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.

Some people can be impatient! I know because I’m one of them.

The other week I was conducting an existing customer opportunity audit with a business and we discovered that in their specific situation, there was a really good business case for doing a newsletter. I was confident that the newsletter would deliver the conservative results that we discussed. They were completely sold on the idea and ready to get started, but then they said “We’ll try it for 3 months, and only if we see a return during that time, we’ll continue.”. – I had to stop them right there and say “If you can’t commit for at least 12 months, we can’t take you on as a client”

And there is a mathematical reason why we wont! So I thought I’d show you the ‘maths’ behind how a newsletter makes you more money. – It’s not like other forms of advertising where you get a new client with whom you can immediately and easily track the return.

We’ll use a hypothetical business… lets pretend it is a car mechanic, and they have 300 current clients.

This particular business has an average sale of $300, and on average a client gets their car detailed once every 9 months, and currently clients stay loyal for about 3 years. And on average about 1 in 4 clients will make a referral over their lifetime.
By implementing a newsletter, there are some key factors we are likely to change:

1.) Increase the transaction size – by educating customers and building trust you can usually up-sell customers, and cross-sell additional products and services to your clients which increases the transaction size. Let’s say this happens and the average sale increased from $300 to $330. a mere 10%

2.) Increase the frequency of how often they purchase – by encouraging and educating customers about the importance of servicing your car every 6 months, they can easily increase the frequency, not everyone complies, but lets say it moves from every 9 months to every 7 months (or said another way, from 1.33 times per year to 1.71 times per year)

3.) Increase how many years they stay loyal for. – By staying in touch every month, nobody will ‘forget’ you, they will stay connected with you and the likelihood of leaving will decrease a lot. For this purpose lets say we manage to increase the time they stay loyal from 3 years to 4 years.

4.) Increase the referrals you get. – By always being in front of customers, you will be top of mind, the perfect place to be to garner referrals. By implementing a referral programs alongside your newsletter it will increase it even more. In this instance we change it from 1 in 4 clients to 1 in 3 clients referring. (or said another way, from 0.25 referrals per client to 0.33 referrals per client.)

All these numbers don’t really mean a lot on their own, but lets crunch some numbers.

Currently with no newsletter, here is the current “lifetime value” of their current customer base (including the referrals those customers bring in):

300 x $300 x 1.33 x 3 x 1.25 = $448,875

If we achieve those projected changes, look what happens:

300 x $330 x 1.71 x 4 x 1.33 = $900,622

A 200% increase in what those customers are worth to your business! While this looks impressive to do as an exercise, and the numbers are a good estimate, Their is a gradual increase to those changes, and the ‘increase in loyalty doesn’t really kick in until a few years time! I’ve demonstrated below an example of the cost and return involved in this particular case. You’ll see why we don’t think that judging the success of the newsletter after 3 months is a wise decision.

* This figure is unchanged because by year 4, the existing customers have already left.

I mean the Large Hadron Collider will either create a massive black hole to destroy the earth or it won’t.

Oh! I mean you are either a success or a failure.

No way known to man that you are either a success or a failure.

I know I spent a lot of time dealing with this idea. I wasn’t successful so I was a failure. I can over simplify things – Pobody is Nerfect.

With time and perspective I can see how limiting that belief is. However, when it is an omnipresent demon in your head, it isn’t helpful at all.

I spent the best part of a decade dealing with those demons. I don’t know where they came from, how they got there, but they were there. Gnawing away at my confidence, my ability and my effectiveness every day.

The downside of a good memory is the ability to replay every failure in your life over and over again, from a missed tackle in a hockey grand final that cost us the premiership to every time I botched a sale. I can recall them all with enough accuracy to bring my mood down.

For a long time, a part of my mind decided that they should be on a continuous loop. Not exactly the positive thinking material we are all told to focus on if we want to be successful.

In the end what got me through was the following realisation. Possibly from Dr Glenn Livingston for the sake of attributing it to someone.

Success is more like a process of removing anchors. If you are held in place by even a single anchor then you won’t make much progress quickly, especially in the eyes of an outside observer. However, you are making massive progress every time you remove an anchor.

Most importantly you won’t move freely until all the anchors are up.

