan is
born.
The 1-Page Marketing Plan is the 4% of effort that generates 64% (or more) of the result in your business. It’s the 64/4 rule applied to business planning.
Using this process we can boil down hundreds of pages and thousands of hours of traditional business planning in a single page which can take as little as thirty minutes to think about and fill in.
Even more exciting is that it becomes a living document in your business.
One that you can stick on the wall of your office and refer to and refine over time. Most of all it’s practical. There’s no management speak or jargon to understand. You don’t need an MBA to create it or understand it.
The 1-Page Marketing Plan has been a marketing implementation breakthrough. I’ve seen compliance rates among coaching clients significantly improve. Small business owners who would have never had the time, money or knowhow to create a traditional marketing plan now have one. As a result, they’ve reaped the massive benefits that come from having clarity around their marketing.
I’ll introduce the 1-Page Marketing Plan shortly but first I think it would be valuable to start at the beginning and not assume anything. Marketing itself is a vague term which is poorly understood even by so-called professionals
and experts in the industry.
So let’s quickly get a quick and simple understanding of what marketing actually is.
What Is Marketing?
Some people think marketing is advertising or branding or some other vague concept. While all these are associated with marketing, they are not one and the same.
Here’s the simplest, most jargon-free, definition of marketing you’re ever likely to come across:
If the circus is coming to town and you paint a sign saying “Circus Coming to the Showground Saturday,” that’s advertising.
If you put the sign on the back of an elephant and walk it into town, that’s promotion.
If the elephant walks through the mayor’s flower bed and the local newspaper writes a story about it, that’s publicity.
And if you get the mayor to laugh about it, that’s public relations.
If the town’s citizens go to the circus, you show them the many entertainment booths, explain how much fun they’ll have spending money at the booths, answer their questions and ultimately, they spend a lot at the circus, that’s sales.
And if you planned the whole thing, that’s marketing.
Yup it’s as simple as that—marketing is the strategy you use for getting your ideal target market to know you, like and trust you enough to become a customer. All the stuff you usually associate with marketing are tactics.
We’ll talk more about strategy vs. tactics in a moment.
However, before we do that you need to understand a fundamental shift has occurred in the last decade and things will never be the same.
The Answers Have Changed
Albert Einstein was once giving an exam paper to his graduating class. It turned out that it was the exact same exam paper he had given them the
previous year. His teaching assistant, alarmed at what he saw and thinking it to be the result of the professor’s absent-mindedness, alerted Einstein.
“Excuse me, sir,” said the shy assistant, not quite sure how to tell the great man about his blunder.
“Yes?” said Einstein.
“Um, eh, it’s about the test you just handed out.”
Einstein waited patiently.
“I’m not sure if you realize it, but this is the same test you gave out last year. In fact, it’s identical.”
Einstein paused to think for a moment, then said,
“Yes, it is the same test but the answers have changed.”
Just as the answers in physics change as new discoveries are made, so too do the answers in business and in marketing.
Once upon a time you placed an ad in the Yellow Pages, paid them a truck load of money and your marketing for the year was done. Now you have Google, social media, blogs, websites and myriad of other things to think
about.
The Internet has literally opened up a world of competitors. Whereas previously your competitors may have been across the road, now they can be on the other side of the globe.
As a result of this many who are trying to market their business become paralyzed by the “bright shiny object syndrome.” This is where they get caught up in whatever the currently “hot” marketing tactics are like SEO,
video, podcasting, pay-per-click advertising, etc.
They get caught up with tools and tactics and never figure out the big picture of what they’re trying to actually do and why.
Let me show you why this will lead to a world of pain.
Strategy vs. Tactics
Understanding the difference between strategy and tactics is absolutely key to marketing success.
Strategy is the big-picture planning you do prior to the tactics. Imagine you’ve bought an empty block of land and want to build a house. Would you just order a pile of bricks and then just start laying them? Of course not.
You’d end up with a big old mess that likely wasn’t safe.
So what do you do instead? You hire a builder and an architect first and they plan everything out from the major stuff like getting building permits, down to what kind of tap fittings you’d like. All of this is planned prior to a
single shovel of dirt being moved. That’s strategy.
Then once you have your strategy, you know how many bricks you need, where the foundation goes and what kind of roof you’re going to have. Now you can hire a brick layer, carpenter, plumber, electrician, etc. That’s
tactics.
You can’t do anything worthwhile successfully without both strategy and tactics.
Strategy without tactics leads to paralysis by analysis. No matter how good the builder and the architect are, the house isn’t going to get built until someone starts laying bricks. At some stage they’re going to need to say, “OK the blueprint is now good, we’ve got all the necessary approvals to build so let’s get started.”
Tactics without strategy lead to “bright shiny object syndrome.” Imagine you started building a wall without any plans and then later found out that it was in the wrong place, so you start pouring the foundation and then you
find out it’s not right for this type of house, so you start excavating the area where you want the pool but that isn’t right either. This clearly isn’t going to work. Yet this is exactly how many business owners do marketing. They
string together a bunch of random tactics in the hope that what they’re doing will lead to a customer. They whack up a website without much thought and it ends up being an online version of their brochure or they start promoting on social media because they heard that’s the latest thing and so on.
You need both strategy and tactics to be successful but strategy must come first and it dictates the tactics you use. This is where your marketing plan comes in. Think of your marketing plan as the architect’s blueprint for getting and retaining customers.
I Have Great Product/Service, Do I Really Need Marketing?
Many business owners fool themselves into thinking that if their product is excellent, the market will buy. While “if you build it, they will come” makes a great movie plot, it’s a terrible business strategy. It’s a strategy  that’s expensive and comes with a high rate of failure. History is littered with technically superior products that commercially failed. A few examples include Betamax, The Newton and LaserDisc to name just a few.
Good, even great, products are simply not enough. Marketing must be one of your major activities if you’re to have business success.
Ask yourself, when does a prospect find out how good your product or service is? The answer of course is—when they buy. If they don’t buy, they’ll never know how good your products or services are. As Thomas Watson from IBM famously said:
“Nothing happens until a sale is made.”
Therefore we need to clearly understand an important concept: a good product or service is a customer retention tool. If we give our customers a great product or service experience they’ll buy more from us, they’ll refer other people to us and build up the brand through positive word of mouth.
However, before customer retention, we need to think about customer acquisition (AKA marketing). The most successful entrepreneurs always start with marketing.
How To Kill Your Business
I’m about to reveal to you one of the easiest and most common ways to kill your business—in the earnest hope that you won’t do it. It’s absolutely the biggest mistake made by small business owners when it comes to
marketing.
It’s a widespread problem, and it’s at the heart of why most small business marketing fails.
If you’re a small business owner, you’ve no doubt given some thought to marketing and advertising. What approach are you going to take? What are you going to say in your advertising?
The most common way most small business owners decide on this is by looking at large, successful competitors in their industry and mimicking what they’re doing. This seems logical—do what other successful businesses are doing and you will also become successful. Right?
In reality this is the fastest way to fail and I’m certain it’s responsible for the bulk of small business failures. Here are the two major reasons why…
#1 Large Companies Have A Different Agenda
Large companies have a very different agenda when it comes to marketing than small businesses do. Their strategies and priorities differ from yours significantly.
The marketing priorities of a large company looks something like this:
1. Pleasing The Board Of Directors
2. Appeasing Shareholders
3. Satisfying Superiors’ Biases
4. Satisfying Existing Clients’ Preconceptions
5. Winning Advertising And Creative Awards
6. Getting “Buy In” From Various Committees And Stakeholders
7. Making A Profit
The marketing priorities of a small business owner look something like this:
1. Making A Profit
As you can see there is a world of difference in the marketing priorities of small and large companies. So naturally there would have to be a world of difference in strategy and execution.
#2 Large Companies Have A VERY Different Budget
Strategy changes with scale. This is very important to understand. Do you think someone investing in and building skyscrapers has a different property investment strategy than the average small property investor? Of course.
Using the same strategy simply won’t work on a small scale. You can’t just build one floor of a skyscraper and have a success. You need all 100 stories.
If you have an advertising budget of $10 million and three years to get a profitable result, then you’re going to use a very different strategy compared to someone needing to make a profit immediately with a $10,000
budget.
Using a large company marketing strategy, your $10,000 is going to be a drop in the ocean. It will be totally wasted and ineffective because you’re using the wrong strategy for the scale that you’re operating at.
Large Company Marketing
Large company marketing is also sometimes known as mass marketing or “branding.” The goal of this type of advertising is to remind customers and prospects about your brand as well as the products and services you offer.
The idea is that the more times you run ads from your brand, the more likely people are to have this brand at the top of their consciousness when they go to make a purchasing decision.
The vast majority of large company marketing falls into this category. If you’ve seen the ads from major brands such as Coca-Cola, Nike and Apple you’ll have experienced mass marketing.
This type of marketing is effective; however, it is very expensive to successfully pull off and takes a lot of time. It requires you to saturate various types of advertising media e.g. TV, print, radio, Internet, etc., on a very regular basis and over an extended period of time.
The expense and time involved are not a problem for the major brands as they have massive advertising budgets, teams of marketing people and product lines are planned years in advance.
However, a major problem arises when small businesses try to imitate the big brands at this type of marketing.
The few times they run their ads is like a drop in the ocean. It’s nowhere near enough to reach the consciousness of their target market who are bombarded with thousands of marketing messages each day. So they get drowned out and see little or no return for their investment. Another advertising victim bites the dust.
It’s not that the small businesses aren’t good at “branding” or mass media ads. It’s that they simply don’t have the budget to run their ads in sufficient volume to make them effective.
Unless you have millions of dollars in your marketing budget, you have a very high probability of failure with this type of marketing.
Branding, mass marketing and ego-based marketing is the domain of large companies. To achieve any kind of cut through requires an enormous budget and the use of expensive mass media.
Following the path of other successful businesses is smart, but it’s vital that you understand the full strategy you’re following and that you’re able to execute it.
Strategy from an outside observer’s perspective can be very different to the reality. If you’re following a strategy that has different priorities to you or has a vastly different budget then it’s highly unlikely it will generate the kind of result you’re hoping for.
Now let’s look at what successful small to medium business marketing looks like.
Small and Medium Business Marketing
Direct response marketing is a particular branch of marketing that gives small businesses cut through and a competitive edge on a small budget. It’s designed to ensure you get a return on investment that is measurable.
If $10 bills were being sold for $2 each, how many would you buy? As many as you could get hands on naturally! The name of the game with direct response marketing is “money at a discount.” For example for every $2 spent on advertising, you get $10 out in the way of profits from sales.
It’s also a highly ethical way of selling. It’s focused on the specific problems of the prospect and aims to solve these problems with education and specific solutions. It is also the only real way for a small business to affordably reach the consciousness of a prospect.
When you turn your ads into direct response ads, they become lead generating tools rather than just name recognition tools.
Direct response marketing is designed to evoke an immediate response and compel prospects to take some specific action, such as opting-in to your email list, picking up the phone and calling for more information, placing an order or being directed to a web page. So what makes a direct response ad?

Here are some of the main characteristics:
It’s trackable. That is, when someone responds, you know which ad and which media was responsible for generating the response. This is in direct
contrast to mass media or “brand” marketing—no one will ever know what ad compelled you to buy that can of Coke, heck you may not even know yourself.
It’s measurable. Since you know which ads are being responded to and how many sales you’ve received from each one, you can measure exactly how effective each ad is. You then drop or change ads that are not giving you a return on investment.
It uses compelling headlines and sales copy. Direct response marketing has a compelling message of strong interest to your chosen prospects. It uses attention-grabbing headlines with strong sales copy that is “salesmanship in print.” Often the ad looks more like an editorial than an ad (hence making it at least three times more likely to get read).
It targets a specific audience or niche. Prospects within specific verticals, geographic zones or niche markets are targeted. The ad aims to appeal to a narrow target market.
It makes a specific offer. Usually the ad makes a specific value-packed offer. Often the aim is not necessarily to sell anything from the ad but to
simply get the prospect to take the next action, such as requesting a free report. The offer focuses on the prospect rather than on the advertiser and talks about the prospect’s interests, desires, fears and frustrations. By contrast, mass media or “brand” marketing has a broad, one-size-fits-all marketing message and is focused on the advertiser.
It demands a response. Direct response advertising has a “call to action,”
compelling the prospect to do something specific. It also includes a means of response and “capture” of these responses. Interested, high probability prospects have easy ways to respond such as a regular phone number, a free
recorded message line, a website, a fax back form, a reply card or coupons.
When the prospect responds, as much of the person’s contact information as possible is captured so that they can be contacted beyond the initial response.
Multi-step, short-term follow-up. In exchange for capturing the prospect’s details, valuable education and information on the prospect’s problem is offered. The information should carry with it a second “irresistible offer”—
tied to whatever next step you want the prospect to take, such as calling to schedule an appointment or coming into the showroom or store. Then a series of follow-up “touches” via different media such as mail, e-mail, fax, and phone are made. Often there is a time or quantity limit on the offer.
Maintenance follow-up of unconverted leads. People who do not respond within the short-term follow-up period may have many reasons for not “maturing” into buyers immediately. There is value in this bank of slow-tomature prospects. They should be nurtured and continue hearing from you regularly.
Direct response marketing is a very deep topic with many facets. The 1- Page Marketing Plan is a tool that helps you implement direct response marketing in your business without needing to spend years studying to become an expert.
It’s a guided process that helps you create the key elements of a direct response campaign for your business quickly and easily.
The 1-Page Marketing Plan
The 1-Page Marketing Plan template is designed so that you can fill it in, in point form as you read this book and end up with a personalized marketing
plan for your business. Here’s what a blank template of the 1-Page
Marketing Plan looks like:

There are nine squares split up into the three major phases of the marketing process. Most great plays, movies and books are split up into a three-act structure and so too is good marketing. Let’s take a look into these three
“acts.”
Download your copy of the 1-Page Marketing Plan template at 1pmp.com
The Three Phases Of The Marketing Journey
The marketing process is a journey we want to guide our ideal target market through. We want to guide them from not knowing we exist right through to being a raving fan customer.
Through this journey there are three distinct phases that we guide them through. These phases are the Before, During and After2
phases of your marketing process. The following is a brief overview of each of these phases.
Before
We label people going through the before phase as a prospects. At the beginning of the “before” phase, prospects typically don’t even know you exist. The successful completion of this phase results in the prospect knowing who you are and indicating interest.
Example: Tom is a busy business owner and is frustrated that he can’t keep his contacts in sync between his laptop and smartphone. He searches online for a solution and comes across an ad with the headline “Five Little Known
Strategies That Unlock The Power Of Your Business IT System.” Tom clicks on the ad and is taken to an online form where he must enter his email address in order to download a free report. Tom sees value in what the report has to offer so enters his email address.
During
We label people going through the during phase as a leads. At the beginning of the “during” phase, leads have indicated some interest in your offer. The successful completion of this phase results in the prospect buying from you
for the first time.
Example: Tom gets a lot of value from the report he downloaded. It has some genuinely good tips that he didn’t previously know and implementing them has saved him a lot of time. In addition, the IT company that wrote the
report has been emailing him additional valuable tips and information and offers Tom a free Twenty-one-point IT audit for his business. Tom takes them up on this offer. The audit is thorough and professional and reveals to
Tom that his IT systems are vulnerable because a lot of the software on his computers is out of date. Also, the backups he thought were happening actually stopped working six months ago. They offer Tom a heavily discounted offer where they’ll send a technician to fix all the problems identified during the audit. Tom takes them up on this offer.
After
We label people in this phase as customers3
. At the beginning of the “after”
phase, customers have already given you money. The after never ends and when executed correctly, results in a virtuous cycle where the customer buys from you repeatedly and is such a fan of your products or services that they
consistently recommend you and introduce you to new prospects.
Example: Tom is extremely impressed with the professionalism of the technician that came in and fixed his IT problems. The technician was on time, courteous and explained everything to Tom in plain English.
Importantly, he follows through on his company’s promise of “Fixed First Time or It’s Free.” Someone from headquarters follows up with Tom the next day to ensure he’s satisfied with the service he received. Tom indicates
that he is very satisfied. During this follow-up call, Tom is offered a maintenance package where a qualified technician will look after his IT systems for a fixed monthly fee. It also includes unlimited technical support so if Tom is stuck at any time, he can call a toll free number and get immediate help. Tom takes up this offer. The support line alone is of huge value to him as he frequently gets frustrated with his IT system and loses productive time trying to figure out a fix. Tom even refers three of his business friends from his golf club to this company because of the great service he’s experienced.
In summary if we were to describe the three phases in table form, it would look like this:
Now that we’ve got a good bird’s eye view of the overall structure, it’s time to dive in and look in depth at each of the nine squares that make up your 1- Page Marketing Plan.
Important: Download your copy of the 1-Page Marketing Plan
template at 1pmp.com
ACT I – The “Before” Phase
The “Before” Phase Section Summary
In the “before” phase you’re dealing with prospects. Prospects are people that may not even yet know you exist. In this phase you’ll identify a target market, craft a compelling message for this target market and deliver your
message to them through advertising media.
The goal of this phase is to get your prospect to know you and respond to your message. Once they’ve indicated interest by responding, they become a lead and enter the second phase of your marketing process.
Chapter 1 – Selecting Your Target Market
Chapter 1 Summary
Selecting your target market is a crucial first step in the marketing process.
Doing so will ensure your marketing message resonates better, which in turn will make your marketing far more effective. By focusing on the right target market for your business, you’ll be able to get a better return on the
time, money and energy you invest.
Highlights covered in this chapter include:
Why targeting everyone with your product or service is a terrible idea.
Why mass marketing can be harmful to your business and cost you far more than it makes you.
How to use the “PVP index” to select your perfect target market.
Why you should focus on a niche and become a big fish in a small pond.
How to make price irrelevant.
Why you should stop advertising a long list of products and services.
How to go deep into the mind of your prospect so you can understand exactly what they want.
It’s Not Everyone
When I ask business owners who their target market is, many tend to respond with “everyone.” In reality this means no one. In their zeal to acquire as many customers as possible, many business owners try to serve the widest market possible.
On the face it of it this seems logical. However, it’s actually a huge mistake.
Many business owners worry about narrowing down their target market because they don’t want to exclude any potential customers.
This is a typical newbie marketing mistake. In this chapter we’re going to examine why excluding customers is actually a good thing.
As discussed in the previous chapter, most large company advertising falls into a category called mass marketing, sometimes also referred to as “branding.” With this type of marketing, business owners are like an archer in the middle of a dense fog, shooting arrows in every direction in the hope that one or more of them will hit the intended target.
The theory behind mass marketing is that you want to “get your name out there.” I’m not really sure exactly where “there” is or what’s supposed to happen when your name arrives “there.” Regardless the theory is that if you broadcast your message enough times, you’ll by chance get an audience with your prospects and some percentage of them will buy from you.
If that sounds a lot like our disoriented archer, flailing about in the fog, shooting his arrows in random directions and hoping for the best, then you’d be right. However, you might be thinking—if he just shoots enough arrows in all directions, surely he’s bound to hit his target. Right? Maybe, but for small to medium sized businesses at least, that’s the stupid way of marketing because they’ll never have enough arrows (i.e., money) to hit their target enough times to get a good return on their investment.
To be a successful small business marketer you need laser-like focus on a narrow target market, sometimes called a niche.
Niching—Harnesses The Power Of Focus
Before going any further let’s define what a business niche is.
A niche is a tightly defined portion of a subcategory. For example think of the health and beauty category. This is a very wide category. A beauty salon can offer a wide variety of services including tanning, waxing, facials, massage, cellulite treatment and much more. If, for example, we take one of these subcategories—let’s say cellulite treatment, this could be our niche.
However, we could tighten it up even further by focusing on cellulite treatment for women who’ve just had a baby. This is a tightly defined niche.
Now you may be thinking why on earth would we want to limit our market so much? Here’s why:
1. You have a limited amount of money. If you focus too broadly, your marketing message will become diluted and weak.
2. The other critical factor is relevance. The goal of your ad is for your prospects to say, “Hey that’s for me.”
If you’re a woman who’s just had a baby and are concerned about cellulite, would an ad targeting this specific problem grab your interest? Most certainly. How about if the ad was a general ad for a beauty salon which reeled off a long list of services, one of which was cellulite treatment?
Likely it would get missed in the clutter.
A 100 watt light bulb, like the kind of light bulb we normally have in our homes, lights up a room. By contrast a 100 watt laser can cut through steel.
Same energy, dramatically different result. The difference being how the energy is focused. The exact same thing is true of your marketing.
Take another example of a photographer. If you look at ads from most photographers you’ll often see a laundry list of services like:
Portraits
Weddings
Family photography
Commercial photography
Fashion photography
etc.
The technical way photography is done may not change very much from situation to situation, but let me ask you a question. Do you think someone looking for wedding photography would respond to a different ad than someone who’s after commercial photography?
Do you think a bride-to-be looking for a photographer for her special day might be looking for something radically different than a purchasing manager from a heavy machinery distributor looking to photograph a truck for a product brochure? Of course.
However, if the ad just rolls out a broad laundry list of services, then it’s not speaking to either prospect, therefore it’s not relevant, therefore it will likely be ignored by both market segments. That’s why you need to choose a narrow target market for your marketing campaign.
Being all things to all people leads to marketing failure. This doesn’t mean you can’t offer a broad range of services, but understand that each category of service is a separate campaign.
Targeting a tight niche allows you to become a big fish in a small pond. It allows you to dominate a category or geography in a way that is impossible by being general.
The type of niches that you want to go after are “an inch wide and a mile deep.” An inch wide meaning it is a very highly targeted subsection of a category. A mile deep meaning there’s a lot of people looking for a solution to that specific problem. Once you dominate one niche, you can expand your business by finding another profitable and highly targeted niche, then dominate that one also.
Now you can have all the advantages of being highly targeted without limiting the potential size of your business.
Niching Makes Price Irrelevant If you had just suffered a heart attack, would you prefer to be treated by a general doctor or a heart specialist? Of course you’d choose the specialist.
Now if you had a consultation with the heart specialist, would you expect them to charge you more than a general doctor? Of course.
Your bill with the specialist would likely be much higher than with your general practitioner, yet you’re not shopping on price.
How did price suddenly become irrelevant? That is the beauty of serving a niche. Whether you do heart surgery or offer cellulite treatment, you can now charge far more for your services than by being a generalist. You’re
perceived differently by your prospects and customers. A specialist is sought after, rather than shopped on price. A specialist is much more highly respected than a jack of all trades. A specialist is paid handsomely to solve
a specific problem for their target market.
So figure out the one thing your market wants a solution to, something that they’ll pay you handsomely for. Then enter the conversation they’re having
in their mind, preferably something they go to bed worrying about and wake up thinking about. Do this and your results will dramatically improve.
Trying to target everyone in reality means you’re targeting no one. By going too broad you kill your “specialness” and become a commodity bought on price. By narrowly defining a target market that you can wow and deliver huge results for, you become a specialist.
When you narrow down your target market, you naturally decide who you’re going to exclude. Don’t underestimate the importance of this.
Excluding potential customers scares many small business owners. They mistakenly believe that a wider net is more likely to capture more customers. This is a huge mistake. Dominate a niche, then once you own it, do the same with another and then another. But never do so all at once.
Doing so dilutes your message and your marketing power.
How To Identify Your Ideal Customer
Given that you’ve now seen the power of choosing a narrow target market it’s time to select yours. As with most businesses, you may currently serve multiple market segments. For example back to our photographer friend, he
might do:
– Weddings
– Corporate photography
– Photojournalism
– Family portraits
These are vastly different market segments. A great way of figuring out your ideal target market is to use the PVP index4
(Personal fulfillment, Value to the marketplace and Profitability) and giving each market segment you serve
a rating out of 10.
P – Personal fulfillment: How much do you enjoy dealing with this type of customer? Sometimes we work with “pain in the butt” type customers just because of the money. Here you rate how much you enjoy working with this
market segment.
V – Value To The Marketplace: How much does this market segment value your work? Are they willing to pay you a lot of $$$ for your work?
P – Profitability: How profitable is the work you do for this market segment? Sometimes even when you are charging high fees for your work, when you look at the numbers it may be barely profitable or even loss making. Remember it’s not about the “turnover,” it’s all about the “left over.”
For our photographer example, his PVP index may look as follows:
The ideal customer for the photographer is people wanting family portraits.
They are the most fun, most profitable, highest value and best paying types of customers. There’s likely to be a standout market segment for you too.
This doesn’t mean that you can’t take on work outside your ideal target market; however, for now our marketing efforts will be directed at one ideal market segment. We want to be laser focused. Once we dominate this market
segment, we can go on and add others. If we are too broad initially and target a laundry list of market segments, then our marketing efforts will be ineffective.
Who is your ideal target market? Be as specific as possible about all the attributes that may be relevant. What is their gender, age, geography?
Do you have a picture of them? If so, cut out or print a picture of them when you think about and answer the following questions:
What keeps them awake at night, indigestion boiling up their esophagus, eyes open, staring at the ceiling?
What are they afraid of?
What are they angry about?
Who are they angry at?
What are their top daily frustrations?
What trends are occurring and will occur in their businesses or lives?
What do they secretly, ardently desire most?
Is there a built-in bias to the way they make decisions? (Example: engineers
= exceptionally analytical)
Do they have their own language or jargon they use?
What magazines do they read?
What websites do they visit?
What’s this person’s day like?
What’s the main dominant emotion this market feels?
What is the ONE thing they crave above all else?
These questions are not theoretical, pie-in-the-sky questions. They are absolutely key to your marketing success. Unless you can get into the mind of your prospect, all your other marketing efforts will be wasted—no matter
how well you execute.
Unless you bin depthelong to your target market, then a large part of your initial marketing efforts should be directed to indepth research, interviews and careful study of your target market.
Create An Avatar
One of the best tools for getting into the mind of your prospect is to temporarily become them by creating an avatar. Don’t worry, I’m not going to get all woo woo on you here.
An avatar is a detailed exploration and description of your target customer and their lives. Like a police sketch artist you piece together a composite which creates a vivid picture of them in your mind. It helps tell their story
so that you can visualize life from their perspective.
It’s also important to create avatars for each type of decision maker or influencer you might encounter in your target market. For example if you’re selling IT services to small companies in the financial services industry you might be dealing with both the business owner and their assistant.
Here’s an example of avatars for Max Cash, the owner of a successful financial planning firm and his personal assistant Angela Assistant.
Max Cash:
Max is 51 years old.
He owns a successful financial planning business which has grown steadily over the past ten years.
Previously, he had a career working for KPMG and some other large corporates before he went out on his own.
He has a bachelor’s degree and an MBA.
He’s married has two teenage daughters and younger son.
He lives in an upper-middle-class suburb in a five-bedroom house which he’s been in for about four years. He drives a two-year-old Mercedes S-Class.
He has eighteen staff members and operates from an office building which he owns. His office is a fifteen-minute drive from home.
The business has an annual turnover of $4.5M which is predominantly service-based revenue.
He has no IT support person on staff and delegates most of the IT and tech responsibilities to his PA, Angela Assistant.
He spends about four thousand dollars per month on the various pieces of software used in his industry which give him access to the most current financial data. He knows the software helps him and his clients but he also knows that there are many features that are going underutilized.
His office server and systems are a hodgepodge of various computers mostly installed by his software vendors and which have had very little maintenance since installation. The backup systems are archaic and have never actually been tested.
He’s a golf nut. His office is decorated with golf memorabilia. There are photos of him playing golf throughout. The desktop background on his computer is a beautiful panoramic photo of Pebble Beach Golf Links.
In his spare time, unsurprisingly, he likes to play golf with his friends and business associates.
He reads The Wall Street Journal, Bloomberg Businessweek and his local newspaper.
He uses an iPhone but it’s mostly used for phone calls and a little bit of email.
See how this can give us a valuable insight into what the life of our prospect looks like? Now let’s look at the avatar for another influencer within our target market:
Angela Assistant:
Angela is 29 years old.
She’s single and lives in a two-bedroom rented apartment with her cat Sprinkles. She takes public transport to work and commutes daily for about thirty minutes.
Angela is organized, always smartly dressed and very enthusiastic.
Angela has been working for Max as his PA for the last three years when the growth of the company had really started to accelerate. She’s his right hand and he’d be totally lost without her.
She organizes Max’s calendar, sets up his laptop and phone, makes and takes calls on his behalf and much, much more. She’s the glue that holds Max’s business together and she does a bit of everything from ordering stationary to IT to HR.
Although her title says PA, she’s more than that. She’s really the office manager and probably even to some extent the general manager. She’s the one that staff go to when something needs to be fixed, ordered or organized.
She’s tech savvy but really out of her depth when it comes to the more technical and strategic aspects of IT systems.
After work, she usually hits the gym for a workout and loves to watch new shows on Netflix. On weekends she catches up with friends and loves the nightlife.
She spends a lot of time online reading beauty, fashion and celebrity gossip blogs.
Angela spends most of her discretionary income on going out, entertainment and online shopping which is like an addiction for her. Even though Angela is quite well paid, she always runs short of money, which has resulted in her having about $10,000 worth of credit card debt. She knows she needs to be better with money but there always just seems to be too many temptations for her to resist.
She’s always glued to her phone, constantly texting and using social media apps.
To take a step further, find an actual image to visually represent your avatar and have it in front of you whenever you’re creating marketing material for them.
Hopefully by now you can see how powerful avatars are. They are the marketing equivalent of method acting. They get you right into the mind of your prospect which is going to be absolutely crucial when it comes to crafting your message to your target market.
Chapter 1 Action Item:
Who Is Your Target Market?
Fill in square #1 of your 1-Page Marketing Plan
Chapter 2 – Crafting Your Message
Chapter 2 Summary
Most marketing messages are boring, timid and ineffective. To stand out from the crowd you need to craft a compelling message that grabs the attention of your target market. Once you have their attention, the goal of
your message is to compel them to respond.
Highlights covered in this chapter include:
Why most advertising is totally useless and what to do instead.
How to stand out from the crowd even when you’re selling a commodity.
Why you should never compete solely on price.
How to craft a compelling offer for your target market.
Examples of some of the most successful advertising headlines
in history.
How to enter the mind of your prospect and join the conversation
going on in there.
How to effectively name your business, product or service.
An Accident Waiting To Happen

I spend a lot of time looking through various forms of local and national media—not for articles but for advertisements. Having done this for several years, with very few exceptions, I’m absolutely amazed how boring, similar and useless most advertising is. The waste going on is staggering.

Wasted money and wasted opportunity.
You could summarize the structure of most ads from small businesses as follows:
Company name
Company logo
A laundry list of services offered
Claims of best quality, best service or best prices
Offer of a “free quote”
Contact details
It’s basically name, rank and serial number. Then they hope and pray that on the very day their ad runs, a prospect in immediate need of their product or service stumbles across it and takes action. This is what I call marketing by accident. A qualified prospect happening upon the right ad at the right time sometimes results in the happy accident of a sale taking place.
If these “accidents” never happened then no one would ever advertise. But as it happens the occasional random sale or lead will come from this type of advertising. It tortures business owners to death because while the ad generally loses them money, they fear not running it because some dribs and drabs of new business have come out of it—and who knows, next week
it may bring in that big sale they’ve been hoping for.
It’s like these businesses are visiting a slot machine in a casino. They put their money in, pull the handle and hope for a jackpot—but most of the time the house just takes their money. Occasionally they’ll get a few cents on the dollar back which raises their hopes and emboldens them to continue.
