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What can you learn from a small town?

April 30, 2012

Turns out, quite a bit.

The whole concept of having a marketplace is blurry today. It used to be — you sold stuff to your neighbors because they were the only ones close enough to buy from you.

But today the world is one “global small town” where all your customers can talk directly to each other and every one of them can buy from you or from the guy on the other side of the planet.

In their book Small Town Rules (click to buy it on Amazon*) authors Becky McCray and Barry Moltz take a look at what works in a small town and help us understand how those same rules apply to us, whether we are a big fish in a little pond or a tiny fish in a huge pond.

The truth is — size, scale, and resources are no guarantee of success anymore. Who would have thought Tom’s could have created enough buzz and passion that they become the worldwide sensation that they are today?

Today more than ever before it’s about how you build relationships, trust and compelling word of mouth. And no one knows how to do that better than a local shopkeep.

Barry and Becky tell great stories, offer up plenty of examples but best of all — give us seven rules to learn and follow, no matter how big or how local your business is.

1. Plan for zero. Planning for zero income requires building new sources of revenue and all kinds of different equity.

2. Spend creative brainpower before spending dollars. This protects you from doing something just because everyone else is… and let’s you introduce your customers to the real you.

3. Multiply lines of income to diversify your risk. That way if one stream runs dry, the others keep things flowing.

4. Work anywhere, anywhen through technology. We have new expectations and tolerance for how and when we get responses from companies.

5. Treat customers like community. Make them feel valued, special and like an insider.

6. Be proud of being small. Small and nimble is the new big.

7. Build your local connections. Making connections that count help you accomplish the first 6 rules because you quickly learn that you can’t do it alone.

This book is a great read for anyone who is running a business — anywhere. Turns out we all have a lot we can learn from those small towns.

What you don’t know about your sales funnel

January 30, 2012

We all think and talk about our sales funnel a lot. We’re always saying things like:

We need to keep it full.
We need to stay active with the prospects that have been in it for awhile.
On average, it takes a prospect X months to move through it.
And so on….

But consider the statistic to the right. 60% of your sales efforts are what happens before you have actively put someone into the funnel. In other words — it’s not you who is doing the selling.

Who is?

Your existing customers
The customer who left and is working with your competitors
Your vendors
Your website
Review sites
Your social presence (or lack thereof)

How much do you know about your pre-funnel sales machine? Do you know what’s being said? Maybe the bigger question — how should you be influencing those conscious and accidental sales efforts?

Think about how you shop — whether it’s for work or something for home. Do you beeline for a salesperson or sales collateral? Or do you do a little bit of investigating first?

Get out a piece of paper and do this exercise. Write down the bullet points I have above (starting with your existing customers) and next to each bullet point — describe what you would ideally like a prospect to hear/see/experience from each source.

Then — go to each source and see what’s actually being said/experienced. I’m guessing you’ll identify some areas that require your attention.

After all — your prospects are paying attention to these sources — shouldn’t you?

Marketing Insights Question: How are you building your marketing foundation?

December 20, 2011

How are you building your marketing’s foundation?

Over the next few weeks, as we head towards 2012, I want to get you thinking about your business in a new/fresh way. I’m going to ask a single question in each post — but I’m warning you, these aren’t slam dunk questions.

I’m hopeful that as you ponder my question — it will give you some ideas for making 2012 a break out year for your organization. If nothing else — this exercise should fine tune some of your marketing efforts.

How are you building your marketing foundation? We’ve talked a lot about the know • like • trust model. If you remember, the final leg of that equation is that consistency creates trust and trust leads to sales.

How do you generate that trust? By building a marketing foundation. And here’s how you go about that.

You do one thing on a regular (daily, weekly or monthly) basis that will add incredible value for your prospects and customers. This is something that, if you stopped doing it or skipped a week — they’d not only notice the absence but they’d actually miss it.

What is the one thing? It’s going to be different for every one of us — depending on our industry, our clientele, our position in the market place, our bandwidth and our organization’s culture.

It could be as simple as an enewsletter or as complex as a podcast where you interview leading experts in your field every week. It might be a cartoon or an ongoing video series.

