CHAPTER 6
HOW TO CREATE EXCITING SALES AND MARKETING BREAKTH ROUGHS
People love to buy.
—BILL GOVE
OK, here it is—what you probably bought this book for: a no-holds-barred, no-B.S. collection of breakthrough strategies, to get rich, preferably quick.
By the way, nothing wrong with quick, and no special virtue in slow. I know you’ve been told that “get-rich-quick schemes” are bad news. But the word “scheme” has simply been tarred with a broad black brush. A good, sound scheme is a perfectly fine thing. And when you deposit money at the bank, you don’t get penalized for having made it quickly or easily.
And contrary to popular myth, a lot of fortunes are made fast.
Once Dave Thomas got really cooking, pardon the pun, he opened 1,000 Wendy’s restaurants in one year. While not that many that fast, a client of mine went from zero to over 150 franchised locations operating in one year, in a service category where franchising had never been successfully done at all. Ever. It’s actually quite common for me to spend a day consulting with a client for the first time and find the hidden or neglected opportunity in his business that is better than the core business, and that lends itself to speed to market and speed to wealth because of the platform provided by the first business. One that is quite memorable involved a small business owner with a nice, successful, local small business from which he earned a perfectly respectable $150,000.00 a year—but worked much too hard doing so. Midway through our day he mentioned, as an “oh, by the way,” a little sideline enterprise run out of the business during its down time that brought in nearly as much as the full-time earnings but required virtually no work on his part. We hatched a plan to ten times it before he left, and in the next 24 months, it produced over $2-million.
The first breakthrough is in thinking bigger and bolder rather than small and incremental. You won’t experience a big, fast financial breakthrough if you aren’t looking for one.
Then you need to know where to look. These kind of gigantic, fast leaps come from only one place: sales and marketing breakthroughs.
The big money in the world is made in sales and marketing . Nobody gets rich dusting shelves, changing light bulbs, keeping books, or managing employees. Yet, I’m amazed at how many entrepreneurs let such things suck up all their time, focused on everything and anything but sales and marketing.
So let’s get this straight from the start: the place for you to direct your time, energy, creativity, common sense, hard work, and resources is marketing.
In fact, the first quantum leap from ordinary good-job-type income to big entrepreneur-type income occurs very rapidly after the business owner makes the intellectual, emotional, and actual switch from “doer” of his “thing” to “marketer” of his “thing.”
The fact that marketing’s where the money is can be seen at play in small or big business.
Some years ago, I was doing a lot of consulting and advertising copywriting work for a big company owned by an even bigger Fortune 500 company. Its president, a nice, pleasant fellow, called me in to his private office, closed the door, sat across from me, and said: “I’ve done some calculations and realized we are actually paying you more per hour than we are paying me.”
Imagine being a consultant confronted with this one!
I answered, “There is a very good reason for that. You see, you know how to do everything in this company better than I do by a big margin except for one thing, and it is essential and vital that one thing gets done the best way it can, because nothing you know how to do matters if it doesn’t. That one thing is getting customers. That’s the one thing I know how to do that you don’t, and that’s why I get paid more. But look, “ I said, “we’ll just keep this as our little secret.”
That is a true story and it makes more than one important point. One is, as I’ve said, any rapid and dramatic value improvement in a business is going to come from the sales and marketing side, and usually the only indispensably valuable people are the ones who know how to create sales and marketing breakthroughs. Two, you do not want to be in the position that corporate CEO was. You do not want a guy like me holding you and your success hostage. The only way to prevent that is to personally master the sales and marketing aspects of your business.
At Least Avoid the Ultimate Marketing Sin
I’ve created more marketing breakthroughs by being exciting, different, and outrageous than by any other means. Many have emulated me.
Bill Glazer became famous for the “Outrageous Advertising” he created for his own wildly successful menswear stores, and then provided to other store owners nationwide. He has sent out direct-mail pieces that look like hand-scrawled notes on a diner’s placemat, complete with coffee cup stains; handwritten notes on torn legal pad paper; and notes on lunch bags.