It’s time to start marketing on purpose—treating advertising like a vending machine where the results and value generated are predictable, rather than like a slot machine where the results are random and the odds are stacked
against you.
To start marketing on purpose we need to look at two vital elements:
1. What Is The Purpose Of Your Ad?
2. What Does Your Ad Focus On?
When I ask business owners what the purpose of their ad is, I usually get a
list like:
Branding
Getting my name out there
Letting people know about my products and services
Making sales
Getting people to call in for a quote
These are all very different and you cannot possibly do all of these with one ad. In typical small business style they’re trying to get maximum bang for their buck. But by trying to do too much, they end up achieving none of
their objectives.
My rule of thumb is one ad, one objective. If something in the ad isn’t helping you achieve that objective then it’s detracting from it and you
should get rid of it. That includes sacred cows like your company name and company logo. Advertising space is valuable and these things taking up
prime real estate in your ad space often detract from your message rather than enhance it.
Rather than trying to sell directly from your ad, simply invite prospects to put their hand up and indicate interest. This lowers resistance and helps you build a marketing database—one of the most valuable assets in your business.
Once your objective is clear, you need to communicate it to your reader.
What exactly do you want them to do next? Do they call your toll free number to order? Do they call you or visit your website to request a free sample? Do they request a free report? You need a very clear call to action —not something wimpy and vague like “don’t hesitate to call us.”
You need to be clear on what they should do next and what they will get in return. Also, give them multiple ways to take that action. For example if the call to action is to order your product, give them the ability to do it online, over the phone or even via a mail-in coupon. Different people have different preferences when it comes to modality of communication. Give them multiple means of response so they can choose the one they are most comfortable with.
Have you ever been to a party or gathering and been seated next to someone who just spends the whole night talking about themselves? It gets old pretty fast. You keep giving halfhearted smiles and polite nods but your mind is
elsewhere and that exit sign is calling your name.
Similarly, most advertising by small businesses is inwardly focused. Instead
of speaking to the needs and problems of the prospect, it is focused on selfaggrandizement. The prominent logo and company name, the laundry list of services, the claims of being the leading provider of that product or service.
All of these things are shouting, “look at me!”
Unfortunately, you’re in a crowded market and with everyone shouting “look at me!” at the same time, it just becomes background noise. By contrast, direct response marketing focuses heavily on the needs, thoughts and emotions of the target market. By doing this you enter the conversation already going on in the mind of your ideal prospect. You will resonate at a deeper level with your prospect and your ad will stand out from 99% of
other ads that are just shouting and talking about themselves.
Don’t be the advertising equivalent of that guy at the party obliviously talking about himself the whole night while his uninterested audience looks for the exit. Also, don’t leave anything to chance. Know exactly what you want your ad to achieve and the exact action you want your prospect to take.
Developing A Unique Selling Proposition
Many small businesses don’t have a reason to exist. Take away their name and logo from their website or other marketing material and you’d never know who they were. They could be any of the other businesses in their category. Their reason for existence is to survive and pay the bills of the owner who is usually only just getting by or possibly not even.
From a customer’s perspective, there is no compelling reason to buy from them and any sales they do make is just because they happen to be there.
You see a lot of these businesses in retail. The only sales they get is through random walk-in traffic. No one is seeking them out. No one actively desires what they have to offer and if they weren’t there no one would miss them.
Harsh but true.
The problem is that these businesses are just another “me too” business.
How did they decide on price? How did they decide on product? How did they decide on marketing? Usually the answer is they just had a look at what their nearest competitor was doing and did the same thing or slightly changed something. Don’t get me wrong, there’s nothing wrong in modeling something that’s already working. In fact that’s a very smart thing to do. However, it’s likely the competitors they are modeling are in the same boat they are in—struggling to win business with no compelling reason why you should buy from them. They based their most important business decisions on guesses and on what their mediocre competitors are doing. It’s the blind leading the blind.
After some time of torturing themselves to death – making just enough money to survive but not enough money to do well, many of these businesses finally decide to “try marketing.” So they start marketing their “me too” business with an equally boring “me too” message. As expected, it doesn’t work and any extra sales it does bring in often doesn’t even cover the marketing costs.
Here’s the thing – the chance of you getting your marketing perfectly right – message to market and media match on the first go is impossibly small.
Even the most experienced marketer will tell you they hardly ever hit a homerun on their first go. It takes several iterations. It takes testing and measuring to finally get your message to market and media match right.
Yet these guys can’t afford the time, money and effort needed to get it right.
Worse still with a “me too” style of offer they don’t have a hope.
Think of marketing as an amplifier. Here’s an example. You tell one person about what you do and they don’t get excited. You then try telling ten people about what you do and they don’t get excited either. If you amplify this message through marketing and tell 10,000 people, what makes you think that the result will be any different?
Marketing is an uphill battle if you haven’t clearly clarified first in your mind why your business exists and why people should buy from you rather than your nearest competitor.
You need to develop your unique selling proposition (USP). This is where a lot of people get stuck. They say something like “I sell coffee, there’s nothing unique about that.”
Really? Then why aren’t we all just getting our $1 coffee from 7-Eleven?
Why do we queue up to spend $4 to $5 to buy our coffee from some hipster that looks like he’s in urgent need of a bath? Think about it. You regularly pay 400%-500% more for the same commodity.
Think about water—one of the most abundant commodities on earth. When you buy this commodity, in bottled form at either a convenience store or from a vending machine, you happily pay 2000 times the price compared to
getting it from your tap at home.
See how the commodity in both examples hasn’t changed, but the circumstances and things around the commodity have changed or the way they are packaged and delivered has changed?
The entire goal of your USP is to answer this question: Why should I buy
from you rather than from your nearest competitor?
Another good test is this: if I removed the company name and logo from
your website, would people still know that it’s you or could it be any other
company in your industry?
The common place people go wrong with developing their USP is they say
“quality” or “great service” is their USP. There are two things wrong with
that:
1. Quality and great service are expectations, they are just part of
good business practice—not something unique.
2. People only find out about your quality and great service after
they’ve bought. A good USP is designed to attract prospects
before they’ve made a purchasing decision.
You know you’re marketing your business as a commodity when prospects
start the conversation by asking you about price.
Positioning yourself as a commodity and hence being shopped on price
alone is a terrible position for a small business owner to be in. It’s soul
crushing and this race to the bottom is bound to end in tears.
The answer is to develop a unique selling proposition (USP). Something
that positions you differently, so that prospects are forced to make an
apples-to-oranges comparison when comparing you with your competitor.
If they can do an apples-to-apples comparison of you and your competitors
then it comes down to price and you’re toast. There’s always someone
willing to sell cheaper than you.
There’s Nothing New Under The Sun
Very few if any businesses or products are truly unique, so a common
question is, “There’s nothing unique about my business, how do I develop a
USP?”
There are two questions I ask my clients when helping them develop their
USP. Answering these two questions is the path towards marketing and
financial success in your business.
So the two questions you must ask and answer are:
Why should they buy?
Why should they buy from me?
These are questions that should have clear, concise and quantifiable
answers. Not wishy-washy nonsense like “we are the best” or “we have the
highest quality.”
What is the unique advantage you are offering? Now the uniqueness doesn’t
have to be in the product itself. In fact, it would be fair to say that there are
very few truly unique products. The uniqueness may be in the way it is
packaged, delivered, supported or even sold.
You need to position what you do in such a way that even if your
competitor was operating directly opposite you, customers would cross the
road to do business with you instead of your competitor.
Do it really well and they may even stand in line overnight to do business
with you instead of your competitor, like they do with Apple products.

Getting Into The Mind Of Your Prospect
We want to get into the mind of our prospect. What do they really want? It’s
rarely the thing you are selling, it’s usually the result of the thing you are
selling. The difference may seem subtle but it’s huge.
For example someone buying a $50 watch is buying something very
different from a person buying a $50,000 watch. In the latter case they are
likely buying status, luxury and exclusivity. Sure they want it to tell the
time just like the buyer of the $50 watch but that’s unlikely to be their core
motivation.
So to get into the mind of the prospect, we need to discover what result they
are actually buying. Once you understand this, you then need to craft your
unique selling proposition based on the result your prospects want to
achieve.
For example, if you’re a printer, you’re in a commodity business. You want
to get out of the commodity business as quickly as possible. I don’t mean
get out of the industry but you do need to change how you position
yourself.
Stop selling business cards, brochures and printing and start asking openended questions such as, “Why are you coming to a printer? What is it that
you want to achieve?” The prospect doesn’t want business cards and
brochures, they want what they think business cards and brochures are
going to do for their business.
So you could sit down with them and say, “What are you trying to
accomplish? Let’s do a printing audit and evaluate all of the things you’re
trying to use printing for.” By taking them through the process, you can
charge them to do a printing audit. Then if they end up hiring you to do
their printing, you can apply that consulting fee towards printing. This way
you’re no longer viewed as a printer anymore. You’re now viewed as a
trusted advisor that’s serving their needs.
If You Confuse Them You Lose Them
Understand that your prospect has essentially three options:
Buy from you
Buy from your competitor
Do nothing
You may think your competitors are your biggest problem, but in reality it’s
more likely to be a fight against inertia. Therefore you need to first answer
the question of why they should buy and in addition to why they should buy
from YOU.
We live in a sound bite, MTV generation which has to deal with thousands
of messages each day. The importance of crafting your message in an
immediately understandable and impactful way has never been more
important.
Can you explain your product and the unique benefit it offers in a single
short sentence?
You must understand a very important concept: confusion leads to lost
sales. This is especially so when you have a complex product. Many
business owners erroneously think that a confused customer will seek
clarification or contact you for more information. Nothing could be further
from the truth. When you confuse them, you lose them.
People have too many options and too much information coming at them
constantly and they’re rarely motivated enough to wade through a confused
message.
How To Be Remarkable When You Are Selling A Commodity
How do you charge high prices for your products and services while having
your customers thank you for it? In short, by being remarkable.
When given this answer, the first thing many business owners do is mutter
under their breath something like, “easier said than done”—perhaps it’s
because being remarkable evokes visions of being unattainably unique or
creative. Something that others far more talented do.
The cafe owner says, “dude I just sell coffee, how am I supposed to be
remarkable?” That raises a common question, how can you be remarkable
when you sell a commodity?
Let’s look at a few examples.
When I talk about being remarkable, it doesn’t necessarily mean that the
product or service you sell is unique. Far from it. In fact being unique is a
dangerous, difficult and expensive place to be. However, you must be
different. How can our cafe owner be different? Check this out:
How much extra did it cost the cafe to serve art with its coffee? Pretty close
to zero I would expect. Maybe some extra training for the barista and a few
extra seconds of time per cup.
But how many people will each customer tell or better still bring in to
show? Could this cafe owner charge 50¢ more per cup than the cafe down
the road? For sure. That’s 50¢ of pure profit multiplied by hundreds of
thousands of cups per year straight to the bottom line.
Yet is the product unique? Not by a long shot—just slightly different.
Different enough to be remarkable.
Here’s another example. Most e-commerce sites send the same boring
confirmation email when you buy from them. Something along the lines of,
“Your order has been shipped. Please let us know if it doesn’t arrive. Thank
you for your business.”
Instead have a look at how CD Baby creates a remarkable experience for
the customer and a viral marketing opportunity for themselves instead of a
normal boring confirmation email:
Your CD has been gently taken from our CD Baby shelves with sterilized contamination-free
gloves and placed onto a satin pillow.
A team of 50 employees inspected your CD and polished it to make sure it was in the best possible
condition before mailing.
Our packing specialist from Japan lit a candle and a hush fell over the crowd as he put your CD
into the finest gold-lined box that money can buy.
We all had a wonderful celebration afterwards and the whole party marched down the street to the
post office where the entire town of Portland waved “Bon Voyage!” to your package, on its way to
you, in our private CD Baby jet on this day, Friday, June 6th.
I hope you had a wonderful time shopping at CD Baby. We sure did. Your picture is on our wall as
“Customer of the Year.” We’re all exhausted but can’t wait for you to come back to
CDBABY.COM!!
This order confirmation email has been forwarded thousands of times and
posted on countless blogs and websites. Derek Sivers, the founder of CD
Baby credits this remarkable order confirmation message for creating
thousands of new customers.
Again nothing unique about the product, but the transformation of
something ordinary and boring gives the customer a smile and creates free
viral marketing for the business.
One more example from another highly competitive, commodity industry—
consumer electronics:
When Apple first launched their legendary music player, the iPod, they
could have talked about the five-gigabyte storage capacity or other
technical features like all the other music players of the day did. But instead
how did they promote it?
“1000 songs in your pocket”
Genius! Five gigabytes doesn’t mean a thing to most consumers. Neither
does a bunch of technical jargon, but “1000 songs in your pocket”—anyone
can instantly understand that and the benefits it will offer.
Apple was by no means the first portable music player on the market or
even the best, but they were by far the most successful because of their
ability to quickly and easily convey the reasons why you should buy. Notice
in all three of the examples the actual product being sold is a commodity
and what makes it remarkable is something totally peripheral to what you
are buying.
Yet the seller can, and does, command premium pricing because they are
selling a remarkable experience. Not only is the customer happy to pay the
premium but in fact rewards the seller by spreading the message about their
product or service. Why? Because we all want to share things and
experiences that are remarkable.
What can you do in your business that’s remarkable? Your clarity around
this will have a huge impact on the success of your business.
Lowest Price
I’m sometimes asked, “Can’t lowest price be my USP?” Sure it can, but can
you absolutely guarantee that everything you sell will be priced lower than
all your competitors including the behemoths like Costco and Walmart?
Unlikely.
There’ll always be someone willing to go out of business faster than you. I
suggest you not play that game.
So a USP that says “lowest prices on some things, some of the time” is not
quite so compelling.
The fact is if you’re a small or medium business, you’re unlikely to beat the
big discounters at the lowest price game.
Truth be told, you probably don’t want to. By charging higher prices, you
attract a better quality client. As counterintuitive as it may seem, you get far
less grief from high-end customers than you do from low-end ones. I’ve
seen and experienced this in multiple businesses across multiple industries.
A better option than discounting is to increase the value of your offering.
Bundling in bonuses, adding services, customizing the solution can all be of
genuine value to your customer but can cost you very little to do.
This also helps you create that valuable apples-to-oranges comparison that
gets you out of the commodity game.
Don’t hate the player, hate the game. So as hard as it may be to resist, don’t
play the commodity/price game. Develop your USP, deliver on it and make
those you deal with play your game, on your terms.
Create Your Elevator Pitch
As a business owner, being able to succinctly convey what problem you
solve is a real art, especially if you’re in a business that is complex.
A great way of distilling your USP is by crafting an “elevator pitch.” An
elevator pitch is a concise, well-rehearsed summary of your business and its
value proposition which can be delivered in the time span of an elevator
ride, i.e. 30-90 seconds.
Yes it’s cheesy and you may not even really use it often as an elevator pitch
but it can really help you clarify your message and your USP. This will
become extremely valuable when you get to crafting your offer, which we’ll
cover shortly.
The thirty seconds that follows the “what do you do?” question is one of the
most commonly wasted marketing opportunities. The response is almost
always self-focused, unclear and often nonsensical.
This is where many people reply with the highest-sounding title they can
get away with, as they feel the inquirer’s judgment of their worth will
depend on the answer. “I’m a waste management technician,” says the
janitor.
I once asked a lady what she did for a living to which she replied, “I’m a
senior event builder.” None the wiser about what she did, I continued
probing until I finally came to understand that she arranges seating for
concerts and large events in stadiums.
While it’s true some shallow people judge a person’s worth by their job title
or line of business, there’s a much better way to respond to this question. A
way that doesn’t require you to raid a thesaurus in order to inflate or
obfuscate what you really do.
The next time someone asks what you do for a living, it’s your queue to
deliver an elevator pitch. It’s a perfect opportunity to convey your
marketing message on a regular basis and in many different settings.
Obviously, you don’t want to come across as a pushy, obnoxious
salesperson, so it’s important to structure your elevator pitch properly. Most
elevator pitches suffer from the same problem as overinflated job titles. It
leaves the recipient confused or thinking “what a douchebag” rather than
the intended effect of impressing them.
Bad marketing is highly product-focused and self-focused. Good
marketing, especially direct response marketing, is always customer and
problem/solution focused, and that’s exactly how we want our elevator
pitch to be. We want to be remembered for what problem we solve rather
than for some impressive but incomprehensible title or business.
Good marketing takes the prospect through a journey that covers the
problem, the solution and finally the proof. Your elevator pitch should be no
different.
So how do you effectively communicate these three components in the
space of thirty or so seconds? The best formula I’ve seen is:
You know [problem]? Well what we do is [solution]. In fact [proof].
Here are a few of examples:
Insurance Sales: “You know how most people rarely review their insurance
coverage when their circumstances change? Well what I do is help people
have peace of mind by ensuring their insurance coverage always matches
their current circumstances. In fact, just last week a client of mine was
robbed, but he was able to recover the full cost of the items he’d lost
because his insurance coverage was up to date.”
Electrical Engineering: “You know when there are power outages that
bring down critical systems in large businesses? Well what I do is install
backup power systems for companies that rely on having a continual supply
of power for their operations. In fact, I installed the system at XYZ Bank
which has resulted in them having 100% uptime since the system was
installed.”
Website Development: “You know how most company websites are out of
date? Well what I do is install software that makes it easy for people to
update their own websites, without the need to pay a web designer each
time. In fact, I installed the software for one of my clients recently and they
saved $2,000 a year in web development costs.”
This gives you a reliable formula to craft your elevator pitch while being
customer/problem focused rather than you/product focused.
Crafting Your Offer
This part is absolutely crucial and this is where a lot of people get lazy by
offering something boring, price discounting or copying what their nearest
competitor is doing.
Remember if you don’t give your ideal target market a reason why your
offer is different, they will default to price as the main criteria for making
their decision. After all if vendor A is selling apples for $1 and vendor B is
selling the same apples for $1.50 which would you buy based on the
information you have on hand?
It’s your job to create an offer that is exciting and radically different from
that of your competitors.
Two great questions to think about when you’re crafting your offer are:
1. Of all the products and services you offer, which do you have the
most confidence in delivering? For example, if you only got paid
if the client achieved their desired result, what product or service
would you offer? Phrasing it another way—what problem are
you sure that you could solve for a member of your target
market?
2. Of all the products and services you offer, which do you enjoy
delivering the most?
Some supplemental questions that can help you craft your offer include:
What is my target market really buying? (e.g. people don’t really
buy insurance, they buy peace of mind)
What’s the biggest benefit to lead with?
What are the best emotionally charged words and phrases that
will capture and hold the attention of this market?
What objections do my prospects have and how will I solve
them?
What outrageous offer (including a guarantee) can we make?
Is there an intriguing story we can tell?
Who else is selling something similar to my product or service,
and how?
Who else has tried selling them something similar, and how has
that effort failed?
One of the main reasons marketing campaigns fail is because the offer is
lazy and poorly thought out. It’s something crappy and unexciting like 10%
or 20% off.
The offer is one of the most important parts of your marketing campaign
and you need to spend much of your time and energy on structuring this
correctly.
What Does My Target Market Want?
Putting the right stuff in front of the wrong people or the wrong stuff in
front of the right people is one of the first marketing mistakes made by
business owners.
That’s why the first and arguably most important square of the 1-Page
Marketing Plan is all about identifying a specific target market for our
marketing efforts.
Now that we’ve laid that groundwork, we want to structure an offer that
will excite this target market. One that will have them ready to whip out
their wallet and one that will stand out from all the boring, lazy offers from
our competitors.
One of the easiest methods of finding out what your prospects want is
simply by asking them. You can do so through a survey or through more
formal market research.
It should also be noted that most people don’t know what they want until
they’ve actually been presented with it. Also when people are doing surveys
or responding to market research, they do so with logic; however, when it
comes to actual purchasing, this is done with emotions and justified
with logic after the fact. So you need to supplement asking with
observing.
If you asked those in the market for expensive luxury cars as to what they
wanted, you’d typically get logical (and untrue or half true) answers like
quality, reliability, comfort. In reality what they really want is status.
A quote often attributed to Henry Ford puts it well:
“If I had asked people what they wanted, they would have said faster horses.”
One of the ways I’ve done and recommend doing market research is by
analyzing what your target market are actually buying or looking for.
Look at products and categories that are trending on marketplaces like
Amazon and Ebay.
Analyzing search engine queries can be a great using a tool like Google’s
Adwords Keyword Tool is another method.
Lastly see what topics are trending on social media and industry news sites.
What are people commenting on and reacting to?
Using these tools is almost like tapping into the global consciousness and
will give you a good idea of what is currently in demand and being talked
or thought about.
Create An Irresistible Offer
Now that you know what your market wants, you need to package it up and
present it as an irresistible offer. Here are some of the essential elements:
Value: First you need to think, what is the most valuable thing you could do
for your customer? What is the result which takes them from point A to
point B that you can take them through while making a good profit?
This really is the crux of your offer.
Language: If you’re not a member of your target market, you need to learn
the language and jargon used within your target market. If you’re selling
BMX bikes you need talk about “endos,” “sick wheelies” and “bunny
hops,” not features, benefits and specifications. If you’re selling golf clubs
you need to talk about “hooks,” “slices” and “handicaps.”
Reason Why: When you have a great offer, you need to justify why you’re
doing this. People are so used to being short-changed that when someone
makes a strong, value-filled offer, they become skeptical and look for the
catch.
I’ve personally experienced this in one of my businesses where we were
offering a much better service at a price that was about half the price of our
competitors. People kept ringing into the sales line to recap the offer that
was on the website and to ask what the catch was.
I don’t suggest you fabricate reasons for your offer but be ready to have a
solid reason why you are offering a great deal, e.g. clearing old stock,
damaged inventory, overstock, moving your office or warehouse, etc.
Value Stacking: Packing in many bonuses can make your offer seem like a
no-brainer. This is a very smart move and can dramatically increase
conversions. In fact I advocate where possible to make the bonuses more
valuable than the main offer. Infomercials do this very well. “We’ll double
your offer,” “That’s not all..” etc.
Upsells: When your prospect is hot and in the buying frame of mind, this is
the perfect time to offer them a complimentary product or service. This is
where you have the perfect opportunity to tack on a high margin item even
if the primary product you are selling is low margin. It’s the fries with the
burger, the extended warranty, the car rustproofing. It gives the customer
added value and gives you more profit per transaction.
Payment Plan: This one is absolutely critical for high ticket items and can
mean the difference between the customer balking and walking away or
making the sale.
If something is $5,000, presenting it as 12 easy payments of $497 makes it
a much easier pill to swallow. People generally think of their expenses on a
monthly basis and $497 per month feels much easier than $5,000 in one
lump sum.
Also notice that 12 x $497 adds up to more than $5,000. In fact it makes it
almost $6,000. The first reason you want to do this is to cover your finance
costs if you’re financing the sale.
Second, you want to incentivize the people who can pay in a lump sum to
receive a “discount” by paying upfront.
Guarantee: As discussed previously in this chapter, you need an
outrageous guarantee. One that totally reverses the risk of doing business
with you. People have been disappointed so many times that they don’t trust
any of the claims you make. It’s nothing personal, just the way it is. You
need to make dealing with you a risk-free transaction. In fact one where the
risk is on you should you fail to deliver on your promises. “Satisfaction
guaranteed” is weak and ineffective.
Scarcity: Your offer needs to have an element of scarcity. A reason why
people need to respond immediately. People respond much more to a fear of
loss than the prospect of gain. However, again you need a good “reason
why” the scarcity exists as you don’t want to be disingenuous with your
scarcity claims.
You have a limited supply, limited time, limited resources. Use this to your
advantage in your marketing. If you can have a running countdown of time
or available stock this can further turn up the heat on the fear of loss
emotion.
As you’ve seen there are many components to crafting a compelling offer.
Taking the lazy, ill-thought-out road of “10% off” or similar crappy offers is
akin to throwing your marketing dollars in the trash.
Take the time to craft a compelling, well-thought-out offer. Your conversion
rate will skyrocket and so will your bottom line.
Target The Pain
You’ve got a splitting headache. You open your medicine cabinet and start
rifling through your museum of half-used tablets, creams and vitamins only
to realize you’re totally out of pain relief medication. So you rush down to
your local pharmacy in the hope of getting the tablet that’s going to give
you the relief you so desperately need.
Do you worry about the price? Does it even enter your mind to shop around
and see if you can buy the same product cheaper at another pharmacy?
Unlikely. You’re in pain and you need immediate relief. In fact even if the
tablets were priced at double or triple the normal price, you’d probably still
buy.
The usual ways of shopping get thrown out the window when we’re in pain.
The exact same is true for your customers and prospects. So many times
businesses talk about “features and benefits” rather than speaking to the
pain that the customer already has. How much selling does a pharmacist
need to do to sell pain relief medication to someone with a splitting
headache? Very little I suspect.
The same is true whether you sell TVs, cars or consulting. You have
prospects and customers who are in pain. They want pain relief, not features
and benefits. If you’re selling me a TV, you could sell me features and
benefits by telling me it’s got four HDMI ports and 1080p resolution. This
will mean very little to most people. Imagine instead you target my pain
point which is bringing it back home, unpacking it and spending an
infuriating number of hours trying to get it working properly with all my
other devices.
Instead of price discounting and positioning yourself as a commodity, why
not offer to deliver it to my house, mount it on the wall, ensure the picture
quality is spectacular and make sure that it works perfectly with all my
other peripherals. Now you’re giving me pain relief and price becomes less
important than if you’re selling me a commodity with a list of features and
benefits.
In the above example, even though you might be selling the exact same TV
as your competitor, if you package it up in a way that takes away my pain—
then you’ve won my business. It’s also much more likely I’ll become a
raving fan and refer others to you because you weren’t just the vendor of a
commodity. You were a problem solver. Now it’s an apples-to-oranges
comparison. How do you compare this to “it’s got four HDMI ports and
1080p resolution”?
Selling features and benefits is the best way to turn your prospects into
price shoppers who view your product as a commodity bought solely on
price. Your goal is to be a problem solver, pain reliever and turn any
comparison with your competition into an apples-to-oranges comparison.
Remember people are much more willing to pay for a cure than for
prevention. Targeting existing pain rather than promising future pleasure
will result in much higher conversion, much higher customer satisfaction
and lower price resistance. Look for pain points in your industry and
become the source of relief.
Copywriting For Sales—You Can’t Bore People Into Buying
Almost no other skill will reward you more richly than the ability to write
compelling words. Being able to clearly articulate why a prospect should
buy from you rather than your competitors in a way that creates an emotion
and motivates them to action is the master skill of marketing.
Earlier in this book we touched on the fact that direct response marketing
uses very different copywriting techniques. In direct response marketing we
use copy which is designed to push the emotional hot buttons of the target
audience.
Rather than using the conventional, boring, “professional” sounding copy,
we use copy that is like a car accident—no matter how much you don’t
want to, you can’t help but look.
Emotional direct response copywriting uses attention grabbing headlines,
strong sales copy and compelling calls to action. It’s what’s known as
“salesmanship in print.”
Many businesses, especially those who sell products and services to
professional or business customers feel like this type of copy is not
appropriate for their market. And while it’s true we should tailor our
approach to this market (as we would for any target market), it would be a
major mistake to discount emotional direct response copywriting.
From the CEO of a Fortune 500 company down to the janitor, we’re all big
bags of emotion and our buying decisions are made with emotion and then
justified with logic later. “Hey honey, I bought that Porsche 911 because of
safety and German cars are really reliable too.” Yeah right.
So many times when I meet business owners in person I find their
personality is completely different from the personality displayed in their
marketing. Truth be told most display no personality in their marketing at
all. The reason behind this is a perceived need to look “professional.” Their
marketing is often bland, generic and if you swapped out their logo and
name from their marketing material, it could be anyone else in their
industry. It’s such a shame because if only they communicated in their
marketing the way they do in person, they’d have much more success.
When you meet them in person, these people are often highly intelligent,
interesting to listen to and passionate about what they do, yet when it comes
to their marketing material and sales copy it’s like they freeze up. All of a
sudden, they try to sound “professional” and start using weasel words and
phrases they would never normally use in conversation. You know the sort
of words and phrases I mean, “best of breed products,” “synergistic,”
“strategic alignment,” etc. Words they’d never use in a real conversion with
their friends or colleagues.
The fact is people buy from people, not from corporations. Building
relationships and rapport is well understood in the world of one-to-one
sales; however, for some reason when it comes to the one-to-many position
of being a marketer, many business owners think they need to put their
personality aside and behave like a faceless corporation. Copywriting is
salesmanship in print. You need to write your sales copy as though you
were talking directly to a single person.
Using monotone, boring, “professional” sales copy is the fastest way of
losing the interest of your customers and prospects. Meaningless clichés
and claims of being the leading provider in your category makes you look
like a “me-too” business. “Me-too” businesses attract lowest common
denominator clients who by necessity shop based on price as they have
nothing else to differentiate you by.
People love authenticity, personality and opinion. Even if they don’t agree
with you, they’ll respect you for being real and open. Being yourself and
bringing out your personality will help you stand out in a sea of sameness
and monotony. Just have a look at one of the most consistently enduring TV
formats—the news talking head. Why waste such a large percentage of air
time on showing the face of the presenter? Using just their voice-over
would mean that a lot more content and visual footage of the news story
could be broadcast.
However, the reason so much time is allocated to just the video of a talking
head is that it adds personality to often bland topics. It also adds authority
and feels like a one-on-one conversation with a trusted source. People
respond to pictures and videos of other people. It’s no accident that
YouTube and Facebook are two of the biggest online properties in the
world. We’re extremely interested in what other people are doing and
saying.
You can easily take advantage of this in your business. One example is by
adding a video to your website. It can be as simple as a talking head video
of you describing your products and services, which you can shoot and
upload in the space of five minutes using a handheld camera or even a
smartphone. Another example is using social media as a two-way
communication medium for engaging with customers and prospects. Doing
just these two things will create deeper connections because you’re adding
personality to your business.
Don’t use your marketing material as a screen to hide behind. Use it to give
opinion, insight, advice and commentary and above all be yourself and be
authentic. This will instantly create rapport and will differentiate you from
all the other boring and bland marketing material around you.
People open their mail above a wastepaper basket and have their index
finger hovering above the delete button when reading email. They sort it
into two piles, the first pile gets opened and read and the second pile goes
into the trash, often unopened. People are craving something new,
something entertaining, something different. When you give that to them,
you get their attention. When your copy is “professional,” it’s boring,
monotone and ignored. The fact is that most businesses are too afraid to
send out copy that will get them noticed. They fear what their friends,
relatives, industry peers and others will think or say.
So they send out letters and ads which are timid and “me too.” Swap the
company name and logo and they are pretty much interchangeable with
every one of their other competitors. There’s really only one opinion you
should be worrying about—that of your customers and prospects. Frankly
no one else’s opinion, including yours, should figure in what you put in
your sales copy. Testing and measuring response is the only true way of
judging the effectiveness of your copy.
The truth is the masses are living lives of quiet desperation. They are
absolutely craving something that grabs or entertains them, even if it’s just
for a moment. Your job is to give it to them.