One less anchor, holding you in place means you are a step closer to success. Once they are all removed then you have the happiest thing you could possibly want – largely unmitigated success the rest of your life.

“Life isn’t fair,” we all have a different anchors, and different numbers of anchors holding us in place. There are things holding us in place that aren’t a problem for others, and some people never seem to have had any problems. Our main task in life is to remove those anchors. Most people don’t, they remain anchored in place their entire life.

I know pulling up even one anchor is hard, dirty work. And if there is no breaking free then there isn’t reward either. The good news is once you are free, it is an incredible feeling.

The sooner you start to enjoy the process the easier it is. And how you feel about the task is actually entirely up to you – it’s just another anchor to pull up.

Very early in my marketing days, I was reading the Gary Halbert letter. It is a brilliant crash course in marketing and copywriting. Go though the entire archives written by Gary at www.TheGaryHalbertLetter.com

It was one of the first things I ever did and I don’t regret it.

I was reading about Sir Gary’s early days in the Coat Of Arms business.

He was talking about how he used to send a catalogue of all the products you could purchase with your family’s coat of arms on them.

Into that process, he realised that there were three big selling items from that catalogue. So he crafted sales letters for those products, and then he would send them. And sales of those products went up.

So now the question becomes when promoting your products and services to your clients how do you promote them?

Like with solo promotions like Gary did with his sales letters?

Do you send a catalogue?

Recently we put together a printing catalogue for our existing customers at Newsletter Marketing Systems – so for those products we’ve gone the broad approach there.

However with some feedback – we will start taking a more focused approach. It makes sense to focus on what your market wants.

Where you have high margin products make the investment to develop high quality marketing for those products.

It will pay off over time.

Where you aren’t sure what’s going to sell or need to hedge your bets, go broad, to find a clue on what to focus on.

That is how to cross sell.

There are certain things that have to be done. Every month, every week and every day. Interestingly, they do vary for each business.

For us, we need to get our own newsletter out on time every month. It’s kind of hypocritical if we are telling other businesses that we can make this happen for them and we can’t do it for ourselves.

We are also the only business in the world who produces newsletters for other businesses and eats our own dog food. Nobody else who can do it for you actually does their own newsletter – the way they tell you to do it.

There is an ever expanding list of things that you should be doing. I don’t know why this is. But I do know 80% of your results are going to be tied to 20% of your effort. Isn’t best just to identify what the 20% is and then focus on that. You are going to be working less – 20% of what you currently do and still getting 80% of the result.

It’s not LAZY it SMART. VERY SMART

There is an inordinate amount of rubbish thrown around about work and rewards. The two are not as linked as we like to think. I think this all stems from the dollars for hours mentality most of us are brought up with. Every hour is worth $20, $30 or $50…

It becomes like a sickening cancer that ruins ours thinking about how the world works.

Success can be had by focusing. After I finish this article I’ll have about 45 minutes to prepare for a sales meeting.

IF I get that right – then Newsletter Marketing will have a new customer. If I get it wrong then we don’t. Time and money well spent in order to tackle a high value task. If I spend a day on this it will be time well spent. It’s a 20% activity that yields 80% of the result.

The most effective among us at business are the ones who take their 20% effort tasks that yield 80% of the results and they focus on doing them as well as they can to the EXCLUSION of all others, to maximise their business results. Those tasks are the non-negotiable ones.

Do them poorly and your business will suffer. Do them well and your business will thrive

That is how you maximise your efficiency and effectiveness. Be good at the vital few tasks.

This is an excerpt about features and benefits discussion I had with a client she wanted to know how she could make more money from each issue. I’ve cobbled together the relevant parts and removed names to protect the innocent. It is a very important content writing and copywriting lesson. Don’t get fooled by the funny.

Client: I have 2 new people in the office – 1 sales guy and one  girl who has a sister who is a chiropractor and she herself is a qualified masseuse BTW and she is lovely Zac J

Zac (because this is copywriting feedback for the newsletter and I get a kick out of being deliberately thick, After giving the client 2 pages of good advice – I added):

Finally, I gather the best things about ‘the new girl’ are:

1. that she is single,
2. her sister is a chiropractor (different from Osteopath because of the spelling),
3.  is a masseuse
4. is really nice

What sort of salesperson are you?  

