“Winning Isn’t Everything But Losing Is Nothing” – Part 2

In the first part of this article I talked about how winning and losing needs to be constructed in the context of playing a bigger game to reach your goals. Then having the ability to not take losing (Or winning) personally – which is a major barrier to reaching your goals and success.

And more importantly being able to understand that it’s not the number of times you win necessarily but how big you win when you do – and being emotionally okay with it. Mostly people are not okay with losing at all.

The second thing you need to be aware of is that you don’t want to go broke trying to win.

In both my and other people’s opinion, the inability to understand how to make compound interest or geometric growth work for you rather than against you is the single biggest obstacle to sustained success.

Is a 2% return any good?

One of our clients is getting about a 2% referral rate every month on his newsletter. In a past business life I was getting a 2% return on my direct mail, (that return meant I was making 2 grand in profit for every $100 spent.) I got depressed with 2% and stopped doing direct mail. Can you spell

‘B.I.G. M.I.S.T.A.K.E?’

Do you know what sustaining that response rate means? It means quite simply that our client’s business will grow 27% from new customers in the next 12 months.

Would that make you happy? 27% bigger this time next year.

All from a ‘piddly’ 2% response rate being able to compound for 12 months. 2 years on and you’ve grown 61%.

Unfortunately most people will get discouraged at 2% and just stop.

You can use compound interest in your favor or not. The choice is yours. But I can guarantee you that playing the long game is how most people succeed. I am yet to encounter a genuine overnight success. They all begin with long periods spent in obscurity, before the bloom into something massive.

As far as I can see everything unfettered in nature grows geometrically. The only place there is linear growth is in the world of jobs and employees.

“Winning Isn’t Everything But Losing Is Nothing”  – Part 1

I probably heard the first quote from my mother when I first played under 8’s basketball. I heard the second quote from Mutant League Football on my Sega Megadrive when I was 12.

The first thing it is worth noting about any competition is that there are automatically winners and losers. In all but the most unlikely of circumstances you will end up with one label or the other. For those of you unhappy with labels there is only one option – life on the sidelines. In all likelihood working for the man, in either that depressingly massive bureaucracy – the government or a Dilbert Cube.

Unfortunately most of us feel that losing is nothing. It can be especially when you don’t learn anything or it’s not part a of deliberate strategy to win overall.

The hardest trophy to win in all professional sports is the Stanley Cup in the NHL. You play for best of 7 series, after completing a gruelling 82 game season just to make the finals. The commentators are fond of saying you have to win 16 games of hockey to win Lord Stanley’s Cup.

What never gets mentioned is that you can lose another 12 and still win – a 57% win rate. Wow! Those odds are hardly better than a coin flip. In this case a 7% edge over ‘chance’ and you become a grand champion – bathed in glory – your name etched on the cup along with every other person to have ever won it!

That’s what I mean about a deliberate strategy. One where the losses are factored in and accounted for as part of your plan for success. Not everything we’ve done here at Newsletter Marketing has been successful. Personally we can both share our share of hard luck stories. However when we’ve risked, we have risked small but the rewards have been comparatively massive.

We stack risk: reward in our favour!

So we can have lots of small losses and still come out ahead.

1. Which means we don’t need that many winners to win.
2. We keep using our winners until they no longer work – maximising our win.

We’ve been using a handful of control ads to do our lead generation in rotation for over 2 years now. They work like clockwork – month in month out they profitably  bring in new customers. It took a few goes to get it right but I couldn’t even begin to calculate the value of those winners to Newsletter Marketing.

Most people get stuck in the winning and losing is personal trap. I win means I am a winner. I lose means I am a loser. It means they have never see the big picture – success just doesn’t even mean winning more than losing. For many people it means when they win, they win so big that it cancels out all the losses and then keeps paying them.

It’s not whether you win or lose but how big you win and being able to stay in the game long enough to actually win. When you see the bigger picture the losses are just part of the bigger game.

For most of us that is the hardest question we can answer. It happens to be one of the foundation questions for making a sale.

Interestingly a bunch of people have just written about this in their marketing newsletters. Considering the UNPRECEDENTED levels of commoditisation (and rising) that are out there in more and more industries, every business needs a crystal clear Unique Selling Proposition (USP).

The USP was originally coined by Rosser Reeves in ‘Reality In Advertising.’ I have my copy. I hope you’ve got yours. For some reason unlike ‘Ogilvy On Advertising,’ ‘Scientific Advertising’ and ‘Tested Advertising Methods,’ ‘Reality in Advertising’ hasn’t stayed in print.

It is on its way to becoming the next ‘Breakthrough Advertising’ (which sold for $900 used on eBay until it was reprinted). At the moment ‘Reality in Advertising’ will only set you back a couple hundred bucks.

A COUPLE HUNDRED BUCKS For a Book?

Developing a USP that actually works for a single product should allow you to sell much more than a couple hundred dollars worth of your product. In fact one of the criteria of a successful USP is that it can sell millions.

The advice in that book is absolutely priceless.

Now a lot of people have actually taken the term USP and pirated it into something else. A USP is not a slogan or a tag line but it can be.

The most famous USPs like that are probably :-

‘Fresh, hot pizza delivered to your door in 30 minutes. Guaranteed.’

