Recently I was reading a book on trading. It fascinates me… Mostly because I need something in my life that I can endlessly talk about that means nothing, Football statistics, tactics and strategy is my poison of choice, it works in social situations. If it wasn’t football it probably would have been the stock market.

(It’s no coincidence that I run my fantasy football teams as ‘Buffet/Graham style’ value investing exercises.)

I don’t know if you’ve ever watched finance and investing shows on TV but they are remarkably similar to sports opinion and analysis shows. A bunch of people sitting around a desk talking about things that is in reality largely irrelevant to the outcomes.

If these people held the secret to getting rich in the stock market you’d all be rich already – watch the investing show and follow the advice (It doesn’t work that by the way – they mostly recommend losers). If the sports guys know so damn much about football why wouldn’t they coach a team and win 10 consecutive premierships?

Anyway, tangents aside, while I was reading this book I realised that customer retention has a lot in common with investing. You are making an investment now in hope of a future return (the next sale, a referral, etc). So a lot of the same maths and psychology is involved. (Isn’t marketing, maths and psychology?)

Which means when you invest in a customer relationship you need to balance 3 things:

The amount you invest in order to get a future return. If you have a retail store selling cup cakes then your next purchase is probably only going to be a couple of dollars – which means the amount you can sensibly invest to get a future return is low. Would spending $25 on a newsletter for each customer make sense? I doubt it. Compare that with someone selling industrial components to a manufacturer. They can invest a lot more and still see a return.

The odds of the future return occurring. What are the odds of you closing another sale with them? The higher you stack those odds in your favour the faster you get richer. Say it is 50% at the moment and you only need it to get to 52% to cover the cost of a newsletter. Then it warrants taking the risk. If you need a newsletter to double your sales then I wouldn’t get too excited about those sorts of odds.

The size of the future return. Basically, the bigger the next purchase the less the odds can be and you will still win. Let’s say if you invest $20 in each customer and that every 25th customer buys a second time. Now let’s say that when they buy the second time you make $1000 profit.

That means that you have a licence to print money. For every $500 you spend on customer retention you make $1000 profit. Coincidentally, that is the formula that a lot of the most successful traders use. They aren’t ‘right’ very often but when they are it pays off in spades.

That is also the story behind why there are a lot of failures on the way to success. Few really big winners.

Since we all adhere to NMS production cycle…

I’ll confess I am a bit late getting this article into the newsletter on deadline.

I’ve added it as a last minute piece. We tell our clients to write a personal interest article and an industry specific article each month for their newsletter and we are no different. This newsletter follows all of the same advice we give our clients and we follow our own deadlines.

The last 8 weeks of 2013 were a physical struggle for me. I’d call it burn out. It comes from trying to grow Newsletter Marketing, keep up with my consulting and copywriting work on as well as trying to stay sane and have a life outside of work…

Ideally, this article would be ready to go in at the start of January. But instead somewhere around November 3 I hit the wall and it became an exercise in priority management and my health to get through until Xmas. I made it.

We are all entrepreneurs, so we are all likely to burn the candle at both ends. But I am a case study in pushing too far at the moment.

While I gave you the nuts and bolts in January of how I spent my summer I didn’t give you the why. And that was it – I was so exhausted I couldn’t think straight or see straight some days. I watched TV, I slept and occasionally left the house to catch up with some friends – it didn’t help my back was out but it was more an excuse than really stopping me.

Just before my birthday I was starting to panic that the exhaustion I was never going to leave. Thankfully it has largely left by the end of College Bowl season. Which ends this afternoon.

Be sure to take the time to rest and recharge. It is okay to work intensely in bursts but be sure that it is balanced out. If you don’t take the time for the recovery, your health will leave. After this break I couldn’t imagine anything worse.

There is no point being rich if you have sacrificed your health or anything else to get there. Happiness seems to me to be a function of having a balanced life, not robbing one area to pay another.

Started Jan 7 11:07am Finished Jan 7 11:22am, which is why I don’t worry about being behind with writing (now way I could have done it that fast in December it might have taken hours). But note I was nearly a week behind getting this ready for Ben.  And to think it used to take hours to write a 300 word essay in high school.

We’ve all heard for a long time that the money is in the list.

If you haven’t then you probably are investing adequately in your marketing education.

Probably 80% of businesses are not even actively building theirs lists… Yes plural. A real business should have at least 3 lists and sub lists within each of those main lists as they get bigger.