2 Copywriting and Sales Lessons:

Lesson 1: none of these are benefits, they are features. One of them is a feature pretending to be a benefit. (can you guess which one? – write to info@newslettermarketing.com.au with ‘features’ in the subject line and tell me what the feature pretending to be a benefit is and why – 2 movie tickets for the first 3 correct answers and they will be published in the next newsletter.)

Lesson 2: Present the biggest benefit first, cos if that don’t get them interested nothing else will.

Client’s reply: She has big boobs!!!!

Zac: Still a feature!!!!

Thankfully, I know the client is being silly and the lesson learned – the matchmaking is a bit of fun for her. She thinks I am good boyfriend material, I have my doubts.

If you who want to sell more- focus on benefits. Here are my definitions:

FEATURE: The characteristics of the product being sold.

BENEFIT: What the product being sold can do for the customer. (what your customer actually wants)

That means adding big does not turn boobs into a benefit. We are still talking about a characteristic of the product. (As soon as you start selling anything or anyone they automatically become a product.  And any product can be made more desirable with good salesmanship read copywriting. )

What a product can do for your customer is determined by its features. But make no mistake, it is the benefits that your customers desire.

Let’s bridge the gap together:

I’ll turn ‘masseuse’ and ‘chiropractor sister ‘into a benefit. Cos, quite frankly I not sure how to work single, boobs and being nice into a benefit without offending someone. Probably too late but hey.

How do I turn a feature into a benefit?

Simple – with one question over and over. “Why is that important?” take the feature – new girl is a masseuse. Why is that important? Well, my back doesn’t hurt after it has been massaged. Why is that important? Asked enough times I come up with this for the most compelling way to present life feels pretty good when my back don’t hurt:

‘Hey Zac you know how you had back problems over Christmas? Well how much better if at the end of the day you could get a relaxing massage from ‘the new girl?’ Also she has a sister who is a chiropractor so anything she can’t fix she can get her sister to fix ASAP… How is that for stress and pain free living?’

You should never turn the task of extracting the benefits from a feature over to your client. NEVER EVER, EVER. They won’t do it. Robbing you of sales because you are TOO LAZY to think through how to make your products and services desirable to them. You are better than that. If not, unsubscribe.

See how much more attractive the new girl is even if you don’t have back pain after I’ve turned her skill into a benefit?

By the way, the first thing I thought when I read about the masseuse/chiropractor was “Yeah? So? and What?”

Anyway, to show you this isn’t a one off, another client sent me this list of reasons why his customers will buy an LED rechargeable flood light:

• Super white led 10W
• Brightness of 900+ Lumens
• LED lifetime up to 5000hrs
• Rechargeable 3.6ah Lithium Ion battery offering up to 4 hours of run time
• Solid cast aluminium housing
• Includes 240v  Plug in Charger

I might be naive but I am pretty sure that you buy a Floodlight to see in the dark (there will be reasons why this floodlight is better than the others (actual benefits) – to be extracted from its features).

However, if this guys clients can buy ‘a potion of seeing in the dark’ that allows them so see in the dark better than the flood light they will buy the potion, all other things being equal.

Those three little words can be the source of every breakthrough and they can also be the source of damnation. Knowing whether or not a certain tactic works is the first step towards evaluating anything in general, but also in business.

The next three words need to be, “Where’s The Proof?” So that you can make a decision based on the evidence.

We can show you case studies of clients who have successfully grown their businesses with our services. You can also find people who have tried newsletters and have failed with them.

The problem is both sources of advice are biased. One of the strongest needs in human nature is the “need to be right.”

The people whose newsletter didn’t work (or their marketing in general), also need to be right in their forecast that if you do a newsletter it won’t work for you either. They aren’t doing it because they have your best interests at heart, they are doing it to satisfy their own personal needs.

Measure your own results and make your decisions independent of others.

The ability to understand and interpret numbers mean you know if you are on a winner or not, and that is all that counts. The hype of the media, the opinions of your well-meaning friends, family, co-workers, competitors or even marketing gurus don’t matter.

What matters is that you are making money doing it. If you are, keep going. If not, where can you make more money doing something else? Test it, then commit.

