Today we are going to talk about the final piece of the puzzle for creating more profits, growing and escaping the rat race.

It has to do with retention and another ‘by-product’ of retention you can harness.

If you want to double the size of your business and you only want to do ‘one thing’ then you are down to only one choice – figure out how you can get each customer in your business to clone themself.

I mean refer a new customer to you.

Referrals are the Holy Grail for growth, boosting profits and expanding your customer list. They are less price resistant, they buy more and they close more easily than a new customer brought in from other forms of sales and marketing. Forget the internet, direct mail, print advertising and social media.

Referrals can and SHOULD be obtained systematically from your existing customers.

Each referral gained is easy growth and additional profits.

What could be better than having referrals call you up and begging to buy from you?

There are ‘Critical factors’ to successful referral marketing.

1. An Ironclad relationship with your customers – so that they like trust you enough to refer their family, friends and colleagues to you (They have to stick their neck out for you in order to refer)
2. A compelling reason to make the referral (An offer)

When we’ve implemented our own referral program using these principles we got an immediate 700% return on investment.

One of our clients increased their referral rate by 350% using our referral generation system. We are reporting this because Jarrad is a tracking ninja – he knows what those referrals are worth to his business and he wants to see an ROI on every dollar he spends on marketing.

If his close rate and his referral rate stay the same (not increase) then the referrals alone are going to pay for his newsletter.

This is why we’ve added the bonus module– “How to get referrals without being pushy” to our complete newsletter marketing blueprint.

It’s how to implement your own referral program so that you don’t have to be that pushy salesman asking “Do you know anyone else who will be interested in our products and services?” all the time.

Newsletters and Referrals are linked. Your newsletter is the ideal place to promote your referral program and one of the easiest ways to get a positive ROI from your newsletter is from getting the people receiving it to refer new clients to you.

Frankly, if you don’t need or want more referrals, I don’t know why you’ve read this far.

So do yourself a favour – register for our “Complete Newsletter Marketing Blueprint: The step by step guide to creating a profitable newsletter for yourself.”

If you sell anything of value then odds are that the referrals you’ll get after you implement the referral program in the bonus module will actually pay for your newsletter for the year.

Join us as we take you from beginning to profits:

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In part 8, we talked about the power of retention to make the long term profits of your business higher.

The solidarity of your customer base means that you can also grow faster. The more customers you are keeping the less you have to replace. It’s the key to long term positive growth.

Say you’ve got 1,000 active customers. If you are losing 100 per year – then you have to add 100 new customers before you can grow that year.  Cut the losses in half – remember as Dr Glenn Livingston says – repeat purchasing is about your customer LIKING YOU.

That means that you’d only have to replace 50 customers to start to grow.

That means that more of your customer acquisition marketing is actually going towards creating growth. We know we are a long way deep into this series but this explains why any established business should be more concerned about retaining their existing customers than they should be about getting more customers.

It’s the easiest path to growth. Keep what you have so that you need less new customers so that your business can grow.

Focus on improving retention before you focus on your customer acquisition.

Unfortunately, many of the business we talk to are actually backwards about this. They want more customers now and they aren’t concerned with keeping – the longer you keep them the more profits you’ll bank – you’ve already gotten them – its like free money.

Also, the longer you keep them and the more they spend with you the more you can AFFORD to spend to get them.

We do improve our client’s customer acquisition systems. But we can do more to improve them when our clients can afford to spend more on customer acquisition because those customers are worth more to them.

Got it?

Good.

So get focused on retention for your business, it makes it easier to grow.

For the first time ever we are revealing our step by step blue print to build an ironclad bond with your customers, so that they keep purchasing from you for longer, they buy more of your services from you, they buy in larger quantities and take your other products and services that you might offer (if you don’t have any there is nothing stopping you from finding some).

And finally, getting them to refer without you being seen as pushy!

Click Here To Find Out More

In part 7 we talked about how we can boost your profits using the power of geometric growth. Here we are going to talk about the hidden reason why your existing customers can make it easier to grow and boost profits.