16 of the remaining 20% are probably not investing adequately to see a return from their lists or they are too small or in such a state of neglect so are in effect worthless.

The rest are probably lists of significant value. Well invested in order to make a considerable return on the investment.

So here is my point on lists…

The value in a list grows as it gets bigger. So I can invest a couple of weeks to create a product and the marketing for it. Now let’s say it converts at 1 in 50. A 2% response rate.

When you have 100 people on the list you can send your marketing to that means that you’re going to get 2 sales, all things being equal.

Now that may be fine or it may not. That depends on you and your situation as well as the profits on the product.

Once your list is at 1,000, that same work yielding a 2% response rate yields 20 customers.

At 10,000 on your list the same work yields 200 customers.

The same work yields 100 times the response. If 1,10 or 10,000 people receive this email, it still takes just as long to write and to send it.

That is a big part of the leverage you can have from marketing. Rather than ‘selling,’ which I define as a 1:1 activity.

If you are actively growing your business then you can be actively growing your lists. And if you are acquiring customers then it is not too hard to be nurturing those accumulated lists in order to have a readymade asset that can make you large additional profits from in the future.

Be wise and invest as you grow your business. This is a ‘money on the table’ opportunity that a great many entrepreneurs neglect through their unwillingness to be disciplined about their business.

While a list is small, it ‘hardly seems worth it.’ When your list gets bigger it is major income source.

(Names changed to protect the innocent).

The middle of 2013 I was working with a new client to get help them generate more leads. We had a good size list of high value, prospective clients. If we got one sale it would pay for the direct mail campaign – which by the way is how you play business smart.

Since this client was familiar with direct marketing, as we do it in these parts – I am a Dan Kennedy Certified Copywriter, he is intimately familiar with Dan Kennedy and his marketing philosophy. This lead to me making several assumptions as you will see later.

So we put together a simple 3 step mailing to get my client some leads. We both understood that this was about testing the market. There are lots of things we can do in order to make it more successful in the future, if the test came back positive. We were looking to generate sales appointments.

Away we went, I wrote what I thought was a pretty good campaign – 3 letters to be sent 2 weeks apart.

The client approves the letters. While we were scoping the project I found the sub section of the list that is most likely to respond to the offer. Mailing test list drops from 1000 to 200. Client thinks I am a genius. I suppose I am when I work list magic like this.

My client sends his secretary off to print the letters and get them in the post.

Mailing step 1 goes out. No response.

4 weeks go by, my client gets step 2 out 2 weeks late (later admits it is half of mailing step 2). Still no response.

I’m explaining the reality of the maths at this point, ‘when you do a 3 step direct mail campaign, you do all of it – then analyse the results.’ ‘Response is better to the second and third step.’ ‘not a big difference between 0 and 1 response – numbers wise is there’

At this point 2 things happen. The regulations change for the industry that we’ve targeted and they aren’t going to be worth chasing as clients anymore (valuable lesson about market selection).

Secondly, he gets a cease and desist letter from the industry’s regulator. I had engineered in a second way for this campaign to be a success – he might be able to get the regulator to refer him clients as a preferred vendor. But none the less we are dead in the water with this campaign.

Another 2 weeks go by. At this point I got a sheepish note from my client – Turns out he’s had 5 email responses – that he has only seen and that the phone number he put in the letter hasn’t been answered – the people he emailed back all said it was engaged and they had each tried it at least 3 times.

1.6% response would have been an outrageous success for this client. Good copy was nearly sabotaged by not testing the phone number and the email address. I screwed this up by not checking the response mechanism – I am to blame here too.

Be sure that you test your response mechanisms before you go out and spend money on media. It can save you a lot of stress.

With Ben and Hollie expecting a baby come April, I was leafing through our article ideas materials looking for an idea for this article. One of them is ‘would you recommend your kids get a job in this industry.’

Now, I am a long way off having kids (probably unqualified in the eyes of some to offer this opinion), but that won’t stop me offering my opinion on whether or not I would get my kids to get a job in this industry of newsletters (whatever that is).

I’ve just finished reading ‘The World Until Yesterday: What can we learn from Traditional Societies’  by Jarred Diamond – so that coupled with some interesting patterns started to stew.

In the West we often see a pattern where great wealth is built in the first generation, grown in the second and squandered by the third. The third generation never has experienced ‘lack’ so will lose the money that has been built up because they feel entitled to it and don’t appreciate what went into getting it in the first place. A fool and their money are soon parted.