Elements Of Great Copy
It’s incredible how a change in a word or phrase can dramatically change
the effectiveness of an ad. The fact is there are some words which are
extremely powerful and trigger emotional hot buttons. For example think
about the following three words:
Animal
Fish
Shark
Which of these three triggers the most emotional response in you? I suspect
it’s the last one, yet they could all be used to describe the same creature.
The same is true of words you use when writing sales copy. Some words
trigger a bigger emotional response than others. Here are just a small
sample of the most common compelling words:
Free
You
Save
Results
Health
Love
Proven
Money
New
Easy
Safety
Guaranteed
Discovery
A one word change in your headline can dramatically alter the results you
achieve. Always remember, people buy with emotions first and then
justify with logic afterwards. Trying to sell to their logical brain with facts
and figures is a complete waste of time.
The five major motivators of human behavior, especially buying behavior
are:
Fear
Love
Greed
Guilt
Pride
If your sales copy isn’t pushing at least one of these emotional hot buttons,
then it’s likely too timid and ineffective.
Headlines are one of the most important elements in your sales copy. Their
job is to grab the attention of your target market and get them to start
reading your body copy. The headline is basically the ad for the ad and
should encompass the self-serving result your reader will get. You’ll use
headlines extensively in your marketing when writing email subject lines,
sales letter headlines or web page titles. Here’s a small sample of headlines
from some of the most successful advertising campaigns throughout
history:
They Laughed When I Sat Down At The Piano – But When I
Started To Play!
Who Else Wants A Screen Star Figure?
Amazing Secret Discovered By One-Legged Golfer Adds 50
Yards To Your Drives, Eliminates Hooks and Slices And Can
Slash Up To 10 Strokes From Your Game Almost Overnight!
Confessions Of A Disbarred Lawyer
Have You Ever Seen A Grown Man Cry?
An Open Letter To Every Overweight Person In Portland
Is The Life Of A Child Worth $1 To You?
How A Strange Accident Saved Me From Baldness
When The Government Freezes Your Bank Account—What
Then?
How A “Fool Stunt” Made A Star Salesman
Wife Of Famous Movie Star Swears Under Oath Her New
Perfume Does Not Contain An Illegal Sexual Stimulant!
Profits That Lie Hidden In Your Farm
Proof: Doctors Are More Dangerous Than Guns!
Notice how all the successful, tested headlines above push one or more of
the five major motivators of human behavior?
To get a list of hundreds of the most successful headlines in
advertising history visit 1pmp.com
Fear, especially the fear of loss is one of the most powerful emotional hot
buttons you can push in your sales copy. Understanding how certain words
link to certain emotions is powerful.
Many worry that this is too manipulative. Like any powerful tool it can be
used for good or for evil purposes and no doubt many people do both.
A sharp knife in the hands of a surgeon can be used to save a life or in the
hands of a criminal to take a life. Either way, we need to understand how
this powerful tool works and likely we can’t go through life avoiding its
use.
The same thing is applied to emotional direct response copywriting. It’s a
powerful selling tool and you should never use it unethically.
If you sell something that is in the best interest of your prospect or customer
then you are actually doing them a great service by using this powerful
selling tool. You are preventing them from buying someone else’s inferior
product or service.
Enter The Conversation Already Going On In Your Prospect’s
Mind
We all have a conversation going on in our mind, all the time. Sometimes
this is referred to as “inner talk.”
That conversation is going to be very different if you are an expectant
mother compared to a retiree. Or a fanatical fitness junkie compared to a
couch potato. This is part of why it’s so important to understand your target
market well.
An emotional hot button for one type of target audience will fall on deaf ears
to another audience. Emotional direct response copywriting is no substitute
for understanding EXACTLY who your target audience is and what their
emotional triggers are.
Before you ever write a single word of copy, you must intimately understand
how your target market thinks and talks. The kind of language they use and
respond to. What kind of day they have and the conversation that goes on in
their mind. What are their fears and frustrations? What gets them excited and
motivated?
Research is often the most neglected component of copywriting and is the
major reason why even powerful copy can sometimes fail. Emotional direct
response copywriting is a powerful tool in your marketing arsenal. But
understand it is part of a process. Research, write, then test and measure and
you’ll be far ahead of 99.9% of all your competitors.
Another way to enter the conversation going on in your prospect’s mind is to
address the elephant in the room. It’s natural to always try and present your
business in the most favorable light possible when marketing yourself.
However, this often leads to one of the most common marketing blunders—
discussing only the positive aspects of doing business with you. Avoiding
the elephant in the room, i.e. the risks associated with buying from you, is a
rookie mistake.
The amygdala is the fear part of our brain. It governs our reactions to events
that are important for our survival and it stimulates fear to warn us of
imminent danger. If you’re being followed at night by a suspicious looking
individual and your heart is pounding, that’s your amygdala doing its job.
That’s good. However, the amygdala in your prospect’s brain can also stop
them from buying from you. That’s bad.
Whether you own a coffee shop or a hospital, when a prospective customer
considers buying from you, their amygdala is making a judgment call about
the potential risks involved. The risk being evaluated by the amygdala may
be as trivial as a bad tasting latte or as severe as an untimely death on an
operating table. Either way, the risk evaluation is always going on in the
background. As a business owner and marketer you need to understand that.
If you skirt around this issue in your marketing, you allow the amygdala in
your prospect’s brain to run wild and potentially kill the sale. Given that this
risk evaluation will happen whether you like it or not, why not participate in
it and give yourself the best chance of addressing any potential deal breakers
before they get a chance to damage your bottom line?
Traditional selling tells us to overcome objections; however, in reality,
objections are rarely voiced. Instead in our polite society we say nonsense
things like, “let me think about it” while inside the amygdala is screaming
“let’s get out of here.” Part of the job of good sales copy is to tell potential
prospects who your product or service is NOT for. There are three very good
reasons you should do this.
First, it filters out people who aren’t part of your target market or those who
wouldn’t be a good fit for what you have to offer. This ensures you don’t
waste your time on low quality, low probability prospects. It also reduces the
number of refunds and complaints from customers who misunderstood what
they bought.
Second, it immediately makes it more credible when you tell them who this
product is for. It feels much more even handed when you cover both angles
by telling them who it is for and who it isn’t for.
Last, the prospects who it is for will feel the product or service is much more
tailored to their needs versus if you had said your product is for anyone and
everyone. It feels more targeted and exclusive.
Another excellent way to enter the mind of your prospect is to find out what
they blame and use a device in your copy known as “the enemy in
common.” If you ask most people why they haven’t achieved success, some
of the most common responses include:
The economy
The government
Taxes are too high
Poor upbringing or parenting
Unsupportive family or friends
No time
No money
No opportunity
Lack of skills or education
Unfair boss
Etc.
There’s just one thing wrong with this list—they aren’t on it!
Here are the results of a national survey which was conducted by one of the
major newspapers on “cost of living pressure” also known as spending too
much and earning too little. You can see how few people blame themselves
for their current circumstances.
According to the Journal of Safety Research5
, 74% of Americans believe
they are above average drivers. Yet only 1% believe they are below average.
It’s the same with accepting blame. How many times have you heard a child
say “It’s Not My Fault”? As adults, people are much the same. Most of us
don’t believe we are in the wrong. So what can you do with this knowledge?
First, in your sales copy never blame your prospects for the position they are
in. If we’re going to enter the conversation already going on in their mind,
our marketing message needs to take into account these existing thought
processes—no matter how foreign they are from our own.
“The enemy in common” is a great way of leveraging the “it’s not my fault”
mentality. Take something relevant from your prospect’s blame list, side
with them and tie it into a solution you have to offer. Here’s a sample
headline that an accountant could use:
“Free Report Reveals How To Reclaim Your Hard Earned Cash From The
Greedy Tax Man”
This is a great way of bonding with your prospect while offering them a
solution. By using a common enemy, you connect with the prospect, and
you’re seen as the savior against a foe—in this case, government taxes.
“The enemy in common” rattles their cage, enters the conversation already
going on in their mind and stirs up the emotions that are already there just
below the surface.
It’s a great way to break through the clutter and get your prospect’s attention.
How To Name Your Product, Service Or Business
I’ve had “the naming discussion” with entrepreneurs many times. It usually
goes like this—I’ll be asked for my opinion on a new name or several
variations thereof for a new product, service or business venture. Then often
follows an explanation of the name or names which are being considered.
Here’s my take on naming—if you need to explain the name, to me that’s an
automatic fail. Title should equal content. In other words if the name
doesn’t make it automatically obvious what the product, service or business
is, then you’re starting from behind. When I give people this advice some
shake their heads in disbelief. What about great brands with unusual names
like Nike, Apple, Skype, Amazon, etc.? Surely I must be missing something
by giving such simplistic advice? Here’s the thing. All of the big brands
spend hundreds of millions of dollars in advertising to educate people about
who they are and what they do. How much are you willing to spend to do
the same?
Here we’re not even talking about advertising that sells or generates leads.
We’re talking about advertising that merely tells people what you do. I can’t
think of a bigger waste of money. By using a non-obvious name, you’re
starting from behind and then have to make up for by spending a lot of
money on advertising to rectify the situation. All you had to do to avoid this
colossal waste of money was call your business “Fast Plumbing Repairs,”
which immediately explains what you do and what you stand for, rather
than “Aqua Solutions” after which you have to explain that Aqua is the
Latin for water and that you provide “complete plumbing solutions”
(whatever that means) hence the name “Aqua Solutions.”
So many times I’ve seen a business or product name whose meaning is
unclear. Sometimes it’s a corny play on words, other times it’s an obscure
literary reference and still other times it’s some made up word, the meaning
of which is only apparent to the creator. The reality is no matter how clever
your name is, very few people will go to the trouble of trying to decipher its
meaning or origin. These things may be important to you because it’s your
baby, but rarely does a customer or prospect give it even a split second of
thought.
What’s even worse is that being “clever” often creates confusion and works
against you. As we covered earlier in this chapter confusion leads to lost
sales. If you confuse them, you lose them. It’s that simple. Always choose
clarity over cleverness. It’s hard enough to get a message read, understood
then acted upon at the best of times. But intentionally adding confusion into
the mix when you’re a small business with a modest marketing budget is
madness.
Lastly, please don’t ask friends and family for their opinion on your clever
new name. They’ll of course praise your idea and compliment you, which
feels nice, but it’s unlikely to be truly helpful. By all means test and get
opinions but do so from objective people who are part of your target market
—not from those who already know what you’re about. Naming can work
for you or against you and it’s expensive and difficult to change down the
track, so give it thought, effort and above all else focus on clarity.
Chapter 2 Action Item:
What Is Your Message To Your Target Market?
Fill in square #2 of your 1-Page Marketing Plan
Chapter 3 – Reaching Prospects With Advertising
Media
Chapter 3 Summary
Advertising media is the vehicle you’ll use to reach your target market and
communicate your message. It’s typically the most expensive component of
your marketing, so it needs to be selected and managed carefully to ensure
you get a good return on investment (ROI).
Highlights covered in this chapter include:
How to measure the effectiveness of a marketing campaign.
Why “getting your name out there” is a losing strategy.
How to get a good return on investment (ROI) when advertising.
The lifetime value of a customer and how this is split up between
the “front end” and “back end.”
The role that social media plays in your business.
How to effectively use email and postal mail as part of your
media strategy.
How to protect your business from “a single point of failure.”
The ROI Game
John Wanamaker, one of the marketing greats, famously said:
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half”
While this was understandable a century ago, when it was first said, it
should be a crime to say that today. Yet the reality is that most small
businesses do little if any tracking of advertising. Not measuring where
your leads and sales come from and not tracking ROI on ad spend is the
mark of the amateur. We all have at our disposal the technology to quickly,
easily and cheaply track advertising effectiveness.
Tools such as toll-free numbers, website analytics and coupon codes make
this trivial. Remember what gets measured, gets managed. Be ruthless
with your ad spend by cutting the losers and riding the winners. Obviously
to know what’s losing and what’s winning, you need to be tracking and
measuring.
This is vital because media is by far the most expensive component of your
marketing spend. It’s the bridge that connects your offer to your target
market. Whether you’re using traditional media like radio, TV and print or
newer digital media like social, search engine optimization (SEO) and email
marketing, you need to understand the idiosyncrasies of each.
It’s well beyond the scope of this book to go into the technical details of
each category and subcategory of media. However, I’d give you this piece
of general advice: hire experts that specialize in whatever media you decide
is right for your campaign—they’re worth their weight in gold. Don’t try
and do it yourself, especially when it comes to the most expensive part of
your marketing process. What you don’t know WILL hurt you. Whether
you’re using online media like social, email or web, or offline media like
direct mail, print or radio, each has its own idiosyncrasies and technicalities
that you’re highly likely to mess up if you’re not experienced with it. It
would be a tragedy to get the target market and offer right and then have
your campaign flop because you messed up a technical detail in your media.
I’m often asked questions like, “What’s a good response rate for direct
mail?” or “What kind of open rate should I expect when doing email
marketing?” The expectation is that I’ll give a numerical answer. Something
like, “Expect a 2% response rate from direct mail” or “Expect a 20% open
rate for email.”
Usually these kinds of questions come from well-meaning business owners
who are yet to build their marketing infrastructure. My answer is always the
same—it depends. Sometimes a 50% response rate is a disaster and
sometimes a 0.01% response rate is a massive success.
Response rates will vary dramatically depending on factors such as how
relevant the message is to the target market, how compelling the offer is and
how you came about the list you’re marketing to. Instead of asking what a
good response rate is, which is a nonsense question, they’re really asking,
“How do I measure the success of my marketing campaign?”
So how do you measure the success of a marketing campaign?
For the impatient, here’s the short answer: did the marketing campaign
make you more money than it cost you? Another way of putting it is, what
was the return on investment (ROI) on the marketing campaign? If it cost
you more than you made (or will ever make) on this campaign then it’s a
failure. If it cost you less than the profits you made as result of the
campaign then it’s a success.
Of course some people will argue with me and say that even a campaign
that lost money was valuable because it “got your name out there” or was
some sort of “branding” exercise. Unless you’re a mega brand like Nike,
Apple, Coca-Cola or similar then it’s likely you can’t afford to burn tens of
millions of dollars on fuzzy marketing like “branding” or “getting your
name out there.”
Rather than “getting your name out there,” you’ll fare much better by
concentrating on getting the name of your prospects in here.
I like to think of marketing dollars as firepower. You need to use your
limited firepower wisely so that you can successfully hunt, come home
victorious and feed your family. However, if you start randomly firing in
every direction, you’re going to startle and scare off your prey. You need to
be targeted and clever if you wish to be victorious.
If you’re a small or medium sized business you need to get a return on your
marketing spend. Putting your comparatively tiny marketing budget into
fuzzy marketing would have the same effect as a kid peeing in the ocean.
The game of mass marketing/branding/getting your name out there type of
marketing can only be won with atomic bomb scale firepower. If you’re a
small to medium business, that’s not a game you’re equipped to play. That
being the case we need to look at the numbers carefully.
Let’s run through an example with some numbers to illustrate. I’ll keep the
numbers small and round for the sake of clarity.
You do a direct mail campaign and send out one hundred letters.
The cost of printing and mailing the one hundred letters is $300.
Out of one hundred letters, ten people respond (10% response rate).
Out of the ten people who responded, two people end up buying from you
(20% closure rate).
From this we can work out one of the most important numbers in marketing
—customer acquisition cost. In this example, you acquired two customers
and the campaign cost you a total of $300. So your customer acquisition
cost is $150.
Now if the product or service you sell these customers makes you a profit
of only $100 per sale, then this was a losing campaign. You lost $50 for
every customer acquired in this campaign (negative ROI).
However, let’s say the product or service you sell makes you a profit of
$600 per sale, then this is a winning campaign. You made $450 for every
customer acquired (positive ROI).
Now obviously this is a simplistic example but it illustrates how irrelevant
statistics like response rates and conversion rates are. Our primary concern
is return on investment, which varies based on the customer acquisition cost
and how much actual profit a marketing campaign yields.
One of the massive advantages of targeting a niche is that your marketing
becomes much cheaper. Targeted advertising ends up being much cheaper
than mass marketing because there is far less waste.
If you’re selling photography of newborn babies you’d be far better served
advertising in “New Mother Magazine” than putting a general photography
ad in the classifieds.
Your customer acquisition cost will drop dramatically because your
message to market match is much better and hence your conversion rate
will be much higher than if you had a general message in your ad.
Your advertising costs would also be lower because your target market is
smaller.
Remember the entire goal of your ad is for your prospect to say, “Hey that’s
for me.”
Being all things to all people is unlikely to have the same reaction.
The “Front End,” “Back End” and Lifetime Value Of A
Customer
With the above example we determined that if we made only $100 of profit
per sale then we had a losing campaign. However, in that example we didn’t
take into account one of the other very important numbers used in
measuring marketing success, customer lifetime value.
If for example we make $100 directly as a result of the campaign but then
the customer continues to buy from us down the track, that completely
changes the economics of the campaign. A campaign that looked like a
loser can in fact become a winner when we take into account their lifetime
value as a customer.
We now need to take into account how much we’ll likely make on a
customer over their entire tenure with us. For example you might sell
printers that require refills or a car that requires servicing or some other
service that a customer buys repeatedly, e.g. haircuts, massage, insurance,
Internet access, etc.
The money we make upfront on a campaign is known as “the front end.”
The money we make on subsequent purchases is known as “the back end.”
Together these figures make up the lifetime value of a customer.
Lifetime value and customer acquisition cost are two of the key numbers
you need to know to measure marketing effectiveness. The other statistics
like response rates and conversion rates in themselves are useless. We just
use them to determine these two figures, which give us a true picture of
how our marketing is performing.
If you don’t know what these numbers are in your business, then now’s the
time to start measuring and making your marketing accountable. Constantly
testing, measuring and improving these numbers is how you build a high
growth business.
Your “front end” offer is the offer that gets seen by prospects (people who
aren’t yet your customers). These are people who don’t know you and have
no reason to like you or trust you. In general, the goal of your front end
offer is to create a customer and make enough profit from the first
transaction to at least cover the customer acquisition cost. This makes it
very sustainable to keep advertising. The real profit is made on the “back
end” through repeat purchases by existing customers.
Sometimes it makes sense to “go negative,” that is lose money on the front
end because you know for certain you’ll make it up and more on the back
end. This is often the case with subscription businesses or businesses that
have a high lifetime value. If you don’t know your numbers, this can be a
risky strategy, so stick to the goal having your front end pay for your
customer acquisition cost until you have a good handle on your lifetime
value numbers. In Chapter 8 we’ll talk more about the back end and
increasing customer lifetime value. This can revolutionize your business
and turn losing campaigns into winners.
Is Social Media A Cure All?
Without a doubt the Internet and social media are media breakthroughs.
They’ve democratized information and have made possible a level of
connectedness never before possible. However there’s also a lot of hype
that surrounds these forms of “new media,” as they’re often referred to.
Especially with all the hype that surrounds social media, you’d imagine it
was a marketing cure all. Many self-proclaimed social media “gurus” would
have you believe that social media is the future of all marketing and that if
you’re not dedicating all or most of your marketing resources to social
media, you’re a luddite who’ll soon be out of business.
Of course as with most hype, there’s a need to keep a level head in order to
separate fact from fiction. Before I’m labeled as being against social media,
let me set the record straight. I’ve used social media in multiple businesses
and continue to use it on a regular basis.
However, because there’s so much hype that surrounds social media, I want
to put it in perspective for you and help you see where it fits into an overall
marketing strategy.
A successful marketing campaign has to get three vital elements right:
Market (covered in Chapter 1) – The target market you send your message
to
Message (covered in Chapter 2) – The marketing message or offer you send
Media (covered in this chapter) – The vehicle that you use to communicate
your message to your target market, e.g. radio, direct mail, telemarketing,
Internet, TV, etc
You need to hit all three of these to have a successful campaign. You need
to send the right message to the right target market, through the right media
channel. Failing at any one of these three elements will likely cause your
marketing campaign to fail. Understanding this framework helps put things
in context. Social media, by definition is a media—it’s not a strategy.
The time-tested fundamentals of marketing don’t suddenly change just
because a new type of media comes along. The next thing to ask—is it the
right media for your business? Remember of the three things we need to get
right for a successful campaign, media is one of them. Every type of media
has its idiosyncrasies and social media is no exception. Here are some of
the things you need to be aware of when it comes to social media.
First, it’s not the ideal selling environment. I like to think of social media as
a social gathering or party. We’ve all been to gatherings where someone,
perhaps a family member or friend has been bitten by the multi-level
marketing bug. You know where they start spruiking the health benefits of
the latest pills or potions and try to sell or recruit others to sell.
It makes everyone uncomfortable because it feels pushy and feels like an
inappropriate time to be making or receiving a sales pitch. Social media is
exactly the same. Overt selling and constant pitching of offers is generally
considered poor behavior on social networks and can result in repelling
people from your business rather than attracting them.
However, just like a real life social gathering, social media is a great place
to create and extend relationships which can later turn into something
commercial if there’s a good fit. One of the most valuable things I see in
social media is being able to gauge customer emotions toward your
business and engage with vocal customers who offer either praise or
complaints in a public forum.
A side benefit of this is social proof. Being accessible, responding to
criticism or praise and engaging with your customers builds social proof
and makes prospects and customers feel like they are dealing with humans
rather than a faceless corporation. Remember people buy from people.
There are two potential traps with social media.
First, it can be a time suck. Feeling like you have to respond to every inane
comment can be draining and it can suck time away from marketing tasks
that can give you a far better return on time and money invested. It’s
important to be disciplined with your use of social media. Just like you
wouldn’t let your employees stand around and chit chat all day, you can’t
let yourself or them get carried away with the online equivalent. Some
people have the perception that social media marketing is “free”. It’s only
truly if your time is worth nothing.
Second, there’s the question of ownership. Your social media page and
profile is actually the property of the social network. So spending huge
amounts of time and money building up a profile and audience on these
networks ends up building up their assets rather than your own.
My preference as much as possible is to build and own my own marketing
assets such as websites, blogs, email lists, etc. I then use social media
simply as a way to drive traffic to these marketing assets. This way, my
time and effort goes into renovating my own “house” rather than that of a
landlord who can kick me out at any time.
A classic example of why you want to do this is Facebook’s change of
policy on business pages. Previously if people “Liked” your business’s
Facebook page you could freely reach this entire audience for free. So
businesses spent a lot of time, money and effort getting people to “Like”
them on their Facebook page.
Now Facebook requires you to pay them each time you want to send a
message to your entire audience, otherwise it only allows you to reach a
small percentage. For those who spent huge resources on building up a
Facebook audience only to have the rug pulled out from under them, this
came as a huge blow.
This is one of the reasons why personally I’d prefer to have 1,000 people on
my own email list than 10,000 people who “Like” my Facebook page.
As always with any marketing strategy it’s vitally important to find out
where your prospects “hang out” and use the appropriate media to get your
message through to them. Social media may or may not be one of those
places they hang out.
Email Marketing
Email is a direct, personal way to engage with prospects and customers.
Thanks to the proliferation of smartphones and mobile devices, pretty much
everyone has email in their pocket or within easy reach.
Building a database of email subscribers plays a central role in your online
marketing strategy. A prominent part of your website should be an email
opt-in form. This enables you to capture the email address of website
visitors and gives you the opportunity to nurture those visitors who may not
be ready to buy immediately but who are interested and want more
information.
As we’ll discuss in the next two chapters, lead capture and lead nurturing
are two critical stages of the marketing process. They give us the ability to
intelligently deal with interested prospects that may not yet be developed to
the point of making a purchasing decision. Generally, these kinds of
prospects make up the majority of all prospects and are crucial to filling
your pipeline of future sales. If you didn’t capture these interested nonbuyers you’d likely lose them forever. Your only hope would be that when
they finally became ready to buy, they would remember your website
among hundreds they may have visited and complete the buying cycle they
began days, weeks or months ago.
Email also enables you to maintain a close relationship with your customer
base and makes it easy to test and launch new products and services. Over
time as you build a relationship with your email subscribers, your database
becomes an increasingly valuable marketing asset.
Having a highly responsive list of email subscribers enables you to almost
create cash on demand. You create a compelling offer with a response
mechanism and send an email blast to your list. You’ll get instant feedback
whether it’s a hit or a miss. It’s a great way of cheaply testing offers prior to
investing in more expensive media such as print or pay-per-click
advertising.
Despite the growth and popularity of social media, your database of email
subscribers remains one of the most important elements of your online
marketing strategy. As discussed in the previous few pages, social media
reach has become problematic because only a small percentage of your
followers will actually see your message. Even if your message were
allowed to reach everyone, you’d probably get drowned out in all the noise.
Funny cat videos, jokes and memes will crowd out your marketing
message. It’s called social media for a reason.
Even more importantly an email database is an asset that you own. It’s
independent of whatever social media property may be the flavor of the
month. Remember MySpace? While I don’t think Facebook or Twitter are
going away soon, it is a fast moving space. If you build your business on
someone else’s platform and it starts to decline in popularity, your key
online marketing asset becomes stranded.
While email is a powerful media, it does have a few idiosyncrasies that you
must be aware of. Here are some of the key dos and don’ts when it comes to
email.
Don’t spam. There are strict rules about email marketing in most countries.
Most notably that you must have the consent of the email recipient to send
them marketing emails. That’s why an opt-in form on your website is
critical. Never ever buy or compile lists of email addresses where the
recipients haven’t explicitly requested to be emailed. Not only is this very
poor positioning, putting you in the same category as spammers, but it’s
also illegal. We’ll discuss positioning in much more detail in Chapter 6.
Be human. Don’t write an email like a robot or like you’re writing a formal
letter. Email is a very personal media and even if you’re sending the same
email to thousands of subscribers, write as though you’re emailing a single
person. Feel free to be a bit informal.
Use a commercial email marketing system. Don’t ever use Outlook,
Gmail or any other standard email service for mass email marketing. These
services are designed for one-to-one emails not one-to-many. Your account
will either get shut down or blacklisted if you start mass emailing from
these services. There are commercial email marketing systems that are
cheap and easy to use. Some popular ones are AWeber, MailChimp,
Infusionsoft and Active Campaign. The great thing about using these
services is that they automatically take care of a lot of the legal compliance
for you, things like having an unsubscribe option and your contact details at
the bottom of your marketing emails. They also work hard to bypass spam
filters and ensure good deliverability.
Email regularly. If you rarely email your email database they’ll start to go
“cold.” They may have opted into your email database but if they haven’t
heard from you for a long time, they may forget who you are and mark you
as a spammer. Worse still, the value of your key online marketing asset
starts to decay. To keep the relationship warm, stay in touch with your email
subscribers at the very least monthly. Best practice is closer to weekly but it
also depends on your target market. I know some email marketers who
email daily or even multiple times a day. There are no hard and fast rules
when it comes to frequency. Just ensure when you email it’s relevant and
value building.
Give them value. If you only ever email your subscriber database when
you want to sell them something, this will quickly get old and they’ll either
unsubscribe from your list, ignore your emails or mark you as a spammer.
All healthy relationships are based on an exchange of value. Ensure the
majority of your emails are not sales pitches but rather something that
creates value for your subscribers. A good ratio is three value building
emails for every offer email.
Automate. Another great reason to use a commercial email marketing
platform is automation. These platforms allow you to set up sequences that
automatically get emailed to new subscribers. For example when they
subscribe, you could have your email marketing platform automatically
send them a welcome email. A day later it could send them a value-packed
email helping them to better understand the product category they’re
interested in. Three days later it could send an email telling them more
about you and your business. A week later it could invite them to schedule a
phone call with you. All this can be done on autopilot. An email marketing
platform can be one of the best salespeople in your organization. It will
never take a sick day, never complain and never forget to follow up.
With email marketing you have three challenges:
Getting your email delivered. As discussed, the best way to
ensure good email deliverability is to use a commercial email
marketing platform. In addition to that, ensure that your email
copy doesn’t contain spammy phrases or use too many images or
links.
Getting your email opened. The best way to get your email
opened is to have a compelling subject line. In the copywriting
section of Chapter 2 we discussed copywriting strategy and
headlines. Imagine your email among hundreds of others in your
prospect’s inbox. The job of your email subject line is to create
curiosity and motivate the recipient to open your email.
Getting your email read. Some marketers advocate that you
should keep emails to subscribers short. In reality, the length of
your emails is secondary to their relevance and quality. If you
write compelling content it will get read. For example prominent
email marketer and blogger Ramit Sethi writes very long emails.
He also emails his subscribers frequently. He has collected
thousands of data points on his target market and knows exactly
what they want to read. So while his emails are long, they are
highly relevant and compelling to his target market. An
alternative approach is to keep emails short by only having a
teaser or summary in the email body. Readers are then invited to
click on a link so they can read more on your website or blog.
Email is a very powerful and personal media channel. It allows you to
create compelling campaigns with a high degree of automation. When done
right it can be a valuable part of both an online and offline media strategy.
Snail Mail
In an age where the Internet, email and social media play such huge roles in
our personal and business communications, many have taken the view that
postal mail or “snail mail” is all but dead. Nothing could be further from the
truth.
I’m extremely tech savvy and I’ve grown up with the Internet from its early
dial-up days and prior. I’ve also been a co-founder of two very successful
tech startups that I helped build from zero right through to rapid growth and
exit. Yet despite this background, or perhaps because of it, I regard “snail
mail” as one of the most important and underutilized forms of media for
marketing. When it comes to your media strategy you should understand
that email doesn’t replace postal mail, it complements it.
We all love the speed and efficiency of all things virtual; however, it would
be a mistake to underestimate the power of physical objects when it comes
to moving people emotionally. And moving people emotionally towards a
desired action is what marketing is all about. Imagine a man sending his
wife an “I love you” text or email on their anniversary versus the same
message communicated with a handwritten card with a bunch of her
favorite flowers. There’s a world of difference between the virtual and
physical equivalents of the same message.
Have you ever received one of those Google AdWords coupon postcards in
the mail? It’s instructive that the poster child for the digital age, Google,
uses postal mail as part of its small business marketing strategy. Postal mail
has a much longer lifespan and requires effort to dispose of. It’s not
uncommon for people to treasure and keep postal letters from significant
people in their lives for decades. The same would rarely be the case for
emails which are ephemeral—in your inbox one moment, deleted and
forgotten about the next.
Another important point about postal mail is that it has gotten significantly
less cluttered over the past few years, which from a marketer’s perspective
is a dream come true. Clutter is the enemy of message cut through and
having a media that has actually become less cluttered makes it all the more
compelling. Conversely, email has become orders of magnitude more
cluttered. The noise within email inboxes has gotten to ridiculous
proportions and even someone who is good at sorting it approaches it with a
completely different frame of mind to postal mail. People handle their email
with a finger hovering over the delete key. Anything that isn’t immediately
actionable gets deleted, forwarded or forgotten about in an inbox archive.
Until we figure out how to teleport physical objects from one location to
another, like they do on Star Trek, we’re reliant on couriers and the postal
service to transport postal mail and physical objects for us.
Without doubt, postal mail is a powerful media channel. However, as with
all media it’s important not to get hung up or tied to a single channel. Your
goal is to figure out how to get a good return on your media investment
whether that be postal mail or anything else.
How To Have An Unlimited Marketing Budget
No discussion of marketing or spending on media can be complete without
discussing budget. When spending money on marketing one of the
following three things will occur:
1. Your marketing fails (i.e. you make less in profit than you spent
on your marketing expenses).