One of my long-time followers in the business of advising leaders of mid-sized family owned companies on investments, asset protection, succession planning, and other financial matters solicits appointments with new prospective clients by having his very-oversized sales letter delivered to the prospect’s office in a full-size aluminum trashcan, brought there by a uniformed messenger. The letter cautions against “permitting the legacy you’ve built to be trashed or throwing away any of the wealth you’ve worked so hard to earn.” He secures appointments with better than 50% of the prospects he hand selects every month for such a delivery. I have been telling this story for many years but as far as I know, no other financial advisor has copied the tactic—but many have told me they never would because it’s just too unprofessional. They say they would be embarrassed. Being privy to this advisor’s income, I can assure everybody he has nothing to be embarrassed about.
Incidentally, ad-man-turned-CNBC-TV-commentator, Donny Deutsch, recounts a story of deciding to go after a $3-million a year account, a tri-state area auto dealers’ association. If they got it, it would have then been their largest account. They had no auto industry experience. The client used TV extensively and, at the time, Donny’s agency had no TV experience. Donny wanted to do something “different” to get the key man’s attention and get him to decide “We’ve got to at least give these guys a chance.”
Donny and a couple of his associates got a bunch of used car parts from a junkyard and had one after another delivered to the prospect, every half hour. A headlight came with a note promising bright ideas. A steering wheel with a note promising to steer them in the right direction. Etc. Donny admits it could have backfired. But it didn’t. And I can promise you from extensive experience with countless of our Members using this kind of approach multiplied to many prospects not just one, it works more often than not.
Donny Deutsch
Read Donny Deutsch’s book Often Wrong, Never In Doubt—Unleash The Business Rebel Within. And look for current Outrageous Advertising examples from Bill Glazer in every issue of my No B.S. Marketing Letter. See pages 272–273 for a free trial subscription gift.
One of my long-time Members, who has been studying me for over 20 years, Dr. Gregg Nielsen, does the most outrageous advertising and marketing in the entire chiropractic profession. I’ve reprinted one of his direct-mail pieces, a funny letter from his staff, at the end of this chapter, so you can get a feel for what I’m talking about. Believe me, his doctor peers and even his wife cringe at mailings like this. But his patients love it and refer like crazy—at a rate five times better than his profession’s average.
I could show you hundreds more examples from the evergrowing tribe of like-minded marketers I’ve inspired.
Their output is the antithesis of dull, boring, institutional, stuffy professional marketing.
The worst marketing sin you can commit is to be boring. People love to buy when it’s a pleasure to buy. When it’s interesting to buy. When the experience of buying itself is involving and rewarding.
This crosses all demographic boundaries and applies whether you market to consumers or B2B. Boring is boring. Leap-out-at-you, outrageous, fun, and interesting is what it is. People are people, in the boardroom on the 50th floor or in the living room, on the floor.
The entrepreneur’s responsibility and opportunity is to create breakthrough ideas that foster exciting, positive relationships between the company and its customers. This chapter gives you the very best ways I know to create those kinds of breakthrough ideas.
Breakthrough Strategy #1: Find a Market Niche and Exploit It
In niches, there are riches! A market niche is a crack, a crevice, an opportunity gap, sometimes a tiny segment of a market being overlooked, ignored, abused, or very poorly serviced.
It might be a story not being told with special appeal to a segment of a market. Subway’s clever reinvention of itself as a weight-loss program with Jared’s diet gave the company great differentiation from all other fast food restaurant chains. Our Member Diana Coutu, owner of Diana’s Gourmet Pizzeria, has dieter-friendly and even diabetic-friendly pizzas that still taste terrific.
It might be a way to be of service to a special segment of a market. Consider the printing company specializing in medical forms for hospitals. They (and their competitors) packaged and sold their various forms in cartons of 1,000, 5,000, and 10,000. Many small hospitals and nursing homes refused to buy from them because they didn’t need 1,000 copies of any one form. The president of this printing company took the time to ask how many forms they would buy. (Asking your customers what they want—now there is a radical concept!) He then put out a new catalog with all their forms priced in packages of 150 for smaller hospitals and institutions and, in short order, they captured the niche market of small institutions.
It might be making ordinary goods and services proprietary. I watched Jim and Naomi Rhode build a small company originally called Semantodontics into a very large company now called Smart Practice, based on marketing imprinted advertising specialties, freemiums, premiums, gift items, office supplies, and imprinted forms exclusively to dentists. Much of what they sell to dentists can be purchased from any number of other, generic vendors to any and all, but the Rhodes were smart enough to organize it, “tweak” some of it to dentistry, and present their company as the source of it all just for dentists.
