Blog - Newsletter Marketing Systems

Is Customer Retention A Cost Or An Investment?

June 5, 2013 by Zac Nelles 2

When Ben and I talk to potential clients about the costs associated with doing a newsletter it is often met with dismay. Yes, it is a lot of money.

Neither of us are going to beat around the bush. However at the same time the investment relative to the return is miniscule.

Are you interested in income or equity?

Now Ben and I have actually just gone through annual reviews with our first three clients – all them have had financially positive results. That is, they have made more than they have spent usually in multiples of their investment. With one breaking even. (They work in the slow market of real estate and didn’t send their newsletter to the most likely prospects for them this year.)

So yes, there is a lot of money to spend to do a newsletter but on the income side they are at least as well off directly because of the newsletter.

One client, Cariss Printing have had clients who have been steadily spending less with them over the last 5 years jump in their purchasing from them. Often as much as a 5X jump. The only difference being the client started receiving a print newsletter each month.

What we haven’t yet been able to help our clients measure is the change in equity in their business (and if all we could show after a year of working with them is ‘equity’ then I would see our activity as a failure). That siad The chickens will really come home to roost in the future, when they all decide that it is time to sell up their business. That is when you get paid for the equity you have created.

Customers = Equity

An ongoing purchasing relationship with your clients is often the only form of equity a business can create. Thankfully, it is also the best. Business owners complain bitterly about the good old days when customer loyalty was a given. It is still there, but customers are only loyal to those who deserve it now, it is no longer a given.

These days, you the business owner need to invest in the relationship in order to be rewarded with the loyalty. This equity (in the form of loyalty/retention) changes the value proposition of your business.

No longer when you sell up is your buyer facing the proposition that they are buying some ‘physical stuff’ when they buy your business, they are buying future income from guaranteed and know sources. This is an incredible difference.

There is equity and future income to be had from your existing customers. Think long and hard before you choose to neglect them because it costs ‘too much to retain them.’

Filed Under: Blog

Why Nerds, Newsletters and The Back End Of Your Business Go Together

June 5, 2013 by Zac Nelles 2

nerds Somewhere along the line being a Nerd became cool. Beauty and The Geek and The Big Bang Theory have become staples the country’s nightly television viewing (I challenge you to find a night where Big Bang isn’t on).

I believe most people are pretty nerdy about something. There are people who would self identify as jocks who can easily name the starting 22 of each AFL footy side. I’d say that is pretty nerdy too. There are fashion nerds, art nerds, music nerds (Ever seen Rockwiz?).

Anyway, to me what makes someone appear nerdy, is knowing something at a deeper level than most of the rest of the population. For me, I am a marketing nerd. I know the fundamental difference that made Google the dominant search engine rather than Yahoo. (They used a different metric to set the prices in their Pay Per Click Advertising models – that is the difference between the biggest internet business in the world and lying around waiting to be put out of your misery.)

We all have our own areas of expertise. Customer retention is as much a science as it is a black art. It requires planning, being absolutely meticulous and the ability to follow a very precise program. When doing a customer newsletter, that multiplies out because late and missed issues cost you, repeat business, referrals, cross sells and more.

If you don’t have someone who is a nerd with an attention to detail looking after this part of your business then you are sunk. This is one of the areas of your business where lack of attention to detail is really magnified and overlooked problems add up over time.

Sadly a ‘poor’ newsletter mailed every month like clockwork will outperform a well prepared newsletter done irregularly. The problem for those who are DIYers without the necessary attention to detail is even to get a newsletter in the mail on time every month is a herculean task.

Don’t believe me? Then think about how few newsletters actually stay on a regular production schedule.

There are far more started and abandoned than you will ever count.

Even to produce a single good newsletter is harder than you might imagine. Most of the people who are trying to pull a newsletter together are struggling to get it done in two days. What is your ‘day rate’ if you are charging even a slender $800 per day then that means you newsletter is costing $1600 to produce. An astronomical sum compared to outsourcing it to us who come in at less than half that to produce a newsletter.

We can usually do a higher quality newsletter for our clients can than they can do for themselves and in all of our time doing this we have only had one newsletter go out late, that was when a client called us the night before we were scheduled to post and asked us not to mail because he had a staff member who he featured in that newsletter walked out on him that day.

We got a replacement in the mail for them in under a week.