2. You have no idea if your marketing was a success or failure
because you don’t measure the results.
3. Your marketing succeeds (i.e. you make more in profit than you
spent on your marketing).
For each of these scenarios there’s a simple course of action:
If your marketing consistently fails and loses you money then STOP and
change what you’re doing.
If you don’t measure your marketing results that’s just plain stupid because
with the technology we have readily and cheaply available, it’s easier than
ever to track your marketing results and return on investment (ROI).
If your marketing is working and consistently giving you a positive ROI,
then you should crank it up and throw as much money as you can at it.
One of the craziest things I see small business owners doing is setting a
“marketing budget.” By setting a marketing budget you are implying that
either your marketing isn’t working and hence it’s a pure expense (i.e. a
waste of money). Or you have no idea if it’s working because you don’t
measure the results and so you throw money at it in the hope that it’s giving
you some sort of positive result. If it’s the former then of course you need to
set a budget because you can’t have expenses running wild in your
business. But a good question might be—why are you wasting money on
marketing that isn’t working? If it’s the latter then you need to change
things pronto. You wouldn’t hire an employee and not measure their
productivity, so why on earth would you consistently pay for marketing and
not know what result it’s generating?
If your marketing is working (i.e. giving you a positive return on
investment) why on earth would you limit it with a budget? It’s like having
a legal money printing press. This scenario is called money at a discount. If
I was selling $100 bills for $80, wouldn’t you buy as many as you could
possibly get your hands on? Or would you say, “sorry my budget for
discounted $100 bills this month is only $800, I’ll just take ten please.”
That’s why I always say have an unlimited budget for marketing that works.
One argument I hear against this is concern about being able to handle the
demand. Firstly, that’s a great problem to have. Secondly, if you’re truly
receiving more demand than you can fill, this is the perfect opportunity to
raise your prices. This will instantly boost your margins and bring you a
better quality of client.
The only time to set a marketing budget is when you’re in the testing phase.
In the testing phase I advocate that you fail often and fail cheap until you
have a winner. Test your headline, your offer, your ad positioning and other
variables. Then cut the losers and optimize the winners until you finally
have a combination that gives you the best possible return on investment.
Remember the post office charges you the same amount to mail a crappy
direct mail piece that bombs as they do a high-converting direct mail piece
that pulls in millions. Once you have a winner that pulls in more than it
costs you, crank up the marketing spend and hence the speed of your legal
money printing press!
The Most Dangerous Number
One is the most dangerous number in your business. It makes businesses
brittle.
Does your business have only one source of leads? One major supplier?
One major customer? Rely on one type of media? Offer one type of
product? To borrow a computer system term, does your business have “a
single point of failure?” If so your business is brittle and a small change in
circumstances outside of your control could have a devastating effect.
That’s a very tough situation to end up in. Many businesses were hit hard
when Google changed its search engine algorithm. These businesses put all
their marketing budget and effort on search engine optimization and
literally overnight found themselves with no other source of leads.
Similarly when Google started to make changes to the types of paid ads it
wanted to show, even advertisers who were paying Google enormous
amounts of money each month, were hit with the “Google Slap.” That is
Google started to charge them four, five, sometimes even ten times as much
as they did previously. This change forced the advertiser to stop their
campaigns and try to fix the issue or find another source of leads. In the
meantime, their business virtually stopped. Fax broadcasting was
effectively outlawed in the United States and many businesses that relied on
that as a sole source of leads went broke.
Some wise words of antiquity recommend that we build our house on a rock
mass instead of on sand. That way when the storm inevitably comes, our
house doesn’t cave in. The first step is to identify any scenarios where the
number one can potentially hurt you. Here are some examples:
What if your largest customer leaves you for a competitor or
what if they go out of business?
What if there is a change of government legislation and the
product you currently offer gets outlawed or regulated into
oblivion?
What if your main advertising strategy stops working?
What if your advertising costs rise dramatically?
What if your currently high search engine rankings disappear or
pay-per-click rates rise sharply?
What if your biggest supplier raises prices, has a supply shortage
or goes out of business?
What if you rely on email marketing and the government cracks
down further on this strategy?
All of these scenarios can and do happen. If you rely on one of anything,
you are leaving yourself in an exposed position—you’re effectively
building your house on a sandy foundation. When the storm comes and the
floods rise, the house is going to collapse. Identify and eliminate single
points of failure in your business.
That way, if the laws change, if the advertising rates go up, if all of a
sudden one specific strategy stops working as well as it used to, your
business will be safe. You’ll be the one with the power because you are not
reliant on one of anything. Jim Rohn had an excellent philosophy on the
matter:
“You’ve got to think winter in the summer. It’s just too easy to get faked out when the sky is blue
and the clouds are fleecy. You’ve got to prepare for winter because it’s coming, it always does.”
In the meantime even if none of these scenarios come to pass, at least you’ll
have built a more resilient and valuable business.
A common scenario I see when it comes to media strategy is that many
small businesses have only one source of new business. I advocate having
at least five different sources of new leads and new customers. Further I
recommend that most of these five sources be in paid media, i.e. they cost
you money to market yourself. The reason paid media is so important is
twofold.
First, it’s extremely reliable. If I pay a newspaper to run my ad, there’s an
extremely high probability the ad will actually be run. It’s much harder to
get such reliable and consistent lead flow from free (or seemingly free)
marketing methods such as word of mouth.
Second, paid marketing forces you to focus on return on investment (ROI).
If a paid marketing method is not working, you cut it. You don’t waste
further time or money on it. Whereas when the marketing method is
nominally free, such as with word of mouth, we tend to be less ruthless and
often end up wasting huge amounts of time because we didn’t have to pay
anything upfront. However ,there’s an opportunity cost which, if careful
analysis is done, often translates to a surprisingly large amount of real
money.
The art and science of being able to consistently turn a dollar of paid
advertising into a dollar or more in profits through direct response
marketing will make your business resilient and can help you turn the tap
on to rapid business growth.
Chapter 3 Action Item:
What Media Will You Use To Reach Your Target Market?
Fill in square #3 of your 1-Page Marketing Plan
ACT II – The “During” Phase
The “During” Phase Section Summary
In the “during” phase you’re dealing with leads. Leads are people that know
you and have indicated interest in what you have to offer by responding to
your marketing message. In this phase you’ll capture these interested leads
in a database system, nurture them with regular value-building information
and convert them into paying customers.
The goal of this phase is to get your leads to like you and what you have to
offer enough to buy from you for the first time. Once they’ve bought from
you, they become a customer and enter the third and final phase of your
marketing process.
Chapter 4 – Capturing Leads
Chapter 4 Summary
Capturing leads in a database system for future follow-up is critical to your
marketing success.
This is because only a very small percentage of interested leads may be
ready to purchase from you immediately. Lead capture is all about properly
handling interest and building your future sales pipeline.
Highlights covered in this chapter include:
Why you should never try to sell directly from an advertisement
and what to do instead.
How to transition from “hunting” to “farming” and ensure you
always have a full pipeline of new business.
Why you shouldn’t treat all prospects equally.
How to use an “ethical bribe” to uncover high probability
prospects.
How to instantly increase the effectiveness of your advertising
by 1,233%.
Why some businesses get a constant flow of leads and prospects
while others struggle.
How to be seen as an expert and authority by your target market.
Hunting vs. Farming
Imagine yourself as a hunter. You wake up in the morning, gather your
weapons and head out to the hunt. Some days you come back with a kill
and your family eats a feast. Other days you come back empty handed and
your family goes hungry. The pressure is on every single day to hunt
successfully—it’s a constant battle.
Now imagine yourself as a farmer. You plant your seeds and wait for them
to be ready for the harvest. In the meantime, you nurture them and treat
them with care. You water and tend to your crop. When they’re ready, you
start harvesting. In my experience, most businesses are hunters—not
farmers:
They cold call to generate new business
They spend huge amounts of time and energy trying to get a new
customer and do anything to close the sale as soon as possible
Their advertising reeks of desperation as they try discounting
and competing on price just to make a quick sale
They waste huge amounts of time pestering people who are not
interested in their product or service
Most business owners are clueless about the purpose behind their
marketing. They slap the name of their business on their ad with a pretty
logo and some meaningless slogan claiming to be the leader in their
industry or area. If you ask them what the purpose of their advertising is,
most will say it’s to sell their products or to “get their name out there.” This
is wrong! Dead wrong. They may as well be flushing money down the
toilet.
In direct response marketing, the purpose of your advertising is to find
people who are interested in what you do, rather than trying to make an
immediate sale from the ad. When you interested leads respond, you put
them on your follow-up database so that you can build value for them,
position yourself as an authority and create a relationship built on trust.
After doing this, the sale comes (if it’s right for them) as a natural
consequence. This will take a mindset shift but is an absolutely vital
concept to understand.
Why not try to sell to them from your ad? It’s true that some people reading
your ad might be ready to buy immediately, but the vast majority will not
be ready to make a purchasing decision on the very day they read your ad—
even if they are interested in what you do.
If you don’t put them in a database then you’ve lost them. They might have
been ready to buy in a month, six months or a year. But since your
advertising was “one-shot” you’ve completely wasted that opportunity.
Your chances of them remembering your one-shot ad from six months ago
is extremely slim.
This kind of marketing is similar to farming. It is an investment in your
future because as your database grows, so will your business and your
results.
Mining For Gold With The Ethical Bribe
Even in a narrow target market, all prospects should not be treated equally.
All other things being equal, the more money you can spend marketing
to high probability prospects, the better your chances are of converting
them to a customer.
Just like the proverbial archer mentioned in Chapter 1, who has a limited
number of arrows, you have a limited supply of money for your marketing
campaign, so it’s essential you invest it wisely.
For example if you have $1,000 to spend on an ad campaign which reaches
1,000 people, you’re essentially spending $1 per prospect.
Now assume that out of the 1,000 people the ad reaches, 100 are potential
prospects for your product. By treating them equally, as you would have to
do with mass marketing, you’re wasting $900 on uninterested and
unmotivated prospects to reach the 100 who are interested.
What if instead of treating them all equally you could sift, sort and screen so
that you were only dealing with high probability prospects and not wasting
valuable time and marketing dollars on uninterested and unmotivated
prospects?
You could then spend the whole $1,000 on the 100 high probability
prospects. That would allow you to spend $10 on wooing each of them
instead of the measly $1 per prospect you’d have if you treated them all
equally.
With ten times the firepower aimed at the right targets, do you think we’d
have a better conversion rate? Of course.
But how do we separate the wheat from the chaff? The short answer is we
bribe them into telling us!
Don’t worry, there’s nothing underhanded here. We offer an “ethical bribe”
to get them to identify themselves to us. For example, our friend the
photographer could offer a free DVD telling prospective brides exactly what
they should look for in a wedding photographer and showcasing some of his
work.
A very simple lead generating ad could be headlined: “Free DVD Reveals
The Seven Costly Mistakes To Avoid When Choosing A Photographer For
Your Wedding Day.”
Anyone requesting this “ethical bribe” would be identifying themselves as a
high probability prospect. You now have at least their name and address
which would go onto your marketing database.
Remember the goal is simply to generate leads. Avoid the temptation of
trying to sell from your ad. At this early stage you just want to sift out the
uninterested and unmotivated so that you can build your database of high
probability prospects.
Here’s the other big reason you want to avoid selling directly from your
ad: at any given time (on average) about 3% of your target market are highly
motivated and ready to buy immediately. These are the prospects most mass
marketing hopes to convert. However, there’s a further 7% who are very
open to buying and another 30% who are interested but not right now. The
next 30% are not interested and finally the last 30% wouldn’t even take your
product if it was free.
If you tried selling directly from your ad, you’d be targeting only the 3%
who are ready to buy immediately and losing the other 97%.
By creating a lead generating ad, you increase your addressable market to
40%. You do this by capturing the 3% who are immediate buyers but also by
capturing the 7% who are open to talking as well as the 30% who are
interested but not right now.
By going from a 3% addressable market to 40%, you’re increasing the
effectiveness of your advertising by 1,233%.
This also has a secondary side effect with the people who are ready to buy
immediately. They see you’re not desperate to sell or discount your product
or service. They see that you are interested in building a relationship first
rather than just going for the jugular to make a sale. This kind of marketing
is similar to sowing seeds on a farm. It is an investment in your future
because as your database of interested prospects grows, so will your business
and your results.
When you educate and teach you are seen as an expert and an authority.
You’re no longer questioned, instead you are obeyed and seen to have a
personal, genuine, helpful interest in other people.
A sample campaign might have an offer of a free report or video series
promising to educate your clients about the things they need to be aware of,
how to avoid being ripped off and what they should look for. Once your
prospect receives the value-packed information, you’ve delivered on all the
promises made in your advertisement.
This skyrockets your trustworthiness, positions you as the expert and sets
you apart from your competition. You haven’t put sales pressure into your ad
just to make a quick sale. Instead you’re just starting with the process of
getting them to raise their hand. You’re asking them to contact you just so
they identify themselves to you.
Managing Your Goldmine
As a kid I used to watch the futuristic cartoon The Jetsons. I was sure by the
time I grew up we’d all be riding around in flying cars. Well according to
my wife I have yet to grow up but nevertheless many years later my
primary form of transport remains terrestrial.
Sure modern cars have some nice bells and whistles, but in their basic form
and function cars haven’t really changed in over one hundred years. So that
begs the question, why aren’t we all zipping around in personal flying
machines?
Personal flight technology has been around for some time and the cost of it
is surprisingly low. In mass production it would certainly come pretty close
to what cars cost. So what’s the problem? The short answer is there’s
simply no infrastructure to support personal flight. The vast majority of our
infrastructure is built around cars. Modern houses, buildings and cities are
all built to accommodate cars.
Why do some businesses get a constant flow of leads and prospects while
others struggle to get any? The answer is the same as the answer to our
personal flight dilemma—infrastructure.
Some businesses have built a marketing infrastructure which constantly
brings in new leads, follows them up, nurtures and converts them into
raving fan customers. Other businesses, in fact I would say most businesses,
do what I call “random acts of marketing.” They throw up an ad here, an ad
there, perhaps a website or a brochure. They’re not building infrastructure
—a system whereby a cold lead enters one end and a raving fan customer
comes out of the other.
These sporadic, one shot, random acts of marketing usually end up costing
more than they bring in, which is demoralizing and sometimes leads
business owners to say ridiculous things like “marketing doesn’t work in
my industry.”
To build a system, we need to think it through from start to end. We need to
understand how it works and what resources we’ll need to run it.
At the absolute center of your marketing infrastructure is your database of
customers and prospects, but to manage your database effectively you really
need a CRM system. The CRM system is your marketing nerve center. It’s
where you manage your goldmine.
You want all your leads, all your customer interactions to end up in your
CRM. This is where things get exciting.
Chapter 4 Action Item:
What Is Your Lead Capture System?
Fill in square #4 of your 1-Page Marketing Plan
Chapter 5 – Nurturing Leads
Chapter 5 Summary
Nurturing leads is the process of taking people from being vaguely
interested in what you have to offer to desiring it and wanting to do
business with you. The lead nurturing process ensures that leads are
interested, motivated, qualified and predisposed to buying from you before
you ever try to sell to them.
Highlights covered in this chapter include:
The secret behind the Guinness Book of Record’s “world’s
greatest salesman.”
Why the money is in the follow-up and how to leverage this.
How to annihilate your competitors and put yourself in a class of
your own.
A simple strategy for quickly moving prospects further into the
buying cycle.
Why a “marketing infrastructure” is critical to your business
success and how to create one.
The three major types of people you need in your team to make
your business work.
How to leverage international talent to ensure your business
success.
The Secret Behind World’s Greatest Salesman
Joe Girard is listed in the Guinness Book of World Records as “the world’s
greatest salesman.” He’s sold more retails big ticket items, one at a time,
than any other salesperson in recorded history. Was he selling some
amazing new technology that everyone had to have? No. Was he selling to
the mega rich? Wrong again. He sold ordinary cars to ordinary people.
Between 1963 and 1978, he sold over 13,000 cars at a Chevrolet dealership.
His stats are amazing:
In total, he sold 13,001 cars. That’s an average of six cars per
day.
On his best day, he sold 18 vehicles.
On his best month, he sold 174.
In his best year, he sold 1,425.
Joe Girard sold more cars by himself than 95 percent of all the
dealerships in North America.
To make his feat even more incredible, he sold them at retail—
one vehicle at a time. No bulk fleet deals.
So what was the secret to Joe’s success? He lists several including working
hard and being likeable. Without discounting these factors, I’m sure there
were thousands of salesmen at that time who had those admirable qualities
but they didn’t sell a fraction of the volume that Joe did. One of the stand
out things that Joe did was to constantly keep in touch with his customers.
He sent a personalized greeting card every month to his entire list of
customers. In January, it would be a Happy New Year card and inside it
would say, “I like you.” He would then sign his name and stamp it with the
details of the dealership where he worked. In February, his list might get a
Valentine’s Day card. Again inside the message was the same, “I like you.”
He would vary the size and color of the envelope and each was handaddressed and stamped. This was critical to getting past the postal mail
equivalent of spam filters, where people stand over the trash can and
discard all the items that look like ads, scams, credit card offers and other
types of junk mail. He wanted his customers to open his envelope, see his
name and the positive message inside and feel good. He did this month after
month, year after year in the knowledge that they would eventually need a
new car. And when they did who do you think would have been top of
mind? By the end of his career, he was sending out 13,000 cards per month
and needed to hire an assistant to help him.
By the time he was a decade into his career, almost two-thirds of his sales
were to repeat customers. It got to the point where customers had to set
appointments in advance to come in and buy from him. Contrast that with
other car salespeople who just stood around waiting and hoping for walk-in
traffic.
Marketing Like A Farmer
What would you guess the average number of times a salesperson follows
up a lead? If you guessed once or twice you’d be about right.
50% of salespeople give up after one contact, 65% give up after two and
79.8% give up after three shots6
. Imagine that a farmer planted seeds and
then refused to water them more than once or twice. Would he have a
successful harvest? Hardly.
When it comes to marketing, the money is in the follow-up. Based on this
we build the irresistible lead nurturing model.

Immediately after you’ve captured a lead, they should go into your system
where repeated contacts are made over time. These are not contacts where
you obnoxiously try to pester them into buying. You build a relationship,
giving them value in advance of them buying anything from you and in the
process building trust and demonstrating authority in your field of expertise.
Accept the fact most people will not be ready to buy right away. Put them in
a database—and by database this could be email or physical direct mail
(preferably both). Mail them something regularly to stay in touch,
positioning yourself as an expert in your industry or field (more on that in
the next chapter).
Like a farmer you prepare your prospects to become ready for harvesting.
Just as Joe Girard did, over time you too can build a huge pipeline of
potential customers who’ll have you at top of mind when they’re ready to
buy. Even more exciting is that they’ll already be predisposed to doing
business with you because of the value you’ve created in advance. You
won’t need to convince or put on a hard sell, the sale just becomes the next
logical step.
This growing list of prospects and the relationship you have with them will
become the most valuable asset in your business. It’s the golden goose.
Now when the prospect is finally ready to buy, you’re a welcome invited
guest rather than a pest. The most important thing you can take away from
this message is to become a marketing farmer. It’s a simple three step
process:
1. Advertise with the intention of finding people who are interested
in what you do. Do this by offering a free report, video, CD, etc.
Any kind of relevant, free information that presents a solution to
a problem they have will work. This positions you as an expert
and as an educator rather than a salesperson. Which would you
prefer to buy from?
2. Add them to your database.
3. Continually nurture them and provide them with value. For
example, a newsletter on your industry or information on how to
get the most from whatever it is you do or offer. Important point
—do not make this a constant sales pitch. That will become old
very quickly. Be sure to offer them valuable information with an
occasional pitch or special offer. Most important of all, be sure to
keep in contact regularly, otherwise the prospect will forget you
and your relationship will then be relegated to that of a cold
prospect and pest salesperson.
If you become a “marketing farmer,” you’ll have a rich and continual
harvest as your database grows in number and quality.
Building Your Marketing Infrastructure
In the previous chapter we introduced the concept of advertising with the
intention of capturing leads. Capturing leads is one thing but what you do
with these leads is what really separates the boys from the men, so to speak.
Have you ever had the experiencing of inquiring about a product or service
and never receiving any follow-up? Or perhaps you received a quote and
got one lazy follow-up call and nothing further? This is a sign of a broken
marketing infrastructure.
The sad thing is that a lot, even most, of the follow-up grunt work can be
automated using a CRM system. Most good CRM systems can be set up to
automatically fire off an email or SMS to a client or alert a salesperson to
call and follow up. The automation can be triggered based on some action
taken by the prospect, by tracking inquiries and purchases or based on
preset timers. Automation systems allow you to robotically sort, sift and
screen prospects and customers so that you can leverage your time more
effectively.
Now that you have a database of high probability prospects, your job is to
market to them until they buy or die. It may seem like I’m advocating
being obnoxious and pestering people to buy until they cave in. Nothing
could be further from the truth.
Traditional selling training often focuses on pressure tactics like “always be
closing” and other silly little close techniques which are based on pressure.
It makes the seller a pest who the prospect wants to avoid.
Instead of being a pest, I advocate becoming a welcome guest. Send
your high probability prospects a continuous stream of value until they’re
ready to buy. This could be in the form of tutorials, articles, case studies or
even something as simple as a monthly newsletter that’s related to their area
of interest. This builds trust, goodwill and positions you as an expert and
educator rather than just a sales person going for the jugular.
Various technology tools make it easy to automate this continuous followup mechanism, making this a cost effective and scalable way of building up
a huge pipeline of interested and motivated prospects.
Some of these prospects will convert into customers immediately, while
others will do so weeks, months or even years later. The point is that by the
time they’re ready to buy, you’ve already built a solid relationship with
them based on value and trust. This makes you the logical choice when it
comes time for them to make a buying decision.
This is one of the most ethical and painless ways of selling, because it’s
based completely on trust and an exchange of value. While your
competitors are blindly shooting arrows every which way in the hope of
hitting one of the 3% of immediate buyers, with this technique you’re
focusing all of your firepower on a clear and visible target.
Your marketing infrastructure will be made up of “assets.” Here are a few
of the assets I’ve successfully deployed in marketing infrastructures that
I’ve built to help manage:
Lead capture websites
Free recorded message info lines
Newsletters
Blogs
Free reports
Direct mail sequences
Email sequences
Social media
Online videos and DVDs
Podcasts and Audio CDs
Print ads
Hand written notes
Email auto-responders
SMS auto-responders
Shock and awe packages (discussed in the next section)
These are all part of my marketing infrastructure. I continue to build bigger
and more sophisticated assets but these are some of which make up my
core. Each one of these has a place and purpose. All the ads that I run are
designed to plug cold leads into this system and convert them to raving fan
customers.
Of course it does take time and money to build such a marketing
infrastructure, but just like building physical infrastructure like roads or a
railway network—the bulk of the time and cost goes into the initial build.
After that it’s just maintenance.
And here’s the exciting thing—thanks to advances in technology, much of
my marketing system is automated, which gives me enormous leverage.
When I find a combination that works, I can redeploy it over and over and
reliably get the same results.
As I continue to build out my marketing infrastructure, my results continue
to improve. What about you? Are you building your marketing
infrastructure? Are you constantly building on and improving your
marketing systems?
Doing so is what will put you far ahead of your competitors who’ll be just
fluffing about with their random acts of marketing.
Lumpy Mail And The Shock And Awe Package
In Chapter 3 we discussed the power of postal mail as a media channel.
“Lumpy mail” is a way of taking this powerful media channel and putting it
on steroids. Think about your postal mail sorting habits. You have a pile of
envelopes then you notice one of the envelopes has something in it that
makes it lumpy. There’s a 3D physical object in it, perhaps a book, DVD or
a trinket of some sort. Which of your envelopes is going to get opened first
and get the most attention? If you’re like most people it will be the lumpy
one.
Lumpy mail is an attention getter and allows you to get very creative with
your direct mail campaigns. In the direct mail industry, trinkets purposely
inserted for attracting attention are called “grabbers.” Grabbers often set the
theme of your sales letter. For example you might insert a small plastic
trash can into the envelope with the theme of the sales letter being, “Stop
Wasting Money.” Or perhaps you insert a magnet with the theme being,
“Attract More Clients.” It sounds corny and it probably is, but it gets
attention, entertains and more importantly if done right, it gets great results.
Books, CDs and DVDs are other excellent items you can insert in envelopes
to make them lumpy. Other than just attracting attention once off when
being opened, these items generally don’t get thrown away. Your customers
and prospects will likely keep what you sent them indefinitely and it will be
a constant reminder of you.
Taking lumpy mail to the next level is the “shock and awe package.7” The
shock and awe package is perhaps one of the most powerful direct response
marketing follow-up tools in existence. When done right it can skyrocket
conversions and position you far above your competitors. In fact, it’s so
powerful it essentially annihilates your competitors and puts you in a class
of your own. The awesome thing about them is that even when your
competitors find out what you’re doing, they usually won’t dare copy you.
Practically no one does this.
In the previous chapter we discussed the importance of capturing the details
of prospects who have indicated interest. The purpose of this of course is to
keep in touch with them and nurture them to the point where they’re ready
to become a customer.
Now think back to the last time you enquired about a product or service.
Perhaps you phoned in, emailed or submitted your inquiry through a web
page. You did the typical prospect dance of “send me more information.”
What did you get back in response to this request? Likely the organization
you were inquiring with did one of the following things:
Sent you a link to a web page
Sent you an email (perhaps accompanied by some attachments)
Spoke with you over the phone and answered your questions
It may have been all or some of the above. See what’s happening? They’re
responding to your inquiry in the cheapest and most efficient manner.
There’s nothing wrong with cheap and efficient but no one is going to be
entertained, delighted or inspired by it. No one’s going to stop and say,
“Wow they sent me a PDF file with all the specifications, how awesome!”
With your first few interactions with prospects you have the opportunity to
make one of the following three impressions:
1. same same
2. crappy
3. mind-blowingly amazing
Most business owners choose option 1, a surprisingly large number choose
option 2 and almost no one chooses option 3. Your job is to devise a way to
be option 3. Fortunately you don’t need to reinvent the wheel. A “shock and
awe package” is one of the best ways to do this.
A shock and awe package is essentially a physical box that you mail or
deliver to prospects full of unique benefit-laden assets related to your
business and industry. Here are some of the things you can and should
include in a shock and awe package:
Books – people are conditioned to almost never throw books out.
Big bonus points if it’s a book you wrote. Books are an amazing
positioning tool and catapult you from salesperson to educator
and expert authority instantly. I’m doing this right now with this
book! 🙂
DVDs or CDs introducing yourself and the specific problems
your product, service or business solves for your prospect.
Testimonials from past clients in video, audio or written form.
Clippings from media mentions or features about you, your
product or industry
Brochures, sales letters or other marketing material
Independent reports or whitepapers proving your point or
demonstrating the value of your type of product or service.
A sample of your products or services. Coupons or gift cards
with a face value on them can be powerful as it feels like
“wasting money” to just throw these out. They also motivate the
prospect to try you out.
Unusual trinkets and gifts that entertain, inform and wow. I’ve
heard of everything from personalized coffee mugs to iPads
being included.
Handwritten notes thanking them for inquiring or recapping a
conversation you’ve had with them over the phone.
Whaaaat?, I hear you say. Snail mail in this instant access, on-demand,
“information age?” The answer is YES! Trust me, no one loves technology
more than I do. I’m a sucker for the latest iAnything and I’m constantly
glued to one of many screens. However, like most people I love receiving
packages—even more so when they’re unexpected.
While people’s snail mail used to be much more voluminous, it’s now easier
than ever to get cut through with physical mail and especially packages. If
something in a FedEx box lands on your desk how long is it before you rip
it open? If you’re like most people, I suspect it’s not very long.
I’m certainly not saying you shouldn’t send immediate responses to
information inquiries using the phone, email or web but understand that the
first few interactions with a prospect are sacred and should be carefully
orchestrated. Nothing should be left to chance. A shock and awe pack is an
amazing tool for delivering that “wow” emotion in your prospect.
A shock and awe pack should do three things:
Give your prospect amazing, unexpected value
Position you as an expert and trusted authority in your field
Move your prospect further down the buying cycle than they
would otherwise have been
How much more powerful is this than the standard “Sure, I’ll shoot an
email with more information.”
A common objection to shock and awe packages is that they’re too
expensive. In the previous chapter we discussed that, all other things being
equal, the more money you can spend marketing to high probability
prospects, the better your chances are of converting them to a customer.
That’s what the shock and awe pack is all about. If you can outspend your
competitor wooing and wowing prospects, you’ll run rings around them. Of
course you must know your numbers, particularly numbers like customer
lifetime value otherwise you will go negative. You can’t substitute good
marketing for bad maths.
The numbers obviously have to make sense. Unless you’re in an extremely
low margin, purely transactional business (something I really don’t
recommend you be in) then the numbers should work and sending the shock
and awe pack should be very economical.
Don’t make the mistake of being cheap and efficient when it comes to
wooing prospects. Shock and awe packages are a huge competitive
advantage. Most competitors won’t understand them and even those who
do, usually won’t have the courage to use them because, if they’re like most
businesses, they won’t know their numbers. They will likely perceive them
as being too expensive—after all there are cheaper and more efficient ways
to acquire customers. Let your competitors do cheap and efficient
marketing while yours entertains, delights, inspires and wows. It will put
you worlds apart.
Become A Prolific Marketer
One of the commonalities amongst high growth businesses is that they
focus heavily on marketing and make a lot of offers. Some of these offers
end up being misses and some end up being hits. The exciting part is that
you don’t need many hits to offset your misses, especially if you place
“small bets” by first testing with a small segment of your list.
By making many offers, you start to get a very good sense of what works
and what doesn’t. When you become a prolific marketer it’s much easier to
spot trends and scientifically measure response by split testing.
Another important attribute of high growth businesses is that they’re not
timid with their offers. They take risks, use compelling copy and make
outrageous guarantees.
Could it really be that simple? Making more compelling and more frequent
offers? The short answer is yes. The fundamentals never change. Sure there
are now more media channels through which to make offers, new marketing
technology to help you track return on investment and split test, but the
fundamentals never change.
More compelling and more frequent offers = rapid business growth.
Being more prolific with your marketing will create a buzz in your
business. Your clients and prospects will start to notice you more and you’ll
start to cut through the clutter and fill up your sales pipeline.
Any change that becomes part of your routine, whether positive or negative,
will have a profound impact over time. If you make the crafting and
sending offers to your list of clients and prospects part of your regular
routine, within a short time you’ll have a dramatically different business.
Making regular offers will make you a better marketer. Getting good at the
science of marketing is the key to rapid business growth. And when you get
better, everything will get better for you.
Make It Up, Make It Real and Make It Recur
In school, you were taught to be independent. You had to pass math, science
and English to get to the next level. Imagine you pooled your talents with a
couple of friends. One friend who was good at math did all the math tests.
Another friend who was good at science did all the science tests. Finally,
you did all the English tests, because that’s what you were good at. In
school, that type of collaborative work structure would have been called
cheating and all three of you might have been disciplined or even expelled.
Yet in business, pooling different talents in pursuit of a single goal is
exactly the type of structure that results in successful outcomes. Business is
a team sport. One where you’re never going to win on your own.
It takes different “types” to make a business work. Here are the three major
types that it takes:
The Entrepreneur – This is the ideas person or visionary. They
see a problem or gap in the market and are willing to take risks
so they can solve that problem for a profit. They make it up.