“If you had a Shih Tzu dog, wouldn’t you pay more for doggie biscuits created just for the dietary needs of Shih Tzus? If you were an attorney, wouldn’t you pay more for a software program that was designed specifically for lawyers? If you were a woman over 50, wouldn’t you pay more for a face cream that claimed it had ingredients that would diminish the appearance of fine lines and wrinkles? Everyday people spend more for products and services that they believe have been created or designed specifically for their particular needs or situations. Could you create a version of the product or service you sell for a niche within your market? The product or service can be identical to, or a slightly tweaked version of, one you offer to all other customers. But if the niche customer believes there is something special and different about it, if it sends the message ‘this is for ME!’, that is the one they’ll buy.”
—SYDNEY BIDDLE BARROWS, AUTHOR,
UNCENSORED SALES STRATEGIES: A RADICAL NEW APPROACH TO SELLING YOUR CUSTOMERS WHAT THEY REALLY WANT—NO MATTER WHAT BUSINESS YOU’RE INIn a very similar way, another long-time Member built a hugely profitable business virtually invisible to anyone not in leadership in a fraternal organization, like the Shriners or Kiwanis—but those folks know him well, because he is the dominant provider of awards, promotional items, glassware, apparel, and other products emblazoned with these organizations’ logos. He also publishes a newsletter about group leadership for the clients who buy these goods from him. Almost all the merchandise his company sold can be provided by any of the thousands of “generic” ad specialty companies, but Shawn has created a niche business and dominated a target market.
The Power of the Price Gap In a Niche
Way back in 1983, I was doing some speaking for a practice management company in the chiropractic profession, another in the dental profession. As I analyzed the professions, I identified an enormous “gap” in what was being offered to help doctors market, promote, and grow their practices. There were a number of management companies offering multi-year programs requiring fees upwards from $30,000.00 per doctor. There were books and how-to manuals in the trade journals, for $10.00 to $50.00. But there was nothing in between. It also was true that almost all the management companies acquired their clients by inviting doctors to free seminars, then delivering sales presentations, ultimately asking for $30,000.00 or more. I devised a company that would copycat the entire seminar method, but offer do-it-yourselfer-type “marketing kits” and complete courses for $400.00 to $1,000.00.
We hit the “price gap” perfectly. Within the first 12 months the company I created became THE largest seminar and publishing company exclusively serving chiropractors and dentists. Actually, we became that our first day because we were the only company mixing chiropractors and dentists into the same seminars; I defined my own niche, so I could trumpet being the biggest instantly. Some call that creating a “category of one,” and it is a terrific positioning strategy. Beyond that, we did quickly grow to millions of dollars. We trained well over 15,000 doctors.
In recent years, a number of companies have created fabulously successful businesses by finding a price position far above all others’ in their category. There is, for example, a $25,000.00 mattress, typically sold by private invitation demonstration parties with fine wine and appetizers served, in upscale department stores. Very pricey time-share programs have appeared and prospered with invitation fees in the $500,000.00 neighborhood. On the other hand, some luxury manufacturers identified price gaps they were not responsive to, where customers eager for their brands were available in significant numbers. Mercedes-Benz, as example, created a new “S class” of smaller, more modestly priced Mercedes automobiles for this reason and has done well with them.
It’s important to understand that all of America—the world, really—divides into niches and sub-cultures, and just about everybody belongs to one to several of each, and closely identifies with them. For example, for years I made a lion’s share of my living as a professional speaker, and another big portion as a direct-response advertising strategist and copywriter. Those are professional niches not even known to many outside of them. For many years I also traveled constantly on business, a “road warrior”; that’s a subculture. Road warriors describe themselves that way and have profound interest in many things that are of little interest to anyone but a road warrior—from the OAG Guide to any good tricks for getting to sleep quickly even in a noisy airport hotel, with planes flying overhead and your room next to the elevator shaft. I travel little now for business, and I fly by private jet, so I no longer consider myself a road warrior. But those of us who fly private are also a subculture.
