Keep What You Have, Grow What You've Got

The more you engage with customers the clearer things become and the easier it is to determine what you should be doing. - John Russell, President, Harley Davidson

Don’t underestimate the need to satisfy and retain customers. Most businesses put too much money, time, and effort into chasing new customers/prospects and far too little resources trying to keep their current ones. However, we all know that you can’t fill up a bucket if you don’t plug the current leaks. Real profits and stable revenue streams come from long-term relationships and repeat business with your current loyal, profitable customers. Some experts declare that 80% of a company’s future growth comes from existing clients, if served and cultivated properly. As such, customer satisfaction and retention should be your #1 marketing priority.

Again, the purpose of a business is to attract and retain customers. You can’t grow and remain in business without keeping the customers you currently have. First, you must measure your current attrition rate (loss of customers) and set a goal for dramatically reducing this rate. For example, let’s say, on average, that you lose 20% of your customers every year. A realistic goal would be to reduce this attrition rate to 10% per year. Bottom line, it is easier and nearly eight times cheaper to serve and retain current clients/customers than to pursue new ones.

Once you have plugged the holes in your attrition bucket, you want to serve better and get closer to these profitable and worthy customers. You want to better understand their needs and then fulfill as many of these needs as possible with additional products and services. Continually communicate with your customers. Give them value. Give them solutions. Focus on them and their needs, not on your products/services.

Communicate with them in person, in letters, in faxes, in emails, via your website, brief newsletters, etc. Don’t worry, you can’t over-communicate with your customers. Like employees, keep them informed, involved, and inspired to continue doing business with you. Also, repeatedly ask your customers the following questions:

• “How are we doing?”
• “What other needs do you have?” and
• “How could we improve our value to you?”

Your objective is to provide them with more value more frequently and as a result, you will benefit with more profits. Never sell a customer only once. Real profits come from repeat business. As such, set goals to increase the frequency and size of repeat business. You want ongoing relationships and ongoing sales.

Grow Your Business: Winning New Customers

The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed. – Henry Ford

Bottom line, to be successful at winning new customers/clients, you need to be perceived as being different, special, better. You cannot afford to be viewed as a commodity. Commodity companies are paid commodity prices/fees. There is tremendous power and profits in being perceived as unique, different, better.

Spend time researching and establishing your company’s Unique Selling Proposition (USP). What is your most powerful, compelling benefit/advantage? What is the big, overt advantage of your product/service? Why do customers continue to do business with you? What major frustrations do you remove from their lives? Once you define your USP, broadcast it like mad in your sales presentations, in your brochures, in your direct mail, on your website, in your telephone answering methods, in your advertisements, in your news releases, etc.

Do not let your USP simply be “quality, service, and price”. This says nothing different and has no emotional power. It sounds trite and comes across as “blah, blah, blah” to your prospective customers. Instead, clearly delineate your differences and performance guarantees. Instead of being a mere marketing consultant, be a marketing partner that guarantees revenue results (pay-for-performance) or the client doesn’t pay. Now that is different and understandable. FedEx’s earlier USP was “when it positively, absolutely needs to be there overnight”.

Additionally, to achieve substantial increases in profits and customer satisfaction, you must challenge yourselves to come up with new products/services or repackage old ones in a way that truly excites and delights customers/clients. To qualify as killer ideas and killer solutions, they need to include the following:

1. An obvious, compelling benefit to the potential buyer
2. Believable evidence/reasons that support this benefit (credibility)
3. A significant difference from existing products/services (dramatically new and better) and,
4. A simple and effective means to communicate the benefit, evidence, and difference to the target market.

Such killer ideas can revolutionize your business and industry. Dream big.

In addition to being perceived as different, special and better, you need to try new marketing strategies to attract new customers/clients. Here are some other brief ideas for bringing in new clients:

• Leverage your past customer relationships. Revisit with past, worthy customers or inactive customers and express your interest in rekindling the relationship and solving any of their current problems. These folks did business with you at one time, wrote out checks to you, and may well be receptive to re-activating their relationship with you. However, you must identify and heal any unresolved wounds and share with them the benefits of doing business with your company once again. Give them an inducement (bonus, discount, additional service level, etc.) for taking action and ordering once again.
• Formalize and optimize your referral systems. Identify (crunch numbers, don’t rely on hunches) your best-performing referral sources (some use the term market influencers) over the past 12 months and be sure that you thank and reward them for their efforts. Communicate with these proven providers often to maintain a top-of-mind awareness in their heads. Once you identify these top providers, shamelessly clone these folks. For example, if you are a house painting company and determine that your best referral sources have been real estate agents, replicate this formula. Don’t complicate the magic. Educate these and others as to the specific types of customers and circumstances you serve best. Referral source cultivation is one of the most underutilized yet low-cost, high-yield marketing weapons that exist.
• Leverage those relationships that your business helps to financially support (your banker, CPA, attorney, suppliers, financial adviser, insurance agent, etc.). To determine which would make for good informal sales agents for your business, ask the following types of questions: “Who will benefit from our success as we continue to grow and expand?” “Who do we write checks to on a regular basis and would have a vested interest in supporting our business development efforts?” Identify these relationships and ask these folks to reciprocate and support your growth efforts through leads, referrals, testimonials, etc.
• Leverage indirect competitors to gain new customers. Indirect competitors are companies that you seldom go head-to-head with competing for business. For example, you could establish a formal referral relationship (swap leads, pay finder’s fees, share revenue, co-marketing, etc.) with an indirect competitor that is much larger or smaller than you are or in a different geographic region. For example, a smaller CPA firm could establish an alliance with a large CPA firm and swap leads that don’t fit their respective niches. A small, traditional plumbing business could form an alliance with a plumbing company that focuses on doing only the tough, complex, big jobs. Leads could flow both ways.
• Gain leverage from current clients/customers. Ask current buyers for introductions/referrals to other potential buyers or ask current customers to provide endorsements, testimonials, or serve as references. Always ask current clients about other unmet needs they may have.
• Identify and cultivate complementary businesses as strategic alliances. For example, a technology consulting firm would want to form alliances with those that can help steer business their way (CPAs, software/hardware vendors, other non-competitive consultants, etc.) How do you find potential referral or alliance partners? Ask, “Who already has the trust and respect of our prospects?”
• Make doing business easy, convenient, and risk free. Do not ask the other party to assume risk if they start a business relationship with you. Instead, communicate an unconditional, money-back guarantee. Don’t keep your guarantee hidden, broadcast it. A credible and specific guarantee will bring in far more business than it costs you. Here is a simple example, “If you don’t find our technology training courses among the best you have ever taken, simply ask for a refund before the start of the second day and we will gladly return 100% of your money without any questions or delay.”
• Use direct-response advertising. Don’t waste money on ineffective advertising. Always make sure any advertising contains a compelling offer/benefit and motivates the reader/listener/viewer to take action. Never advertise just an image. Advertise only to sell something. Track the effectiveness of your ads to generate leads and/or sales. If the ads don’t seem to be working, kill them. Never advertise to merely satisfy your ego.
• Consider using telemarketing. Use it to develop leads for your salespeople or use telemarketers to follow-up a direct mail or advertising campaign. Even consider using telemarketing to follow up a sale to see if the person requires any additional help, advice, services or products (warranties, add-on products, additional levels of service, etc.) If you just cleaned the carpet in two rooms of a customer’s house, call up a week later and ask if they would want additional rooms to look as good and offer them a discount as inducement for taking immediate action.
• Influence many people at once with special events/seminars. Consider hosting educational events for customers, referral sources, and prospects. Consider holding them in conjunction with other companies (newspapers, radio stations, suppliers, banks, CPA firms, industry experts, trade associations, complementary companies, etc.). This will allow you to tap into their customer relationships. For example, if you are an upscale travel agency introducing new exotic trips, consider co-hosting an event with an upscale radio station, magazine or with a high-end jewelry store, auto dealership, country club, money management firm, etc.
• Consider using direct mail. Direct mail is simply putting a powerful and complete sales presentation in writing. Such a vehicle allows you to touch many buyers at once – immense leverage. Most owners would be best served in the long run by hiring a professional direct marketer on a project basis.
• Consider using public relations. Public relations can be a powerful source of leverage as you educate and influence a targeted audience about your benefits, expertise, etc. Get to know the reporters in your industry and periodically call them with some story ideas.
• Gain leverage by improving the effectiveness of your sales approach. Give your sales people a proven, simple sales methodology. For example, use READ. Relate to your prospect. Establish the Need/Problem. Advance a Tailored Solution. Determine Next Steps. It’s all about building relationships and solving problems. Buy books, tapes, CDs on selling skills and distribute to your team. Also, periodically send your salespeople to strategic selling courses. Huge payoff!
• Buy other reputable businesses possessing great reputations and strong goodwill to gain access to their loyal customers. Be sure their business is a good fit for your company, culture, values, customer base, etc.
  