It’s how you rapidly boost your top and bottom line using only your ‘existing customer assets.’

The next great growth source for your business is actually subtly hidden. It’s customer retention. Yes – it’s overlooked because it isn’t paid attention to and so it isn’t measured.

Let’s go back to Zac’s stomach and the Thai restaurant from part 7 {link to part 7} again:

There are other Thai restaurants that are within driving distance of my house – they are direct competitors, then I have maybe 50 places I can buy dinner at within 20 minutes from my house. They are all competing with that Thai restaurant for my money when I decide to eat out.

I am fairly loyal when I have reason to be. If I decide I want Thai food I will go to them. However, if I decide that I should try someone else and they are ‘better’ I will switch to them and they will get my $840 per year.

So let’s say my average stint as a loyal customer is two years, and that is fairly average for their customers – that means that for each additional year they can keep me that is an extra $840 in their pockets.

Got it? Okay good. Just if they retain me an extra year I go from being worth 1680 (840 X 2) to 2520 ($840 X 3) and at year 4 I am now worth $3360 to them ($840 X 4). Doubled my life time – double the revenue.

We don’t necessarily see this in our business unless we are A grade tracking ninjas. But it’s there and it can be tracked over the years. The easiest way to track it is what percentage of your list has become inactive over the last 12 months?

Just keeping a customer purchasing at their current levels for longer is reason enough to investing in your customer relationships – so they are iron clad. Buyer Psychologist Dr Glenn Livingstone has said on more than one occasion “second and subsequent purchases from your customers are driven primarily by whether or not the buyer LIKES you.”

Yep. Loyalty is about being liked. Not necessarily having the best or the cheapest.

So while sounds airy-fairy, building relationships and rapport with your customers does tangibly turn into dollars. Trust me, that is why Dan Kennedy works so damn hard to be positioned as the NO BS guy and he inserts a whole lot of salient facts about his life into all of his newsletters, books and products. And as he says – “we can compare tax returns if you want to dispute that it works,” and his stories about customers who have been with him for 20+ years and spent 6 figures with him in that time.

In the next email I’m going to talk about how retention and customer acquisition together can supercharge your growth.

For the first time ever, we are revealing our step by step blue print to build an ironclad bond with your customers, so that keep purchasing from you for longer, they buy more of your services from you, they buy in larger quantities and take your other products and services that you might offer (if you don’t have any there is nothing stopping you from finding some).

And finally getting them to refer without you being seen as pushy!

Click Here To Find Out More

One of the really complex things about growing your profits from your existing customer base is the math gets a bit screwy.

For the math geeks out there (Zac included), the growth isn’t linear it’s geometric – your gains don’t add they multiply.

So here is what happens when Zac eats Thai food:

So say you run a restaurant and your ‘average’ customer comes in once a month spends $70 with you each time they come in. That’s what happens when I order Thai food here and usually it’s for 3-4 people. Maybe that says more about me than it should.

So we know that I would spend $840 ($70 X 12) in Thai food a year.  I do eat out more than once a month so they do have a chance for me buy to more Thai food than I do. Every time I eat out I could choose Thai food but I don’t – the fact that I don’t means there is an opportunity for them for extra purchases.

Let’s be conservative and say that they find a way to get me to purchase an additional 4 times a year. Which is surprisingly easy – I probably eat out once a week. I’ll admit I do respond to advertising – so whoever has something I want to try means I eat there.

One thing McDonalds does very well is get people to order a little bit extra – that is what their Value menu /Loose change menu or whatever they decide to call it next is all about. You order the meal and they get you to buy an apple pie or another burger with your meal. Bonus profits – just by increasing the transaction size.

So back to my Thai food. Let’s say they figure out how to get me to order either an extra entree or desert with my meal. There’s an extra $7-10 no sweat for them.

So now we are at $77 a meal 16 times a year. $1232 per year rather than $740. A 66% increase in revenue all from a 10% increase in transaction size and a 33% increase in purchasing frequency. Then we multiply that by your customers and low and behold we get a ludicrous increase in your turnover.