This is all very important from a marketing standpoint because people want and respond best to whatever they perceive is for them, preferably exclusively for them, relevant specifically to them, and offered by somebody who really understands, respects, and appreciates them. The further you drill down, to make whatever you offer feel customized for and unique to a very well-defined niche or, better, niche within a niche, or subculture or, better, subculture within a subculture, the better your results may be and the better able you are to command premium prices or fees and above-par profits without resistance.
Breakthrough Strategy #2: Find a New Sales Media and Let It Make You Rich
In Arizona, there is an industrial cleaning products manufacturer with a very successful line of citrus-peel-based cleaners and stain removers. For years, they bottled these chemicals in giant drums and sold them to factories, restaurants, hospitals, hotels, and other large institutional buyers. Like every other industrial chemical company, the only sales media they used were industrial sales representatives and catalogues distributed to their customers.
They made the leap to marketing directly to consumers through a sales medium far, far outside their norms—a shopping channel on cable TV. It works for them because their products demonstrate like magic tricks. They’re perfect for television. After their first on-the-air test, they couldn’t bottle product fast enough. They were instant “TV bestsellers,” and this very different sales media made these entrepreneurs rich, quick, and has continued to add to their wealth year after year.
The internet has come into its own as provider of media many find ways to use profitably. As I write this, social networking media like MySpace, Facebook, Twitter, and the countless niche/subculture versions are being used by everyone from comedians on the rise to entrepreneurs promoting their products. ... YouTube used by companies like the venerable direct-selling company Vita-Mix as a means of reaching a new, different audience for its product demonstrations ... Google AdWords® a means of purchasing “eyeballs” i.e., website visitors who are actually searching for the exact expertise, information, products, or services a particular company provides. ... and the list goes on and on. Websites, of course, grow increasingly complex and sophisticated, and many companies have reason for more than one kind, including catalog-type sites, sales letters and videoassisted sales letters, and customer service and support.
Much of this is now a necessary part of business. Within it all may be the combination of media you need to create a dynamic sales breakthrough. None of it, however, is any sort of magic bean or panacea. No media is inherently good or bad; it’s all in appropriate application. With online media, it’s important not to be fooled by its appearance of “free”—there is time, manual labor, and distraction cost. It’s also important to carefully and critically analyze the quality of the customer it brings you, not just the quantity. And my final caution: over-reliance on any one media for new customer acquisition or for communication with established customers is a huge, costly, dangerous mistake. That goes double for e-mail.
My own preference is for multi-channel marketing. A madefor-the-internet company like
LegalZoom.com makes its sales of do-it-yourself legal filings, forms, and kits online, but it drives traffic there with television, radio, and print advertising. Similarly, the overwhelming majority of new Glazer-Kennedy Insider’s Circle
™ Members may learn about and opt in to a free trial membership online at any one of many websites like
FreeGiftFrom.com/business, but they are sent there from books like this, advertisements in print magazines, articles in magazines and newsletters, and direct mail; and our Members get many deliverables online including webinars, archives of information, directories, blogs, and community, and receive e-mail from us at least twice a week. But they also receive from one to three monthly print newsletters, audio learning programs (presently on CDs), other direct mail, and telephone support.
The company 1-800-Flowers is a full-scale multi-channel merchant. It began with a brick-and-mortar flower shop, expanded via toll-free number and mail-order, then online, and with additional stores and licensed retailers. Today, its online marketing and sales operation is the centerpiece of the business and while a lion’s share of its marketing to existing customers is done by e-mail, it continues advertising on radio, TV, and by direct mail, as well as continues brick-and-mortar retail operations. Each channel feeds the other and feeds into the center. Many retailers also have e-commerce sites and owners of e-commerce businesses sometimes open retail stores, but few become truly sophisticated multi-channel merchants with smart synergy interconnecting every channel.
Many sales breakthroughs don’t require a new media to become available; instead they come from fitting a product together with an existing media not previously used for that type of product.
My friend Joe Sugarman, a bona fide direct marketing legend, has had mammoth success with his product “Blu-Blockers” sunglasses. Today, you can buy them in retail stores and in catalogs, but their launch was via a 30-minute TV infomercial, and that success in turn led to QVC, the home shopping channel, where millions of pairs have been sold. To my knowledge, sunglasses had never been sold via infomercial before Joe.
