Archive for the ‘Marketing’ Category

Existing Customers Create New Customers

Friday, October 23rd, 2009

Companies spend a disproportionate amount of money on trying to acquire new customers. Let’s say a company wants to find just ten new customers. How much could they expect to spend?

The cost to gain 10 new customers via TV, Pay Per Click or Direct Mail

Let’s hope that company is selling something that has a margin of more than $80, or they won’t see any profit. If only they knew that keeping existing customers happy naturally creates new customers. And it costs very little.

More often, companies treat existing customers like chopped liver. They forget about—or worse, punish– someone as soon as he buys something from them.

If you are a satellite television customer, the cable company will be glad to give you three months of free cable to become their new customer. If you are an existing cable customer, you know to expect the onerous contracts with rate raises and dread calling the dismal customer service when your signal goes out.

Companies focus on acquiring new customers at the expense of maintaining existing customers for mainly two reasons:

  1. That’s what they’ve always done. When a product or company is brand new, there are no existing customers. All marketing efforts have to be focused on gaining new customers. This marketing inertia carries through well after a company has become established.
  2. Those evil competitors! We must act now to steal market share away from them! What companies don’t think about is that it costs more to steal a customer from a competitor than to keep an existing customer.

An existing customer who is loyal to your company will buy more products more often and will rave about you to their friends. We all nod appreciatively when we are told that word-of-mouth and referrals are the most powerful motivators to encourage customers to try a new product, but then we go on with our e-mail blasts and Val-Pak coupons. Instead, we should be creating that word-of-mouth by inspiring our existing customers to rave about us!

But how do you create raving customers? Anticipate what would delight them. Then, deliver it! Netflix recently sent me an email that because of their increased operational efficiencies, they would be lowering my monthly subscription fee. Oh, and by the way, now I can watch thousands more movies instantly, and they created a movie player that works on my Mac. All without me having to ask. I’m delighted! I’m loyal! And here I am telling you about Netflix.

But what if you don’t know what would delight your customers? Ask them. A part of my consulting work is finding out what a company’s favorite customers love about them and to help them do that for every customer.

Remember, if we have existing customers, that means prospective customers don’t even exist yet. Companies should only spend a proportionate amount of their marketing budget on customers who don’t exist yet. Don’t invest yourself too heavily in imaginary friends.

Instead, we should focus a higher proportion of our efforts on relationships with existing customers. If we delight them, they will reward us by buying more from us with higher frequency. And, as a benefit, they will create our new customers for us.

Small Business Advertising and Promotions Podcast

Monday, October 19th, 2009

Small businesses face many challenges in their advertising and promotions efforts. “Where do we advertise?” “What should our ads say?” “Do I need to hire an expensive ad agency?” are some of the questions every small business faces.

David Taylor and I talk about small business marketing advertising and promotions with David Weatherholt on his show “Getting Down to Business.”

Download the advertising and promotions for small business MP3 file here. (10.73MB)

Marketing Fundamentals for Small Business Podcast

Monday, October 12th, 2009

Dave Weatherholt interviewed me along with Dave Taylor on his small business radio show, “Getting Down to Business.” We talked about marketing fundamentals for small businesses. Dave asked me to discuss how the internet affects small business marketing and how the marketplace has changed.

Download the marketing fundamentals for small business MP3 file here. (9.71MB)

Introduction to Marketing Quality

Friday, September 25th, 2009

The Passion and Purpose of Design

Do you want your marketing to be good? Do you want it to be great?
Over the next few months, this series of articles will provide practical tips to help you create a great marketing message and make your business more successful. We will explore your customer experience, web marketing, graphic design and writing. But today, we need to establish a foundation for the marketing tools that will come later.
Marketing is really all about design. Great marketing is about quality design. We design graphics. We craft stories and narratives. We compose photographs of happy, smiling people for the advertising campaigns we planned. We design grand brand strategies with flow charts. We even design our budgets.
We design every communication we have with customers, whether intentionally or not. We need to take ownership of our design and design for quality.
Robert Pirsig writes in his book, Zen and the Art of Motorcycle Maintenance, that quality cannot be defined, but it does exist, and we all know what it is. He describes quality as a train in motion. Everything we know is catalogued in boxcars, and everything we don’t know yet lays on the track in front of us. To practice quality, we need to acknowledge that reality is constantly changing, and we must combine what we’ve always known with what we’re about to learn.  In business, aspects about our customers are constantly changing, and we need to keep up by designing our customer interactions with quality.1
To create quality design, we need to have a passion for it. Pirsig describes it as “caring” and writes, “Care and Quality are internal and external aspects of the same thing. A person who sees Quality and feels it as he works is a person who cares.2” Passion is a mindset, and that is why we have to establish the quality mindset before explaining specific tools or methods.
Lack of passion leads to an overabundance of mediocrity and—even worse—a lack of purpose. If the purpose of the design is lost, then the design is useless.
In Ayn Rand’s The Fountainhead, a small group of architects fight for the purpose of design. The protagonist Howard Roark designed buildings to help make living a joy, not to impress the neighbors or conform with precedent. He had a passion for building what “should be” and never settled for mediocrity. As he exchanged with a prospective client who asked him to use supposedly decorative flourishes:
“’Mr. Janss, when you buy an automobile, you don’t want it to have rose garlands about the windows, a lion on each fender and an angel sitting on the roof. Why don’t you?’
‘That would be silly,’ stated Mr. Janss.
‘Why would it be silly? Now I think it would be beautiful. Besides, Louis the Fourteenth had a carriage like that and what was good enough for Louis is good enough or for us. We shouldn’t go in for rash innovations and we shouldn’t break with tradition.’
‘Now you know damn well you don’t believe anything of the sort!’
‘I know I don’t. But that’s what you believe, isn’t it? Now take a human body. Why wouldn’t you like to see a human body with a curling tail with a crest of ostrich feathers at the end? And with ears shaped like acanthus leaves? It would be ornamental, you know, instead of the stark, bare ugliness we have now. Well, why don’t you like the idea? Because it would be useless and pointless. Because the beauty of the human body is that it doesn’t have a single muscle which doesn’t serve its purpose; that there’s not a line wasted; that every detail of it fits one idea, the idea of a man and the life of a man.’”3
Purposeful design is not limited to architects. The purpose of marketing design is to focus on the customer. We want to inform our customers, delight them, help them use our products and get them to do things (like buy something or refer a friend). Don’t focus on competitors, impressing trade groups or what you did last year unless it helps you with your customer goals.
Don’t let your next web page be mediocre. Think again before letting Val-Pak design your company’s ad for you. Realize that a typo speaks more about you than anything else you’ve written. If you seek out passionate, purposeful design, you will see the results in your bottom line.
In the next article, I’ll build on the design principles of passion and purpose and provide helpful tools you can start using right away to increase the quality of your marketing.

