Archives for March 2014

Recently, Zac and I have been conducting a lot of Existing Customer Opportunity Audits with prospective clients and one of the questions we ask is:

“How many referrals per active client/customer have you averaged during the last 12 months?”

We can count on one finger the number of times a client has been able to reliably answer this without guessing or having to go away and dig deep into records to find it / create it. This is a key statistic for growing your business, yet most business owners don’t measure it.

Arguably the quickest way to double your business is simply to get every customer to refer another one to you. Some may refer 5, others may refer none, but on average if every customer refers 1 other customer in a 12 month period, you will essentially double your business.

But that’s not all it will do, it will

• Lower your marketing costs. (referral generation tactics are dirt cheap or even free!)
• Referred customers have less price resistance. Referred customer have pre-established trust. They are predisposed to buy. And they have less resistant to price than new non-referral customers.
• You’ll get more referrals. Customers obtained by referral are usually more likely to refer.

There are a number of systems you can implement to increase referrals, thank you gifts, referral programs, reward systems, newsletters etc, and if you are interested in finding out more about those, simply give us a call on 1300 120 106 and book in your Free Existing Customer Opportunity Audit.

But today I wanted to focus on something that you can implement immediately at no cost. It’s all about making referrals a priority and holding yourself and your staff accountable.

There is one statistic you MUST measure, focus on and try to improve.

The Average Number of Referrals per Customer

This statistic should become you and your staff’s highest priority and your primary focus. You want keep yourself and your staff accountable and ask “What did I do today to get more referrals?”, “Who did I talk to today about referrals?”, “How many customers did I talk to about referrals today?”

Most businesses tend to be over the moon with whatever referrals that come their way… But honestly, given the power of referrals, not measuring them and just letting them happen willy-nilly is lazy and somewhat negligent.

Try to measure it weekly. Or at the very least, monthly. Just by measuring the number and being accountable, there will be improvement in the numbers, or at the very least it will remain stable.

It’s amazing what happens when you measure things… there is often significant improvement in practices purely because of the regular awareness and reporting of statistics and activities. All successful businesses are managed by statistics.

It may sound tedious or boring, but it is the only scientific way to achieve success.

Recently we helped one of our star newsletter clients, Jarrad Mahon from Investors Edge Real Estate, implement a Referral Program to insert with his newsletters.

Jarrad is a numbers man, he knows his metrics! Because he was focused on his numbers,  he was actively looking for a way to increase referrals. He sent his referral program out to his landlords and he immediately got 3 referrals. Then because he was focusing on his metrics he was looking at other ways he could increase referrals. He then started getting the property managers leaving the referral flyer with tenants during property inspections, which resulted in a quick additional 4 referrals.

What Jarrad now knows is that for every ‘x’ number of newsletters he sends with the referral insert, on average he will get ‘y’ number of referrals.

Or for every “x” number of property inspections, with a flyer left, on average he will get “y” number of referrals.

Now, Jarrad needs to simply make sure that his staff are leaving the flyers, that the insert is going out reliably every month or two (which we can assure him it is!). and by watching the metrics, Jarrad will find additional opportunities to improve that statistic.

Most businesses could easily increase their business by 50-100% simple through implementing this kind of measurement across the important areas of their business. They wouldn’t need to spend a dollar more on marketing or make any breakthrough changes. Just performance improvement automatically by measuring, making it a priority and holding yourself and staff accountable for it.

There is nothing more amazing to me than price objections. Yet for some reason we always encounter them. I don’t know why that is. Oh, probably because everyone wants to make a deal. Also we are becoming more and more conditioned to price shopping.

There are an ever expanding number of discount vendors in every strip of business. Look what you can get done on Fiverr.com, look at Ikea, all the chains selling discount anything and everything. This behaviour is common with governments – contracts awarded to the lowest bidder. Build a bridge that is going to last for 100 years – who’s the cheapest?

So it is understandable that when faced with making major investment decisions, most people start to wonder what they can do to cut the costs.

There will always and I mean always be someone willing to do it for less. The question you need to be asking is what are they cutting out in order to cut the cost. Is it quality, performance or what else could they cut out?

What is always missing in this conversation is the value of what is being done. What is the return you are going to get from buying?

That may sound obtuse but in the end it is about return and not percentage returns, but gross returns. You can’t bank a percentage, only hard dollars. Invest to make money, not for the best possible ROI.

While we are being conditioned to look for a better deal all the time, we usually mistake ‘better deal’ with ‘cheaper.’ When in fact it is never about that at all.

When we spend money in business we are looking at how much more we can get back, not how much it costs us in the first place.

If I told you to write me a cheque for $11,000 and I could show you how to make an extra $60,000 per year would that be a good deal?

What if I said if you do a newsletter with us, it will cost you a little more than if you have to do it yourself but that extra investment would help you realise $30,000 in additional profits, would that be a good deal?