No matter what form it takes, it must meet these criteria to qualify:

It’s scaleable so as your audience grows, you can include many more people
You are 110% committed to honoring your consistency pledge
It is not a sales piece — this is you creating incredible value
It is shareable (people can pass it along to colleagues somehow, even if that means tacking it up on a bulletin board)
It should be unique to you. Either no one else in your competitive set does something like it or you do it so differently that it stands out

This is going to require some creativity on your part. And some discipline. As soon as an idea starts to sound at all like a sales tool or gimmick, smack yourself. That’s the kiss of death. And it is the mistake 90% of all organizations make. They just can’t resist hinting at or outright asking for the sale.

If you truly adopt this effort — you will create long lasting relationships with clients and prospects. You’ll also create a word of mouth marketing machine, as your audience shares your offerings far and wide.

Start with that first building block…and you’ll be amazed at how quickly you’ve built something worthwhile.

Marketing Insights Question: Calculating the lifetime value of your customer

December 12, 2011

What is your customer worth to you?

What’s a customer worth? I’m always surprised when people don’t know the answer to this question. If I said to you “for every $100 you give me, I will give you a client” – is that a good deal for you? How about for every $1,000? $5?

The truth is, most business owners have no idea what a customer is worth to their business. If that’s the case – how do you know how much you can afford to spend to get one?

Why does this matter? What kinds of decisions do you think you’d make in terms of acquiring new clients if I told you that over the lifetime of your relationship, every one of them is worth $500 in profit? How would your choices change if I said each one is worth $10,000?

How do you figure out the lifetime value of a customer?

You need to know this number. (Want to bet that your ideal customers are worth a heck of a lot more than your so-so customers?)

Not sure how to calculate the lifetime value? Check out this great infographic (from kissmetrics)which does a nice job of modeling how you can get a good ballpark figure.

Once you know that….you know what you can do to earn a customer. And what it costs you when you lose one.

Lifetime value of a customer infographic

Stock photo courtesy of BigStockPhoto.com

Marketing insights question: Who is your ideal customer?

December 6, 2011

Do you really know your ideal customer?

Who is your ideal customer? One of the biggest mistakes most businesses make is that they cast too wide a net, when it comes to prospecting. Not all money on the table is good money. We’ve all had a bad customer. But if we’re really honest, we’ll admit that they weren’t a bad customer. They were just bad for us.

Assuming you have a finite marketing budget or that you still haven’t figured out how to extend the day past 24 hours — you have to make some choices. So why not target the very best possible customers?

Your intentional marketing efforts should be laser focused on those people/companies who are ideally suited to benefit the most from your offerings AND bring you the best benefit (profits, repeat business, referrals, longevity etc.) back to your organization.

Are you running around like Chicken Little, trying to make sure that everyone and anyone knows about your business? Do you spend marketing dollars on long shots and Hail Mary passes? If you are — stop it. Now.

Instead, invest that energy into discovering who your best customer is. Describe them. Be able to tell me what matters to them and how they get their kicks. Know what they drive and why they chose it. When they go to a restaurant, do they pay attention to the fat content of the offerings, the prices or if there’s a 16 z steak on the menu?

Once you really know who they are — you’ll know how you can help them. Talk to them about it. Help them a little so they get to know you before you ask them to buy. Tell them stories of how you’ve helped other people. In other words — market to your best customers in a way that creates trust and familiarity. have you noticed how your best customers end up being your friends?

That should tell you something, shouldn’t it?

Unless you have an unlimited marketing budget and time on your hands – you can’t afford to waste one minute or one dollar on anyone who isn’t ideal. So figure out who that is…. and stay focused on the people/companies you can help the most.

Photo courtesy of BigStockPhoto.com

The smaller you are, the better Facebook is

September 26, 2011

Facebook lets you actually talk to people!

A comment made on my blog post about Facebook’s dominance which basically said… “Facebook is only for people who care about social media and media types” had me shaking my head.

He’s not alone in his opinion. Check out this recent study that looked at why many small firms don’t utilize it.

I am not suggesting that every single business on the planet needs to have a presence on Facebook, but especially for many small businesses — it can be a game changer. In fact, I think it’s much more potent for the little guys than it can be for the Cokes, Mini Coopers and Disneys of the world.