As an interesting aside in the lecture ‘Arithmetic Population and Energy’ (It’s on Youtube here http://www.youtube.com/watch?v=umFnrvcS6AQ )– Dr Albert A. Bartlett’s opening sentence is

“The Greatest Shortcoming Of The Human Race Is Our Inability To Grasp The Exponential Function.” 

Exponential and Geometric are the same thing.

For the sake of our little chat here, what that means is that many people will look at the 66% increase in customer purchasing and say something like “Bullshit.”

However if we all get out our calculators and do the math for own business we will see that a 10% increase and a 25% increase will actually increase our turnover by 66%… You can’t fault the math.

Then if our restaurant achieves this with 1000 patrons like me then $740,000 to $1,232,000.

Our challenge to you is are you asking yourself the questions necessary to get your customers in more often and to get them to spend more when you do?

What are those profits worth to you?

That is only the beginning of what your existing customers can do for your business when you have a ironclad relationship with them.

For the first time ever, we are revealing our step by step blue print to building an ironclad bond with your customers, so that they keep purchasing from you for longer, they buy more of your services from you, they buy in larger quantities and take your other products and services that you might offer (if you don’t have any there is nothing stopping you from finding some.

And finally, getting them to refer without you being seen as pushy!

Click Here To Find Out More

In part 5 of the series we discussed how there is only one TRUE ASSET in business.

Many gurus will be up on stage telling you the real money is in your customer list. And they are right there is some income is in the list. But the equity and the big profits are not in the list.

It’s kind of funny, most people don’t understand that the value of List is not the size of it. So much of the time lists get compared based on size – ‘mines 10,000’ mine’s 1,000. And so on and so forth. Doesn’t matter how big it is, it matters how much they spend with you.

As we saw in part 5 {link to it} just because someone is on your list doesn’t mean they will automatically buy those products and services from you. They are only a better offer away from it.

There is a way to stop that shopping behaviour, by developing the only true asset you can actually have in business.

A RELATIONSHIP with YOUR CUSTOMERS.

That my friends is about the only asset you can actually have in business. It is the only way to ensure customer loyalty. It is about the only way to sustain increased customer value. It means that they will clamber at the door in order to get everything they can from you.

Now as we were talking about in the last 2 emails – if you try and build up the value of your existing customers using manual labour, who do you think has the relationship with your customers? You – Business Owner, Entrepreneur, Marketer? Or the people you are paying to make the calls, pound the pavement and talk to your customers for you?

Yeah – it’s them. Then when one of them has delusions of grandeur and goes out on their own, those relationships follow them out the door.

In high-tech sales it is not uncommon to hire someone just for their rolodex. The best thing about casting John Travolta in a movie is he can get a slot on Oprah to promote the movie at will. If the target audience for the movie watches Oprah, casting Travolta is a good way to boost ticket sales.

If you want to keep your customers and grow their value to your business – YOU need a relationship with YOUR customers. And because time is scarce, it needs to be leveraged and systematised.

For the first time ever we are revealing our step by step blue print to build an ironclad bond with your customers, so that they keep purchasing from you for longer, they buy more of your services from you, they buy in larger quantities and take your other products and services that you might offer (if you don’t have any, there is nothing stopping you from finding some.

And finally, getting them to refer without you being seen as pushy!

Click Here To Find Out More

“There is hardly anything that can be done a little cheaper with a slightly lower quality.” Never have truer words being said.

I’ve thought similar things myself; back when I struck out on my own, starting my first business doing roof restorations. Unfortunately, I couldn’t do what happened to one of my clients – I couldn’t steal the customer list – seriously how can you steal a list of people who won’t need your services again for 10 years?

Another of our clients had one of their employees do exactly the same thing to them but the customer list contained repeat buyers – ready to buy today.

It’s really easy to go into business for yourself by stealing your competitor’s customer list, cutting your prices and calling them up and saying “I can do what they were doing for half price.”

It’s not ethical and not all that legal either but none the less it happens more often than we would care to admit.