The second generation appreciates how hard the first generation worked or have been involved in acquiring it themselves and usually have the experience to grow the first generation’s wealth.

So, would I recommend my kids get a job in this industry?

There aren’t that many jobs in the information marketing industry at large, the majority of these businesses operate lean with few employees in ‘kitchen table’ type operations. That is the first problem. The second is, it is relatively easy to start these businesses and with the right skill set run your own business – why go and work for someone else?

In many western dynastic families, children are given a job in the family business, leaving them forever dependent on their parents in some ways. In hunter-gatherer societies, children able to walk are basically treated as adults, many are expected to contribute to food production once they reach puberty.

It’s common to see children playing with knives, near fires and doing all sorts of dangerous things. Why? Because the child is considered autonomous. You cut yourself playing with the sharp knife, it’s your fault; you put your hand in the fire and burn because it was hot, your fault. Imagine that attitude at a child care centre.

Yes we would consider it child abuse but it seems to result in very little teenage rebellion in traditional societies and generally they grow up to be very happy adults that socialise well. Compared with the ‘adults’ our society turns many would consider it an improvement.

Personally I value freedom – I see no freedom in jobs. The only true freedom in the west is the ability to create your wealth from nothing. That is what I would want for my kids.

It’s a good industry to get work in if you want a job but a far better way to be able to create your own wealth and if your parents are in the industry it could make it easier to acquire the skills you need for your own business – for that reason I wouldn’t mind it if my kids worked in our industry, but I would prefer it if they became producers – capable of creating their own wealth and run their own businesses.

One of the best things about having Zac (a Dan Kennedy trained Gold Certified Copywriter) as a business partner is that he keeps me up to date and tells me all the really useful stuff he comes across. Last year he told me about a really simple but effective way to write Google AdWords, and send me a link to check out Perry Marshall’s Swiss Army Knife Method of writing good AdWords. It made it much simpler, and we used it for our Facebook ads and had a lot of success!

Today I want to focus on one specific technique that was taught and how it applies to all copywriting and marketing. When marketing I always found that it was so easy to get stuck on focusing on one benefit or one particular view of a product and trying to come up with different angles was quite difficult. Or as Perry Marshall puts it in the report I read ““There’s only a few things I can think of to say and it’s really hard to not sound like everyone else in my market.”  – But with this technique it completely eliminates the ‘stuckness’ that I used to get and gives me a treasure trove of ideas to choose from.

Perry didn’t have a particular name for it, he mentioned it simply as ‘Relationships’, but for the purpose of this article I’m going to call these “Relationship Angles”.

Most people, when writing or marketing focus on one relationship angle, usually the relationship between your customer and your product/service, but this is what everyone does, this is what’s expected, and to be honest it is very hard to stand out and be noticed when marketing with this relationship.

For example, a solar power company might simply say “Get Solar Power Installed This Summer?”

Pretty dull and boring really…

If you view the diagram you’ll notice I’ve identified 6 different People / Things. There could be heaps more than this, but for now we will simply use these. What we want to do is shift the angle that we look at with our marketing, view the different relationships that exist and how your marketing could fit into that angle.

For example, we could look at the relationship between our customer’s family member (wife / husband) and something your customer hates (high power bills), and suddenly it opens up a completely different angle to tap into:

“Are high power bills causing arguments in your home?”
“No more making your family suffer in the heat over summer in order to save on your ridiculous power bills”

Or perhaps we could look at something your customer loves (saving money) and  your customer’s enemy (the government) – once again it opens up even more angles to try on:

“The latest government taxes has increased power costs making it difficult for families to save money”

Or even the relationship between your customer’s children and your customer.

“Your kids will inherit the world we create, save power and save the planet”

These ideas are by no means polished, but by simply taking a relationship, you can wrap your marketing around it and completely change the angle you take.

I hope you find this tool as useful as I did!

The other week, Zac and I were sitting on our monthly Mastermind call listening to hospitality expert Jon Taffer from reality TV series ‘Bar Rescue’. He dispensed some great advice: “9/10 business people think the physical item or the service they provide is the product that they are selling, but it’s not, it’s the vehicle. The product is always the reaction to the experience, and he or she that creates the best reactions wins.”

Jon went into a little more detail and explained how in most restaurants, when you cook a plate of food, you think the food is the product. But he said if it is a good plate of food, customers react to it, they sit up and notice it, they physically react to it, and if they don’t, that restaurant is essentially stuck in mediocrity.  Jon says that “the chef in the kitchen is not just making an entrée, he’s making a reaction, the entrée is not the product, it’s the vehicle.” He used other analogies about bars, saying “we don’t play music, we create reactions and we achieve it through music, we don’t serve people, we create reactions, and we achieve it through service.”