Why?

The human element. If I tweet Disney or post something on Coke‘s wall — I may or may not get a response but it’s certainly not going to be a very personal one. But if I write something on the Des Moines Playhouse’s page…a real person is going to give me a real response. And we might even get into a conversation. (see the screen capture to the right)

Isn’t that what we’re all hungry for — more conversations with customers or potential customers?

Here are some of the perks of Facebook for small businesses:

Built for local and hyper local. It allows you to spend your time talking to people who can actually become customers or already are your customers.
Supports and encourages word of mouth with the share and like buttons. Odds are most of your page’s fans have a high percentage of friends who are also local.
It’s a great way to gather testimonials, get customer feedback/input and answer customer questions.
With their hyper targeted ads, you can very cost effectively deliver your message to exactly and only the people who might care.
Your audience shows up every day. Facebook is part of their social experience. What better place to connect with them?
You can use Facebook’s different message vehicles — your business page, ads, events, groups etc. to share different types of news, events, tips etc.
You can share your work in other media (TV spots, radio commercials, blog posts, enewsletters) to bring in your multimedia campaign elements.

Again…not going to say it’s for everyone. But I am hardpressed to think of a small business that wouldn’t benefit from a well strategied Facebook presence.

I’m curious — what small/local businesses do you think use Facebook well? I’d love to find some examples.

THE best customer service tip ever

August 31, 2011

… stellar customer service = pinky swearing

I’m going to tell you THE secret to incredible customer service, customer retention and word of mouth referrals.

It’s quite complicated so you’ll want to print off this post and hang it somewhere where you can refer to it every day.

If you’ve got music playing or some other distraction around you — turn it off/put it away so you can fully concentrate on the concept I am about to unveil before your very eyes.

Ready?

Pinky Swear.

When we were kids, if you pinky swore — that was a blood oath, a die or do it sort of thing. There were no asterisks, exceptions, small type or exclusions. It was a pinky swear. Enough said.

If you want your customers to rave about you and to come back time and time again — pinky swear.

If you are so old that you don’t remember pinky swearing — let me translate it for you.

Do what you say you’re going to do. Every time. No exceptions.

Go forth….and pinky swear. Your customers will love you for it.

Your customers are afraid to spend

August 23, 2011

…Customers are afraid of the coming tides

Building a sandcastle (with our without the pre-form buckets) is a childhood ritual that brings with it a sobering life lesson.

Unless you are uber cautious about location — the tide is going to come in and wipe out that sandcastle sooner or later. And if the tide doesn’t get it, beach walkers, dogs or 4 wheelers will do the job.

Young or old, there’s something haunting about watching the waves creep up on your masterpiece, knowing you can’t alter its fate.

I think that’s exactly how our customers are feeling today. They’re leery of investing too deeply or buying into new long-term programs because they have this nagging fear that the waves are heading back in.

The world economy’s continuing struggle, the US debt ceiling debacle and credit rating slap on the wrist and in general, a sense that it’s tougher to make a buck these days does not bode well for us as marketers.

How do we function in an environment of nervous trepidation?

Acknowledge it: Don’t hide from it. Don’t pretend it isn’t there. Be up front about it. Recognize that your sales cycles are going to be longer. Build your projections accordingly. The only way to weather the storm is to be well prepared for it.

Make the most of it: If your customers are less likely to sign long term agreements or are going to want to stretch out their payments — price accordingly. Create a new, shorter term choice but price it at a premium. That’s not taking advantage — that’s upselling.

Don’t cut your prices: This is one of the biggest mistakes business people make during tough economic times. It may make short term sense but it’s a killer long term. If you reduce your prices — you will never be able to raise them back to where they belong again.

Manage your costs by managing your customers: Not all customers are created equal. Customers who are not a good fit, demand too much of your time and don’t reward you with their dollars in equal measure are actually draining your company’s resources. Perhaps it’s time to fire some of them?

Re-think your business model: It may be that how/what you’ve sold in the past simply isn’t going to work in 2011 and beyond. Just because you want to sell it doesn’t mean there’s still a market for it. Or maybe it needs to be re-packaged or re-tooled. If you were starting a new business from scratch in your industry — what would it look like? Should you move in that direction?