  
  

Growing Your Business - Marketing

"Traditional methods of sales prospecting are grossly inefficient." - Jill Konrath, Author SNAP SELLING

What is marketing? First, it’s about understanding deeply the needs and wants of your customers and providing them with greater value. You must clearly identify the demand in the marketplace. At a minimum, most businesses can improve significantly in this area. However, the real power and leverage of marketing comes from the next level of influence, communicating convincingly your unique and superior value proposition.

Marketing is about communicating with and educating your customers, prospects, and referral sources why it’s in their best interest to do business with your company. It is about educating the right target audience on the unique and superior advantages, benefits, value, and results you can provide and sharing the credible evidence/reasons that support and back-up such promises. In short, marketing is about educating your target market on the advantages of doing business with you and the reasons why they should trust you to deliver on your promises.

Instead of impacting one prospect at a time (i.e. direct selling), marketing allows you to communicate with, educate, and influence many buyers at once. In a sense, marketing is a one-to-many selling system. Marketing allows you to target and influence large groups of customers, prospects, alliances, referral sources, reporters, etc. in a single action.

Unfortunately, most business owners mistakenly try to tackle most goals (i.e. growing sales) with a one-to-one, single weapon, combat mentality. For example, instead of considering the leverage of marketing (i.e. strategic alliances, referral systems, direct mail, telemarketing, etc.) to grow sales, many owners remain in the same comfort zone and deadly rut of using a single weapon like direct selling. They fail to consider and try new options, new approaches, and new strategies.

While all businesses have a selling process (converting leads to customers), most do not have a legitimate marketing process (generating qualified leads). As such, they miss out on tremendous leverage and opportunities.

Your goal should be to add an ongoing marketing process to your business. Again, marketing is nothing more than understanding the needs of your customers and then communicating to them the superior advantages/benefits they can derive by doing business with you. Think of marketing as ongoing education. You are educating customers, prospects, and referral sources why it’s in their best interest to do business with your company.

There are only 5 ways to grow your business:

1. Keep the customers you have,
2. Bring in more customers,
3. Increase the average transaction size (unit sale),
4. Increase the frequency of purchases, and
5. Say “no” to bad customers/prospects.

In short, keep what you have, bring in more customers, sell larger amounts to them, and sell to them more often. Do one of these ways and your business grows. Do two or more of these well, and your business can grow by quantum leaps and bounds, geometric growth instead of mere linear growth.

Think and Act Like a CEO, not an Employee

Before you can fully re-engineer your business and your life, you must first re-engineer your mindset.  You need to tame and calm your mind to free it from reactive, counterproductive habits.  You must adopt a strategic mindset and focus.

Please adopt this simple change management formula -- BE-DO-HAVE.  In order to have, you must do, and in order to do effectively, you must truly be.  For example, want to have a better golf handicap?  Then you must do certain things: take lessons, practice and play more, get better clubs, etc.  However, all this doing won’t be optimally effective unless you first change your mindset – you must be a better golfer on the inside.  You must start to see, feel, think and behave like a better golfer in order to be a better golfer. 

Similarly, in order to have more freedom, joy and financial success as an owner, you must do new strategies (i.e. systematize your business, utilize marketing, etc.).  In order to do optimally these strategies, you must first be a more effective business owner – mind, body and soul.  Like an award-winning actor, do not just play the part, become the part.  You must change from the inside out before your external realities change. 

How do you escape the nauseating details and headaches of your business?  How do you gain greater freedom?  You must make the great mental leap from that of employee to that of a business leader.  First, you must acknowledge your technical bias, your addiction to being busy, and your uneasiness with delegation.  Next you must adopt the “big picture” mindset of a Chief Executive Officer (CEO).  You must be a CEO in mind and spirit to get the results you seek.  You must think, feel, see, taste, smell and hear like a CEO. 

If you don’t start thinking like a CEO, it will be nearly impossible for you to start behaving like a strategic business owner and truly working on your business in a proactive, purposeful manner.  For many owners, jumping this wide chasm from employee to owner is tough and terrifying.  However, you will never escape a workaholic existence unless you stop being a detailed-oriented technician masquerading as an owner.  Stop focusing on the technical work of the business; focus on the entire business.  The choice is yours.  Step up and be a leader, not a micro-manager!