E.g. Seeing a gap in the market for a particular product and
hiring all the right people needed to get it up and running.
The Specialist – This is an implementer of your vision. They
could be an engineer, a venture capitalist, a graphic designer.
They take your vision, or part of it, and help make it reality.
They make it real. e.g. Building the factory to produce the
product, getting the tooling right, creating the product packaging.
The Manager – They come in every day and make sure things
get done, work gets delivered and the vision is on track. They
make it recur. Running the factory, making sure shipments get
out on time, making sure quality is right.
It takes all three types for business success yet it’s extremely rare for a
single person to be good at all three. Many small business owners are either
the Entrepreneur or the Specialist or both but rarely the Manager.
Even if you’re currently the sole operator of your business, you need to find
a way to have all three bases covered. You can do this by outsourcing or
hiring. Small business owners often try to take on too much and things
inevitably slip through the gaps. Lack of a Manager role is often why a
marketing infrastructure never gets up and running properly. It’s why
monthly newsletters don’t go out or why shock and awe packs never get
sent. The business owner might agree these are great lead nurturing ideas
(and they are) but they’re busy being the Entrepreneur or Specialist and in
the absence of a Manager taking care of the marketing infrastructure, they
don’t get done.
So what’s the point of having sophisticated marketing tools and assets like a
shock and awe pack if they don’t consistently get deployed?
You’ve probably already got all three roles handled in many other parts of
your business. For example when you were starting out, you had the idea
and vision for what you were going to build—you made it up. You then
might have hired a lawyer to set up the business’s legal structure—your
lawyer made it real. Then every year you might get your accountant to take
care of your tax returns and compliance—your accountant makes it recur.
It’s critical you do the same for your marketing infrastructure. Get systems
into place (we talk more about systems in Chapter 7). Come up with the
marketing ideas or better still, shamelessly steal the ones in this book, hire
graphic designers, web developers and copywriters to make it real, then get
admin help or use fulfillment services to make it recur. As discussed earlier,
much of this can be automated and what can’t be automated should be
delegated. It’s just too important to neglect. Lack of a functional, running,
marketing infrastructure will harm or possibly kill your business.
The reason you likely don’t neglect your annual tax obligations is because
it’s enforced upon you by the government. They have a calendar which
dictates when tax returns needs to be filed and when various taxes need to
be paid.
You can replicate a similar forcing mechanism with a “marketing calendar.”
A marketing calendar sets out what marketing activities have to happen on
a daily, weekly, monthly, quarterly and annual basis and you put those into
your schedule like you would any other important business events.
For example, you might decide the following marketing calendar is right for
your business:
Daily: Check social media for mentions and respond
appropriately.
Weekly: Write a blog post and send the link in an email blast to
email list subscribers.
Monthly: Mail customers and prospects a printed newsletter or
postcard.
Quarterly: Send past customers who haven’t purchased recently
a reactivation letter.
Annually: Send all customers a gift basket thanking them for
their business.
After you’ve locked in what needs to be done and when, the only other
question you need to answer is who will be responsible for delivering on
each of these scheduled marketing activities. Again if you’re a small or sole
operator don’t try and do it all yourself. Where possible make these
repetitive operational activities someone else’s responsibility.
In addition to regular, scheduled marketing activities, you need to consider
event triggered marketing activities. For example, consider these event
triggers and their corresponding actions:
You meet a potential prospect at a business event: Transcribe
their details from their business card into your CRM system and
put them on your monthly newsletter/postcard list.
You get an inbound sales inquiry: Send them a handwritten
note and your shock and awe package.
You get a new email list subscriber from your blog: Add them
to your CRM system which automatically emails them an
educational five-part video series over the next thirty days.
Received a customer complaint: After the issue is resolved
send them a handwritten apology note and a $100 discount
coupon on their next purchase.
Again as far as possible make these event triggered activities someone
else’s responsibility. This will free you up to do higher level marketing
tasks like designing and testing new marketing campaigns or improving the
value of your offering. There are few business activities that pay as highly
as working on your marketing.
Even if your business is currently small, hire admin help in the form of a
manager type who will “run the factory” for you and make sure your
scheduled and event triggered marketing activities recur.
As entrepreneurs we have a “can do” mindset. This often means when
something needs to be done, we are tempted to just roll up our sleeves and
just do it. However, spending a lot of time doing things that aren’t your area
of expertise or aren’t a good use of your time can quickly become a very
expensive exercise. Remember money is a renewable resource—you can
always get more money but you can never get more time.
Another common concern with outsourcing or delegating tasks is quality.
Will they get done as well as if you were doing them yourself? The answer
is probably not, but a rule of thumb I like to use is if someone else can do it
80% as good as you can, then you should delegate it.
Letting go can be difficult, especially if you’re a control freak and
perfectionist like most entrepreneurial types are. But it’s necessary if you’re
going to get scalability and leverage in your business. Otherwise you end up
effectively paying yourself minimum wage for routine tasks while
sacrificing high value tasks such as building your marketing infrastructure,
which can take your business to a whole new level.
Some timeless wisdom from Jim Rohn:
Learn how to separate the majors and the minors. A lot of people don’t do well simply because
they major in minor things.
Don’t mistake movement for achievement. It’s easy to get faked out by being busy. The question is:
Busy doing what?
Days are expensive. When you spend a day you have one less day to spend. So make sure you
spend each one wisely.
We can no more afford to spend major time on minor things than we can to spend minor time on
major things.
Time is more valuable than money. You can get more money, but you cannot get more time.
Time is the best-kept secret of the rich.
Finally the most common complaint is that it’s too expensive to hire or
outsource help. This may have been true a few years ago but not any more
thanks to the wonder of geoarbitrage. There is an enormous pool of talent in
Southeast Asia, India and Eastern Europe that will work for you at a
fraction of the price of local employees and contractors.
There’s a good reason large companies move a lot of their routine
operations to these locations. They are full of workers who are talented,
eager, well-educated and speak English fluently.
You can assign tasks and have them magically happen while you sleep.
Importantly, it’s not just about cost but also about scalability. Locally you
would need to comply with all sorts of red tape when hiring and firing
employees or even contractors. However, thanks to massive online job
boards like Upwork, Freelancer and 99Designs you can hire an army of
personal assistants, graphic designers, web developers and almost any other
skill you can imagine. All of these can be hired on demand to work on a
project basis or as part of your team on an ongoing basis
The production of this book is a perfect example of this. It was written by
me in Australia, edited by a copy editor based in the United States who
works for an Armenian company. The cover design was done by a graphic
designer in India and my researcher was based in the Philippines. The
Internet has broken down geographical barriers and enabled anyone to have
a global workforce. Never before has so much talent been so readily
available and been so cost effective.
Of course from time to time the tired old argument about patriotism and
creating local jobs comes up, but how many local jobs are you going to
create if you fail to implement critical marketing strategies and go out of
business? Globalization of labor and talent is a reality and has been for
some time. Previously the domain of only large multinational companies,
it’s now in easy reach of small to medium businesses and entrepreneurs like
you and I. This is a real game changer. As entrepreneurs, our job is to
embrace change and find ways to leverage and profit from it, rather than
fight it.
As you become more successful you’ll help create local jobs as a byproduct
of your success. When you upgrade your house, give generously to a good
cause or buy a new car, you’ll be creating local jobs and benefiting your
local community, most of which wouldn’t have been possible if your
business had failed.
Chapter 5 Action Item:
What Is Your Lead Nurturing System?
Fill in square #5 of your 1-Page Marketing Plan
Chapter 6 – Sales Conversion
Chapter 6 Summary
Sales conversion is all about creating enough trust and demonstrating
enough value to motivate interested leads to become paying customers.
Positioning yourself correctly will make the sales conversion process easy
and natural for both you and your customer.
Highlights covered in this chapter include:
Why positioning is the critical factor when it comes to charging
high prices for your products and services.
How to position yourself as a welcome guest rather than a pest
when selling.
Why the odds are stacked against you if you’re a small to
medium business and what to do to level the playing field.
How to massively reduce the perceived risk that customers see
when it comes to buying from you.
How to instantly generate trust and credibility when selling.
How to correctly price your products and services.
How to remove the roadblocks that are preventing people from
buying.
Every Dog Bites
You’ve likely heard the corny old joke, which appears in the classic movie,
The Pink Panther Strikes Again. There Peter Sellers who plays the hapless
Inspector Clouseau sees a cute dog and in his ridiculous French accent asks
the man standing near it, “Does your dog bite?” The man shakes his head
and replies, “No.” Clouseau then reaches out to pat the dog whereupon the
dog lashes out and bites his hand. He then turns back to the man and
indignantly asks, “I thought you said your dog didn’t bite?” The man
casually replies, “That is not my dog.”
The people you’re selling to have been bitten too many times and now think
all dogs bite. The fact is unless you’re the well-known incumbent in your
industry, you’re not even starting the selling process in neutral territory but
rather you’re starting behind in negative territory. Even though you’re an
ethical operator, your prospects are cynical and don’t trust you.
Unfortunately it’s a case of guilty until proven innocent and you have to
work your way from negative to positive territory and win their trust before
a sale can be made.
With trust being the major barrier to a sale you’ve got to have some solid
strategies for sales conversion. While a comprehensive program of sales
training8
is out of the scope of this book, in this chapter we’re going to look
at few strategies and tactics that will make the sales conversion process
much easier. Specifically we’re going to discuss the central role played by
positioning and how to make proper positioning a part of your trust-based
sales conversion process.
In the previous two chapters we covered how to capture and nurture high
probability leads in order to build trust, value and authority. All this was
done with the purpose of making the sales conversion process natural and
easy. By the time you get them to the point of sales conversion, they should
already be pre-framed, pre-motivated and pre-interested and essentially
asking to buy from you. If you have to convince them or put on the hard
sell then you likely need to improve your lead nurturing process.
Most sales people position themselves either as desperate beggars or as
obnoxious, pushy sales people using silly outdated “closing” techniques
like ABC (always be closing), the trial close or the assumptive close. These
techniques have become a joke in selling and unless you’re selling lowvalue products like vacuum cleaners door-to-door, they’ll create more
distrust with your prospect rather than help you.
Another equally bad approach taken in many new businesses is expecting
sales to happen by the mere fact that they exist. Some open a physical store,
others start a website and expect sales to just start rolling in. Their
marketing strategy is hope. And sure they may make a small number of
sales just by virtue of being there when a random prospect wanders by. But
that is a guaranteed path to frustration. Many such businesses make just
enough in sales to torture themselves to death. They then conclude the
market or their industry is too competitive.
Truth be told, I don’t know of any market or industry that is not
competitive. But one thing I know for certain is that in any market or
industry you look at, no matter how competitive, there’ll be someone doing
really well and there’ll be someone struggling.
So if we were honest with ourselves, we couldn’t really put it down to a
problem with the market or industry. So what’s the problem? The problem
is likely that they’re positioning themselves as a commodity, a “me too”
type of business.
When you position yourself in this way you’re only marketing weapons are
to shout as loudly as possible (which is very expensive) or to discount your
prices as far as possible (which is dangerous). Unless you are a Costco,
Walmart or other such behemoth, you really don’t want price to be your key
differentiator, as that’s a battle you won’t win.
At this stage many of these businesses realize their folly and start making
dubious and unquantifiable claims like being “the best,” “the highest
quality,” etc.
There’s No Money In Your Product Or Service
Whether you’re selling freshly baked bread, accounting services or IT
support, the way you market yourself will have a dramatic impact on the
clients you attract and the amount that you can charge for your services. A
commonly held belief is that “it’s all about the product” so if you have a
better product or service people will automatically be more likely to buy
from you and pay you more for it.
While this is true to some extent, the law of diminishing returns comes into
play when your product or service reaches a “good enough” level. After all,
how much better can your IT support or accounting services or bread be
than that of your competition? Once you’ve reached a level of competence,
the real profit comes from the way you market yourself.
How much does a world class violinist make? Well that depends on how he
markets himself. Have you ever heard of Joshua Bell? He’s one of the finest
classical musicians in the world. He plays to packed audiences all around
the world, making upwards of $1,000 per minute. The violin that he plays is
a Stradivarius violin built in 1713, currently valued at $3.5 million. This
particular Stradivarius violin, being close to 300 years old, is renowned to
be the most beautiful sounding violin ever crafted.
So, here we have the finest violinist in the world playing the most beautiful
violin ever. It’s safe to say that Bell, as a musician, is the best at what he
does. At the height of his career he was approached by the Washington Post
to participate in a social experiment. They wanted him to play at a local
subway for an hour, during which thousands of people would walk by and
hear him playing. So on the morning of January 12, 2007, Bell played
through a set list of classical masterpieces with his violin case open. Can
you a guess how much the finest violinist in the world, playing a beautiful
$3.5 million violin made in hour? A grand total of $32.
To see the video of the Joshua Bell social experiment visit 1pmp.com
The finest violinist, playing the most beautiful instrument made a meager
$32 from his “customers.” The same violinist played in a Boston concert
hall a few nights earlier. It was a performance where audience members
paid $100 or more per ticket. During that event, he earned over $60,000 per
hour.
The same talented musician, playing the same music on the same violin, yet
in one instance he earns $32 an hour and in another, he earns $60,000 per
hour. What made the dramatic difference? In a word—positioning.
If you’re a professional musician and you position yourself as a subway
busker, your “customers” will treat you as such and pay you accordingly.
Conversely if you position yourself as a professional concert performer you
attract a totally different customer and once again get paid accordingly. In
other words, people will generally take you at your own appraisal—unless
proven otherwise.
Of course you can’t cheat by positioning yourself as a professional
musician and then show up and be unable to perform at a high level. The
same is true regardless what business you’re in. If you’ve got a quality
product or service, what’s stopping you from positioning it at a much higher
level—offering it a premium price and attracting a much higher quality of
customer?
Resolve to stop positioning yourself as a commodity and competing solely
on price. The result to your bottom line will be phenomenal.
Transitioning From Pest To Welcome Guest
How do you feel about a dear friend who shows up at your front door?
Contrast this with how you feel about a stranger selling door-to-door who
interrupts your dinner or family time. What’s the difference? The former is
a welcome guest, someone you have a relationship and connection with.
The latter is a pest. You don’t know who he is, where he’s from and most
likely you don’t even want or need what he’s selling.
The welcome guest brings value to your life, whereas the pest is just there
to interrupt you and to take. Wouldn’t it be great if you could approach a
prospect and be treated by them as a welcome guest rather than a pest?
Selling suddenly becomes much easier and more pleasant when you are
welcomed with open arms and when the prospect is deeply interested in
what you have to offer. This is the transformation I’d like you to make in
your business and in your marketing. Transition from being a pest to a
welcome guest.
Most businesses try to sell without first creating trust. They either cold call
or advertise using outdated methods that no longer work.
The problem with this is you’re asking your customer to make a decision
when they have no idea about who you are or what you’re about. They
don’t know you, don’t like you and don’t trust you yet.
It’s like proposing marriage on a first date—sure it may work once in a blue
moon but do you really want to stake your whole business on a strategy like
that? And so you end up with a poor closing ratio of say 1 in 10 or 1 in 20
and you waste a significant amount of time, energy and money dealing with
unqualified prospects. What’s more, you waste a lot of money on poor
advertising.
You have a generic ad and you get people calling up and you say to them,
“Sure I can come out and see you” or “Sure I can help you.” The problem
with this is they barely know you and are probably just price shopping, so
your conversion is probably going to be at a far lower level than it could be.
At this stage many business owners get hooked on the “hopeium” drug.
Hopeium is a “drug” that travels through your body and mind when you
“think” you have an interested prospect who is sending you positive signals
but has no intention of buying from you. The drug is usually activated when
your prospect tells you “Tell me more about your product…” “Send me a
quote…” or “Send me more information…..” You know what I mean right?
Someone calls your office and shows interest in what you have to offer and
then instantaneously you feel the “rush” of excitement that this is going to
be your next sale.
Then a few days or a few weeks later after continually chasing them, you
get hit with the “silent treatment.” You’ve had some good conversations and
they’ve expressed interest in what you have to offer then all of a sudden
everything stops and goes cold. You try calling them back once or twice.
You even send a follow-up email, but nothing. They just disappear. You
figure you’ve somehow lost the sale, and you don’t know what you did
wrong, or what was wrong with your product. It makes selling feel like such
a painful and arduous process.
Hopeium is dangerous because it’s not based on the truth of what your
prospect is really thinking. The faster you “detox” from hopeium, the
sooner you’ll stop wasting your selling time chasing prospects who aren’t a
true fit for your solution.
Over the years, clients have become more and more skeptical. They’ve been
burnt too many times and they simply don’t believe you. So the problem is
you’re not even starting at zero, you’re starting in negative territory. And
the old school “close, close, close… sell, sell, sell” approach doesn’t work
the way it used to. Potential clients get their back up and end up doing
nothing because they don’t trust you.
Instead you need to move towards the model of… educate, educate, educate.
With education, you build trust. With education, you position yourself as an
expert. With education you build relationships. With education you make
the selling process easier for both buyer and seller.
As discussed in the previous chapter, instead of trying to sell to them
straight off the bat, the first thing you do is offer your readers something of
value that educates them about a problem they have. A free report, free CD,
free DVD, online webinar, etc., are all great educational tools you can use.
Delaying the sale accomplishes two things. First, it shows you’re willing to
give long before you take, which breaks down sales resistance. Second, it
presents you as an educator and expert in your field. Think about it. Who
would you prefer to buy from—a pushy salesperson salivating for their next
commission or an expert educator who has your interests at heart and wants
to help you solve your problem?
You must stop selling and start educating, consulting and advising prospects
about the benefits your products and services deliver as opposed to each
and every competitor in your category.
Best you read that again, it could be worth a fortune to you.
Let’s face it, no one wants to be seen as a stereotypical salesperson who is a
pushy and untrustworthy. However, if you think about yourself as a doctor
who diagnoses and then prescribes solutions to people’s problems, then I’m
sure you’d be much more comfortable selling under those circumstances—
as a trusted, educated, knowledgeable, qualified, confident, capable adviser.
And that is exactly who you need to be perceived as in the eyes and mind of
your prospects—someone who educates them and solves their problems.
This would be a good time to share with you my definition of an
entrepreneur, “Someone who solves people’s problems at a profit.”
Bottom line, don’t let them think you are in sales for one second. The best
way to do all this is consultative, advisory selling using a nurturing system
(more on that shortly). You must see yourself as an agent of change, a
creator of great value, benefit and advantage in the lives of your customers
and prospects.
Become the expert in your category or industry. Quite honestly, everybody
is generally trying to be an expert, it’s just their marketing sucks. The coffee
shop is trying to make the best coffee, it just sucks at marketing that fact.
Consultative, advisory selling is the most cost effective, the most enduring,
the most impactful and the most powerful marketing strategy a business
owner could ever devise.
The balance of power is now in the hands of those who would choose to
consult, advise and educate prospects or clients about the benefit that your
product brings to them. It’s the only way to take the power back off the
buyer in the chaotic collaborative world we live in today. So stop selling
and start educating and advising. Your clients will appreciate you more and
so will your bank manager.
Manufacturing Trust
Ask most people and they’ll tell you they despise dealing with large, dumb
companies. Poor service, indifferent staff and out-of-touch management are
hallmarks of large companies. Yet for some reason we keep dealing with
them despite knowing that there are probably much better options out there.
One of the biggest reasons behind this is a comfort, that while the
experience may not be great, it likely won’t be horrible. As the saying goes,
“Better the devil you know than the devil you don’t.” Fly by night operators
and snake oil salesmen have made many people distrust small businesses by
default. People know that while a large company might not give the very
best service, they are unlikely to be outright scammed by them.
If you run a small business that puts you at an immediate disadvantage. A
customer doing indepth due diligence on you may come to the conclusion
that you are trustworthy and provide great service, but the vast majority of
customers won’t go to that effort. They will often take a cursory glance and
judge you by your cover.
That’s why it’s increasingly important to present your business in a way that
conveys trust and confidence. The strategic use of technology is one way
that you can level the playing field. In times not so long ago, access to
business technology tools was cost prohibitive for small businesses and
hence was the domain of large companies. The Internet, software as a
service (SaaS) and cloud computing have leveled the playing field.
A famous cartoon published in The New Yorker depicts a dog sitting at a
computer and is captioned, “On the Internet, nobody knows you’re a dog.”
This illustrates how technology can help make the little guy look like one of
the big guys—leveling the playing field and helping fight the trust bias
against small businesses.
The following are some inexpensive ways you can use technology to help
you present your business in a larger and more professional manner. Other
than the fact they will help you fight the small business trust bias, many of
these tools will help you run and scale your business in a much more
efficient manner.
Website: Your website is probably one of the first places prospects go to
check you out. Beware of the following signals which scream to potential
prospects that you are small or potentially untrustworthy:
No phone number listed. Phone numbers should be prominently
listed at the top of every page.
A PO Box address or no address listed instead of a proper
physical business address. Even if you work from home, you can
use virtual office services to meet with customers and to display
a business address on your website.
Lack of privacy policy and/or terms of use. Templates for these
are widely available.
Poor or cheap-looking design. Don’t skimp on design, even if
you build the website yourself, attractive easy-to-use website
templates are available at very minimal cost.
Email Address: It amazes me how many small, even medium-sized
businesses advertise a Hotmail, Gmail or ISP-issued email address rather
than using an email address with their own domain. Who looks more
trustworthy johnny14@gmail.com or john.smith@company.com?
Phone Number: Your phone number can say a lot about you. Using a
national toll free number or a toll free word or “vanity” number can give
your business a national and accessible feel. It can also help people recall
your phone number on fast-moving mediums such as radio or billboards
where the prospect has only a split second to take note of your phone
number.
CRM: As discussed in previous chapters this is your marketing nerve
center. A customer relationship management (CRM) system will help you
keep track of customer details and automate and manage follow-up. It’s a
much more efficient way of managing customer records than just a
spreadsheet or some ad-hoc filing system.
Ticketing System: If dealing with customer support or inquiries, a ticketing
system can help you and your customers keep track of requests. This can
dramatically lower the burden on you and your staff to respond to status
updates, phone calls and emails. It also gives the potential customer
confidence that their request is trackable and hasn’t gone into some black
hole.
These are just a few of the tools that can help you fight the trust bias that
disadvantages small businesses. Using these tools you can punch above
your weight and present yourself as a professional organization, even if
you’re just starting out.
While these tools are not a replacement for having great products and great
service, they can help you manage perception. Keep focused on your
marketing and soon perception will become reality.
Outrageous Guarantees
The first time I saw tasting spoons at an ice creamery, I finally realized just
how truly risk averse we all are. Here potential ice cream buyers hold up a
queue of people behind them while they taste test several flavors with tiny
plastic spoons. All this is to ensure that the flavor of ice cream they finally
commit to buying doesn’t disappoint.
Risk reversal in form of an outrageous guarantee means that if the product
or service doesn’t work out for the prospect, you’re the one who’ll have
something to lose rather than them. This needs to be more powerful than
something ordinary and lame like “money back guarantee” or “satisfaction
guaranteed.” By having something to lose if it doesn’t work out, you have
an easier path to the sale and you’ll much more easily avoid alarm bells set
off in your prospect’s brain.
Here’s a practical example. If I’m wanting to hire an IT company for my
business what sort of things might I fear? Here are a few that immediately
come to mind:
Are they going to send some junior technician who’ll fluff about
for hours as he learns on the job while I get billed a premium
hourly rate for the privilege?
Are they going to be available when I urgently need support?
Will the problems they fix continue to recur?
Are they going to bamboozle me with geek speak when I request
an explanation of work performed or needed?
A risk reversal guarantee for this type of business might look like: “We
guarantee that our certified and experienced IT consultants will fix your IT
problems so they don’t recur. They’ll also return your calls within fifteen
minutes and will always speak to you in plain English. If we don’t live up to
any of these promises, we insist that you tell us and we’ll credit back to
your account double the billable amount of the consultation.” Compare that
to a weak and vague guarantee like, “satisfaction guaranteed.”
To be truly effective when using this technique you must avoid the vague
crap that everyone says, e.g. satisfaction guaranteed, service, quality,
dependability. Your guarantee should be very specific and address the fear
or uncertainty that the prospect has about the transaction.
For example, if you’re in the pest control business your customers want to
know that:
The pests won’t come back
The technician won’t leave their house dirty
You won’t poison their family or pets with chemicals
So your outrageous guarantee could be something like this:
“We guarantee to rid your home of ants forever, without the use of toxic
chemicals, while leaving your home in the same clean and tidy condition
we found it. If you aren’t absolutely delighted with the service provided, we
insist that you tell us and we’ll refund double your money back.”
Is this kind of guarantee risky? Only if you consistently do a crappy job. If
you are committed to giving your customers excellent service and training
your staff accordingly, then there is almost zero risk for you. More
importantly there’s also almost zero risk for your prospects, which makes
closing sales much easier. Indeed the law may even require that you provide
warranties as to the quality of your products and services and make things
right if they fall short. So given this is likely already a legal requirement,
why not up the ante and make it a feature you promote in your marketing?
Here’s the other thing about guarantees. If you’re an ethical operator, you
are most likely already offering a guarantee but you just aren’t using it to
your advantage in your marketing. So why not make a point of talking
about something that you’re already doing. Most people are honest and
won’t abuse guarantees if they’ve received the service they were promised.
Even after accounting for the few people who do abuse them, you’ll be far
ahead because a strong guarantee will attract more customers than a weak
and vague one.
A smart entrepreneur will look at their business from the eyes of a fearful,
skeptical prospect and reverse all the perceived risks so that the path to the
sale is much smoother. This also results in customers who are much more
sticky and who won’t fall for your competitors who by comparison seem
much more risky to deal with.
A strong, results-oriented guarantee will also drive you to deliver a great
customer experience. This alone ensures that it’s worthwhile to have a
strong guarantee. Your customers have their own fears. When you can name
the fears and guarantee against them in your marketing, you give yourself
an overwhelming advantage over your competitors.
Pricing Strategy
Setting price on your products or services is one of the weightiest decisions
you’ll make in your business. It will touch every part of your business from
the financials to how you are perceived in the market place. Yet often scant
attention is paid to the psychology and marketing potential of price.
The price of your product is a critical positioning indicator. Do you think
when they go to set price on a Rolls Royce or Ferrari, they just add up the
bill of materials and then just add on an acceptable markup? Hardly. Price is
central to the positioning of the product.
As discussed earlier in this chapter, if you position yourself as an educator
and a trusted adviser price becomes much more flexible. I hope you’re
never in unfortunate position of needing heart surgery but if you are do you
want the cheapest heart surgeon? I doubt it.
More often than not, business owners set prices based on what their
competitors charge. A common application of this is setting price slightly
lower than the market leader in their industry. Another common way that
price is set is to just take cost price and then add what feels like an
acceptable markup.
Both of these are acceptable starting points; however, if you aren’t thinking
about the marketing or the psychological implications of price then you are
likely leaving huge sums of money on the table.
Number Of Options
Regardless of industry, most products or services offer multiple flavors or
variants of the primary offering. Henry Ford famously offered his
customers the Model T “In any color that he wants so long as it is black.”
While it may seem backward by today’s expectations of infinite choice and
expressions of individuality through ever increasing personalization, the
great industrialist does bring up an issue that is relevant to all entrepreneurs.
How much choice should we offer?
Conventional wisdom would have you believe that the more choice you
offer, the more sales you will make. However, this has been proven totally
false time and time again.
There is a famous study by a professor of business at Columbia University
that illustrates this point well. In a California gourmet market, Professor
Iyengar and her research assistants set up a booth of samples of jam. Every
few hours, they switched between a selection of twenty-four flavors of jam
to only six flavors. On average, customers tasted two jam flavors,
regardless of the size of the assortment.
Here’s the interesting part. Sixty percent of customers were drawn to the
large assortment, while only forty percent stopped by the small one. But
thirty percent of the people who had sampled from the small assortment
decided to buy, while only three percent of those confronted with the
flavors purchased a jar.
The conclusion? Offering too much choice can actually prevent sales. The
psychology behind this finding is that people get caught like a deer in the
headlights. Fear of making a suboptimal choice prevents them from making
any choice at all.
If you look at Apple and their wildly successful products, you’ll see they
are usually offered in only two or three variations each. This seems to be
the happy medium between too few options and the brain overload that is
caused by too many options.
Along these lines, a pricing strategy that I’ve seen work very well is
offering a “standard” and “premium” variation of a service or product. The
“premium” version is priced at about 50% above the “standard” but offers
twice or more value than the “standard” variation.
When using this strategy it’s important to make sure that you are genuinely
offering much more value with the “premium” than you are with the
“standard.” This strategy works extremely well in cases where the
incremental cost of delivering the “premium” is relatively low, because the
price differential ends up as pure profit on your bottom line.
Reverse Risk With “Unlimited”
Most people are extremely risk averse. They fear being stung by
unexpected charges whether this be related to data usage, medical costs or
consulting fees.
As we previously discussed, if you can remove this risk for them, you
greatly increase the opportunity for a sale. An excellent strategy for
removing this risk is to offer an “unlimited” variation of your product or
service at a fixed price.
For example an IT company could offer “unlimited” technical support for a
fixed monthly fee, a restaurant could offer “unlimited” beverage refills and
so on. While many business owners fear that abuse of an unlimited option
will send them broke, this can easily be remedied in your terms and
conditions which would allow for fair use but would stop or limit abuse.
Especially when you are selling something that needs to be consumed in a
particular time frame, the risk of offering an unlimited option is very low.
Looking at your average transaction value over time and working with the
law of averages can give you a very accurate idea of what it will cost you to
offer an unlimited option.
People tend to overestimate how much they will use a product or service
when they are at the point of purchase—my ab workout machine is a
testament to this! So offering an unlimited option helps you capitalize on
this as well as removing any perceived risk of overage charges.
The Ultra High Ticket Item
In every market there is a small percentage of the population who want to
buy “the best” variant of a product in its class.
The indicator most often used by consumers as to what is “the best,” is
price. Some consumers will pay 10, 20 or 100 times the price of other
functionally similar products e.g. Rolls Royce, private jet travel, etc.
While you might not sell these kinds of high ticket products every day of
the week, if you don’t make them available among your normal product
mix, then you’re definitely leaving money on the table.
These ultra high ticket items can make up a very large percentage of your
net profit even if you only sell a small number of units. It will also help you
attract a more affluent customer who shops based on prestige, service and
convenience rather than on price.
Lastly, a big benefit of the ultra high ticket item is that it makes the other
variations in your product range look much more reasonably priced by
comparison. A rule of thumb often used is that ten percent of your customer
base would pay ten times more and one percent of your customers would
pay one hundred times more. Make sure you’re not leaving money on the
table by not having ultra high ticket items in your product mix.
Resist The Urge To Discount
When the market you operate in is highly competitive, there is a strong urge
to discount your prices. This strategy needs to be used with extreme
caution, because of the pressure it puts on your margins, profit and more
importantly your market positioning.
Unless you have a very specific loss leader strategy, try to avoid
discounting at all costs. With a loss leader strategy you try to entice a
customer based on price and then upsell or cross sell other higher margin
products or services.
A better option than discounting is to increase the value of your offering.
Bundling in bonuses, increasing quantities or adding peripheral services can
be of genuine value to your customer but cost you very little to do.