It would. So stop worrying about the price of what your suppliers are charging and focus on the value return.

The dollar return is what matters, not getting the lowest possible price. It’s not how business people think.

“The rich aren’t different from you or I…”

“Yes they are?”

“How?”

“They’re richer.”

In a lot of ways there aren’t that many differences between successful people and ‘unsuccessful’ people. They tend to look pretty similar, they sound pretty similar and to be honest, when you compare the thoughts of the two camps there still aren’t that many differences.

With that said there seems to be a handful of key differences.

The most important in my opinion is actually the willingness to go above and beyond to meet a deadline.

Meeting deadlines means getting work done and on to the next person or out the door. Successful people are ruthlessly focused on this. While the people who aren’t successful tend to cut themselves more slack, get less done and don’t get the results they could.

In our time with Newsletter Marketing Systems, our clients who have gotten the best results from their newsletter are always the ones who know the value of a deadline. Especially an imposed deadline. They are the ones who know that the deadline is there to help them get their newsletter in the mail every month. So that it arrives in their clients’ hands at the same time every month so that their newsletter is seen as an educational publication, not as a randomly appearing advertisement.

Conversely, our clients who aren’t committed to meeting deadlines and need to be cajoled, pushed and prodded in the right direction are the ones who need most managing and also are the ones who see the least response.

Because they are late they compromise quality to get the job done.

This sort of lazy, sloppy and half-arsed approach runs into other areas of their business and their life as well.

It is a sad, sorry state of affairs all caused by their lack of commitment to being meeting a deadline. If you don’t make deadlines a focus, you’ll never be able to get the mountain of work done in order to be successful.

At the end of a day, I will stop working when I am tired, even if I have unfinished work. However, that unfinished work will all be done by Sunday night come hell or high-water.

The reason I hated my roof restoring business was the dread of knowing tomorrow I’ve got to get up and knock on enough doors to speak to 50 people about roof restorations. I knew if I did that I would be able to eat, if not then I would starve.

Making a sale meant I ate this week. It didn’t mean a steady stream of future income.

Cold calling either on the phone or in person is gruelling, soul-destroying work. It crippled me emotionally – but I pushed through and did it anyway. If you can do it for 30 years then power to you. Every time I knocked on a stranger’s door I felt sick.

Before I even dialled the phone to make a cold call I had to mentally brace myself before I even pressed the buttons. Then I felt that same sick/sinking feeling when I heard the first ring.

Force the nausea down… Oh wait, remember to smile…

“Shit! Somebody is home” (or answered the phone). And you are ‘on.’ One down 49 to go. Drudgery come on down.

It was never as bad once you actually got to talk to someone, but all the same the torture I put myself through before every phone call or knock made me think it might be time to find a better way.

When I was making calls I was the system. I needed to own the system.

I found my way to create systems – direct response marketing and being able to write sales copy that actually sells.

I may have meandered a long way off course here but let me bring you back.

Without sophisticated systems and relying solely on grunt work, your business will never achieve stability. Predictable, reliable on-going sales. You are doomed to perpetual grunt work and always on the hunt for the next score.

There are two ways to create that reliability. The first is to create a lead-generating, lead nurturing and conversion process. Think of it as an assembly line for your new customers with each lead coming to maturity over time – getting in touch with you when they are ready. I build these for my consulting clients, Newsletter Marketing Systems grows largely on auto pilot because of these exact systems.

The second is to assemble a client retention system that locks your clients in for life, so that they buy everything they need off of you, complete with sales systems to market your other products and services to your clients.

The first step to having this asset is putting the retention systems in place to make sure that your clients are yours and not going to leave you for the next shiny thing. A list of loyal customers is the most valuable asset your business can ever have! And the fastest way to get and maintain customer loyalty is still the printed newsletter.

Referrals are tricky, one way or another they are always tricky.

Most of us sit around complaining about not getting enough referrals. I know I’ve been there and done that.

What I hate about referral marketing is just how damn hard it is to figure out from the ‘marketing gods.’ There is almost nothing revealed about how to get more referrals. All of them will sing the high praises of referrals but when it comes time for the rubber to meet the road nobody has anything that even remotely resembles a solid action plan.

There is the E.A.R. formula. Earn, Ask, Reward.

Okay, got it. Now how do I do that if I am a dentist? What about if I run a professional services organisation? How do I Earn, then Ask for, then Reward?

This is what makes referral marketing difficult. The implementation of the formula.

I was listening to an IMA CD about a dentist who works with kids – name completely escapes me. He runs an annual event called Smilepalooza. It’s a big circus type event that is hugely successful for generating referrals and also retaining customers – in this case children.

The big problem with these events is coordinating them. Most business people have almost no experience putting on events, so it is incredibly overwhelming.

That said, everyone who has run these events with the agenda of giving back to their customers has always done well generating referrals. It keeps this guy’s dental practice full so it can’t be all bad.