Filed Under: Blog, Newsletter

The Last 12 Months in Newsletter Marketing.

June 5, 2013 by Zac Nelles 2

last-12-months It has been a fun 12 months for us here at Newsletter Marketing Systems.

Although we count our anniversary in September when we launched the company for real and all the legal bits and bobs happened and we landed our first newsletter printing client.

We feel our genuine anniversary is when we officially welcomed Bernie Kroczek Real Estate on as our first full service customer, after ourselves. (As they say in software, Bernie beta tested everything for all our other customers. Thankfully most of it already worked and we only had to fine tune a little)

Shortly after Bernie and Gai started with us we landed a couple of other customers too – they seem to come on in bunches. Cariss Printing and Triumphant Property Services all started within a couple weeks of each other.

So we decided it was time to do a review for each of our clients as their 12 month anniversary came up with us.

The good news is all three have decided to keep doing their newsletter which means they will see even better results this year as compared to last year.

Bernie Kroczek real estate started their newsletter specifically to build loyalty amongst its property management clients. Why you ask? Simple when you finally sell a real estate agency the standard valuation is three times the ‘rent roll.’ Or three times what income derived from property management (not sales). So keeping all the current property management clients until Bernie and Gai finally decide to retire is worth a considerable amount of income to them as they work to add more and more property management clients.

To that end we know they haven’t lost any clients yet and that if they add all the people who have brought or sold a house with them over the last 7 years they will probably get a whole lot of sales listings from past clients too (and at a cost much lower than it normally costs to generate a listing).

Cariss Printing have had phenomenal success – how about that? A printing company actually willing to print their own marketing materials… They have had clients come back to them after receiving their newsletter. They have had clients start to order more, and products they have never ordered from them before and finally they have had a new client come on board after receiving their newsletter, whose first order more than paid for their newsletter for the year.

Finally, Triumphant Property Services have had one client return their strata cleaning contract to them, which has more than paid for their years worth of newsletter. The good news has been thick and fast. The most common comment they heard from clients in the past was “if I knew you did x, I would have gotten you to do that.” That has by and large stopped – clients are aware of all of their services now. From the first issue Shannon has been able to generate leads for his other products and services.

Needless to say, we are all pretty excited about how well our newsletters are going for our clients.

Filed Under: Blog

Creating More Cross Selling Opportunities

June 5, 2013 by Zac Nelles 2

A while ago now I did a day of consulting with a client to explore how we could grow his business.

Not all that unusual in and of itself until the discussion turned to the customers which are hardest to find, take the longest to convert and are the least profitable to my client.

Yet despite those ‘underwhelming endorsements’ of this market segment couldn’t be left alone. My client’s interest in the market segment bordered on obsession.

When you break it down – it would cost him the same amount of money or more to develop the marketing materials in order to go and get these clients as it would to get the marketing materials prepared so he could more effective get more of his best types of customers.

I’ve had clients with a problem like this before and it has made it really difficult to work with them and has sabotaged results before. So I was a little gun shy to be honest.

However, once we stopped looking at that market segment as one-off buyers for my client’s product and looked at who was made up the market and what else we could sell them. Then all of a sudden it became a really interesting proposition.

For confidentiality reasons I won’t go into the specifics. But I will guide you through the thinking because it is instructive for finding additional products and services you can offer.

We started talking about who they were – sociographics, psychographics and demographics.

We explored the problems they were having, specifically why they were interested in my client’s products and services.

Then we started to talk about the bigger picture of the market. What else needed to be brought together in order to serve the market.

We realised that this market actually needed information as much as it did the physical products my client sold. So we started to look at the information they needed. Ultimately, we discovered they wanted a sense of community – others like themselves because they didn’t like doing what they were doing by themselves.

This to me is a more expansive way to approach cross selling. Most of us think about what products and services we have already and try to stuff them down our existing customers’ throats.

I don’t think that is the best way to look at it. Cross selling is best done on a market by market basis within your business.

This approach opens up many more opportunities for cross selling and also a higher uptake of your offers, while at the same time giving you a much stronger bond with your market.

Filed Under: Blog, Cross Selling

Adding Another Avenue For Referrals To Come To You

June 5, 2013 by Zac Nelles 2

Recently I read Dan Kennedy’s “NO BS Guide To Marketing To Boomers and Seniors.” Good read and plenty of good ideas.