Regardless which specific strategies you implement, it is important to
continually test and measure. Consumers are bags of emotion and are not
driven purely by rational motivations.
Make the setting of price a central part of your overall marketing strategy.
Invite Them To Try Before They Buy
Some time ago I dropped into my local BMW dealership/service center to
check out an error message I was getting on the car’s computer system. A
few minutes later the service clerk emerges after the garage had made a
couple of small adjustments. “It’s all sorted,” he goes on to explain what the
problem was with some technical car jargon. I nod my head knowingly,
pretending to understand what he’s saying to prevent the castration of my
male ego.
Next he asks me, “Would you like to book the car in for a service? The car’s
computer indicates you’re almost due.” Nice upsell move. I say, “Sure let’s
book it in for mid next month.” The service clerk then advises me that when
making a booking that far in advance that I’m eligible for a loan vehicle for
the day. I think great, that way I don’t need to have anyone drop me off and
pick me up. I request to borrow a car that is the next model up from mine.
This request should have sent their sales alarm bells ringing: existing
customer with a three-year-old car that has just come out of warranty
requesting to borrow and test drive the expensive next model up for a whole
day. If ever a golden sales opportunity dropped in someone’s lap, this was
it. Instead of recognizing and grabbing this opportunity, he apologizes and
says he can only give a loan of a car several models down from mine. Then
he goes on for the next few minutes telling me how good this much cheaper
model is.
I felt like knocking on his forehead and shouting “HELLO, anybody home,
HELLO!” Or perhaps I should have channeled Julia Robert’s character
from Pretty Woman and said, “Big mistake. Huge. I have to go shopping
now,” and then stormed out. Instead I thanked him for his time and said,
“I’ll see you next month.” I couldn’t believe what had just transpired.
Did the service clerk really not see the opportunity? Unlikely. It was
probably more of a case of “it’s not my job.” He probably thought
something like, “Hey I’m in service, if he wants to test drive a new car, he
should go see someone in sales.” This is a mistake many businesses make.
They segregate their staff into “departments.” Therefore people outside of
the sales department think that sales has nothing to do with them. Big
mistake. Huge! As a business owner you should make it abundantly clear to
all staff that sales are the lifeblood of the business and that everyone is in
sales.
Every staff member at some stage will have the opportunity to positively or
negatively influence a sales opportunity. Make it known that regardless of
what their primary role in the business is, responding to sales opportunities
is their job. One of the best ways to get this point across is to have an
incentive program where sales get rewarded regardless of the position of the
person they came from. You might even discover some hidden sales talent.
Of course the easiest sale to make is to an existing satisfied customer. Let
all your staff know the cues to look out for—without being pushy or
obnoxious of course.
Now granted, I may not have been ready to buy a new car right then and
there, but would spending a full day with a car I’ve been eyeing off have
gotten me closer to buying? Of course! Would it have started my buying
juices flowing? Absolutely!
This brings us to another very powerful technique you can and should add
to your follow-up sequence—try before you buy. Sometimes also known as
a free trial or “the puppy dog close.”
Picture the scenario—you’re not sure if getting a new puppy is such a great
idea, or perhaps you’re unsure if this particular breed is the right fit. The pet
store salesperson assures you that you can take the puppy home with you
and if you don’t like it, just bring it back—no questions asked. Sound
reasonable? So you take the puppy home with you, you and the kids play
fetch and run around outside with it. He licks your nose in the morning and
waits for you faithfully at the door at the end of the day. So of course you
all fall in love with the new member of the family. And the sale is made—
not by the salesperson, but by the puppy.
It’s that simple.
It’s one of the most powerful ways to win more business and it’s based on
the magic of “try before you buy.” Using this technique can dramatically
boost your sales. First, it breaks down sales resistance, making the prospect
feel less like their committing to something irreversible.
Second, it puts the onus on the buyer to reverse the sale which puts inertia
back on your side. Lastly, a genuine customer is highly unlikely to return a
good product that is meeting their needs. Implement the “everyone’s in
sales” mindset in your business and couple it with a “try before you buy”
offer and you’ll see dramatically better conversion results.
Close Down Your Sales Prevention Department
It never ceases to amaze me how many businesses, large and small, make it
difficult to buy from them. It’s almost like they have a sales prevention
department, whose job is making the buying process a painful experience.
Leave the red tape, lengthy forms and inflexible rules for government
departments. Your job is to make it easy for customers to buy from you.
Signs that say “Cash Only” or “$10 Minimum For Credit Cards” or “We
Don’t Accept Amex” are the sales prevention department at work. These
businesses may be saving money on merchant fees but are almost certainly
losing far more in term of lost sales, lost customers and lost goodwill.
They’re stepping over dollars to pick up pennies.
You need to offer your customers their preferred payment method—not
yours. Also don’t punish customers for using their preferred payment
method by adding a surcharge. Rather factor merchant fees into your
general pricing or absorb them. If your competition is intense or your
margins are so thin that you can’t afford to factor merchant fees into your
general pricing then you have some far bigger problems to solve than just
merchant fees.
As mentioned in Chapter 2, another strategy for increasing your
conversions is to offer a payment plan or finance for your higher ticket
items. This can mean the difference between a sale and no sale. First,
people often think of both their income and expenses on a monthly basis.
Second, people are far less attached to future money than present money.
Present money is usually already spent. If you can present your offer in easy
bite-sized monthly chunks or a future obligation, rather than a big lump
sum, this will dramatically increase conversions.
Look for other things that could be roadblocks to sales conversion. Are you
requiring prospects and customers to jump through hoops, fill in useless
forms or conform to processes that aren’t really necessary? How could you
remove these roadblocks or at the very least make them much easier?
Chapter 6 Action Item:
What Is Your Sales Conversion System?
Fill in square #6 of your 1-Page Marketing Plan
ACT III – The “After” Phase
The “After” Phase Section Summary
In the “after” phase you’re dealing with customers. Customers are people
that like you and what you have to offer enough to have paid you money at
least once. In this phase you’ll turn your customers into raving fans by
delivering a world class experience. You’ll then find ways of doing more
business with them and increasing their lifetime value. Finally you’ll create
an environment where referrals continually come your way.
The goal of this final phase is to get your customers to trust you and buy
more from you. This phase continues in an ongoing “virtuous cycle” where
you deepen your relationship with customers, do more business with them
and get more referrals.
Chapter 7 – Delivering A World Class Experience
Chapter 7 Summary
By delivering a world class experience, you turn customers into a tribe of
raving fans who want to buy from you repeatedly. To deliver this world
class experience you need to implement systems in your business and make
smart use of technology.
Highlights covered in this chapter include:
Why building a tribe of raving fans is crucial to your business
success and how to do it.
The two critical functions of your business.
How to innovate even when the product or service you sell is
boring and ordinary.
The purpose of technology in your business and how to leverage
this in your marketing,
Why systems are the key to uncovering a fortune that lies hidden
in your business.
The four main systems in your business that virtually guarantee
your business success.
How to eliminate the biggest bottleneck in your business.
Building Your Tribe Of Raving Fans
A tribe is a group of people connected to one another, connected to a leader
and connected to an idea9
. For thousands of years, human beings have been
part of one tribe or another.
One of the things that separates extraordinary businesses from ordinary
ones is that they lead tribes, tribes of raving fans—not just customers. In
your business, a tribe member is a special type of customer. One that acts as
a cheerleader and is actively conspiring for you success. Your tribe
members amplify your marketing message and take it to heights you’d
never be able to reach on your own with paid advertising. Here are a few of
the qualities of these extraordinary businesses that become tribe leaders:
They continually focus on wowing their customers which turns
them into raving fans
They create and foster lifetime relationships
They make it easy and fun to deal with them
They create a sense of theatre around their products and services
They have systems so that they can reliably and consistently
deliver a great experience
In this chapter we’re going to look at some strategies for turning customers
into raving fans who trust you, refer you and can’t wait to do more business
with you. These people are your tribe and it’s vital to have strategies for
building such a following and taking great care of them.
Most ordinary businesses stop their marketing efforts once they’ve
converted a prospect into a customer (i.e., the prospect buys from them).
This sort of transactional thinking keeps them stuck and puts a firm lid on
their business growth. By contrast truly remarkable businesses get
exponential results because each customer they add is not just revenue once
but it’s revenue over and over again because this person becomes an
evangelist for your business.
Even more exciting than that, new product launches become easy and
predictable. You don’t have to market, hustle and convince as much when
you have a tribe of raving fans. Look at Apple, one of the leaders in this
type of marketing. They can launch a brand new product or even a new
category of product and they already have a legion of raving fans queuing
up days in advance begging Apple to take their money. This is isn’t just the
domain of large companies like Apple.
In fact it’s an area where small businesses have a massive advantage.
Unlike large businesses that are inflexible and steeped in bureaucracy, have
numerous lines of reporting and people with varying agendas, small
businesses can be agile and respond to customer needs and feedback
quickly. More importantly, small businesses can micromanage the customer
relationship. The customer doesn’t as easily get lost in a sea of other
customers and a relationship can be developed which is much more
personal and much more tribe like. It’s your job to create and foster a tribe
of raving fans and understand that the marketing process really only just
begins once you convert a prospect into a paying customer.
Sell Them What They Want But Give Them What They Need
In Chapter 2 we talked about the essential elements of crafting a good offer.
As discussed in that chapter, the first step in crafting a good offer is to find
out exactly what your market wants. Now I want to go deeper. When it
comes to delivery of your product or service we need to give our customers
not just what they want but what they need.
There’s often a big difference between what people want and what people
need. Let me give you an example. Let’s say you’re a fitness instructor. You
improve people’s lives through better health, fitness and nutrition. The
concept of better health is too vague, far off and long-term for most people.
So instead you’ve got to appeal to vanity, performance or some other
specific want that the prospect has—for example ripped abs, toned body,
great figure.
So you need to give them what they need in terms of health improvement
but do it via what they want and that’s what you sell them, which was the
improvements in appearance and performance. You need to understand both
wants and needs. They are sometimes overlapping and sometimes
completely non-overlapping.
If I’ve owned a treadmill for a long time but I haven’t lost any weight, does
this prove that treadmills don’t work? This is obviously a ridiculous
conclusion. For my treadmill to “work” I’ve obviously got to turn it on, run
on it for a while, sweat and repeat the process on a regular basis. Buying it
is just the first step. Putting it to its intended use is another. While this may
seem obvious, a big part of the battle you’ll fight is getting people to do
what they need to do to achieve results with your product or service.
Some business owners feel like following through to implementation is not
their responsibility. That their customer should be responsible for getting
results with the product or service they have bought. However, this is shortsighted. We live in a world that’s fast paced with a lot of things competing
for the time and attention of our customers. Our goal is for our customers to
achieve results.
A customer who buys a product or service and doesn’t use it or implement
it correctly is highly likely to write it off as something that doesn’t work
and that’s the last thing we want. At best it ends up being a one-off sale and
at worst it ends up being labeled a scam. As ridiculous as someone calling
treadmills a scam because they failed to actually use it, a consumer can do
the same with your product or service.
Except now the consumer has access to online forums and social media and
will either spread positive feedback if they got positive results or negative
feedback if they didn’t. Unfair? Maybe—but the mark of winning
businesses is going to be turn-key solutions that help customers through
implementation to the desired result.
In many cases it’s going to mean you need to spoon feed them through the
process of getting results. Otherwise you’re in a low margin, commodity,
transaction style business competing solely on price and that’s a dangerous
place to be with price comparisons being only a click away.
So your job is now to find a way to sell what your prospects want but also
give them what they need. To get them to take action and do what they need
to do to get results may mean that you have to package things in a certain
way. You may need to cut the process up into manageable bite-sized pieces
so that it doesn’t seem so daunting.
You may have the best vitamin in the world, but you need to make it taste
sweet so the kids will eat it. That’s giving them what they want but also
what they need.
Leadership is an attractive quality and people want to be led. By taking the
initiative of packaging up the implementation of your product or service,
anticipating roadblocks that will be encountered along the way and having
solutions to overcoming these roadblocks shows leadership. Helping your
customers all the way through to achieving results will have a big payoff for
both yourself and them.
Not doing so will short change the both of you. Remember your goal is to
create a tribe of raving fans—not just transactions.
Create Theatre Around Your Products and Services
Peter Drucker is famously quoted as saying that the two basic functions of
every business are marketing and innovation. The word innovation often
conjures up thoughts of high tech startups in Silicon Valley, biotech
companies or engineering firms. The question often arises—can an ordinary
business that sells ordinary products be innovative? The answer is of course
yes.
A common misconception is that the innovation has to be in the actual
product or service itself. If you sell a boring or ordinary product it may
seem like innovation may not be relevant to your business or industry. It
may seem you have no option but to compete solely on price.
However, innovation can go far beyond the actual product that’s sold.
Innovation can be applied to how the product is priced, financed, packaged,
supported, delivered, managed, marketed or a myriad of other elements
related to any part of the customer experience. One area where businesses
fail spectacularly is creating a sense of theatre. Your customers don’t just
want to be serviced. They want to be entertained. Give them what they want
by creating a sense of theatre around your product.
If you’re in an “unsexy” business where your customer’s first question is
generally centered around price, you may be a bit skeptical about all this
talk of innovation and theatre. After all how can a manufacturer of blenders
really be innovative? Or perhaps a restaurant? How can these ordinary,
boring businesses be innovative? I’m glad you asked.
Blendtec is a manufacturer of blenders—ordinary blenders like the type you
would use in your kitchen at home. They’ve created an enormous viral
marketing buzz by making a YouTube video series called “Will It Blend”?
Here they have a whacky looking scientist demonstrate their product by
blending a variety of weird objects from iPhones and iPads to golf balls.
To see the Blendtec video series visit 1pmp.com
I want to cry after seeing the wanton destruction of my favorite Apple
products; however, Blendtec must be pretty happy about the hundreds of
millions of views on their YouTube channel. That kind of publicity
compared to the small cost involved in producing these videos is just
genius. Could you similarly create a sense of theatre and publicity by
demonstrating your ordinary product being used in unusual ways?
I was in the men’s room at a local restaurant in my area when I noticed this
poster on the wall:
The restaurant offers a pick up and drop off service so customers don’t have
to worry about driving under the influence. It creates convenience for the
customer and the restaurant ends up selling more of their highest margin
product—alcohol. Everyone wins.
These are just a couple of examples of ordinary, otherwise boring
businesses that are selling their products in innovative ways. Now it’s time
for you to innovate. You don’t have to invent anything original. Model,
borrow or shamelessly steal innovative ideas from other industries or
products.
Do anything other than stay a boring commodity which forces you to
compete solely on price.
Use Technology To Reduce Friction
My wife and I were recently dining at one of our favorite restaurants. The
food there is great, the staff are courteous and helpful and the location is
spectacular—right on the beach. On a cold night they have a log wood
fireplace going which really adds to the atmosphere. We’ve been dining
there for about a year or so—ever since we moved to the area. As I went to
pay for the meal, I looked over and sure enough it was still there—a tattered
hand-written sign near their credit card machine that says, “Sorry our credit
card machine doesn’t work with PINs, please sign instead. Apologies for
the inconvenience.”
I marveled at how such a high-end restaurant that has got so much right, has
got this one fundamental thing wrong. As a business owner, if there’s one
part of interacting with my customers that I want to be as smooth and
frictionless as possible, it’s the part where I get paid. Not only was this
faulty credit card machine not attended to for at least a year (that I know of)
but they clearly had no intention of implementing new, even more
frictionless payment technology such as contactless.
The rate of technology innovation over the past few years has been nothing
short of astonishing. Prior to August 2004 Google was still a private,
relatively unknown company. Prior to September 2006 Facebook was still
just an experiment and not yet open to the public. In mid-2007 there was no
iPhone and in April 2010 the iPad was still just a rumor in geek circles. We
almost can’t imagine life without some of these technologies—yet a few
short years ago they didn’t even exist. While the pace of technology
innovation has increased and continues to increase exponentially, the
purpose of new technology has remained constant over thousands of years.
Plain and simple the purpose of any new technology in your business is
to eliminate friction. We want the fastest and easiest path to the sale, while
increasing customer satisfaction. We also want to avoid situations where
technology hinders rather than facilitates business:
As customers (of usually large institutions) we’ve all had the frustrating
experience of trying to talk sense to someone who’s being held back by
technology and responds with their version of “Computer says ‘No’….” As
small business owners we must ensure technology is being used in our
businesses in ways that remove friction rather than creating it.
Technology makes our lives easier by doing the “heavy lifting” on our
behalf, whether it’s doing a complex calculation, lifting a concrete block
into place or searching through thousands of publications to find that
obscure literary reference you’re looking for. Yet sometimes it’s like we
implement technology for technology’s sake. For example I often ask
people what the purpose of their website, Twitter or Facebook page is. I
rarely get a succinct and direct answer.
Back when the iPod came out, this was the only legal way to load new
music onto it:
Drive down to the local music store and buy a CD with the
music you want.
Insert the CD into the computer and import the contents into
your computer hard drive.
Sync the iPod with the computer so it copies all the music over.
Despite this painful process, the iPod was still a huge success; however,
when Apple introduced the iTunes Store, the success of the iPod exploded
and it also laid the foundation for the iPhone and iPad. The technology
Apple introduced greatly reduced the friction between consumer and
merchant. The same can be said of Amazon, Google, contactless payment
technologies and much more.
By reducing friction, technology helps us do in a fraction of the time what
would have taken us hours, days or years to accomplish without it. So how
can you use technology to reduce the friction between you and your
customers? What tasks can you streamline and make seamless? More
importantly how can you ensure technology isn’t hindering your
relationship with your customers? Here’s how I do it.
Think of each piece of technology as an employee. What am I hiring this
employee to do? What are its key performance indicators (KPIs)? Take the
example of a website. It’s pretty common that a business will have a
website with no specific goal—just some vague notion or hope that
customers will come their way because they have put up an online version
of their brochure.
By contrast, every smart entrepreneur I know uses technology with very
specific goals in mind that are measurable. For example a website can be
used for selling a product or getting prospects to opt-in to a marketing
database. These things are measurable and can have KPI’s attached to them.
We know instantly if they’re working or not and we fire the ones that aren’t
working and we continue improving the ones that are.
Now may be a good time to rethink the various ways you use technology in
your business. Are they reducing friction? Are they doing what they were
hired to do?
Become A Voice Of Value To Your Tribe
The late great Jim Rohn said it well:
“Don’t spend most of your time on the voices that don’t count. Tune out the shallow voices so that
you will have more time to tune in the valuable ones.”
It’s certainly wise advice; however, part of delivering a world class
experience to your customers is becoming a voice of value to them. You
need to be a thought leader in your industry. Someone who is sought out for
opinion and comment. You do this by becoming a creator of content. One of
the major distinctions between successful entrepreneurs and
“wantrepreneurs” is that successful entrepreneurs are predominantly content
creators whereas wantrepreneurs are predominantly content consumers.
Even more than just content creators, successful entrepreneurs are often
prolific content creators.
To become a voice of value, you need to have valuable ideas and rarely do
valuable ideas come from nowhere and interrupt you. By seeking out other
voices of value—thought leaders in and out of your industry, mentors,
coaches and successful peers, you lay the foundation for building your own
valuable ideas.
This type of self-education is the most valuable type of education I know
of. Yet it’s important not to let too many voices in, however tempting that
may be. A few voices who speak from experience and firsthand knowledge
are infinitely more valuable than a multitude of voices that speak from
theory and opinion. While neither theory nor opinion are bad in themselves,
rarely do I find voices of value from sources that haven’t been where I want
to be.
The days of high pressure selling tactics are fast coming to an end, if they
haven’t already. In an age where everyone is connected and everyone has
access to almost all the available information, the most valuable commodity
is reputation. The reputation economy requires that you transform your
marketing from just information and high pressure sales tactics to
education-based marketing. As we’ve discussed throughout this book, the
point of education marketing is twofold.
Firstly, it’s about positioning yourself as an authority in your target market.
Everyone wants to hear from an authoritative source. By being a content
creator, you position yourself as an authority and expert in your niche.
Secondly, it’s about building relationships—becoming the trusted advisor to
your target market rather than just a salesperson. By regularly releasing
valuable, educational content to your target market, you lay the foundation
for a relationship—and after all who would you prefer to buy from, a
trusted source who has been giving you a lot of value or a stranger who
wants to make a quick sale?
Becoming a voice of value is hard work and it takes time, but the time
invested will pay dividends. In the reputation economy you can’t afford to
be a commodity or another “me too” type of business. What can you do to
start being a voice of value in your market? Could you start a blog? A
mailing list? A monthly newsletter? Regular YouTube videos?
Any one of these things could be the start of you becoming a voice of value
to your market place. Certainly doing so will set you far apart from your
competitors who are still stuck on the selling tactics that are no longer
working.
Tell Them All The Trouble You Go To
My wife and I were driving home one night after a being out to dinner and I
was looking forward to a nice relaxing end to my Saturday night when I
heard those dreaded words, “Let’s stop off at the supermarket, I just need to
pick up a couple of things.” I groaned and pulled into the parking lot.
Hating shopping more than almost anything else I tried my old classic line,
“I’ll wait for you in the car”—after all she was only picking up a couple of
things and I could use that time productively on my iPhone to catapult some
angry birds and complete that level I’ve been stuck on. But she’d have none
of it. I finally found myself in the last aisle of the supermarket, holding a
shopping basket heavy with the broken promise of “just a couple of things.”
While my wife was busy deciding between grapefruit or coconut shampoo
(that’s a marketing lesson in itself), something caught my eye—a brilliant
marketing ninja move, perfectly executed. See the picture I took of it
below:
Can you see the huge difference between the two bottles of shower gel on
the right versus the one on the left? The two bottles on the right are one of
the best uses of product packaging I’ve seen in a long time. The one on the
left is boring, safe and almost indistinguishable from the one hundred others
on the shelf.
It takes a long time to pour a full glass of Guinness. This is because of a
process called nucleation in which pockets of air from additional bubbles
diffuse through the beer. While this is now appreciated, originally there was
a lot of negative consumer opinion about the length of time required to
correctly pour a pint of Guinness from the tap. During the mid-1990s
Guinness turned all this around with a marketing campaign that sold this
negative attribute as a positive feature. They started essentially telling the
people how much effort went into pouring the perfect beer. They
emphasized this by saying “it takes 119.5 seconds to pour the perfect pint”
and “good things come to those who wait.”
Here’s the lesson—tell your audience about all the effort that goes into
delivering your product or service. In your sales copy and even in your
packaging give them the details of how you painstakingly prepare or
manufacture your product. This applies equally if you deliver services. Tell
them about your skills, how you acquired them, all the checks and balances
you have in place and how you train your staff. The backstory to your
product or service is an absolutely essential part of your marketing. Don’t
let your efforts and skill go unnoticed. It gives them an assurance that there
is substance and quality behind your product. This is especially important if
you are pitching a premium product or service.
Looking back at my photo of the shower gel above, you can see that the
backstory here takes up the entire space on the bottle. There isn’t even a
logo or company name—very smart and very good use of prime real estate!
The fact is, no one cares about your logo, company name or some
dubious claim about being the leader in your industry. They want to
know about what your product will do for them, and your backstory is
essential to this.
So there you have it, I went from being an unwilling participant in a
shopping trip to seeing a new twist on a valuable marketing principle—
good things indeed come to those who wait.
Products Make You Money, Systems Make You A Fortune
One of the major things I have always concentrated on in all my businesses
is creating systems. After first reading Michael Gerber’s book The E-Myth,
I was hooked. The penny dropped inside the business part of my brain.
Good thing too because I’ve done very well out of business systems. In fact,
this is one thing that took me from struggling and broke in business to
doing well and able to successfully exit multiple startups.
The most valuable business systems are those which are replicable. If your
business relies on a genius or superstar talent at the center of it, then it’s
difficult or impossible to replicate. That’s one of the reasons inventor
Warren Buffet only invests in “boring businesses”—ones he can
understand, that deliver a staple product, that have solid management and
generate a lot of cash—how boring!
Among his portfolio you won’t see any high risk technology startups,
highly speculative biotech companies or concepts you can’t understand.
These often rely on one or two superstars that would kill the company
should they leave. Instead you’ll see solid businesses that have systems
which deliver excellent products consistently over a long period of time.
Systems allow mere mortals to run an extraordinary business.
Once you have a business system that is replicable, people will want to pay
you large sums of money for it. This will come in many forms but the most
common are:
Customers wanting to do business with you because you deliver
consistent results
Licensees wanting to license your system
Franchisees who want to buy into your franchise system
An investor or competitor wanting to buy out your business
There are four main types of business systems you need to create regardless
of what type of business you’re in. You’re almost guaranteed to make a
fortune if you can create scalable and replicable systems in these four areas
of your business:
Marketing system – Generate a consistent flow of leads into the business.
Sales system – Lead nurturing, follow-up and conversion.
Fulfillment system – The actual thing you do in exchange for the
customer’s money.
Administration system – Accounts, reception, human resources, etc.
Support of all the other business functions.
Regardless of what business you run, these four functions will be relevant
to you.
Many small businesses get bogged down with fulfillment and
administration while neglecting their marketing and sales systems. After all,
no one is pressuring you with deadlines to get you to do more marketing.
All the seemingly urgent issues generally fall into the fulfillment and
administration functions. This causes the common situation where the
business is struggling, even though they might be offering excellent
products and services.
The problem is that customers don’t find out how good your products
and services are until they have bought from you. And if your marketing
and sales systems aren’t in place, they will never buy in the first place and
find out how good you are. It’s a vicious cycle.
Some rely on reputation and word of mouth. While these are great, it takes
a very long time to build up enough business purely on reputation. Smart
businesses on the other hand go to great lengths to perfect their marketing
and sales systems. After all there’s very few business problems that can’t be
solved with money.
So what exactly is a business system?
In short, business systems start with documented procedures and processes
that allow your business to run without you. Most often this is in the form
of checklists but video and audio training can also be an important part of it.
Collectively these materials are referred to as an operations manual and its
purpose is to capture the collective “know how” of the business.
The poster child for business systems is McDonald’s. This is a complex,
worldwide, multi-billion dollar business that is essentially run by pimply
teenagers who can’t even be trusted to make their beds. How do they do
this? They have amazing business systems. Their operations manual covers
every minute detail of the business from big things like hiring and customer
interaction to knowing exactly how much sauce to squeeze onto a Big Mac
bun and how many pickles should be on it. I should know. As a teenager, I
used to work there! Here’s a little something I found when I was moving
house a few years ago.
In my experience there are two major reasons why business systems are
overlooked by many small business owners.
The first reason is because business systems are “back office” functions.
Unlike the latest product offering, sales techniques or other highly visible
aspects of your business, good business systems are considered by some as
boring. While building them may indeed be boring, the incredible power
they give you is anything but.
The second major reason that business systems are neglected is because of a
perceived lack of urgency. When a business is small or just starting out,
there are seemingly much more important things to do like sales,
administration and order fulfillment. With all of these important things
vying for the increasingly scarce time of the business owner, business
systems seem like something that can be put off until later. However, just
like any other accumulation of neglect over time, it rarely ends well.
It’s a sad situation when a business owner goes to sell their business and
finds out after putting in many years of hard work, that their business is
worthless. It’s not so much that the business itself is worthless, it’s that they
ARE the business and without them there is no real business to sell. In cases
like this they can’t sell it for any kind of reasonable sum beyond the value
of their stock and maybe a small, nominal amount for “good will.”
There are numerous benefits to implementing systems in your business.
Here are some of the most important.
It builds a valuable asset. It’s nice if your business gives you a great cash
flow to fund your lifestyle. But wouldn’t it be fabulous if one day when you
decided it was time, you could sell your business and have the biggest pay
day of your life? You can only do this if you build the value of the business
and that can only happen if it is a system that can continue running without
you.
Leverage and scalability. Systems give your business the ability to
expand. You can replicate your business in other geographic areas yourself
or by franchising or licensing the rights to your business system. Many
fortunes have been made this way.
Consistency. Consistency is one of the keys to delivering an excellent
customer experience. You may not like the food at McDonald’s but one
thing you can say about them is that wherever you go they deliver a very
consistent experience.
Lower labor costs. When you and your staff don’t have to waste time and
effort re-inventing the wheel each time, this improves your efficiency and
reduces your labor costs.
The Power Of Systems—The Ability To Fire Yourself
Let me ask you a question. If you went overseas for six months leaving
your business behind, when you came back would it be in better or worse
shape than you left it? Would you even have a business left to come back
to? If you answered in the negative to either of these questions, then it’s
likely you don’t have a business—rather you ARE the business. Many small
businesses, especially when they are sole operators or where all the partners
work in the business, make the mistake for reasons outlined above, of not
thinking about systems. After all the business is small and the founder or
founders perform all roles. Unfortunately this thought processes dooms
them to staying small and remaining a prisoner in their business.
They often find themselves in a catch-22 situation. They have no time to
work on the business because they are too busy working in the business.
And they can’t get away from the business because they haven’t developed
documented systems and processes. So they’re stuck in a business that has
become a self-made prison. Don’t get me wrong, they may be financially
successful. Their business may be thriving with a loyal base of customers
but the problem is they are stuck—shackled to their business.
If they were to leave or get sick for an extended period of time, their
business would cease to exist. The problem is that all the “know how” of
the business is stuck in a silo between their ears. The only way out is to
make time to create and document these business systems. Thankfully this
daunting process is not that difficult when we break it into chunks.
Our goal is to eliminate the biggest bottleneck from your business—YOU.
Even if you’re not looking to get out of your business immediately, the day
will come when you need to take time off, want to go onto another venture,
employ more staff or even sell your business. When the time comes you’ll
be thankful you followed this advice.
Your job as an entrepreneur is to be an innovator and a builder of systems.
Even if you are a sole operator right now, it’s important to think long-term
and think big. The first part of the process is to think of your business as
being ten times the size it currently is. If that were the case what roles
would exist? For example, would you have someone taking care of the
bookkeeping, someone else in shipping, another person in sales, a
marketing person, etc.? You get the idea.
If you’re a sole operator or a small business, it’s not a problem if you
currently perform all or most of the roles in your business. But it is a
problem if you currently have to perform all the roles in your business. If
you are indispensable, you are a bottleneck and the business will only move
as fast as you can.
We need to start looking at each role in the business. Now when I say role I
don’t mean person. For example, in a small business the same person might
be both on reception and doing the bookkeeping. Now even though one
person does both of these roles they are still two separate roles and if the
business were larger these two roles would be performed by different
people. In an even larger business a single role might be broken up even
further. For example, there might be a separate bookkeeper for accounts
payable and accounts receivable. Once you’ve identified all the different
roles in your business, you can start defining what tasks each role performs.
For example what are all the tasks we expect the person performing the
bookkeeping role to do? These tasks may include:
Invoicing customers
Bank reconciliation
Following up unpaid invoices
Entering supplier invoices
Etc.
Now once we’ve identified all the roles within the business and defined
what tasks each role does, we now need to document exactly how each task
should be performed.
One of the best tools you can use in building business systems is checklists.
Checklists are easy to create, follow and track. Once you’ve created a list of
all the tasks performed in your business, you are ready to start documenting
exactly how these tasks are performed.