It’s a pretty disappointing feeling to be honest. I’d feel gutted to know all that I had strived to build up had walked out the door with a rogue employee with delusions of entrepreneurship. The sad part is because they had NOT really invested in the only TRUE ASSET you can develop in business they were susceptiable to the loss, and suffered a sharp decline in sales.

Things are rolling along nicely then … ‘Whee’ plummeting the cliff you go. Kind of like a Wyle E. Coyote and Road Runner cartoon – you don’t realise you’ve run over the edge until you look down.

Now thankfully a loyal customer of theirs actually called this client up and told them he had been approached by their rogue employee – but that did take 6 months. 6 months of head scratching and wondering what the hell happened before light was shed on the problem.

There is a way to make this really difficult for your ambitious employees to do and it is the only TRUE ASSET you can develop in your business.

It is the keys to the kingdom, the easiest path I can see to long term financial success and freedom. It is even adds value when you finally decide that you have enough money and want to sell your business.

We’ll talk about it next time.

In parts 1, 2 and 3 we’ve been talking about how to grow your business so that you can get the profits you need to escape the rat race.

There are really two critical points that you need to decide upon before you grow your business.

1. Do you grow by focusing on making your existing customers more profitable? Or do you just add more? In 95% of cases it is going to be extracting more value from your existing customers
2. Do you achieve this growth manually or do you build a ‘machine’ to do it for you?

The real challenge of growing through manual labour is that you need to pay for the labour. So do you have the man power floating around in order to do the work you need done to grow to your desired level?

Then there is the second problem: it is getting harder and harder to find good people. But alas they’ve been saying that since Adam was a boy. So it may be getting harder, it may not – the only thing we can be certain of is that good people are a very scarce resource.

The third problem with people is because slavery is outlawed, good people can come and go as they please. So just because you have a couple of ‘gun’ staffers working for you doesn’t mean that they will always work for you.

Sadly they are not an asset you can own!

That means when the day comes to sell your business you can’t very well sell it for more because you have a couple of really good staff members on books…

Yeah, I know it’s not fair!

Which means that if you want to have genuine wealth, then you need systems that operate independently of the people in your business in order to generate your wealth. And there is another good reason to not be reliant on people with your business…

Another day another dollar. It’s something we hear all too often and we should be striving for better.

Personally I want tomorrow to be another day another 2 dollars, the day after another 4 dollars, 8 dollars the day after that and so on.

As we were saying in part 2, most of the time when business gurus talk about growing your business what they mean is doing more of the same. More customers… Get bigger, growth for the sake of growth.

It’s the path most travelled and it does have its drawbacks. The chief reason being the additional headaches it creates, you don’t get the profits necessary in order to make it worth your while.

Otherwise, we wouldn’t be reminiscing about the good ole days when everything was easier.

However it doesn’t need to be that way. Since financial freedom is determined by net profits not by turnover we as marketing professionals, entrepreneurs and business owners actually have to figure out how to increase profits not turn over.

That is the nub of the doing more problem.

Sure you can get there just by doing more of the same but it is actually the hard way to get to the point where you live your life on your terms.

The second option is to figure out how to get more profits from what you already have and leverage your business’ assets to the max rather than just going around adding more assets.

The terrible truth is that most businesses leave far more on the table than they ever hope to pick up.

How do we know this?

We know this because that is what we really do for our clients. We help them make more from their existing clients (and leads in some cases).

A client of ours Triumphant Property services had on multiple occasions lost business because their clients ‘didn’t know they did that.’

Triumphant’s Managing Director Shannon would go and see a client and see they had say a new lighting system put in and then as “Why didn’t you at least get us to quote on that”

The client would reply “We would have if we knew you did that”

Cariss Printing was able to 4X a sizable percentage of their database’s purchasing. For example before they worked with us, their clients were spending $1,000 per year. Now they are spending $4,000. That money was going to someone else either directly or indirectly (it was being spent at another printer or on something else)

But now it is in Cariss Printing’s pockets rather than anyone else’s.