By and large I now ignore the opinions of others. Warren Buffett has done it all of his life. He sits in relative isolation in Omaha making decisions based on his own criteria. Dr Michael Bury has been the same, creating 700 million of profit in just 8 years – until he closed his fund in 2008. Dan Kennedy ignored his detractors for decades focusing on what works and has built a massive subscriber following.

Take someone else’s idea and test it. If it works – then cool! If not, then no harm done (risk only an amount you can afford to lose). Once you know it works roll it out.

Then I know and I have something nobody else has: The information about what will happen in my situation. Every business is unique. You know your business more intimately than everyone else so you need to be willing to test the ideas and make decisions based on your data.

Stand tall and proud, make your own decisions – and if you are wrong change. No point going out backwards because you are wrong.

I think the reason business owners emotionally covet referrals is because they feel like they are free. We all like to get something for free – and perhaps a free customer is the best thing we could get for free.

Throughout the history of marketing the power of FREE has never been underestimated. It has launched countless businesses and it has fuelled advertising campaigns. Never forget how powerful it can be.

However Referrals are not really free.

Disappointing isn’t it? There is a massive investment required in order to get referrals. You need to get the customer in the first place, you need to make sure that they go from customer to raving fan, who tells their friends, family co-workers and their peers all about you and how great you are.

Then if all of that happens, we get a referral.

And because we didn’t do anything active it’s ‘free.’

If you believe that makes the referral free you probably believe that traffic that came from the search engines is free even though you are paying for an SEO company to get you up the ranks or you’ve invested hours, days and weeks of your own time doing that SEO. Finally, the time you’ve waited while you get up the ranks was also free.

Either  way an investment is made. Getting back to referrals you’ve put all this work in to get the customer to the point they are ready to refer, then I would be doing everything in my power in order to get as many referrals as possible out of them.

They are and forever will be the source of customers that close the fastest and at a higher close rate, buy more, are less price resistant and I’m sure I have forgotten something, (so THERE’S MORE THAT REFERRALS CAN DO.)

The big problem our clients mention over and over is the idea that they want referrals but don’t have a way to ask for them without being pushy.

Referring should feel like the natural progression for your customer rather than feel like they are being interrogated for a list of the people who should be buying from you.

The hardest element to control is timing – when their friends, family and colleagues are ready for your services. The same as you can’t control when they are ready to buy.

It’s something we have figured out how to make work for you – so referrals become an integral lead source, your customers don’t feel intimidated in to giving those referrals and you don’t feel like a pushy sales person getting them out of your customers.

In some ways it’s amazing that marketing is such a little understood skill. I for one am grateful that it is, but there are drawbacks to it.

Marketing is what makes the world go around. Without it nothing is sold, without an army of face to face sales people or tele-marketers. Endless pounding of pavement, calling on customers, or sitting in bricks and mortar stores hoping the right customers happen to come in.

Without marketing, every business would not be able to employ the number of people they do sd more of their costs would be associated with the cost of selling the goods leaving smaller margins, less production, smaller business and lower profits.

With marketing we gain the power to do more with less.

We don’t need to rely on hand outs.

To me there is almost nothing more irritating than businesses that have sprung up to take advantage of some scheme – like the insulation industry during the last Labour government did. That business wouldn’t have existed without government subsidies – and technically it only has one customer – The Government because nobody else was giving them a substantial amount of money if any at all.

Those are not businesses, they are ‘arbitrage’ opportunities. Arbitrage is a trading term – to take advantage of market inefficiencies while they are there. So yes, taking advantage of them makes sense – but the ‘industry’ crumbles the moment that the incentive is withdrawn or the inefficiency is taken away.

It’s not hard to sell, “do you want free insulation?”

We marketers have a far harder challenge – how do we sell our products and services to the end customer so that we make a decent profit at the end of the day.

To me there is something pure, almost beautiful about it. We are making ourselves and our customers richer in the process. They have had their problem solved, their itch scratched or whatever metaphor you choose to use. They are richer from having brought from us.

This is what the marketer does for a business – they enrich lives, both customers and also the lives of the people in their business.

The world becomes a better place and sadly this selling and marketing thing seems to be a dying art right when we need it the most.

It’s the marketer who can succeed. They can grow businesses and they can make the ordinary seem extraordinary.

I am grateful to be a marketer, I hope you are too.