What is the most effective way to generate higher profits? In 1844 Charles Dickens wrote about a scheme very much like a Ponzi Scheme, in 1987 the movie Wall Street warned of doing things the wrong way and in 2013 the movie Wolf of Wall Street demonstrated that these aren’t just stories, this is what happens in real life.
These stories are relevant because first they tell us that it has been generally accepted since at least the early 1900’s that long term profits are not generated by inappropriate business practice, either illegal or just antisocial in nature.
You prefer to buy from people who you know, like and trust. So do your customers. So why do some people still persist in acting against their customer’s best interests?
One reason may be that the salesperson is attempting to maximise their profits, and some jurisdictions require Company Directors to maximise the profit of the company. Surely that’s all good?
It may be until you take actually think about it. Which gives you the biggest overall profit – ripping a client off once or maybe twice at the highest possible profit margin, and in the process driving them away so that they find someone else to do business with or maybe settling for 75% of that profit and keeping that customer for four or five years? Even at half of the original profit you make more money by working with your customer base.
The real point is that we know the right way to treat customers and treating them that way delivers what both of you want: they get good value and you get solid long term profits. Treating your customers so they naturally want to buy from you gives you time to improve your business so that even more people want to buy from you and the existing customer base is even more certain you are the right person to do business with. What would an ever-increasing number of return customers do for your profit margin?
And isn’t making a profit the idea behind being in business?
I was talking with a friend a couple of days ago about marketing which led us to talk about popular searches and just for nothing in particular I thought I’d take a look. About 80% of the most popular searches are about a person.
Not the same person, obviously, but to maybe express it more clearly the most popular searches are about people.
The most popular people appear to be those in the ‘Entertainment’ business if you are in the USA. In the UK the most popular people are still in ‘entertainment’ though most likely they will also be someone who did something noteworthy recently. That can be being evicted from Big Brother, confessing to having had an affair a few years ago (Don’t ask me, I don’t know either) or any one of a surprising number of activities that probably wouldn’t get a mention if it was an unknown who had performed them.
In Australia the most popular people were sports people. I guess that’s still entertainment?
How can this help your marketing?
Marketing is about connecting with your target market, meaning with a select group of people. It involves positioning your product or service inside their world, convincing your target market that they need it.
What the popular searches tell us is not to dwell to much on the features of your product or service, instead describe what effect they will have on the person reading your copy. People are mostly interested in people. Connect to that in-built drive and your message will be far better understood and accepted.
Describe the experience of using your product or service from the perspective of the buyer. Show them how it will improve their lifestyle. Include some comments from other people – also called ‘testimonials’.
Remember the world’s most popular radio station: WII-FM. That’s the call sign, their tagline is “What’s In It – For Me?”
I can guarantee that nearly everyone reading this is making a fundamental mistake in their marketing, one that is costing them more than half the business they might be getting. Get it right and your business will more than double, keep getting it wrong and you will continue to struggle.
That secret is revealed in this post, but allow me to tell you why I’m writing about it now rather than letting you in on the secret years ago.
Over the weekend I spoke to an old friend who amongst other more friendly things told me I “was the wrong profile for a marketer”. For those that know what it means I am a “Lord” profile, and for those that don’t know what that means then I like systems. I like to see things happen in a systematic way.
Now that comment made me stop and think. You see I am actually quite good at marketing, and yet I understood why some would think otherwise. And then it dawned on me.
There is a ‘hidden’ marketing secret that 99.9% of people get wrong. For most people ‘marketing and promotion’ is something they do when they can’t put it off any longer. There are a couple of reasons why most people do this.
The first reason is that ‘marketing’ is a dirty word. Look at the way it is represented in most movies or books: some sleazebag grabs you when you are in the middle of something important and will not take “NO!” for an answer. And to be fair, there really are people who think that’s how marketing is done. They follow the 1980’s-style break the door down and confuse ‘em until they buy strategy. I’m sure you have met some of those. So we avoid being a ‘marketer’ because we don’t want people we know to think we are like that.
The marketing copy seems to be designed to make you feel like an idiot if you don’t buy, or it goes on and on and on with seemingly endless irrelevant details. I don’t know anyone who enjoys reading adverts that are longer than they need to be, do you? By the way, this isn’t a comment on “Long copy” versus “Short copy”, I’ll leave that discussion for another post.