A simplified example for the task “Following up unpaid invoices” could
look something like:
Run accounts receivable report
For any invoices that are 7-13 days overdue send a friendly
reminder
For any invoices that are 14-27 days overdue call the customer to
remind them to pay
Forward any invoices that are more than 27 days overdue to our
debt collection agency
See how we’ve broken the task down into small easy-to-follow steps? Now
granted the above is a simplistic example for illustration purposes. In fact
some of these steps include subtasks which would also need to be
documented—for example how do you run an accounts receivable report?
So to recap—it’s essentially a three step process:
1. Identify all of the roles in your business
2. Define what tasks each role performs
3. Create checklists for properly completing these tasks
Now if you wanted to delegate or outsource a task, it’s going to be so much
easier to hand the person a step-by-step process rather than just giving them
ad hoc training and watching over them constantly to make sure they do it
right.
Now scaling your business becomes super easy—just add people. Once you
see the awesome power of systems in your business you’ll never go back to
the old way of doing things.
As you can see, this process is a way of getting the processes you already
have in place documented. Currently all these processes may be stored in
your head and accessible only to you. Documenting these business systems
will be the only way to easily scale your business and let it run without you.
Importantly this also ensures that your customers get a consistent
experience. If, or rather when, staff join or leave your business you want to
ensure that customers still get the same, world class experience. You can’t
leave this to the discretion of individual staff. It has to come from the
business and having documented systems is by far the best way I know of
doing this.
Your Ultimate Customer
Neil Armstrong once said, “You only have to solve two problems when
going to the moon: first, how to get there; and second, how to get back. The
key is don’t leave until you have solved both problems.”
In the excitement of starting a business, it’s common to spend a lot of time
thinking about “how to get there,” that is become successful, but often
what’s given less thought is “how to get back”—i.e. the exit strategy.
When starting a business it’s important to think clearly and plan for how
you will exit. This sounds obvious but is something many business owners
don’t think about until it’s too late. How’s it going to end? Who will your
buyer be? Why will they buy your business? Will they buy you out for your
customer base, for the revenue, for the intellectual property? How will they
get a return on their investment? Answering some of these questions will
help you visualize exactly who your buyer is and why they would buy you.
It’s crucial to think about these things at the beginning because they will
help you shape exactly how you engineer your business and what you focus
on. If your goal is to exit a business for $50 million then everything you do
in your business can be framed with the question—will this help me get $50
million?
You’ll rarely make as much money running a business as you will selling
one. The person or company who puts you out of business is your ultimate
customer and satisfying them will result in the biggest pay day you’ll ever
receive. Countless fortunes have been made this way. Sadly a very large
number of businesses are worthless and eventually just get wound down
because the owner wants to or has to move on and has not been able to
secure a buyer. This is why it’s so crucial to structure things in a way that
ensures you’re on the receiving end of a big pay day rather than faced with
the realization that your years of hard work have come to naught as far as
the value of the business is concerned.
Over the years I’ve sold multiple businesses and now as an angel investor,
I’m on the other side of the table—evaluating businesses I feel would be
worth buying into. I can tell you one of the most important things a
purchaser looks for and that you need to satisfy is whether you HAVE a
business or whether you ARE the business. There’s an enormous difference.
If your business can’t be operated without you, then it’s not a saleable asset
and you’re stuck—regardless of how good or profitable it is. That’s why
business systems are so crucial. Having documented systems is what
enables the business to run without you.
Next you need to consider who will buy your business and why. Will it be a
competitor? Someone new to the industry? Someone in your industry but in
a different niche? Structuring the business with a logical acquirer in mind is
smart and it’s something that’s very attractive to investors. It shows them a
clear path to exit and return of their invested capital. Even if you don’t plan
to take on investors, as the owner of the business, you should think of
yourself as an investor. You wear the entrepreneur hat by day but at night
the investor hat should come on and you should be questioning when that
return on invested capital is going to occur and how.
One of the most common objections I hear from owner-operators is, “I love
what I’m doing and I don’t intend to sell.” That’s great if what you love
doing is making you a good income—relatively few people enjoy such a
lifestyle. But whether you like it or not, one day your circumstances will
change. You may get bored, get sick, want to retire, see a better opportunity,
etc.
When, not if, that time comes and you do decide it’s time to sell, you want
to be able to walk away with a check that has a lot of zeros on it rather than
have to wind it all down and possibly end up in debt or sell for a pittance. If
you start thinking about structuring for exit at the time you need to exit,
you’re toast. It’s way too late and you’re very unlikely to achieve a
favorable result. You need to start with the end in mind. Start thinking about
your ultimate customer and what would motivate them to write you that
check which becomes your biggest pay day.
Chapter 7 Action Item:
How Will You Deliver A World Class Experience?
Fill in square #7 of your 1-Page Marketing Plan
Chapter 8 – Increasing Customer Lifetime Value
Chapter 8 Summary
Increasing the lifetime value of existing customers is where the real money
is made. To do this you need to have strategies and tactics for getting
existing customers to do more business with you. You also need to know,
manage and continually improve key numbers in your business.
Highlights covered in this chapter include:
Why your existing customer base is a rich diamond mine and
how to realize its value.
Five major ways to make more money from existing customers.
How to win back lost customers or reactivate customers that
haven’t bought from you recently.
The critical marketing metrics you must know and manage.
An example where slightly improving three key numbers
generated a 431% improvement to the bottom line.
Why not all business growth and revenue is good and how to
avoid “polluted revenue”.
The four categories of customers in your business and why you
shouldn’t treat them equally.
Acres Of Diamonds
As entrepreneurs we’re often focused on the kill. We’re closers, hustlers
and we like the taste of fresh blood in our mouths. That’s the sexy stuff
which we discussed in detail in the first six chapters of this book. It’s the
“front end” offer which brings the new customer through the door.
In this chapter I want to focus on the “back end.” That’s the stuff that makes
your existing customers buy more. I know this isn’t as sexy as discussing
positioning, closing techniques or cool marketing strategies to get new
customers but trust me this chapter is where the real money is made.
Russell Conwell’s classic speech “Acres of Diamonds” is about a man, Ali
Hafed, who wanted to find diamonds so badly that he sold his farm, left his
family and went off on a search that took him all over the world. His search
was futile and ultimately led to nothing but his own demise. Meanwhile the
new owner of his farm discovers “the most magnificent diamond mine in all
the history of mankind” right there on the farm that he had purchased from
Ali Hafed.
To hear an audio of the “Acres Of Diamonds” speech or read a
transcript visit 1pmp.com
The moral of the story being “dig first on your own property when seeking
treasure.” I think this applies perfectly to marketing. Most businesses have a
rich “diamond mine” in the form of existing customers which remains
largely untapped, yet they leave this “family” of existing customers after the
first few transactions and spend all their marketing energy, money and
resources on seeking new sources of revenue.
While much of this book rightly focuses on getting new customers, which is
vital, that’s only one of the two ways to grow your business. The other way
is to make more from existing and past customers. Most businesses,
especially if they’ve been around for a while, are sitting on a veritable
diamond mine. Increasing revenue and more importantly profit from
existing and past customers is far easier than getting new ones. A widely
quoted statistic10 is that a person is 21 times more likely to buy from a
business whom they’ve bought from in the past compared to one they’ve
never purchased from. That puts you at a huge selling advantage when it
comes to your current and past customers. The real profit is in figuring out
how to sell more to existing and past customers and increasing their lifetime
value. Let’s look at five major ways to do this.
Raising Prices
One of the most overlooked ways of increasing the lifetime value of a
customer is simply by raising prices. Most business fear that raising prices
could lead to a customer exodus or backlash of some sort. While it does
need to be handled strategically, you’ll generally find your customers are far
less price sensitive than you imagine. Especially if you’re positioning
yourself correctly as discussed in Chapter 6 and delivering a great customer
experience as discussed in the previous chapter then most customers will
happily accept them and depending on how you transact with your
customers, some may not even notice.
Reverse roles for a moment and think back to your own purchasing habits,
how often have you caught yourself just swiping your credit card without
even looking at the total, let alone itemizing the whole bill? Personally, I
find this is very often the case, especially when it comes to lower value
goods and services. Even though I visit my local cafe often, I don’t know
exactly what they charge for a coffee. Even more importantly if they raised
their prices by ten or twenty percent I’d likely be none the wiser. I just tap
my card and wait for it to be served. For the owner of the cafe though, I
suspect a ten or twenty percent increase on the bottom line would be
significant—possibly the difference between struggling and thriving.
When was the last time you actually increased your prices? If it’s been a
while then it may be time to reassess. Here’s the thing—if you hold your
prices constant for a long time, in real terms you’re effectively lowering
them because inflation makes the same nominal amount of money less
valuable over time. Inflation is the sustained increase in the general price
level of goods and services over a period of time. Think about the price of
milk or bread when you were kid compared to now? That’s inflation at
work. By not increasing your prices over a long period of time you’re
effectively giving yourself a pay cut.
The key to raising your prices in a way that makes it palatable to your
clients is giving them a reason why. Explain to them the increases in quality
of your product or the increased input costs that you’ve borne. Explain to
them the benefits they’ve already received from your offering and how
they’ll benefit from your future innovations. Some percentage of customers
may leave you despite your explanation; however, they tend to be the
lowest value customers. A customer won on price will be lost on price. If
it’s done right, the increase in profit gained by raising your prices will
outweigh any lost revenue from price sensitive churners.
If you’re particularly concerned that your existing customers won’t tolerate
a price increase, you can try “grandfathering.” This is where the price
increase is only applicable to new customers and existing ones are
“grandfathered” in at the current price level. If you do this, ensure you tell
your existing customers what you’re doing as this can reinforce to them
what a great deal they’re getting and increase their loyalty to you since
you’re making them feel special.
Upselling
“Would you like fries with that?” is responsible for hundreds of millions of
dollars to McDonald’s and a similar upsell strategy could be worth a fortune
to you. Upselling is the bundling of add-ons with the primary product or
service being sold.
In Robert Cialdini’s classic book Influence: The Psychology of Persuasion,
he discusses the contrast principle. The contrast principle comes into play
when two different things presented sequentially feel more different than
they really are. For example if you lift a heavy object first followed by a
light one, you’ll judge the second object to be lighter than it really is. If
your neighbor is having a really loud party all evening, the peace and quiet
you suddenly appreciate more when it’s over is the contrast principle in
effect.
The exact same thing applies to price. When prospects buy the primary
“expensive” item first, the suggested add-ons feel comparatively cheap.
Men who’ve shopped for a suit will know exactly what I mean. You get to
the counter with the suit you’ve picked out expecting to pay the price on the
tag. In reality, your shopping journey is just beginning. The sales clerk now
starts discussing your shirt requirements. Normally you might have balked
at such expensive shirts but in contrast to the price of the suit, the shirts
seem reasonably priced. Five shirts later, the sales assistant is
complimenting your excellent taste in shirts and helping color match ties to
go with them. When you finally think it’s over, out come the socks and
belts. When all’s said and done your transaction value has possibly doubled
or tripled.
Two things work in your favor with upsells. First, the contrast principle as
already discussed. Second, because the prospect was not specifically
shopping for your suggested add-ons they’re much less likely to be price
sensitive to the item being attached. Both of these factors mean much
higher margins for you. While I don’t recommend it as a strategy, it’s not
uncommon for the primary product to have thin margins with the real profit
being in the upsells. Consumer electronics are often sold that way with
razor thin margin on the core products and most of the real profit coming
from add on accessories like cables, batteries and the extended warranties.
A great way of framing an upsell is, “most customers who bought X also
bought Y.” You see this done well in large ecommerce stores like Amazon.
People want to participate in social norms. By telling them what “normal”
buying habits are, you tap into the powerful, deep-seated psychological
human desire to fit in.
Some mistakenly think that when a customer has just bought, they need to
be given a break before attempting to sell to them again. Nothing could be
further from the truth. When the prospect is “hot and heavy” and in the
buying state of mind, they’ll be much more receptive to other offers to buy.
This is your opportunity to bundle in a high margin add on. It gives the
customer a better result and instantly increases your customer lifetime
value.
Ascension
Ascension is the process of moving existing customers to your higher
priced, and hopefully higher margin, products and services. It’s the ISP
selling you the higher speed Internet plan or the car dealer selling you the
next model up. Ascension campaigns should be a constant part of your
marketing process. Very often customers stay on existing products or
services even though they can benefit from and afford to move up. This is
inertia working against you.
Other than just making you more profit, ascension campaigns help you
combat inertia and can prevent customers from switching to a competitor.
When customers independently consider moving up because your current
product or service is no longer meeting their needs, they will often look at
what your competitors have to offer and blame you for the poor experience
they’re having with your product or service. All they see is the Internet
service you sold them is frustratingly slow or the car you sold has terrible
fuel economy. It may well be their fault for choosing that cheap option three
years ago but it’s your fault and your problem if you lose them because you
weren’t proactive enough to keep up with their needs.
Equally bad is only one pricing option or only one option for each product
or service category. Having only one option means that you’re leaving huge
sums of money on the table. At minimum you need to have a “standard”
and a “premium” option in each category. In Chapter 6 we discussed the
importance of also having an ultra high ticket item among your product
mix.
These types of offerings can make up a very large percentage of your net
profit even if you only sell a small number of units. It also attracts more
affluent customers who shop based on prestige, service and convenience
rather as opposed to low value customers who tend to be price shoppers. As
mentioned in Chapter 6, a general rule of thumb is that about ten percent of
your customers would pay you ten times more and one percent of your
customers would pay you one hundred times more. Having only a single
option leaves an enormous amount of money on the table.
Ultra high ticket items also help you benefit again from Cialdini’s contrast
principle. Your less affluent clients will see your standard products and
services as being much more reasonably priced by comparison, while
perhaps retaining many of the core features and benefits of the ultra high
ticket item.
Lastly it will give clients an upgrade path. Something to aspire to. People
always want what they can’t have and having ultra high ticket items in your
suite of products and services can keep alive their desire to buy from you in
a future where they’re in a better position to do so.
Frequency
Increasing the frequency with which your customers buy from you is
another solid strategy for increasing lifetime value. There are many
strategies for doing so but here are a few of my favorites.
Reminders. People live busy lives. They don’t always remember to do
things in a timely manner even when it’s of benefit to them. Send reminders
by post, email or SMS to remind them to do business with you again. The
sending of regular reminders can be fully automated, so take advantage of
technology to do some of the heavy lifting for you. Some worry about
seeming too pushy. However, if you sell something of value, which benefits
your customers, then you do them a great disservice by not selling to them
regularly enough. Great candidates for reminder notices are products and
services whose benefit or usefulness expires over time. Examples include
car servicing, massages, ink cartridges, pet vaccinations and much more.
What if you sell a product or service that has a longer lifespan, like for
example real estate, cars or financial planning where you don’t really know
when the customer might be likely to buy? We covered this in Chapter 5.
Keep in touch and continue building and developing a relationship through
your nurturing system. It could be as simple as having a monthly postcard
or newsletter. This keeps you top of mind so when they’re ready to buy
again you’ll be top of mind.
Give them a reason to come back. My wife was recently shopping at a
specialty shoe store which is almost an hour drive from our house. When
she paid for her purchase she was given a voucher worth $30 for every
hundred dollars she spent. She spent about $300 and ended up with a $90
voucher. The voucher was given to her at the checkout when she paid and
had an expiry date that was about six months into the future. However,
more importantly it only became valid from the day after its issue, so you
couldn’t just walk back in the store and use it immediately. You had to
come back another day to use it. She came home and told me about all the
amazing bargains she’d found out shopping as wives tend to do. Next she
told me, “They had some shoes I think you’d like and I’ve got this voucher
here for $60. It would be a shame to waste it.” Guess where I was dragged
the next day? With half my Saturday afternoon gone trying out shoes that I
didn’t know I needed we found ourselves at the register handing over
another $200. The cashier told us the good news. We’d spent $200 so we
were entitled to a $60 voucher. What happened next is a lesson in human
psychology worth the additional $200. I watched my wife, who was tired of
driving back and forth to this far flung shoe store, almost plead with the
cashier not to give her the $60 voucher as she didn’t want to drive all the
way back and she also didn’t want to “waste” the $60 voucher either. The
cashier smiled and apologetically said it was store policy and that she had to
give out the vouchers. With one simple tactic, the store had almost doubled
the initial transaction value and created psychological pain associated with
not coming in for repeat purchases. How could you use a similar tactic to
encourage repeat business? Note this is completely different to discounting.
This encouraged, almost forced future purchases.
Help them buy repeatedly with subscriptions. Some products or services
like Internet access, insurance or electricity supply lend themselves
naturally to a subscription business model. However, you need to think
outside the square and take advantage of a revolution that’s going on in the
way that traditionally non-subscription products are being sold.
The Dollar Shave Club turned cheap disposable razor blades into a
subscription service. How brilliant is that! Not only have they created
enormous value and convenience for their customers but they now get to
charge for their product every month until you say stop. Other product
categories have followed suit enabling you to buy monthly subscriptions to
cosmetics, underwear, fruit, socks, pet food and much more.
A big heavy bag of dog food now arrives automatically on my doorstep
every six weeks. No more trekking to the pet store only to find it’s out of
stock. No more loading it in and out of the car and hauling it back home.
It’s automatic, I don’t ever need to think about it again and my supplier is
presumably thrilled with the predictable income stream. If you sell
consumables of any type, couldn’t you turn your product into a subscription
service?
The side effect of this is that the customer’s price-shopping radar generally
turns off when buying products by subscription. Whereas previously I
might have been tempted to look at discount offers on the particular brand
of dog food I buy from the various pet food retailers in my area, now my
dog food shopping radar is off. I know it’s automatically taken care of every
six weeks so why would I bother looking for it? Sure your customer might
do a market check every so often but on a subscription service they don’t
need to make a purchasing decision every time. If you’re delivering extra
value in the way of convenience, your customers likely won’t even care that
you’re charging them more. People understand that convenience has a price
and for the most part they’re ok with that.
Reactivation
If you’re like most businesses you’re sitting on a gold mine in the form of a
list of past customers. Past customers have trusted you enough to cross the
chasm between prospect and customer. They may have stopped buying
from you for any number of reasons including a poor experience, better
pricing elsewhere, moving out of the local area or simply apathy because
you didn’t give them a compelling reason to come back.
This list of past customers is of tremendous value because much of the hard
work involved in getting prospects to know you, like and trust you has
already been done. Now you just need to run a reactivation campaign to win
them back. This is great for getting some quick wins and bringing in “fast
cash.”
Here are the basics of running a reactivation campaign:
1. Start by going through your customer database and pulling out
names of past customers whom you haven’t heard from or who
haven’t bought from you for a while. Obviously, you want to
filter out any bad customers who you don’t want back.
2. Create a strong offer to induce them back to you. A gift card,
coupon or free offer with a strong call to action usually works
well.
3. Contact these past customers and ask them why they haven’t
returned. If it’s something you did wrong and if it’s appropriate
offer an apology and describe what corrective action you’ve
taken. If they reactivate and start buying from you again, follow
up with them afterwards to make them feel special.
Some great reactivation campaign themes and headlines are “We Miss You”
or “Have We Done Something Wrong?” You can then describe to them how
you’ve noticed they haven’t bought from you in a while and you’d love to
have them back and show them how special they are to you. You get the
idea.
In an ideal world reactivation campaigns should be unnecessary but the
reality is from time to time you’ll mess up, lose out to a competitor or just
get complacent with your marketing. A reactivation campaign can reboot
the relationship and contribute significantly to increasing customer lifetime
value.
Numbers Tell Us The Whole Story
I love a good story and storytelling is a big part of what we do as marketers.
But when it comes to measuring and managing the success of your business,
stories often obfuscate the truth.
If you’ve ever watched the television show Shark Tank you’ll know exactly
what I mean. In case you’ve never watched it, Shark Tank is a reality show
where entrepreneurs pitch their business to a group of wealthy investors
(referred to as sharks) in the hope of securing them as an investor. It always
starts in the same predictable manner. The entrepreneur introduces their
product or service, describes what problem it solves and usually
demonstrates it. They usually end the presentation by telling the sharks what
a great investment opportunity their business is. The sharks will then
respond with a few softball questions and then inevitably comes the one
that’s on the mind of every prospective investor, “Tell us about your sales
numbers.” That’s usually when most of the amateur entrepreneurs squirm
and start telling a long convoluted story about why there are very few or no
sales.
You also see great examples of these sort of weasel stories in many company
prospectuses and investor reports. They dedicate pages upon pages telling
their story. They brag about how great their products and service are,
describe what great future prospects they have and back it all up with
beautiful graphs illustrating a healthy growth trajectory. Then you get to
their actual numbers and it’s a sea of red. When I’m in the mood for some
good fiction I skip the Stephen King novels and head for one of these reports
instead. They can be a very entertaining read!
You’ve likely heard the often quoted management maxim, that what gets
measured gets managed. Marketing is a game where you need to constantly
measure, manage and improve your numbers. You don’t need a long
convoluted story. You just need the numbers because numbers tell us the
whole story.
Your doctor just needs several key numbers and they pretty much know the
state of your health. Your accountant just needs a few key numbers and they
know the state of your business. The same is true of your marketing. You
need to know and continually improve your numbers. In a moment I’ll
demonstrate to you why this is so powerful but for now here are some of the
key numbers you need to know:
Leads. This is the number of new leads that come to your
business (lead capture and lead nurturing was covered in Chapters
4 and 5).
Conversion Rate. This is the percentage of leads you converted
into paying customers (we covered sales conversion in Chapter
6).
Average Transaction Value. This is the average dollar amount
that leads spend with you (we looked at several ways of
increasing this number earlier in this chapter).
Break-even point. This is the dollar amount you need to make to
keep your doors open. It encompasses such things as rent, staff,
utilities and any other ongoing operating expenses.
All of these numbers are typically measured on a monthly basis but
depending on the size of your business you could measure them weekly or
even daily. Now let’s look at an example that demonstrates how powerful
measuring, managing and improving these numbers is.
Imagine you run an online store that sells consumer electronics. You import
the goods from China and have a healthy margin of 50% on each item listed
in your online store. You get on average 8,000 visitors to your website each
month and of these an average of 5% end up making a purchase. On average
each customer spends $500 with you. Your break-even point which
encompasses operating expenses such as running the warehouse, employing
staff and hosting the website is $90,000 per month. So your monthly
numbers look like this:
Now all we want to do is focus on improving three key numbers. We want to
improve Leads, Conversion Rate and Average Transaction Value by just
10% each.
So you make your ad copy more compelling and instead of 8,000 visitors to
your website, you get 8,800. Then you have an outrageous risk reversal
guarantee which lifts your conversion rate from 5% to 5.5%. Lastly on your
checkout page you have an upsell offer which lifts your average transaction
value from $500 to $550. Your margin stays the same at 50% and fixed
running expenses remain the same at $90,000 per month.
The numbers before and after your marketing optimizations look as follows:
See what’s happened? We’ve improved just three key numbers by only 10%,
yet the result to the bottom line is a staggering 431% improvement. In the
first scenario, the business owner was taking home $120,000 annually before
taxes. In the second scenario, he takes home $517,000 per year. Do you
think that would have a massive impact to his life? Without a doubt it would.
Granted this is a very simplistic example and we’re using cowboy math for
the purposes of demonstration. However, it quickly becomes clear what a
huge leverage point marketing is within a business.
Further optimizations could be made by increasing the gross margin through
price increases or better buying power with the wholesale supplier. Perhaps
some operating expenses could be cut through better automation and
business systems.
The key point being that measuring, managing and improving your key
marketing numbers even by an incremental amount can have massive impact
on the end result. Small hinges swing big doors.
There are several other key metrics you need to measure and manage. As
discussed in Chapter 3, Customer Acquisition Cost is an important metric
that helps you figure out how much you spend on media spend on average to
attract and convert a new customer. This in turns helps you figure out what
kind of return on investment that particular media is giving you.
As discussed earlier in this chapter, your business should have a subscription
or recurring element to it. If it doesn’t yet, that’s something you need to
implement urgently. Here are some of the key metrics you need to measure
and manage in a subscription or recurring business model:
Monthly Recurring Revenue. Your total recurring billings. You
want this number to be growing over time. If it’s flattening out or
declining you may have either a churn problem or a customer
acquisition problem.
Churn Rate. This is the percentage of recurring customers that
cancel subscriptions or stop buying from you. Filling the bucket
is great but not if it’s leaking at a rapid rate.
Customer Lifetime Value. The key metric that that this chapter is
focused on. Increasing this number is where the money is.
Keeping a constant watch on your key numbers is one the best ways of
managing your business and making sure that things are heading in the right
direction. It avoids nasty surprises on quarterly or annual financial
statements.
I highly recommend you keep track of these marketing metrics and any other
significant numbers in your business on a company dashboard. A business
dashboard can be as simple as whiteboard with the relevant numbers
manually updated on a monthly or weekly basis or it can be more
sophisticated like a real time screen or internal company web page.
Commercial software solutions like Geckoboard can automatically pull data
in realtime from a variety of sources. This makes measuring and managing
your key metrics easy. Other metrics you may want to include on your
dashboard could be Net Promoter Score if you measure it or number of
customer complaints.
A business dashboard is a great early warning system for problems and can
keep you and your team excited, motivated and accountable. Smart business
owners also tie incentives to hitting key metrics. You might do something
informal like taking the team out to dinner if the churn rate stays below a
certain threshold or you might treat it more formally by tying performance
reviews and bonuses to certain metrics.
Measuring, managing and improving your numbers daily, weekly or monthly
is key to building a high growth business.
Polluted Revenue And The Unequal Dollar
Most entrepreneurs are driven and in the drive for growth and revenue
sometimes not enough thought is given to the quality of that revenue. In
this section I want to introduce you to the concept of the unequal dollar. It’s
absolutely key to helping you create a tribe of raving fans rather than
transactional customers. This is absolutely key to your success. The
difference between a customer who is just a transaction and one who is a
raving fan is huge, even if the nominal dollar amount of the transaction is
the same. This is because not all revenue is good and not all growth is good.
For example, cancer grows but it’s not the type of growth you want. Equally
lethal to a business is growth of the wrong type of revenue.
Businesses need revenue like our bodies need air and water. Small
businesses are often under resourced so it’s forgivable that they’re not too
discriminating about where they take their revenue from. They’re often in
“eat what you kill” mode. If you drink polluted water or breathe polluted air
you’ll get sick. Similarly if you take on toxic customers you’ll generate
polluted revenue, which makes your businesses sick.
In other words, a dollar from suboptimal or toxic customers isn’t equal to a
dollar from a raving fan customer. This principle of the unequal dollar is
vital to understand. Generally your customer base can be divided up into
four categories11
:
The Tribe. This is a set of customers that are raving fans, supporters and
cheerleaders who promote your business and are actively conspiring for
your success. This is healthy revenue that builds your business. Growing
these types of customers is the key to being successful and achieving hypergrowth.
The Churners. Churners are customers who really can’t afford you on the
basis of either time or money. Because they can’t afford you, you might
have engage in overly aggressive sales and marketing tactics, overhyped
promises or heavy discounts to get them to sign up. Then when they
discover they’re not a good fit, they churn out. They leave you and if you
have too many of these, you catch a “churn flu,” which can be fatal to your
business. These types of customers can also create brand problems for your
business as they often turn around and go back out into the marketplace and
tell everybody that you’re a liar or label you as dishonest.
The Vampires. Unlike Churners, Vampires can afford you but you can’t
afford them. They consume a massively disproportionate amount of
resources compared to your average customer while paying the same
amount as other customers do. They usually aren’t content to work with the
teams that you have in place. They always need to talk to the CEO and they
often terrorize and manipulate the CEO into terrorizing the team in their
interest. They just suck the blood right out of your business.
The Snow Leopard. This might be your biggest customer, one who makes
up a very large chunk of your revenue and pays you a lot of money. They’re
exquisite and beautiful but extremely rare and almost impossible to
replicate. Most businesses have a client like this. They also tend to be
customers who are fun to work with. They’re so wonderful that the team
and the leaders in the business love to spend a lot of time with them.
Overall they’re a bad investment because they’re so rare and therefore don’t
represent a great growth strategy.
Another more formal way to categorize customers is using the Net
Promoter Score (NPS). NPS has been created to measure customer loyalty
and satisfaction. In NPS terminology customers are either promoters,
detractors or passives. NPS can be as low as -100 (everybody is a detractor)
or as high as +100 (everybody is a promoter). An NPS that is positive (i.e.,
higher than zero) is felt to be good, and an NPS of +50 is considered
excellent. The Net Promoter Score is calculated based on responses to a
single question, “How likely is it that you would recommend our
company/product/service to a friend or colleague?” The score for this
answer is most often based on a scale between one and ten. Those who
respond with a score of 9 or 10 are labeled Promoters. Those who respond
with a score of 0 to 6 are labeled Detractors. Those responding with 7 and 8
are labeled Passives. Often the scoring is then followed with an open-ended
question asking for reason behind the customer’s rating. These reasons can
then be used by management for follow-up action.
Whether you use more formal metrics like NPS along with labels like
Promoters and Detractors or you use less formal techniques and labels like
Tribe, Churner and Vampire to categorize your customers, it’s important
that you don’t treat all customers and revenue equally. Don’t let yourself get
fooled into thinking that all revenue is good.
Fire Problem Customers
Firing customers? That seems a very foreign concept to most business
owners who are desperately trying to find new customers and new business.
It may also seem bizarre that in a book all about marketing and customer
acquisition that we have a section dedicated to firing customers. However,
as discussed in the previous section, not all dollars are equal and not all
revenue is good. You’ll sometimes get to a stage where you know that
you’ve got toxic customers and polluted revenue. You know it’s sucking the
life out of your business and you can’t let it go on anymore.
Not firing problem customers is likely costing you huge amounts of time,
money and aggravation. You’ve likely heard that old business cliché, “the
customer is always right.” I’m here to tell you the customer isn’t always
right. Rather the right customer is always right. Taking this cliché in its
original form seriously will mean you live your business life as a doormat
spending your time trying to please or retain problem customers like
vampires and churners. Unlike red wine, problem clients don’t get better
with time.
First a clarification. I’m not talking about customers who have a legitimate
cause for complaint. Customers who have a genuine complaint are valuable
intelligence assets. It’s often these sort of customers that can help you
uncover weaknesses in your business. They may even reveal something that
was causing you to lose business without you knowing because other
unhappy customers didn’t complain—they simply stopped buying from
you. Fixing legitimate complaints from customers can strengthen your
relationship with them and makes your business more robust. A customer
who sees you responding to, and resolving their genuine complaint is far
more likely to buy from you again and recommend you to others. They feel
validated, respected and taken seriously.
Let’s define problem customers. For whatever reason there’s a percentage
of the population who are never happy. They tend to fall into the categories
of detractor/vampire/churner. They’re always whining, dissatisfied and
feeling like everyone’s out to take advantage of them. You could shower
them with gold and provide your product or service for free and they’ll find
something to complain about. These people are like a cancer sucking the
life out of you and your business. I suggest you cut them loose as quickly as
possible.
I have without exception, across multiple businesses and industries, found
that it’s the low value, price sensitive customers who complain the most,
waste huge amounts of your time and who always need to be chased for
payment. The high value customers who are the most profitable tend to pay
on time, treat you with respect and value your services. It seems
counterintuitive but it’s been proved true in every business I’ve ever been
involved with. I suggest that as part of your regular housekeeping activities,
you fire these low value, problem clients.