‘Melts in your mouth, not in your hand.’

What is A USP? Dammit!?!

The USP is really much more than a slogan – at its essence is actually a boiling down of your sales message to a handful of pithy points that differentiate you from your competition and answer the most critical question: “why should I buy from you right now and not your competitor next week?”

The day you can answer that question your life changes. If you are never able to answer that question your business is doomed to be middle of the road at best.

The reason so few businesses have a USP is that nobody in the business took the time with the right tools to sit down and create a breakthrough USP.

There is a marketing success secret lurking just within our vision – in any professional sporting competition, from cricket to netball to rugby to NRL to AFL.

They all use a feeder system.

There are layers of competition below them aren’t there?

In the AFL you have the SANFL, VFL, WAFL, the NEFL. On top of that you have the junior competitions, not just the local footy clubs’ Seniors, Reserves, U18, U16, U14, U12, U10s all the way down to Oz-kick. There is also the elite under age competition – where future talent is identified and sent to.

Now there are some 800 odd listed AFL players (808 available for selection in supercoach).  My guess would be that the VFL, SANFL WAFL and NEFL probably has 4 times more players between them.

Then you go down to the level of the seniors at local footy clubs and there are at least 4 times as many again.

Then how many kids play at their age level?

It forms a feeder pyramid. Everyone aspiring to get to the next level. With the best players rising to the top.

Your customers do work the same as well. The fewest best should be at the top, giving you the most money, then there is the next tier, good but not quite as good as your best. Then there are some middle guys who might move up a level one day but are otherwise solid citizens. Then there is the rest who should aren’t customers yet, but might become customers one day.

Commonly called ascension – this can be engineered into almost any business. We are currently building into ours.

Most of your revenues can and probably do come from your fewest and best customers (this is 80-20 principle.) Many businesses try and operate outside of this and ignore it. You need to find ways for your best customers to spend more with you. They can and they will.

The amount your customers spend with you should look like this – few spending a lot, many spending some. A whole lot spending not much. That is a business operating in accordance with nature.

One of the sad things about marketing is that not everybody who should respond to an offer does respond. You also get people who do respond, who perhaps shouldn’t but that’s another kettle of fish.

The most successful industry at getting people to pay is the collections industry. Think about it… Collections agencies are have to get money out of people who in all likelihood have no money to begin with.

Marketing at it’s best is about selecting people who can pay for your services and also want your services. Collections agencies have neither of these advantages, yet they still are profitable.

What’s Their Big Secret?

They send a SEQUENCE of letters to people asking to pay what they owe.

This is the general gist of how the sequence goes.

Letter 1: First notice – you owe money, pay up by the date below or suffer the consequences (which includes phone calls and unwelcome visitors).

Letter 2: Second notice – usually this is sent a 2-3 weeks after the first letter and it is a little more terse. And reminds them that we are closer to the deadline than we were when letter 1 went out.

Letter 3: Final notice – this is sent just before the deadline and basically says pay up in the next couple of days ‘or else.’

This is more effective than a single letter for the simple reason that repetition has an effect on people. It reminds them to do what they should have done the first time they received the letter and then promptly forgot.

3 letters has a higher response rate than 3 single shots. So if letter 1 had a respond rate of .5% you’d expect a response rate of 1.5% for three single shots. I’ve done a lot of these sequences and every time I see compound growth. I’ve had a .75% response to letter 1 (you’d expect 2.25% response to three letters) and the campaign pulled 7%.

So when you are marketing to your own customers the same rule applies. You should naturally get a higher response rate compared to marketing to new clients but the repetition of multiple steps in the sequence means that it works on your existing customers too.

So if you have a featured product in your newsletter then you should also be following up with additional email and mail and anything else you can think of.

There is one task that will determine if a business goes from idea on paper to profitable enterprise. Without it you’ll scrap and fight for existence, struggle one month to the next in order to pay all the bills and meet pay roll.

It is foundational to business success.

If you get it right your business can often go on for years very successfully. The drawback being that you never fully take advantage of the other opportunities this one skill generates for you. Success with it can blind you.

If you are halfway serious about marketing I bet you know what it is…

Drum-roll, for the uninitiated.

To be able to buy a customer, cost effectively.

The reason I say ‘buy’ is because you buy customers either by having salesmen on the ground pounding on the pavement or dialling for dollars (You either pay commissions or salaries or both). That is the real cost of a sale right there.

You pay for it in media and in follow up if you are a marketing driven business.

That cost of sale has to be absorbed either by being able to cover the cost in the first transaction or else by paying for it over multiple sales.

If you can’t affordably get customers in the numbers that you need, then your business is toast. However, when you do get it right then nothing can stop you growing your business to the size that you want.

If you haven’t already become proficient at getting customers, it is really hard to be able to generate referrals, you need existing customers to get referrals, you need customers to buy from you once, before you ever get a repeat purchase.

This is why we can’t help a business that is a start-up. To me a start-up is where you hammer out your customer acquisition system. Be it with brute force and a team of salesmen, be it with marketing. However you get there, you need to be getting customers and making initial sales before you’ll ever have a shot at a second sale.

That is your first challenge in business, getting customers. Once you are proficient at that then your next challenge is maximising their value to your business. That is where Newsletter Marketing Systems does its best work.