Archives for July 2013

Ronan and his Tattoo Shop

July 25, 2013 by

A Shiny New tattooBusiness

I caught up with a friend recently. The first thing out of his mouth after ‘Hi Zac’ was

“Guess What?”

“What.” (At this point I was feeling smug because I had guessed ‘What’ correctly. Good thing I was wrong, otherwise this would have been a really short article).

“I’m going to buy the tattoo shop I am working at and live above it.”

“Cool.” I didn’t know what else to say. And “Why on earth would you want to do that?” didn’t seem the right response.

My mate is a pretty clever guy. He’s self confident and outgoing. But this kind of made me wonder.

“What equity is there in the business I asked?” Thinking “Are you going to be able to build that up and sell it?”

Does it have a marketing system?

What are the advantages of owning the tattoo shop over just working in it?

Normally I don’t do consulting work for free and I generally don’t give advice for free because free advice is pretty worthless, but this was fascinating.

As far as I could tell, owning a tattoo shop means that instead of paying someone for the use of their shop you avoided that. In tattooing, owning a shop means you collect enough fees from others leasing space in your shop to cover costs.

So You End Up Tattooing in order to pay yourself- YOU OWN YOUR OWN JOB.

Considering this business was valued at five figures there is not a whole lot of equity and not much value inherent in any shop. So in the end you have additional pain and suffering of owning a small business and no big pay off in the future. There is no equity to sell; there is no autonomy to be gained – if you aren’t there tattooing you make no payola.

The way these businesses are traditionally structured, at some point you will have to do another tattoo in order to be able to eat.

This defeats the purpose of being in business. This is closer to self-employment. Far too many businesses end up like this. The sad case is when the owner doesn’t want this but ends up with it anyway.

My question out of is that “what do you want from your business”? “or do you want more?” You are at least looking at what is involved in having more if you have read this far. Once you see the underlying form of business you can more easily envisage what next. In my friend’s case what can he sell to the same people after he has finished tattooing them? The real estate on their skin is finite; he needs other ways to further monetise his customers (The shop is pretty busy as it stands).

You’ll be faced with the same challenge: Do you expand the boundaries of what you do in order to make more money or do you stick with tradition in your industry – living and dying by their rules?

Filed Under: Blog

My Own Personal Door Knocking Hell

July 25, 2013 by

door-knockingFresh out of university I started my ‘career’ in direct sales.

There was a degree of irony about the world of an agricultural science graduate. The Ag-Chem companies wanted sales people with degrees in agricultural science and relevant sales experience. Kind of hard to do when you’ve spent the last 4 years studying full time and before that you were too young to hold a full time sales position…

Anyway, I didn’t necessarily want a career as an ag-chem salesman. I wanted to sell. Sound familiar? (Robert Kiyosaki’s advice ‘learn to sell’ had happened to me before I finished high school).

I landed a job door knocking for a roof restorations company. Every day from 4pm until sun down and Saturday mornings I would go to neighbourhoods with houses of a certain age and knock on doors. Trying to worry people into getting me to come back for a quote.

Thankfully, if you knock on enough doors (even when you are really bad) you get enough yeses to get enough appointments to make your sales. I hated it. Two weeks in and I was thinking about what next.

This was hard, soul destroying physical labour – grinding out a living, not a very good one at that I might add. I knew some people who are very successful at it. The one thing they all had in common was their ability to get leads from somewhere – the appointment getting was done for them.

It started me thinking – how do I get leads? If I could crack that the rest of this would be easy.

Weeks turned into months, months turned into seasons. (Winter is a tough time in this business – almost everybody worries about the outside of their house in spring and summer when they are outside – Autumn if something is leaking – so that winter doesn’t ruin their house).

I still had no answer except to pound the pavement. Knock on doors and not stop until I had my quota of leads.

I would do it again today if I had to because I learned so many lessons. I learned to sell belly to belly. The most important skill in sales.

If you can’t do that you will never succeed in business. However, if that is all you can do you end up ‘a long-in-the-tooth, direct-sales-guy who’s burned out.’ There is huge churn in this business and many like them because it is soul destroying work. You could see it in the veterans – often they were stuck. There was nothing else they could do and make the same money. But if something came up they would have jumped in an instant.

I knew that I didn’t want that.

After Two years of pounding the pavement, what I discovered was lead generation marketing. I figured that if I could do direct mail to the houses that needed a roof restoration I might get somewhere.

I cobbled together a pretty primitive flyer, (no sales letter) and put it in an envelope and mailed it to a list of people’s houses that I had door knocked when no one was home. I made a $1,000 commission for the $100 I spent on postage. In my defence I didn’t know what I was doing was called copywriting. But hey, it worked.