As business owners we often get faked out by thinking as long as we keep
the gross sales numbers high, there’s bound to be enough net leftover to
make it all worthwhile. However, if you ran a true profit and loss statement
on these problem clients, which took into account all the time you spend
chasing and appeasing them, you’d find very often that you make very
little, if any, real profit on them. In fact most of them would likely result in
a net loss when taking into account the low value they bring coupled with
the time and energy needed to deal with them.
Another important reason you should fire low value customers is because
apart from sucking up your financial resources, they are also causing you to
lose out on opportunities. Firing problem customers frees up valuable time
and resources which can be used for focusing on and building value with
existing tribe members, as well as acquiring new ones. With the toxic
customers taking up all your time and energy, it’s often the high value,
respectful customers who suffer a lack of attention. Don’t give the squeaky
wheels oil. Replace them.
Your tribe members are like the proverbial “good wife” taking care of
things at home and keeping things running while the husband’s out at strip
clubs looking for love in all the wrong places. Your tribe are the ones that
keep your lights on and stick with you and promote you despite you
focusing on trying to appease vampires, trying to retain churners and
throwing your time and resources at snow leopards.
Firing the detractors gives you the time needed to show more love to your
high value tribe members. This builds loyalty and can very quickly result in
an increase in lifetime value and healthy revenue that far outweighs the loss
of the polluted revenue.
Another beneficial side effect of firing problem customers is that it creates
scarcity without being disingenuous. It sends a message that you only have
a limited supply and that you are very selective about who you’ll work
with. With limited supply, people have to play by your rules and pay
accordingly.
Business should be fun. If you allow problem customers to suck the fun out
of it, then you’re losing out on one of the major benefits of running your
own business. If it’s no longer fun, no amount of money can compensate for
being miserable. If it’s no longer fun you’re likely not doing it right. Take
time out periodically to review which customers are causing you the most
pain in your business. Then channel Donald Trump and deliver them the
news they deserve. You’ll feel like a huge weight has been taken off your
shoulders and you’ll have renewed energy to focus on high value tribe
members.
Better still you can kill two birds with one stone by sending your problem
customers to your direct competitors. You’ll be freeing yourself of them
while lumping your competitors with them.
Chapter 8 Action Item:
How Will You Increase Customer Lifetime Value?
Fill in square #8 of your 1-Page Marketing Plan
Chapter 9 – Orchestrating And Stimulating
Referrals
Chapter 9 Summary
Orchestrating and stimulating referrals is an active process. Many
businesses wish and hope for referrals but don’t have a deliberate system
for making them happen. By implementing some simple tactics you can
make the flow of referrals a more reliable part of your marketing process.
Highlights covered in this chapter include:
Why relying on word of mouth is a losing strategy.
How to ask for referrals without looking needy or desperate.
The “Law of 250” and how it relates to getting an ongoing
stream of referral business.
The psychology behind referral marketing and how to compel
existing customers to want to give you referrals.
How to create a winwin scenario with joint ventures.
How to profit by referring your customers to others.
What “branding” really is and how to build brand equity in your
business.
Don’t Rely On A Free Lunch
Whenever I speak to business owners about how they market themselves,
“word of mouth” almost always comes up as the primary or only form of
marketing they rely on. This used to shock me but now I’ve come to expect
it. When I talk about “word of mouth” marketing here I’m talking about the
passive type where you hope that by doing a good job that the word will
spread and more customers will come your way.
Notice that the name of this chapter isn’t sit and wait for referrals? It’s
called orchestrating and stimulating referrals. This implies something
very active on your part to make referrals happen. Yet many business
owners see referrals as something that’s out of their hands and is something
that just (hopefully) happens. Whilst passive word-of-mouth marketing is
great, it’s an extremely slow and unreliable way of building a business.
Assuming you do everything right, it can take many years, even decades, to
build a successful business on the back of word of mouth alone. As
discussed in Chapter 2 having only a single source of new business is
extremely dangerous but being unable to control that source makes it
doubly so.
Word of mouth is the business equivalent of a free lunch. Sure it’s nice
when it comes your way and you appreciate it, but do you really want to
rely on it to feed yourself and your family? By being solely reliant on word
of mouth, you’re putting the fate of your business in the hands of others—
hoping they both like you and remember you often enough to regularly send
new business your way. This is an extremely dangerous path to be on. If it’s
similar to what you do in your business, now’s the time to start building a
much more robust referral marketing system. You need to actively
orchestrate and stimulate referrals, rather than just hope and wait for them
to happen.
The key part of the problem seems to be that business owners don’t want to
seem needy or desperate in actively asking for referrals. They feel like
asking for referrals is like begging or asking for a favor and that’s certainly
not the kind of positioning I’d want you to adopt.
It’s important to understand the psychology behind referral marketing
before we get onto specific tactics. Think back to the last time you
recommended a restaurant or a movie to a friend. Were you doing so as a
favor to the restaurant owner or movie theatre chain? Unlikely. In all
likelihood you wanted your friend to have a great experience. You made the
referral because it made you look and feel good. That’s the exact same
concept we want to use in our referral marketing, but rather than waiting
and hoping someone discovers us and shares, we want to orchestrate and
stimulate the process. We want to make it more deliberate and reliable.
Ask And You Shall Receive
Remember the world’s greatest salesman, Joe Girard, whom we introduced
in Chapter 5? Part of the reason he started sending greeting cards to his list
of clients monthly was because of the “Law of 250.” After attending a
Catholic funeral, Joe looked into the visitor book and counted the numbers
of people who signed it at each funeral. He noticed that on average it was
about 250 people. Later he sold a car to man who ran a funeral home and
after the sale asked him how many people on average attended the funerals
he conducts. The man replied “About 250.” Another time Joe and his wife
were attending a wedding and he asked the owner of the catering business
what the average number of guests at a wedding were. “About 250 from the
bride’s side, and another 250 from the groom’s,” came the answer. That’s
when Joe came to the realization that most people have about 250 people in
their lives who are important enough to invite to a wedding or to a funeral.
From that he figured that every person he did business with represented 250
potential referrals, if he did a great job or 250 enemies if he did a crappy
job. So he set about building relationships rather than thinking
transactionally and just selling cars. One of the things he did was follow up
with new customers and ask how their new car was going. If it was going
well, he’d ask for a referral. If it wasn’t, he’d fix the problem and then ask
for a referral.
This brings us to one of the best strategies for getting what you want in
business and indeed in life—just ask.
So many people just wait to be discovered, wait to be picked, wait to be
referred to. You however are an entrepreneur which means you make
things happen for yourself. You don’t just wait for them to happen to you.
With this in mind one of the best ways to get referrals is by straight out
asking for them from customers for whom you’ve delivered a good result.
It’s amazing how many business owners hope for referrals yet rarely ask for
them. Something as simple as:
“Mr. Customer, it’s been such a pleasure working with you. If you know anyone who’s in a similar
situation as yourself we’d love you to give them one of these gift cards which entitles them to $100
off their first consultation with us. One of the reasons we’re able to keep the cost of our service
down is because we get a lot of our business through referrals from people like you.”
See what’s going on here:
We’re acknowledging them and appealing to their ego. People
love being acknowledged.
We’re not asking them for a favor but instead offering something
valuable they can give to someone in their network.
We’re giving them a reason why they should give us referrals—a
reason that had directly benefited them.
By putting a system around generating referrals, we’ve dramatically
increased the reliability of word of mouth marketing. And while not
everyone will give you referrals, many will and it sure beats just passively
hoping.
One of the things you can be almost sure of is that your customers know
other people who are similar to themselves. It’s human nature to be
attracted to people with the same likes, interests and situations as us.
Another excellent strategy is to make known during your sales or customer
onboarding process that you expect them to give you referrals as a natural
course of doing business with you.
“Mr. Customer, I’m going to do an awesome job for you, but I do need your help also. Most of our
new business comes through referrals. This means that rather than paying for advertising to get
new clients, we can just pass the cost savings directly to you. We typically get about three referrals
from each new customer. When we’re finished working together and you’re 100% satisfied with the
work we’ve done, I’d really appreciate it if you could keep in mind three or more other people that
we could also help.”
Again breaking it down we are:
Letting them know that they’re going to get a great result
Showing them a direct benefit that they’re going to be, or
already are, deriving by referring to us
Creating an expectation of a certain number referrals (without
being too pushy) so that they can start thinking ahead of time
about who would be suitable
Leaving the power with them by telling them that it’s subject to
us doing a great job for them
Relying on the goodwill of others is not my idea of being an entrepreneur.
By increasing the reliability of word of mouth marketing, you take back
control of your lead flow and build a solid foundation for rapid business
growth.
Who Has Your Clients Before You?
As business owners we sometimes don’t see ourselves within the bigger
picture of our customer’s buying behavior. We just see their interaction with
us and market ourselves to acquire more and more customer interactions.
There’s nothing wrong with that of course. But when we start to look at the
bigger picture, we can start to uncover profits that were previously hidden.
It’s like finding a $50 bill in a jacket you haven’t worn in a while but on a
much bigger and more profitable scale!
Your customer’s transaction with you is one of many they will make that
day.
Before their transaction with you they did business with someone else and
after you they’ll do business with someone else.
The transactions may or may not be related but one thing is for certain—
someone had your customers before you did and in all likelihood they spent
a good deal of money on sales and marketing to acquire that customer.
Finding other complimentary businesses that your customer deals with
before they deal with you can help you uncover untapped profits in your
business. Setting up a joint venture (JV) arrangement with one or more of
these businesses that is not in direct competition with you can be a cheap or
free source of leads.
If you’re a lawyer, an accountant might make a great source of new leads. If
you’re a car detailer, a mechanic could be your source of leads. If you’re a
pet food retailer, a vet might be your ideal source of new customers.
While this may seem obvious, it’s rarely done and it is even more rarely
done well.
Setting up a JV arrangement can be tricky. The most obvious and direct
route is to pay either a finder’s fee or a commission for incoming leads or
sales.
However, some business owners may not feel comfortable about taking
cash for leads they send you and in some industries this may not even be
legal. While it’s smart to pay for leads of known buyers who are “hot,”
there are other less direct ways that work just as well or better.
One awesome strategy involves creating a gift card or voucher for your
products or services. Let’s say for example your business is “Mike’s Pet
World”—a pet food retailer. You could create an arrangement with a local
vet. Find out what kind of pet food this vet recommends to his clients, then
create a voucher or gift card that he can give away to new clients.
The beauty of this is that it is goodwill all round, no sales pressure, no
conflicts of interest. The vet would say something like, “I recommend XYZ
dog food. You can buy it at most pet food retailers but you’re a good
customer so here’s a $50 voucher which you can redeem at Mike’s Pet
World who are down the road. They always carry plenty of stock of XYZ
dog food.”
It’s a win-win for every party involved. The vet creates massive goodwill
with the customer because he is essentially handing them $50 for free. The
customer receives an unexpected discount. You, as the owner of Mike’s Pet
World, acquire a new customer whose lifetime value is potentially huge in
exchange for a voucher with a face value of $50 (and a wholesale cost
which is much less). You also get transferred much of the goodwill the
customer already has with their vet.
Now it’s true not all customers will redeem a gift card or voucher but the
vast majority will. It feels too much like throwing out money to throw out a
voucher or gift card that you know has a monetary value associated with it.
Let’s say that you conservatively calculate that the average lifetime value of
a new customer at your pet store is $5,000.
You’ve given away a part of the profit from a sale you would have never
have had. Genius!
Flipping it back the other way, you should look to see who has or wants
your clients after you’re done servicing them. This can become a great
secondary source of revenue to you, while increasing the value of your
offering to the end customer. Here are a few ways to monetize your existing
customer base in this way:
Sell the leads. There’s very likely someone else in a
complementary but noncompetitive line of business that would
be willing to pay handsomely for hot, qualified leads. One caveat
here is to ensure that you have your customer’s explicit
permission to pass on their details.
Exchange the leads. If you didn’t want to, or it’s not
appropriate, to accept payment for leads you could set up a twoway lead exchange program with someone else in a
complementary business. They send you their customers and you
send them yours. Again the same caveat as selling leads applies.
Never give out your customer’s confidential details without their
permission.
Resell complementary products and services. You could buy
complementary products and services on a wholesale or white
label basis and resell these to your customer base. The benefit of
this model is that you maintain full control of the relationship
and never hand over your customer details to a third party.
Become an affiliate referral partner. This is similar to the
model of selling leads except that instead of being paid per lead,
you get paid a commission on sales made by the third party
you’re referring to. This can be extremely profitable especially
in scenarios where you get a trailing commission on all future
sales. Refer once and get paid forever (or at least a long time).
Many people in industries such as insurance,
telecommunications and finance have built highly profitable
businesses based on this model.
Look at who has your customers before you and after you and find ways of
creating value in both directions. This can become an important source of
new customers and new revenue for your business.
Building Your Brand
There’s an enormous amount of confusion, especially among small
businesses, as to what a brand is. A search on the Internet gives the
following diverse range of answers:
“It is the emotional and psychological relationship you have with your customers.”
“A type of product manufactured by a particular company under a particular name.”
“The name, term, design, symbol, or any other feature that identifies one seller’s product distinct
from those of other sellers.”
“It is the idea or image of a specific product or service that consumers connect with, by identifying
the name, logo, slogan, or design of the company who owns the idea or image.”
All of these are only partial answers. I like to eliminate fluff and keep
things simple. So here is my definition: a brand is the personality of a
business. In fact you can use the well-understood word “personality” as a
direct substitute for “brand.” That instantly clarifies the meaning.
Think of your business as a person. What attributes make up its personality?
What’s its name?
What does it wear? (i.e. design)
How does it communicate? (i.e. positioning)
What are its core values and what does it stand for? (i.e. brand
promise)
Who does it associate with? (i.e. target market)
Is it well-known? (i.e. brand awareness)
This personality varies dramatically between businesses. Toyota and Rolls
Royce both produce functionally the same product, but their answers to the
above are very different.
Some small businesses look at the flashy advertising campaigns of wellknown brands like Apple, Coca-Cola etc. and get caught up thinking that
they also need to spend time, money and effort building “brand awareness.”
That’s putting the cart before the horse. Let me ask you a simple question:
What came first, the sales or the brand awareness? The sales of course. It’s
true that as a company gets bigger, brand awareness does feed sales.
However, don’t look at what they do now as big companies. Look at what
these businesses did to get big in the first place.
When they were small, they certainly didn’t spend huge amounts of money
on flashy ads and brand awareness. They hustled, they closed deals and sold
their products. If Apple and Coca-Cola didn’t concentrate on sales to begin
with, they wouldn’t exist today and there’d certainly be no awareness of
them.
That’s why I tell small business owners the best form of brand building is
selling. If a brand is the personality of a business, what better way is there
for someone to understand that personality than by buying from you.
As we discussed in the starting chapter, trying to emulate the marketing
practices of large businesses is a major mistake.
When all is said and done, branding is something you do after someone has
bought from you, rather than something you do to induce them to buy from
you. In the same way that you get a sense of someone’s personality after
you’ve dealt with them, so too it is with your business and its personality or
brand.
Brand equity is the goodwill you build up that compels people to do
business with you rather than your competitor. I once heard brand equity
described as customers crossing the road to buy from you even though
there’s a supplier of an equivalent product on their side of the road.
The things in your business that cause customers to figuratively or literally
“cross the road” to buy from you, is your brand equity. This can manifest
itself in the form of customer loyalty, repeat business or even a price
premium you can charge for your product or service. Importantly, it’s also
the key to stimulating the virtuous cycle of referrals.
For me, nothing illustrates this better than seeing queues of people lining up
for the latest Apple gadget while their competitors with plentiful stock and
no queues get much lower demand. This kind of brand equity is born out of
amazing previous customer experiences, which turn customers into raving
fans. This is something that simply can’t be bought with hype-filled “brand
awareness” campaigns. No one at Apple has to ask you to “tell your
friends,” you just do because the incredible brand equity they’ve built up.
As a small business your best hope for emulating this is focusing on sales
and then turning your customer into a tribe of raving fans. This is the advice
I give to any small-to-medium business wanting to work on branding.
Chapter 9 Action Item:
How Will You Orchestrate And Stimulate Referrals?
Fill in square #9 of your 1-Page Marketing Plan
Conclusion
A Bird’s Eye View Of What We’ve Covered
We’ve covered a lot of ground in our journey through the nine squares that
make up The 1-Page Marketing Plan. It’s useful at this stage to take a step
back and look at a high level, visual overview of the direct response
marketing lifecycle.
To download your copy of the Direct Response Marketing Lifecyle
visit 1pmp.com
This along with your personal implementation of the 1-Page Marketing
Plan will give you a solid foundation for marketing success in your
business.
As mentioned in the preface of this book, very few if any of the ideas in this
book are my original inventions. They are mostly proven strategies, tactics
and concepts taken from decades of testing and measuring by the direct
response marketing masters. However ,The 1-Page Marketing Plan is an
implementation breakthrough. It’s designed to dramatically simplify the
understanding of direct response marketing and speed up its implementation
in your business. Remember it’s all about implementation. I’ll reiterate—
knowing and not doing is the same as not knowing. You need to make
the mistakes, risk looking foolish and invest in yourself and your business.
In my experience I’ve found that entrepreneurs fail to implement for one of
the following three reasons:
1. Paralysis By Analysis: They keep trying to learn more or get
stuck chasing the latest bright shiny object in the hope that
they’ll get everything perfect the first time around. You’ll never
get everything perfect the first time. You only truly learn by
doing. Don’t let perfectionism become a source of
procrastination to you. Remember 80% out the door is better
than 100% in the drawer. Successful entrepreneurs have a bias
for action, implement quickly and course correct along the way.
As one of my early mentors Mal Emery would say, “money
loves speed.” The best time to plant a tree is yesterday. The
second best time to plant a tree is today. If you’ve been putting
off building and implementing a marketing system for your
business then it’s time to plant that tree and get started
immediately so that you can reap the fruits of your labor in the
future.
2. Inability To Delegate: As mentioned in Chapter 5, business is a
team sport. I don’t know of any successful entrepreneur who
doesn’t have a team behind them. You have only twenty-four
hours a day, so the only way you can get more achieved in a day
is by using other people’s time. Even more importantly than
other people’s time is other people’s specialist expertise. This
can reduce your learning by trial and error by years. What you
don’t know will hurt you. Hiring specialist expertise will save
you time, money and huge amounts of frustration. The ability to
get independent and sometimes difficult people to all go in one
direction working on behalf of your cause is skill you should
commit to mastering. This is what the late great Jim Rohn
referred to as “herding cats” and almost nothing pays more than
mastering this skill.
3. “My Business Is Different”: Pretty much any conceivable
problem you have or are going to encounter has been solved by
someone at some time. Many of the solutions to your marketing
problems are in this book. Some business owners mistakenly
think “my business is different, this won’t work for me” or “my
customers are different, they’d never respond to something like
that.” The strategies and tactics in this book are time tested and
proven over many decades. They’ve worked in almost every
category and type of business you could care to imagine from
trades to consulting to medical service and much, much more.
The reason the same stuff works over time and across different
business types is that you’re dealing with humans—big bags of
emotion. This doesn’t change over time or across industry.
People behave in a remarkably predictable manner, which is why
I know that these direct response marketing principles will work
for your business. There’s no leverage in trying to figure out why
these things won’t work for you. Your effort is far better spent
trying to figure out how to make it work for you.
Time Is Not Money
As entrepreneurs, we only get paid for bringing value to the market—not
for time. Sure it takes time to deliver value but we only get paid for the
value. If we deliver a huge amount of value to the marketplace, we get a
huge payday. If we flop, we make a loss. That’s a risk most people aren’t
willing to take. Most people want to get paid for time—work an hour, get
paid for an hour. They want to avoid loss at all costs. Making gain to them
is a nice-to-have but their real objective is pain avoidance. There’s nothing
wrong with that but the mindsets are worlds apart. Put simply entrepreneurs
work in the results economy whereas most other people work in the time
and effort economy.
The money we make as entrepreneurs is an automatic side effect of creating
value. If our focus is on bringing value to the market, it will stop us from
making all kinds of foolish mistakes. We’ll treat customers with the longterm in mind rather than being transactional or trying to make a quick buck.
The products we create or the services we deliver won’t be half-baked.
Focusing on the cause (value) rather than the effect (making money) will
lead to much greater long-term success.
Most of this book has been focused on getting, retaining and satisfying
customers through effective marketing. These are the tasks that create the
most value in your business and facilitate rapid growth. Almost everything
else is overhead.
The more times we create value by getting, retaining and satisfying a
customer, the more we get paid. Unfortunately many business owners get
distracted “playing business.” Playing business is when you do peripheral
activities that don’t really create much value. Some examples of “playing
business” include things like constantly checking email and endless,
nonsense meetings that have no real point or agenda.
Instead of playing business, you must do business. Winning in business
requires you to have a relentless focus on the activities that deliver value.
You must fight a daily battle with distraction, interruption and
procrastination. If you allow yourself to be distracted from the value
creating work of getting, retaining and satisfying customers your business
will struggle or fail. There are always things to do that are more fun or
seemingly urgent.
We rationalize playing business but in reality there are really only a few
value building activities which you need to do daily—marketing being key
among them. It’s important to understand that marketing isn’t an event, it’s
a process. It’s something you do daily to build massive value in your
business and deliver massive value to your customers.
Your view of time affects everything you do in your business. For the
entrepreneur time is not money. Value is money. Time is just one of the
inputs it takes to deliver value to the market. Make marketing a daily
process. Create your own 1-Page Marketing Plan and most importantly
implement the plan. Spend time daily doing business and building value.
Lipstick On A Pig
An enormous amount of your success is dependent on the vehicle you
choose. Some businesses are a Ferrari and adding marketing just
exponentially skyrockets their success. Whereas other businesses are a beatup old jalopy and adding marketing is like putting lipstick on a pig.
In a time when new technology is disrupting industries that have been
around for decades or centuries, it’s valuable to continually evaluate
whether your business or industry is in the sunrise or sunset phase. Good
times don’t last forever. Just ask brick and mortar bookstores, record stores
and traditional news media giants.
Around the year 1900 there were 100,000 horses in New York. London in
1900 had 11,000 cabs, all horse-powered. There were also several thousand
buses, each of which required 12 horses per day, for a total of more than
50,000 horses. In addition, there were countless carts, drays, and wains, all
working constantly to deliver the goods needed by the rapidly growing
population of these cities. All transport, whether of goods or people, was
drawn by horses.
If you had a horse-related business, then business was booming. Everything
from clearing away the huge amounts of horse manure to grooming, feeding
and housing the ever-growing population of horses.
Fast forward a few short years to the advent of electrification and the
development of the internal-combustion engine that brought new ways to
move people and goods around. By 1912, cars in New York outnumbered
horses, and in 1917 the city’s last horse-drawn streetcar made its final run.
So in twelve years your business went from being on top of the world to
losing more than half its revenue. Five years after that you were bust and all
your knowledge, industry connections and skills were totally obsolete.
Failing to anticipate how changes in technology will affect your business or
industry and taking action accordingly can be fatal to your business.
Kodak invented digital photography, yet despite this they could not or did
not use this early lead to its advantage. It let other competitors eat its lunch.
Borders finally got into e-books but it was too little, too late and
consequently it also paid the ultimate price.
When the guy running his booming horse business in the early 1900s
started to see these new fangled electric streetcars appearing, he might have
chuckled to himself and thought that this form of transport was just a
passing fad. After all, horses had been used as means of transport for
thousands of years.
Then a few years on, when more and more of his revenue was being eroded
by the new technology, he might have started pining for the “good old
days” when things were going well. He might have even become angry
about what was happening and expected the government to intervene. See
anything similar happening today?
Various industries including manufacturing, news media and brick and
mortar retail are either in crisis or on the verge of crisis. Globalization, the
Internet and new technology is hurting them—big time. They are whining
and crying about the state of things, lobbying for government intervention
and hoping the good old days will soon return. But the good old days aren’t
coming back—at least not for them.
Why don’t they just embrace the new technology and get onboard with it?
Some of them will but most won’t. The reason most won’t is because they
have the same mindset as a turkey does.
Nassim Taleb, best-selling author of The Black Swan, tells the story of a
turkey who is fed by a farmer every morning for 1,000 days. Eventually the
turkey comes to expect that every visit from the farmer means more good
food. That’s all that has ever happened, so the turkey figures that’s all that
can and will ever happen. In fact, on day 1,000 it’s at the peak of its
confidence. After all it now has 1,000 day’s worth of track record on which
to base its confidence. With a track record like that what can possibly go
wrong? But then day 1,001 arrives. It’s two days before Thanksgiving and
when the farmer shows up this time he hasn’t got food in his hand, instead
he has a recently sharpened axe. The turkey learns very quickly that its
expectations were catastrophically off the mark—that the good old days
weren’t going to last forever. So now Mr. Turkey is dead.
Don’t be a turkey and don’t run your business like one. In times past almost
all the value of a business was in its physical assets. Things like real estate,
plant and equipment, inventory and distribution infrastructure. Today
almost all the value of a business is in the eyeballs it has access to and the
customer base it has acquired.
Look at what’s happening today and the central role that acquiring
customers through effective marketing plays:
Uber, the world’s largest taxi company owns no vehicles.
Facebook, the world’s most popular media owner creates no
content.
Alibaba, the most valuable retailer owns no inventory.
Airbnb, the world’s largest accommodation provider owns no
real estate.
Just these four businesses are worth hundreds of billions of dollars.
Your ultimate competitive advantage is in anticipating change and taking
action accordingly. It’s going to take guts, you’ll have to take risks and
you’ll have to invest in research and new technology. You need to
constantly be pondering questions such as:
What business do I need to be in?
What technologies are coming that are going to disrupt my
industry?
How can I take advantage of the coming changes in technology
rather than fight them?
You need constant strategic innovation—innovation that your customer
cares about.
Skunkworks projects are one of the best ways to stay abreast of emerging
technology while still continuing to run your current operation. A famous
example of a skunkworks project is the first Apple Macintosh computer.
Google has even made it part of their company’s culture by allocating 20%
of employee time on side projects that interest them. Hugely successful
Google products such as Gmail, Adsense and Google News have come
from these skunkworks projects.
What resources are you investing in emerging technologies and trends in
your industry?
Day 1,001 is coming for your business and your industry and if you aren’t
ready with a new plan, your business could well suffer the fate of the
turkey.
Having a culture of innovation, anticipating what’s coming in your industry
and running some skunkworks projects in your business will give your
business a massive competitive advantage.
Your Transition From Business Owner To Marketer
Einstein’s famous definition of insanity, “doing the same thing over and
over again and expecting different results,” is well-known but rarely acted
upon.
At the start of every new year people make “resolutions.” Typical ones are
to lose weight, quit smoking and get out of debt. They hope that things will
magically become better for them as the clock strikes midnight on the 31st
of December. When they hit week two or three of the new year, their
resolutions become a distant memory as they return to routine, old habits
and the daily grind.
Resolutions are a close cousin of wishes—basically nothing more than
goals which have no plan or action behind them. Chances are if nothing
changes in your regular routine, nothing will change in your business or
personal life.
One of the commonalities amongst high growth businesses is that they have
a strong focus on marketing. They make marketing a regular routine in their
business and execute their marketing plan continuously.
Conversely, failed and struggling businesses either neglect marketing
altogether or do random acts of marketing with no plan or structure. They
try random tactics once or twice and give up when they don’t see immediate
success. That’s not a marketing plan—that’s a recipe for disaster.
Others mistakenly believe that having a great product or service is enough
to “get the word out there.” The graveyards of failed businesses are full of
businesses that had excellent products and services. For the most part they
failed because those running them didn’t pay enough attention to marketing.
Remember, no one knows how good your products or services are until
after the sale. Before they buy, they only know how good your
marketing is. Put simply the best marketer wins every time.
If you’re serious about business success then now’s the time to take
decisive action. It’s time to decide to become a great marketer and
transform yourself from a business owner to a marketer who owns a
business. Once you make this exciting transformation you and your
business will never be the same again.
It’s my belief that this book is a marketing implementation breakthrough in
that it makes creating and implementing your own marketing plan easy. It
can help you start or accelerate your journey from business owner to a
marketer.
Marketing is the master skill of business. It will help you make your current
business a success and importantly it will help make other businesses and
enterprises you may be involved with in the future successful.
Throughout this book, you’ve been the recipient of some extremely
valuable information. It’s information that most of your competitors will
never know or seek out. That puts you at a huge advantage—if you take
action. I urge you to take action. As mentioned at the beginning of this book
knowing and not doing is the same as not knowing. If you continue to do
what you’ve always done, you’ll continue to get the same results you’ve
always gotten.
Building a successful business enables you to live life on your own terms.
You deserve business success and it is attainable for YOU. I invite you on
that journey of building an extraordinary business and living life on your
own terms.
About The Author
Allan Dib is a serial entrepreneur, rebellious marketer and technology
expert.
He has started and grown multiple businesses in various industries
including IT, telecommunications and marketing.
One of his previous businesses was in the telecommunications industry
where he faced heated competition from multibillion dollar, multinational
competitors. Allan grew this business from startup to four years later being
named by Business Review Weekly (BRW) as one of Australia’s fastest
growing companies—earning a spot on the coveted BRW Fast 100 list.
Allan is passionate about helping businesses find new and innovative ways
to leverage technology and marketing to facilitate rapid business growth.
As a highly sought after business coach, consultant and public speaker, he
frequently shares his proven strategies and cutting edge tactics with people
all over the world.
Allan can be contacted directly via email at allan@successwise.com
Information about his books, courses and other training materials can be
found at successwise.com
Endnotes
What’s This All About?
1
I first heard of the 64/4 rule from James Schramko at his SuperFastBusiness Live event.
2 Dean Jackson is a direct response marketing legend and developed the “before, during and after”
concept.
3 We use the label ‘customer’ as a generic term for people that pay you money. Depending on what
type of business you’re in, this label could be customer, client or patient.
Chapter 1 – Target Market
4 The PVP concept is one I shamelessly stole from Dr. Frank Kern (attorney at law and chief
engineer with NASA) 🙂
Chapter 2 – Your Message To Your Target Market
5
Journal of Safety Research Vol 34, 2003
Chapter 5 – Lead Nurturing
6 These statistics are widely quoted in sales and marketing circles. I attempted to track down the
original source of these figures but after a few hours of research the best I could do was find was that
they were “based on the findings of major national research firms.” As with most statistics you
should take them with a grain of salt. However regardless of source or how these specific numbers
were derived, in my experience they are about right. The point being that very few salespeople bother
to follow up more than a few times.
7 The name and concept is generally credited as being the invention of direct marketing legend Dan
Kennedy
Chapter 6 – Sales Conversion
8 For a comprehensive study of modern selling strategies I highly recommend “SPIN Selling” by
Neil Rackham
Chapter 7 – Deliver A World Class Experience
9 This definition take from Seth Godin’s excellent book “Tribes”.
Chapter 8 – Increasing Customer Lifetime Value
10 This statistic has been bandied about for years. I’m not even going to attempt to try to track it
down to it’s original source. In reality whether the number is actually 21, 18, 5 or whatever is pretty
irrelevant. What is relevant is that it is orders of magnitude easier to sell to people who’ve previously
purchased from you than it is to try and sell to new prospects.
11 A lot of the concepts in this section were devised by Richard Tripp, a specialist in hyper-growth
and creator of the POV Method which helps categorise healthy versus unhealthy revenue.