One of the main and most interesting takeaways from this was the idea that Boomers and Seniors are more likely to refer clients to you than any other age category.

Now if a referral has a similar customer lifetime value to the referee then getting one referral from each client will double your business. However when a client refers, they often refer more than one new client to you so finding people willing to refer is more like striking gold.

But Wait There is a Catch…

Boomers and Seniors are a very demanding demographic to satisfy. So being just average is as likely to get you referrals as well not being in business I suppose.

The other challenge is creating an avenue for getting Boomers and Seniors to actually refer to you.

In a customer survey highlighted in the book it was reported that 33% Boomers and Seniors prefer to bring referrals to a ‘customer appreciation event.’ There are caveats like it needs to be a fun relaxed atmosphere where the referral can meet you the business owner/salesperson informally. (14% said they would bring a referee to a referral event).

That does tell you that having these sorts of gatherings is likely to pay off big time. If a third of your Boomer and Senior customers are willing to bring referrals to such an event then surely it warrants having customer appreciation events.

They certainly don’t have to be big elaborate affairs. Just invested in adequately, relative to the return.

If your clients that are most likely to refer want events to bring referees to I would certainly be working to make that happen. Maybe do it as a Christmas party to start and if that goes well and end of financial year event too.

If you give customers a chance to respond in a way that they want to they will reward you. Any business that has a large boomer/senior component to its customer list would be foolish not to at least give a couple of these events a try and see how the referrals come.

Filed Under: Blog, Referrals

Don’t Come To Us If You Never want to See a Customer again.

June 5, 2013 by Zac Nelles 2

From a long time now we have been in the business of helping clients get more repeat business and referrals.

So it should be quite obvious who doesn’t need a newsletter:

Businesses that don’t want anything to do with their customers after the first sale.

I know it seems odd to some business owners. But there are businesses out there – scam artists, con men and so on that definitely don’t want to see their customers again.

Strangely enough, I have seen “quit smoking in one session” hypnotists build a business with a monthly subscription newsletter and interview the expert CD. So even there you have an opportunity for repeat business.

Even some really apparently ‘one and done’ businesses can benefit from customer retention.

For example – we were talking to a potential client who is in the building industry and even they had a rock solid business case – despite being perceived as a ‘one and done business.’ Organically, 30% of their clients had repeat purchased from them in the past – so it would seem that you could increase that number of repeat purchases by actively working to retain your clients.

It takes a philosophical shift for a client like this to go from the ‘one and done business’ to the building of a customer database and strategically working to monetize them – which is what Newsletter Marketing Systems is all about.

It can be done and more importantly there is a business case to do it.

What was lacking in this case is something we aren’t so skilled at overcoming – a change in psychology and beliefs. While I could explain the maths to any 10 year old – who would confirm it makes sense. Getting the required shift in beliefs for a business owner to make this a reality is a little more difficult.

So What Business Do You Want to Be In?

Like I said, if you are only interested in creating ‘one and done’ customers then you certainly don’t need to be working with us. However, almost regardless of the business you are in you can decide to be in a completely different kind of business – a business built around monetizing your customers rather than selling a product.

Filed Under: Blog, Customer Retention

Why Newsletters Help to Build Trust

June 5, 2013 by Zac Nelles 2

The GFC of 2008/9 was actually a recession of trust. There was plenty of money.

Banks didn’t trust the other banks to be good for the loans they wanted to take out. Credit seized, businesses were in turn denied loans, the economy contracted. (Strangely there is more money now than ever before but it is harder to get than it has been for a long time.)

Frankly, this was probably a good thing. There was too much cheap credit out there. Although I didn’t experience it there was once a day when you put on your Sunday best to go and see the bank manager to get a mortgage. You wanted the bank manger to trust you to make getting the loan easier.

I got my first mortgage in the office of a mortgage broker wearing jeans and a t-shirt while the broker enthusiastically offered me far more money than I actually needed to buy my house (I took only what I needed). In various real estate bubbles, banks were willing to loan out over 100% of the valuation.

I doubt I could get the same offer today that I was given 7 years ago. But then again our real estate bubble hasn’t popped yet.

In Australia, we aren’t experiencing a recession but it is not the same at the pre GFC days either. Consumers more and more need to trust the people and the businesses they are buying from. If their wallet stays in their pocket then you are poorer for it.