In a short time, it went from radical to common for doctors to promote Botox® injections via Tupperware®-style party plan selling. The in-home sales party is certainly not a new media. But doctors using it—that was new. The in-home party is a distribution channel using human media that is at least 100 years old, is always with us, is viable, and enjoys repeated renaissance and new popularity with each new generation. It is often fueled by recession, when more people become interested in extra income opportunities in direct-selling, and more consumers are receptive to a “night out” with friends and neighbors in someone’s home. Today, the diversity of products and services sold via home parties includes sex toys and lingerie, cruises and vacation tours, investment real estate, children’s toys and games, personal and home security products, and, still, Tupperware®. Far, far, far from a new distribution channel or media, and certainly not high tech, yet used by an ever-increasing number of diverse companies to profitably promote their products. It is case in point that the old used in a new way can be just as powerful as the entirely new, and that no means of marketing should be ignored or too easily rejected.
E. Joseph Cossman’s Million-Dollar Secret
Years back, I did a lot of work over several years with E. Joseph Cossman, who has written several books about mail order, which I urge you to read. Joe made a million dollars or more from scratch at least 20 times, using the very same formula each time: he found a company with a good, salable product that marketed it via only one or two distribution channels. Often it was a manufacturer omitting direct-to-consumer marketing, such as mail order. He acquired exclusive rights to the product only for one or all of the neglected distribution channels. In one instance, it was an insect-killing product called Fly Cake, being manufactured and sold to the military; Joe turned it into a consumer product and began selling it through classified ads. In another case it was a children’s bathtub toy that could be powered by a little chemical pellet and would move about for a long period of time underwater; Joe popularized it, in several forms including a scuba diver, as an underwater aquarium ornament and sold it through pet stores and tropical fish stores and by mail order, direct to consumers. Joe is best remembered, though, for popularizing the famous Ant Farm. At the time he found it, it was being sold only to schools for use in science and biology classes. Joe saw its potential as a toy/novelty, and controlled its sales through toy stores and other retail stores, mail-order catalogs, ads in comic books, and other print advertising. Joe made his fortunes quite a bit before the existence of the internet; and I can only imagine what a field day he might have had with so many more media options at his disposal.
Of course, what Joe did any manufacturer, marketer, retailer, or service provider can do for himself. The lesson of Joe Cossman’s entire business life is: most think too narrowly and provincially about their product, service, or business and therefore leave many sales and distribution channels unexploited.
Breakthrough Strategy #3: Create a New Type of Guarantee and Confound Your Competition
I love marketing on the strength of guarantees. For me, nothing’s better than finding a way to offer the very best guarantee any given field.
I’ve been told that guarantees are outdated, overdone, and no longer effective, but my experience proves this to be nonsense. Good guarantees work just as well today as they did 25 years ago, and they may be more necessary than ever.
Lee Iacocca used this idea to save Chrysler many years back, with its 7-year/70,000-Mile Warranty along with the argument: if you want to know who builds them better, take a look at who guarantees them longer. At the time, this was a ground-breaking guarantee. It left the competition gasping and galloping backwards. It got the public’s attention, and it sold a lot of cars. (Eventually, of course, the competition caught up. That’s to be expected.) Much more recently in that industry, Hyundai responded to recession by promoting the most unusual auto warranty ever—if you lost your job, they would make three consecutive months of car loan payments for you; if you still were in trouble, you could return the car, have your loan voided, owe nothing, and your credit would not be negatively affected. I’m told by one of the biggest dealers that when those TV commercials began, his showroom had a huge surge in traffic and he sold more cars in the ensuing two weeks than in any two months before.
More than 35 years ago, my ad agency had a small chain of eyeglass stores as a client, and we created, I believe before anyone else in the country, the “free eyeglass replacement guarantee.” My client ran large newspaper ads featuring this remarkable guarantee—and he brought in a flood of customers. He sucked customers right out of his competitors’ stores. His stores kicked butt for nearly a year with this promotion. In one store, sales increased by 800%. Today, big chains use the same strategy and it has long ago lost its unique magic. But the business built with this breakthrough guarantee matured successfully and was sold for millions of dollars.