What I got from this interview is that we are not really selling our physical product or service, be it printing, financial planning, baby products, medical services, etc. We are selling experiences that create reactions and we use the physical items we sell or the service we provide as the way to achieve it.

I experienced this concept in action first hand when I took Hollie out for dinner at the amazing Red Manna Waterfront Restaurant on the Mandurah foreshore in WA. First of all, I knew this restaurant had been doing something right, because I had been told on multiple occasions by different people how great the restaurant was.  The reason I was taking Hollie there was because, as a couple, I wanted us to have a great experience, I wasn’t looking to simply fill our tummies.

When we arrived, as we walked up the stairs, the walls were covered in culinary awards, finalists for best service, best food, best experience and many others. I was impressed before I even entered the restaurant. The restaurant itself was beautifully presented, the ambience was relaxed and elegant. The wait staff were very polite and helpful the whole way through the night. The food was heavenly, I am getting hungry just thinking about it again. We sat out on the decking, looking out over the beautiful Mandurah foreshore. The night was everything I wanted, great food, great service, great location… It created an amazing experience that I won’t forget and if you ask Hollie about the “reaction” I had to the melt-in-your mouth lamb cutlets, it was priceless, I was weak at the knees about to propose to my meal. Soooooo good! I highly recommended it if you want a great restaurant in Mandurah, and definitely worth the drive from Perth!

As you can see by the last paragraph, one of the other reactions that has been created from the experience was recommending it to you all, a positive recommendation or referral is so valuable, and by creating the right experience of your product or service it makes people go WOW and want to tell others. Impressed customers buy more, refer more and stay longer.

There’s an old saying that goes “Jack of all Trades, Master of none”. The saying is used in reference to a person that is competent with many skills, but is not necessarily outstanding in any particular one.

The idea of being a jack-of-all-trades in business is pretty appealing for most business owners. If you think about it, if you can do a variety of different services then there are more jobs that you can take on and you have a bigger universe of potential customers.

For some businesses in particular it is great to be a Jack-of-all-trades, a handyman for instance! But for the most part there are some real pitfalls to promoting yourself as a jack-of-all-trades.

Pitfall Number 1: If you are perceived as a jack-of-all-trades then you are perceived as a master of none… It doesn’t matter how great your skills are or how masterful you are at what you do, when you promote yourself as a ‘I can do everything’ type business, people assume you will be competent, but not the best.

Pitfall Number 2: If you do everything, then people expect to pay less. Think about it for a second, who would you expect pay more for? The handyman or the plumber? The G.P. or the Heart Surgeon? Specialists are sought out and paid more because they have expert skills and consumers who want their problems solved or needs filled seek out specialists. Affluent people seek out specialists and are happy to pay the extra, people on a tight budget seek out the jack-of-all trades. Businesses appear desperate for work when they will ‘do anything’ and take on any job that comes their way.

Pitfall Number 3: Your marketing message is harder to focus. When marketing, the more laser-focused your message can be, the easier it will be to connect with your market and make sales. For example “We sell golf gear” is broad and difficult to connect with, to laser-focus you could say “We sell left-handed golf clubs for people with arthritis”, if that’s you, it would connect for sure! A medical example would be a Family Practice vs Heart Surgeon. By having focused messages in your marketing, people know exactly how you can help them and why they should use your service or product.

Pitfall Number 4: Your target customers are harder to pin-point. If I was a make-up artist and I was using a flyer that said I did weddings, school balls, photoshoots etc… then it would be very difficult to pinpoint who needs my services. Instead if I had a flyer that focused on being a school ball makeup specialist, I could easily promote myself through schools and youth groups etc,. Prospects would be easier to pinpoint and reach.

Although these pitfalls exist, there is nothing inherently wrong with being a jack-of-all-trades. The downfall is in promoting yourself as one. Some simple ways that you can avoid falling into this trap is to do separate marketing campaigns for each service you provide, have separate flyers for the services you offer. Be a specialist in one particular service to get new leads in the door and then cross-sell them to your other services. Making this shift will change the way you are perceived by your customers!

Remember, nobody wants to have heart surgery from the jack-of-all-trades doctor who’s offering a 2 for 1 deal and can fit you in tomorrow. They want the guy who’s fully booked and costs an arm and leg!