Trust is important in business because your client’s customers and patients are putting their faith in you to buy. Especially the first time. Think about a chiropractor – you have to trust that the chiropractor will fix ‘what ails ya’ otherwise the money is staying your pocket.

You have to trust that the financial planner you choose will actually make you money in excess of their fees so that you have plenty of money for retirement.

Often it requires a leap of faith on behalf of the customer to experience the results. This is like pre-buyer’s remorse. In her book “Fascinate,” Sally Hogshead talks about how to get better engagement from your clients and how to be more interesting to them.

The one that is most relevant to doing a newsletter is frequency. Simply repeatedly showing up is helps build trust. Now there are high trust media and low trust media. (Blogs and social media are trustworthy in the eyes of just 6% of consumers – 2011 Epsilon Chanel Preference Study)

We marketing people love email because it is free. Your customers know it is free which diminishes its value in their eyes. You send them something in the post – they know you are investing in them and spending money on them. It builds obligation to buy from you.

Getting back to frequency. ‘Just’ showing up regularly helps to foster trust in the eyes of your customers. The sooner they trust you the sooner they are going to buy from you. Take heed, newsletters will increase conversion rate of new customers because it accelerates the rate you can build trust.

Filed Under: Blog

Why Creating a Monthly Newsletter Is Like a Day on the Show Gold Rush

April 8, 2013 by Zac Nelles 2

I have developed a bit of an unnatural relationship with the show Gold Rush. After watching Todd, Jack, Dakota Fred and Parker through two and a bit seasons all I can say is I take perverse pleasure in watching a train wreck happen. Gold Rush is also a touching story about America’s pioneering spirit and rediscovering the American Dream. (Or more darkly: Then they dug for their gold till the land was forsaken and wrote it all down as the progress of man.)

Through two seasons, the three mining camps talk big and then struggle. They don’t seem to know why. Their business simply put, is dropping ‘pay dirt’ into a ‘wash plant’ and gold comes out of the wash plant a long with a whole lot of mud.

All three camps have refined the operation so that there is very little efficiency they can gain. There isn’t too much gold being lost in the tailing’s. So to make more money they want to run more ‘yards of dirt’ through their wash plants.

The plot of every episode involves a breakdown of some vital piece of equipment preventing this activity, causing as much swearing and tantrums as an episode of Geordie Shore. Why this show is a train wreck is the crews are only “dimly pre-aware” that if their wash plant isn’t running and there isn’t gold bearing dirt being dropped in it they aren’t making money. And they never take any preventative measures to keep everything running.

When production stops the crew is losing money in actual fact – not just not making money. In Alaska, you can only mine for about 140 days a year before everything freezes over – so lost production is really expensive. (Captain Super Nerd can work it out but who wants a maths lesson?)

What the show can’t reveal in prime time is the impact of those losses.

For those of us with newsletters to get out every month we feel a similar impact – if you leave everything to the last minute you are in effect eating into time to work on next month’s newsletter. (Kind of like a really short gold mining season) Then it all seems to go to hell in hand basket.

We have some clients who want to do part of their newsletter themselves – it is a lot of hard work. We encourage it because when a client is actively involved with their newsletter the results are much better. The problem is one or two have gotten behind and it often takes an intervention to get them back on track.

Basically if you have to put off doing something for one month’s newsletter it becomes twice the work to get back on track. You need to do two newsletters in order to get back to even. A relative mountain of work. And to be honest unless you actually like writing – doing two newsletters at once is about as much fun as a root canal.

Our most successful clients have actually become good students of our system – keeping their production calendars with them so that all their article ideas end up in the same place. Asking for help early when they get stuck.

Filed Under: Blog, ezine

Would You Like Bites With That?

March 28, 2013 by Zac Nelles 2

The other day Hollie and I were on our way up to Perth and as usual the kids were in the back seat getting a little rowdy. So to keep them quiet we bribed them with a kids meal from Red Rooster.

Now I try not to frequent fast-food places very often, but when you’ve got kids in a car on a long trip… There’s not much else to bribe them with.

This particular instance of going through the drive-through, I ordered the kids their meals and ordered something for Hollie and I. Expecting them to come back with the total and ask me to drive forward (like they always do). So I was taken by surprise by what the little voice came back with next…

“Would you like to try 3 apple bites for just $1”

Now, why was it such a surprise to me that I was asked If I’d like something that I didn’t ask for?