I could go on but I feel I have made the point. Until they educatred their customers properly that business was floating out in the ether. Now they are both getting more from their customers than they were in the past. Their business is getting bigger but their asset base is staying the same.

The reason this is so important is because the relative costs of sale vary greatly between new and existing customers.

You can do this manually but it is a lot of hard work. The real secret is to create a machine that can do it for you.

Unless you have a machine to do that work for you then you are the machine!

Albert Einstein once said, “We cannot solve our problems with the same level of thinking that created them.”

In not so elegant terms – if what you are doing now isn’t getting you where you want to be, then doing more of it is not going to solve your problems. So it’s time to start looking for ideas.

Like my client realised – they needed the right help.

He realised that he has choices to make in order to get what he wants.

You do too.

You can work harder and do more – labouring for what will be in effect minimum wage. That is when a sales person makes 5 extra calls a day. Relying on quantity. It’s the same problem my client talked about in the last email.

That may get you bigger but it may not make you more profitable.  If you put enough meat through the grinder you’ll get there. But there is a massive price to pay if you do.

The problem with this is it often leaves you tired and burnt out, frustrated and disappointed. Solutions like this are lazy and to me are just plundering capital in the hope of a short term gain.

If you could already do more you would do more. We are all hard working people, we aren’t lazy. That is why I am against blindly doing more. If we could do more we would.

The goal is to live off of the interest, not be perpetually eating the capital.

What is most telling especially if you’ve ever paid attention to ‘business gurus’ is they all talk about doing more. More leads, more customers, more sales.

There is an old maxim in sales, to sell them ‘what they want.’

The unfortunate truth is that sometimes what you ‘ask for’ is not what you actually need.

More often than not it is because the gurus aren’t really in the education business, they are in the ‘profits for them’ business and rightfully so. So they sell what is easiest to sell, not necessarily what you need.

And to be honest there aren’t any guru businesses in Australia that would sell for very much money (There are 5 criteria to sell these business for a lot of money and NONE of them meet all 5).

The financial reason we are in business is actually kind of simple. It’s to amass enough money so that we can sit on the beach and drink margaritas.  And that is why profitability is important. It’s the profits that we put in our pocket that allow us to amass that money so that we can go and live our lives how we want.

Stay tuned for part 3 where we will talk about how we can work to build the assets to operate in a smarter way – doing more with what you’ve got or possibly even less.

Recently I was talking with a client and they were talking about their future plans.

We discussed competition, where he has grown his business from and a whole bunch of other stuff. He really laid quite a lot on the line – he knew that he needed help. Not only did he need help, he needed the right help.

If you looked in on his business, it was successful. He had a very nice premises. It seemed busy; there were good margins on his products and services. He was adding more staff to the operation.

Now they weren’t without their problems. There was increasing competition in their area. Within your competitors there is always one in the every market, with the bright idea that they should cut prices in order to grab a larger market share.

There he was, more competition than ever, the mob chasing his customer base getting ever larger. It becomes harder and harder to maintain prices during a discounting war. But thankfully he was willing to do it.

He knew he had two challenges because of the expansion: He needed a larger customer base and he had gotten much bigger over the past couple of years but he hadn’t become more profitable.

This is far too common a problem, businesses get bigger they don’t necessarily get more profitable. One part of the problem can be pricing the other is that they neglect a major profit centres right in their own back yard.

The reason this is so important is that turnover doesn’t necessarily mean more dollars in your pockets. It doesn’t mean more profits. Dollars in – dollars out = profits.

Some of those profits should be going into your back pocket. Regardless of your ambition level if you are in business for any reason other than to own your own job, you need to be putting those profits into your back pocket.

For example – if you can create a surge of $25,000 in additional net profits four times a year, that means you will bank an extra million dollars in the next decade. (This is extracted from a case study for a single location mechanic’s business. One campaign, easy to do.)

Barring striking gold, or winning the lottery, the highest probability path to financial freedom is actually getting rich slowly, systematically, developing assets that will continually put profits in your pocket.

There is a reason that the richest man in Babylon saved 10% of his income every week.