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pile_of_money.jpgMost marketing texts offer a nice discussion about why the Lifetime Value of the Customer (Or Customer Lifetime Value if you prefer that term) is a critical consideration in any strategy.

The bottom-line is that it’s just so much more cost effective to grow business from existing customers than to try to go out and get new ones. When you grow the business of the existing customers (whether the frequency of their purchases, the size of the sales, or grow share of customer through the sale of additional or new product offerings), the margins are virtually 100% because there are no acquisition costs associated with that business.

Plus, any business they refer to you is also essentially at a 100% margin because, again, there are no acquisition costs. So it’s not just a nice-sounding thing to say that customers are our greatest, most important, and highest-yielding asset. It’s something we can prove with numbers. They’re our entire future! Customers ARE the answer!

“Captive customers mean stable revenues and less money and effort on marketing, especially if they make it their habit to put in a good word for you with their friends every so often. Allegedly rival products are less tempting to captive customers; therefore, you get more time to respond to competitors’ innovations. They are not so price-sensitive; therefore, you can afford to charge them a little more, and so forth.” – Dan Herman, Outsmart the MBA Clones

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up_arrow_chart.jpgThat’s a common question. That’s what most of the clients I have come to me asking. “I have this amount of business, but what I want is this amount of business. How can I get there?”

If you want more business, do good business. The better the job you focus on doing, the more value you dedicate yourself to providing, the more repeat business you’ll get. Those repeat customers will spend more when they come back, and the more likely they’ll be to tell others who will come do business with you, will give you repeat business, will spend more when they come back and will tell others about you who will come and do business with you, and so on, and so on, and so on.

That may not sound like a glamorous, magic bullet of a marketing strategy, but I’ll bet if you really give it a try, you’ll be happy with the results you get. Granted, it may not be easy, but it really is that simple. Take care of your customers, because in marketing, customers are the answer. If you want more business, do good business.

“The winner ain’t always the one with the faster car, it’s the one who hates losing the most.” - Dale Earnhardt 

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meter_1.jpgWe hear statistics from various sources all the time, and frankly, some can be a little discouraging. The Small Business Administration says that 50% of small businesses won’t last 5 years. 90% of restaurants don’t make it. A good sales person will have an average closing rate of 20%. The employee turnover in the XYZ industry is so-and-so, customer churn is such-and-such, the typical margin in this business is this, and so on, and so on.

Take it from a trained, professional market researcher of over 15 years experience: The best thing you can do with some statistics is to ignore them! I’ve got a way to help any one, from any background, in any industry, with any goal, BEAT the averages!

Here it is: Be above average!

Simply commit to NOT doing what the “average” person or average business would do. If the average sales person makes 30 calls to get 5 appointments and closes 1 sale, don’t be average, be above average! Make 60 calls so you can get 10 appointments and close 2 sales and you’ll be able to say that you’re twice as good as the “average” sales person!

If the average business closes its doors in 5 years or less, study what things the average business does that leads to common mistakes and just don’t do those things! Make a commitment to asking, before you take any action, “What would an average business do in a situation like this?” and simply make a point of NOT doing that and instead of doing something above average!

Find out from your customers what they consider to be an “average” experience or an “average” organization and use that as a benchmark for what NOT to do. This may seem like a rather common-sense, if not downright simplistic, approach to strategy, but you’ll probably find that’s exactly why it can be so effective!

“When I was young I observed that 9 out of 10 things I did were failures, so I did 10 times more work.”

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Glasses_and_notes.jpgI had the opportunity to attend the workshop of one of my favorite consultants who happened to be giving a workshop to us fellow consultants on consulting, because consulting is one of the things he consults on.

Anyhow, one of my colleagues raised the question of what would be good books to read to help further our management thought. Without hesitation, he responded, “Read Drucker, and not much else,  because frankly, there aren’t that many good business books out there.” This consultant has authored several books of his own, and no one had the courage to ask him if he included his own titles in that appraisal, but I do agree with at least half of his answer. I think you should read as much and as often as you can, but if you find reading difficult to work into your busy life, Drucker’s work will give you a much greater return than the time you have to sacrifice to read it.

“Read Drucker” is good advice because Drucker’s thought is both common sense and powerful. Perhaps it’s so powerful because it is rooted in simple, straightforward common sense, which is often so woefully lacking in most organizations. Drucker was called “The guru to guru to gurus” by Tom Peters, and something that has almost become habit with me is to flip to the index and/or bibliography of any business book I’m reading to see if Drucker is mentioned or cited in the book. I almost consider the book incomplete if it doesn’t cite Drucker at least once.

What was it that distinguished Drucker? Some may argue that he is considered a “guru” because he came along at a time when the notion of the “management guru” was an emerging phenomenon, but I think author Jim Collins summed it up best. Collins had the opportunity to work with and interview Drucker for one of his books, and he said that his immediate realization upon meeting Dr. Drucker was that what made him such a great thinker was that he still very much considered himself a student.

We should all consider ourselves fortunate students of the remarkable game of business and consider ourselves blessed to work in a free market, and we should strive to have as much expertise about what we do as we can, whatever our field or industry. After all, that’s essentially what made Drucker, well, Drucker!

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remote_control.jpgA lot of people think that because I make my living in marketing that the Super Bowl is one of my favorite events. I hate to say it, but, the opposite is the case, and not just because Brett Favre didn’t make it this year.

It makes me cringe to see how all that money gets blown (A 30 second spots costs almost $3M) on spots that are fun, clever, humorous, warm and fuzzy, whatever, and if we all buzz about them on Monday at the water cooler they supposedly represent “good marketing.” The fact that we’re still “buzzing” about some of these commercials nearly a month after they originally aired is noteworthy, but that’s not the ultimate measure of their success.

My friends, it’s only good marketing if it gets results, and typically the result we’re after is sales. Good marketing sells product! When the impact of these ads moves from water cooler chatter to the bottom line, then they’ll really be worth celebrating.

“If it doesn’t sell, it isn’t creative.” – David Ogilvy

 

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