Do you want your marketing to be good? Do you want it to be great?

Marketing is really all about design. Great marketing is about quality design. We design graphics. We craft stories and narratives. We compose photographs of happy, smiling people for the advertising campaigns we planned. We design grand brand strategies with flow charts. We even design our budgets.

We design every communication we have with customers, whether intentionally or not. We need to take ownership of our design and design for quality.

Robert Pirsig writes in his book, Zen and the Art of Motorcycle Maintenance, that quality cannot be defined, but it does exist, and we all know what it is. He describes quality as a train in motion. Everything we know is catalogued in boxcars, and everything we don’t know yet lays on the track in front of us. To practice quality, we need to acknowledge that reality is constantly changing, and we must combine what we’ve always known with what we’re about to learn.  In business, aspects about our customers are constantly changing, and we need to keep up by designing our customer interactions with quality.1

To create quality design, we need to have a passion for it. Pirsig describes it as “caring” and writes, “Care and Quality are internal and external aspects of the same thing. A person who sees Quality and feels it as he works is a person who cares.2″ Passion is a mindset, and that is why we have to establish the quality mindset before explaining specific tools or methods.

Lack of passion leads to an overabundance of mediocrity and—even worse—a lack of purpose. If the purpose of the design is lost, then the design is useless.

In Ayn Rand’s The Fountainhead, a small group of architects fight for the purpose of design. The protagonist Howard Roark designed buildings to help make living a joy, not to impress the neighbors or conform with precedent. He had a passion for building what “should be” and never settled for mediocrity. As he exchanged with a prospective client who asked him to use supposedly decorative flourishes:

“’Mr. Janss, when you buy an automobile, you don’t want it to have rose garlands about the windows, a lion on each fender and an angel sitting on the roof. Why don’t you?’

‘That would be silly,’ stated Mr. Janss.

‘Why would it be silly? Now I think it would be beautiful. Besides, Louis the Fourteenth had a carriage like that and what was good enough for Louis is good enough or for us. We shouldn’t go in for rash innovations and we shouldn’t break with tradition.’

‘Now you know damn well you don’t believe anything of the sort!’

‘I know I don’t. But that’s what you believe, isn’t it? Now take a human body. Why wouldn’t you like to see a human body with a curling tail with a crest of ostrich feathers at the end? And with ears shaped like acanthus leaves? It would be ornamental, you know, instead of the stark, bare ugliness we have now. Well, why don’t you like the idea? Because it would be useless and pointless. Because the beauty of the human body is that it doesn’t have a single muscle which doesn’t serve its purpose; that there’s not a line wasted; that every detail of it fits one idea, the idea of a man and the life of a man.’”3

Purposeful design is not limited to architects. The purpose of marketing design is to focus on the customer. We want to inform our customers, delight them, help them use our products and get them to do things (like buy something or refer a friend). Don’t focus on competitors, impressing trade groups or what you did last year unless it helps you with your customer goals.

Don’t let your next web page be mediocre. Think again before letting Val-Pak design your company’s ad for you. Realize that a typo speaks more about you than anything else you’ve written. If you seek out passionate, purposeful design, you will see the results in your bottom line.

Footnotes
1. Pirsig, Robert M. Zen and the Art of Motorcycle Maintenance. New York: HarperCollins, 1999.
2. Ibid., 281.
3. Rand, Ayn. The Fountainhead. New York: Plume, 1999. 163.

Marketing for Small Business Blog

Tuesday, September 22nd, 2009

It’s time to blog. I’ve created many blogs for my clients, written articles for other websites and regularly appear on a radio show for small businesses.

It will take me a few days to get my blog theme just right. In the meantime, here’s some more small business marketing advice.