You can’t work in marketing or own a business for very long without running into shifts in the economy. And we’re not going to love every shift. So you have to be willing and ready to adapt.

How are you/have you accommodated this current economic climate?

You need a smaller net

August 15, 2011

…are you fishing with too big a net?

Fear can make us take our eye off the ball and lose focus on what really matters. In marketing, that often translates to these sorts of mistakes:

I’m afraid this is the only ad/website/sales letter they’ll ever see so I need to cram everything I can into it.
I’m afraid they’ll choose someone else so I’ll lower our price, even though my price is fair.
I’m afraid we won’t have enough customers, so I’ll chase everyone that breathes.

I must admit, I get on my soapbox about this one. One of the best things about smart branding is that it repels the wrong customers. People who are not a good fit.

Every business has a “right fit” customer and those are the only people you should be actively pursuing. Why would you want to win a new customer only to deliver at a so so level.

You can rock the socks off the “right fit” customers. They’ll brag about you to their friends. And you’ll love working with them. Stop being content with anything you can catch in that big net of yours. Go get a smaller net and chase after just the right fits.

Need more convincing? I got this note on Facebook the other day from Sherry Borzo, a business woman I know here in Des Moines.

“Must tell you, because I’m pretty sure you were the one who said it so often in my presence a few years ago, but I truly GET the idea of working only with your ideal customer. It makes for a much happier environment for both business person and customer. It is like you’re building your own little community. So important. Always think of you saying that when I’m working with a customer that fits well with what I do.”

Amen to that! Toss that big old net in the garbage and begin catching your right fit customers.

You’ve got a bird in your hand. Now what?

August 8, 2011

… Do you value what you already have?

Like the old idiom goes…a bird in the hand is worth two in the bush. I’d argue, when the bird is a customer, the ratio is even greater.

For years, at the risk of preaching, I have been banging on the idea that we spend way too much time and energy chasing after potential customers and way too little time and energy romancing (and creating a love affair) our current customers.

I’ve pushed on the idea that our math is all backwards. It’s cheaper and easier to get more (and more profitable) business from our existing clients — and yet, our “new business” efforts are always aimed at strangers, rather than those friendly, pre-disposed to love us customers.

Which is why I’ve always enjoyed and respected Becky Carroll and her blog Customers Rock. Becky is an Age of Conversation author and a huge believer in the power of treating customers like gold.

So when Becky emailed me and asked if I would read her new book The Hidden Power of Your Customers (click here to buy*) I have to admit — I already knew I would like it. Because I knew it would tout the importance of creating love affairs with your customers.

I just finished it — and wanted to share it with you. As I suspected, Becky spends time making the points that I’ve made above. But the lion’s share of the book is spent showing readers HOW to cultivate and celebrate their current customers. Becky teaches us the how using the acronym ROCK.

R = relevant marketing. This is all about talking to your customers how and when and where they want it. Which, of course, means you need to listen/ask them.

O = orchestrated customer experiences. Brilliant companies are very purposeful in crafting customer experiences that deliver delight and marvel their most valuable clients. It doesn’t happen by accident.

C = customer focused culture. I don’t care how smart or insightful a leader you are — if honoring your customer isn’t baked into your organization’s culture… it won’t happen.

K = killer customer service. This is all about consistency. (as you know, one of the cornerstones to good marketing) When your brand and values are woven into your organization’s culture…. your entire team is able to deliver incredible customer-centric service, regardless of circumstance.

One of the best aspects of this book is the collection of case studies. Becky went beyond the usual suspects and tells tales of customer loving companies like Nicor National, Salon Radius and Sanuk. (Nope, I’d never heard of any of them either!) The fresh stories add a depth that other books are missing. However, no book on treating customers can leave out stories from Disney and you’ll enjoy those as well!

If you want to build an organization that truly treats its current customers as a precious commodity — this book will serve as a valuable guide to making it so.

Check it out and let me know what changes the book inspired.

*Yup, it’s an affiliate link and I was sent a copy of the book by Wiley. However…as you know, I get 4 or 5 books a week. I only recommend the ones I genuinely believe you’ll value and enjoy.

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