Because it rarely happens in the big chain fast-food stores these days. I find it strange when you think that the “would you like fries with that?” concept was virtually made known by the fast-food industry.

It really is just cross-selling 101.

The customer comes in and buys product X, and you simply ask “Would you like to buy product Y for $” or if you want to be a bit more advanced you can educate them on why they would benefit from having product Y too.

Or even better, stack cross-selling on top of each other. A typical stacked cross-sell would be when you buy a video camera and then the sales-guy tell you why you need the fancy camera case to protect your camera, then he tells you how great your photos will look if you buy the tripod and finally you really must upgrade to the 32GB SD Card to make sure you never have to delete a photo…

The main reason that you want to cross-sell is that it increases the transaction value.

If we take the camera example, to make the math easy, let’s say that the camera is $500, and they bundle the case, tripod and SD Card for $200.

If every year, they sold 1000 Cameras, they are making $500,000 per year in camera sales.

Lets pretend that we instruct all the sales-people to say the following after someone purchases a camera “Did you know that we have this great camera essentials bundle pack that will allow you to protect your camera, take steady shots and make sure you never run out of memory on your camer!. It’s valued at over $300, but you can have it today for just $200”.

It costs ZERO dollars to implement this strategy but lets look at the results.

If 1/20 say yes they increase sales by $10,000
If 1/10 say yes they increase sales by $20,000
If 1/5 say yes they increase sales by $40,000

It’s possible that the results could be even better than that, but still $40,000 extra sales simply by asking a question 1000 times is pretty good in anyone’s book… I struggle to comprehend why the fast-food cross-sell is such a rare occurrence these days.

Just letting your customers know that you have additional products is the first step to cross-selling, and some great non-sales approaches to educating your clients about what you sell is with social media, ezines and of course our favourite – The monthly printed customer Newsletter!

So my challenge to you is with every customer simply ask “Would you like to buy Y too?”

Filed Under: Blog, ezine

What Does It Mean To Be Someone Who Gets It?

March 26, 2013 by Zac Nelles 2

Ben and I were speaking on the phone the other day. We were having an interesting conversation about the difference between people that get marketing and those that don’t.

I’ll back up a little – what has brought this conversation on is we’ve done a few newsletter suitability audits for business owners who “just didn’t get it.” This has always led to the person doing the suitability audit to shrug and say “some get it, some don’t.” Which is a little lazy, considering we just spent all this time, energy and effort to do the audit in the first place.

This time, for whatever reason we were a little more philosophical about the whole situation.

After much rumination it turns out there two key factors that people who ‘get it’ have that people that ‘don’t get it,’ don’t have. The two are:

Be Willing And Able To Track Results

The bottom line is unless you can attribute your results to specific marketing activities then every time you are asked to spend money you are going to be sceptical. I hate wasting money and I’m sure you do too. It drives me nuts to think that I have to spend money and not know what I am getting for it.

First and foremost, you need to be able to track results in order to ‘get it.’ It emotionally becomes much easier because you’ll quickly know if you’ve made a wise investment or else you’ve got a dud on your hands – then you have two choices: fix the dud or else stop spending the money.

The inability or unwillingness of the business owners to track results has led to advertising being sold the way it is these days. It also has led to many business owners being ‘irrationally cheap’ – expecting too much from too little.

The Ability To Use ‘Risk’ Wisely.

Due to the incessant babble of Stock Market and Finance experts the entire western world is conditioned to think that you need to take huge risks in order to reap huge rewards. This is not necessarily the case. The world is full of low-risk, high-reward situations.

For a couple thousand dollars I can get a half page ad in an industry magazine – I know that I only need one customer coming from this ad to say “yes” in order to cover the costs – that is a fairly low risk idea. I also understand that it could take more than a single insertion to get the average of one yes a month – it might take 3. And three ‘yes’s’ come in the third month.

There is a chance that it will fall flat on its face but by the same token there is a chance that it will work quite well too. A risk worth taking – the rewards of success are high relative to the risk of ‘failure.’

Marketing is psychology and maths. Great maths can overcome poor psychology, but great psychology can’t overcome poor maths. First and foremost you need to know your marketing maths. That’s what it really means to get it. Get it?

Filed Under: Blog, ezine

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