I have clients who use what we call “penalty guarantees.” Financial advisors who guarantee they will uncover and present hidden opportunities to a new client in the first one hour meeting or pay the client $100.00 to $1,000.00 for wasting his time. Marketers who guarantee reading their lengthy sales letters will be worthwhile or the reader can say his time was wasted and be paid $25.00, $50.00, $100.00. An appliance company that guarantees service on time or they do the repair work free. There is a franchise company, Ben Franklin Plumbing, that has Ben in its commercials promising to pay $5.00 for every minute a technician is late in arriving, so that, if he should be 20 minutes late, you, the customer, would get a Franklin (slang, of course, for a $100.00 bill). This goes back to a guarantee that built a David into a Goliath almost overnight: Dominos’ original “... delivered in 30 minutes or less, guaranteed.”
You should also think about the way you describe and present your guarantees. My client, Guthy-Renker Corporation, has, for many years, had Victoria Principal delivering her Bottom-of-the-Jar Guarantee, i.e., use the whole jar, return it empty if dissatisfied for refund. Still the best worded guarantee in skin care that I’ve ever seen came from my friend, copywriting genius Gary Halbert, for Nancy Kwan’s Pearl Cream: “If your friends don’t actually accuse you of having had a face-lift, return the empty jar ...” I swiped it for a weight loss product: “If your friends don’t accuse you of having had liposuction ...” These are nothing more than ordinary satisfaction guarantees presented in more interesting ways.
It may be marketing consultant Jay Abraham who coined the term “risk reversal selling” for the use of strong, creatively worded guarantees. Whether he originated it or not, he and I share position as committed advocates of risk reversal. Every time I have convinced a client to take a particularly daring risk reversal position, his increased sales have far exceeded the cost of honoring the guarantees.
Breakthrough Strategy #4: Deliver Exceptional Service and Earn Word-of-Mouth Advertising
As a customer these days, aren’t you frustrated more often than not? I find spending money as tough as making it! Think about all the aggravations you have had as a customer and the number of times you’ve turned away from a business because of poor service. In the New Economy, unsatisfactory service is deadly. Now that all the power is in the hands of the consumers and their spending has become more thoughtful and deliberate, no business can afford to disappoint.
What is exceptional service? It means different things to different people in different businesses at different times, so I can’t define it for you in your business with a general statement. But I can tell you where to look and who to study to get close to it.
Walt Disney preached that customers should be viewed and treated like guests. That’s why at Disney World and Disneyland all the employees, from the broom pushers to the managers, learn how to direct guests to any attraction and how to answer the most common questions. They are taught that they are important to the success of each guest’s visit. The next time you’re at a Disney Park, stand near a broom pusher for a few minutes. Watch how people go up to him or her and ask questions. Watch how well that employee responds. You’ll witness exceptional customer service in action.
My favorite Disney marketing principle is do what you do so well that people can’t resist telling others about you. Following this principle gives you marketing leverage. A lot of leverage. If you get one customer from an advertisement, that’s one thing, but if you get that customer plus three referrals, who in turn each refer two people, that’s nine new customers from leverage rather than direct monetary investment.
As service overall has worsened and customers grown more demanding, your opportunity to stand out through service superiority gets more and more significant. I delve into this in exhaustive detail in my book No B.S. Ruthless Management of People and Profits.
Breakthrough Strategy #5: Get Professional Prowess on a Percentage
I’m about to suggest hiring an expert or two to help you with your marketing. But, first, a few words about expert advice in general.
There are a lot of “experts” out there very eager to get their hands into your entrepreneurial pockets. Most of them aren’t worth the powder it would take to blow them up. Most couldn’t run your business or any other for a week. Most couldn’t sell their way out of a closet. They may be good song ‘n’ dance people, but that doesn’t mean they can conceptualize a great song, write a musical, or attract crowds to the theater. When you peel away the top layer of veneer, you’ll find another layer of veneer.
So, the expert advice I have for you about expert advice is to proceed with great caution. And I’m an expert!
Never let yourself be intimidated. Ask a lot of questions. Check references. Ultimately, trust your judgment and retain control. And, in the case of getting marketing assistance, get it from people willing, even eager, to be paid based on performance, not just on task completion.
You’ll be hard-pressed to find a Madison Avenue ad agency that will play this way. If they did, they’d starve. The hard, tough truth is that most of what they do fails to work. It wins awards, it gets talked about, it jazzes up half time at the Super Bowl, but it doesn’t sell. That’s why most agencies that win the industry’s Clio Awards quickly lose the clients for which they created all that award-winning, expensive, but ineffective advertising. That’s why in my seminars, when I’ve asked everybody to jot down the brand name of the battery advertised by the famous pink bunny banging his drum, one-third to one-half of all people write down the wrong brand name.