I did that until the laws changed and completely crippled the industry for 18 months by which time I had learned a different lesson – about cash flow management and the difference between making a sale and getting a customer for life.

I learned a lot about myself in those two years. About work ethic and the like. I also learned that a business that is a single transaction is not a business – the next time I was to journey into the world of an entrepreneur I was going to be sure I had more than just a single transaction business.

That experience informed the creating of Newsletter Marketing Systems the next time I looked at starting a business. (FYI I understood that writing copy, was not a business, I can’t sell those skills to a buyer one day. I am the one with the gift of the golden brain, or the golden fingers depending on how you argue it.)

Filed Under: Blog, Customer Retention

“I am in Your Base Killing YOUR D00dz (dudes).”

July 25, 2013 by

d00dzWhy every business person should be familiar with “I am in Your Base Killing YOUR D00dz (dudes).”

Along with the AFL football joke “Such-and-Such has brought their own football today.” That line about D00dz never fails to raise a chuckle from me.

There is a story to here it is. Once in the dim dark ages of online video games (the late 90s early 00s), two people were playing one of those real time strategy games head to head. (one of the ones where you have to take over the map to win)

Player 1 asks player 2 where is he?

Player 2 responds with I am in Your Base Killing YOUR D00dz.

If you have no ‘D00dz’ it is hard to defend your base. And when you lose your base you lose the game. Obviously player 1 has not been paying attention.

There was a civility to this. Player 2 was kind enough to let Player 1 know they had messed up big time.

What has this got to do with my business?

Unfortunately the competition to your business will not be so generous. If they find a way to take your existing customers one by one off of you they are not going to tell you.

They will sit and take your customers until there are none left. And YOU ARE BROKE.

This can be stopped – the first step to this is awareness. You need to acknowledge you are losing customers even if the loss is small. Then you have a chance to stop the losses.

Customer satisfaction research conducted by Bain And Company found that 68% of customers left simply because they felt unappreciated. Which means you can cut your defection rate by a third just by making your existing customers feel welcome and appreciated.

I know it isn’t logical. Which makes sense – people aren’t logical, they are emotional. When they feel like a valued member of your community, they will forgive the odd mistake or bad experience in order to remain part of the community.

Creating that community through constant communication is one of the easiest and lowest cost way. Having a sense of community with your past present and future customers means your competition can’t start stealing your ‘D00dz.’

Filed Under: Blog, Customer Loyalty, Newsletter

What Does Inaction Cost You?

July 24, 2013 by

inactionFrom time to time when talking to potential clients about the suitability of them doing a newsletter, Ben and I are often left wondering what the costs of not doing a newsletter are for the client.

The worst case scenario is you do nothing. Nothing changes – if you are looking at doing a newsletter then you are obviously interested in growing your business by one means or another. Nothing changing means your current trajectory continues. Which, as we just discussed, is the worst possible scenario because you are unhappy with the current situation and you’ve changed absolutely nothing.

Now if you want to grow and you are exploring options then all well and good if you can manage to find another way to spend the same amount of money to make a better return. We’ve had a client track a 504% return from doing a newsletter with us. There aren’t too many places where you can get 5 times the return on investment over 12 months in a business or in investing for that matter.

If you do have an alternative avenue to place that investment that outperforms a newsletter – terrific use it. Manage your business by the numbers. We are not going to discourage you from being that ruthless.

The Back End of your Business Is Where the Magic Happens.

Prosperity, Equity and stability in business have less to do with customer acquisition and more to do with customer retention and how you monetise your customers once you have them.

It’s not how many customers you have but how good they are.

Groupon’s Death Spiral

How many of you would like Groupon’s customer list. Personally you’d have to pay me to use it. Groupon’s customer list is the list of all the price shoppers. The idea sounded better in principle than in reality.

The Groupon pitch to business is – ‘put an irresistible offer to our database and you get new customers.’

Good deal?

Not when the customers you get sent are highly unlikely to come back to your business and pay full price. Odds are the only time you’ll see them again is when you run another Groupon special.

The businesses using Groupon have wised up. The offer quality being made to Groupon are going down, the response rates are going down which means the businesses that next use Groupon are going to make a worse offer because they know the response rates are low, further lowering response rate.

Soon Groupon will be dead – punished for being the piece of idiocy that it is.

You challenge is to get good quality customers who keep buying from you again and again and again. There is stability and equity in that. A newsletter does exactly that.

It helps you keep those customers coming again and again and again. It lets you promote your other products and services to them. You can get those good quality customers to refer other customers of similar quality to you. It means that you can promote allied product and service providers to them through your newsletter.

It means that because your customers are spending more with you that you can go out and spend more to get more customers.

Filed Under: Blog, Customer Loyalty, Newsletter