Of course that isn’t the only option. We’ve had tremendous referral success ourselves using the model of newsletter and referral competition in our own business.

Getting referrals is all predicated on having an engaged customer base who love you.

I have now been on the other ‘side of the fence,’ Ben and I have had more referrals coming in than we can keep up with.

Surprisingly, there isn’t that big a gap between too few and too many in this case. But of the two problems I can tell you which one I would rather have.

I hope none of you have a business as badly conceived as my first business – selling roof restorations. It is nothing more than a gigantic churn-a-thon.

Every week I would have to go out and knock on enough doors to talk to about 150 people in order to get enough people to do enough quotes in order to sell 2 of these each week – so that I made my money, kept my roofers busy and paid all the bills. About half of my working time was pounding the pavement knocking on doors and usually nobody was home.

The best part of the business was it meant every week I was pretty much starting again from scratch.

This was 100% churn if ever I saw it. There was no repeat purchasing built into the business at all. How poorly built was this business? Yeah, pretty bad.

In retrospect this business was a churn-a-thon. There was no getting ahead, there was no creating future income from the same amount of labour. It was a classic case of making minimum wage with brawn rather than maximum wage with brain.

It took a while before I worked out that I could cross sell the same people other home improvement products. S.L.O.W. should have been my middle name.

Once I understood just how important customer loyalty is, I realised just how much more important it was to be in a business that capitalised on customer loyalty.

Avoiding the churn-a-thon.

Every business is going to churn customers. Some of your customers are going to stop buying from you any given year. It is almost unavoidable. However, you can do your best to minimise that churn. A 25% reduction in churn means that is 25% less new customers that you need to replace the lost ones.

That increased loyalty means an increased customer lifetime value because those customers are going to be staying with you even longer. Which means you should invest more to get keep them and invest more in order to get them in the first place – making it easier to grow your business.

If you are stuck in a business where you can’t get ahead because you are always having to start again, it’s time to do something to end the great churn-a-thon.

This past month has been a real challenge for me. My pregnant girlfriend Hollie has been in and out of hospital with a Kidney infection. Hollie’s pregnancy has been a rough one, It’s left me with a list of tasks longer than I’d care to admit. On top of working full time trying to grow this business, I’m the full time parent, I’m cooking, cleaning, washing folding, dropping kids and school and driving Hollie around from appointment to appointment. On top of that I have my fortnightly toastmaster meetings, I have weekly landmark seminars, I’m currently organising a large charity event and I am currently on a health kick and pretty intense exercise regime… Life has just been busy!

For some people this is just how life is always… and I don’t envy you. I prefer to have a little more spare time each week if possible, try to take the weekends off! But since circumstance has put me in this position, there have been a few things that I’ve done to get myself through it without getting too overwhelmed and I thought I’d share what’s worked for me!.

Schedule Everything

When time is scarce, scheduling is amazing. I usually schedule the next day, the night before. I write a list of everything I need to do and want to do, how long I anticipate it will take, and then slot it into my day. I find scheduling your meals, snack breaks, exercise and even your lazy/leisure time.  I use my phone calendar and to-do lists and just try to stick to the schedule.

Multi-Task The Unimportant

I usually try to stay away from multi-tasking, especially when it comes to work, I much prefer to be focused on one specific task at once, it usually gets done quicker and it’s a better job. But I do multi-task the less important things. For example I might watch TV while doing a work-out or folding washing, making work calls while picking up kids from school (hands free of course!). It can be quite rewarding knowing that you managed to fit 2 hours worth of ‘stuff’ into 1 hour!

Define Specific over Broad Activities

I try to set aside specific actions to be completed, I’d prefer to break the cleaning into 5 x 10 minute tasks. Eg – dishes -10 mins, folding – 10 mins etc. rather than just scheduling in a 60 minute cleaning block. – The main reason I do this is because the chance of finishing a task early and having 60 minutes spare to fit in the cleaning isn’t going to happen, but finishing 20 minutes early and being able to complete a couple of smaller activities will happen!

Rest, Eat & Drink

Get a good nights sleep, as tempting as it is to try and stay up and cram in some extra work, make sure you get 7-8 hours sleep a night. Schedule in some time each week to just laze about, even schedule in a 30 minute nap during the day if need be! Keep yourself well hydrated and eat well-balanced meals!

Don’t be Scared to Ask For Help.

It is completely okay to ask for help! Don’t be ashamed of saying ‘I’m overwhelmed and need help’, Friends and family are willing to help where they can. Clients will usually be happy to wait an extra day or two for jobs, suppliers may grant you extended trading terms. If you don’t ask, you never know. The worst that will happen is someone will say “no”.

I’m looking forward to baby being born, Hollie recovering and things becoming a little less hectic… With a new-born though, the next few months may be just as busy as ever!