Dan Kennedy’s Eternal Truth #8
No one will ever be a bigger expert on
your business than you.
But every top marketing consultant and every top copywriter I know eagerly looks for clients they can really help, then get most of their compensation from a small percentage of the sales created and measured. For example, when I develop direct-marketing and direct-mail campaigns for a client, I charge a hefty fee, but as my main compensation, I take 2% to 5% of the resulting sales. My personal objective is to choose projects right and do the work so well that each client winds up paying me $100,000.00, or much more over time.
Also, keep in mind that the best marketing experts do not tell you what to do. They try to create a partnership with you to combine your unique understanding of your business with their special expertise. Then they do the mechanics.
We realize no one’s more of an expert on your business and your customers than you are, although you may benefit from help in extracting what you know and putting it into useable form.
A good marketing professional can save you a lot of time and trial-and-error experimentation, bring you already-proven ideas from their broader experience, and help you clarify your own thinking.
Breakthrough Strategy #6: Reasonable Investment
This relates to several of the above strategies. While throwing money at marketing is never assurance of success, the opposite extreme, being unreasonably Scroogish about it, being unwilling to invest in acquiring and developing customers, and having wholly unrealistic expectations about what can be achieved pinching pennies is just as destructive as is wholesale waste.
One of the most important numbers you need to determine is your “maximum allowable”; what will you invest to acquire a customer? That number may entirely rule out certain opportunities, media, and methods. It may prohibit your even walking on to certain playing fields. Or it may make every media viable.
You must view this as managed investment. The customer as asset, into which you place investment capital, from which you extract a reasonable return. I encounter business owners all the time who are perfectly willing to accept some small percentage of interest on money parked in CDs at the bank or even put their money at risk in the stock market or elsewhere for single digit percentage yield year to year but balk at investing $500.00 to buy a customer with a $5,000.00 five-year value—or dumber yet, want to acquire such customers for no more than $50.00 each. Val-Pak® and similar merge mail media happens to be one that sparks this discussion a lot. In the years I did a great deal of work with chiropractors and dentists, they would often complain to me about the poor performance of this coupon media—“In two months, all I got was one good patient and, geez, it goes to 10,000 homes every time.” The money invested, I would point out, was about $450.00 a month, $900.00 total, and the minimum value of the patient $5,000.00 or $2,500.00 net if operating the practice with no more than 50% overhead. So, if you could trade $900.00 for $2,500.00 at your bank today, how many times would you like to do so?
Of course, if you are to aggressively and confidently invest in acquiring new customers and further in nurturing and developing them, you need to have your act together in serving, satisfying, and retaining them, obtaining maximum purchasing from them, and multiplying them through referrals.
In a meeting with two financial advisors from the same firm, both enunciated roughly the same goal: adding about 50 top clients over the next two years to arrive at a doubling of their present $500,000.00 yearly income. I asked what they would invest to acquire each client. The first said his average first-year value was $5,000.00, lifetime value over $100,000.00, and said he would gladly invest up to $5,000.00 in marketing to acquire each client. The other advisor said he didn’t think his first-year value was that high, wasn’t sure about lifetime value, definitely was not prepared to invest thousands in each new client, but didn’t know what would be a good acquisition cost that he’d be comfortable with. I told the first one I could help him achieve his goal; I told the other one to leave the room and hit the road.
There is a “dirty little secret” about marketing that can grow a business substantially and rapidly while successfully targeting and attracting ideal customers or clients. The more you can and will invest to acquire each customer, the more likely you are to succeed, the bigger and more crushing is your competitive advantage, the faster you can get from point A to point B. Again, the money itself isn’t magic. It can’t be wasted or carelessly thrown about. But to think you can compete in the Indy 500 with a soapbox-derby car you cobbled together with spare parts and items from the bargain bin at Home Depot is downright foolish.
FIGURE 6.1: Nielsen Exhibit
FIGURE 6.1: Nielsen Exhibit, continued
FIGURE 6.1: Nielsen Exhibit, continued