So we don’t want our friends to think we are “One of those”.
That causes the second problem. We market only when we have to. That means that the marketing system doesn’t have the impetus to work properly. Let me explain it this way.
Imagine you own a farm, and that since it is a small farm you are the only person who works on it. You have a crop in the ground, so you need to fertilise it, keep the bugs off and generally look after it the best way you know how so that you get the best price when that crop is taken to market. That’s obvious.
Though growing a crop isn’t limited to the time after the crop is sown. Before you can do that you must prepare the ground – aerate the soil and then plough it so that the growing crop is as successful as it can be, and add what the ground needs to produce a good crop, then actually sow the seeds and then protect them until they germinate.
Your business is like that too. You must deliver on your current contract, making sure you look after your current customer and give them the best possible experience and yet if you don’t also look for more customers then you will have plenty of time next month to do some marketing but precious little income.
Your income is determined by you doing the job, but if you don’t market your business successfully your income will have peaks and troughs that make life way more ‘interesting’ than it needs to be.
So you need to deliver to current customers and you need to look for new ones at the same time. How do you do that?
The answer is you need a marketing system. One that works for you rather than one that requires you to work for it.
Some of you just thought “You can’t automate marketing”. And in 1980 you’d have been right. Now let me explain a little more about a good marketing system.
We all know about the 80/20 Rule. It basically says that 80% of your income will come from 20% of the customers. In the perfect world you would spend most (if not all) your time delivering value to the 20% rather than trying to figure out what the 80% were thinking. Well actually that’s the automated part.
Your time is limited, so the ideal is to just talk to the 20% of people who are interested in what you have for sale. That way you can fit everything into your busy day.
So your first marketing contact shouldn’t be to look for as many sales as possible, it should be to separate the 80% who will almost never buy from the 20% who really need what you have. Can you see the system here? How it works better for both the Buyer and the Seller? And the Non-Buyer! The Non-Buyer isn’t bombarded with what are now nuisance messages, the Buyer receives the attention they deserve, and you, the Seller, make the best use of your time. And that means a bigger profit for all.
Here is an example of an initial contact that separates the 80% who don’t need my services just now from the 20% that do. It is currently running at above 30% opt-in, so it is out-performing the 80/20 rule (maybe I should start a 70/30 rule?) and it just says “If you are looking for this, just let me know”. Everyone who has indicated interest receives a personal contact from me.
See the system? And how that makes best use of my marketing time?
I’ll talk about Long and Short copy in the next post.
Good marketing, Iain
Everyone looks for improved productivity, but how many of us know what to do to achieve the productivity we want? Here are five simple things you can do to bring your productivity to the level you want.
If you didn’t have big ideas you wouldn’t be in business for yourself or growing your career in a business. That’s exactly what’s needed there – your ideas have to be big or they won’t inspire you. But that’s not how you implement ideas. When you implement the idea it works best if you break the overall project down to its component parts. Let me give you an example.
Imagine you are building a new house. It cannot all be done at once – it is obviously silly to think of raising the roof before the walls are in place and yet we often try to do exactly that in our business projects. The first sub-project might be to prepare the ground work – dig the foundations, put the water and utilities in place, build the foundations, then move on to the framework of the house, then the floors and walls, then the roof and so on. Your business projects can be broken down in the same way.
That gives you a number of easy stages versus one perhaps overwhelming lump, and that means your projects start finishing on time and on budget, just the way you imagined them.
The second productivity boost is to delegate all tasks that do not directly generate income. This just means to consider what is the best use of your time – shopping for stationery or prospecting for clients? Walking around delivering leaflets or delivering product?
Consider everything that you do – are you the only one who can do it? If not – delegate it. Let someone else do it and concentrate on the things that only you can do. Establish the same discipline with your staff. If everyone is doing what they are best at then the chances are that a better job, less supervision, and a happier workforce will result.
The third productivity boost is to manage the time you spend on emails. Stop checking your emails every ten minutes! This is another case of best managing your time – do you make more profits by signing up a new client or reading your emails? Yes, sometimes the order comes in via email, but it will still be there when you come back – and that’s why it was sent via email, there was no urgency at the client’s! If there was a hurry the client would have called.
So get away from your emails and get back to your business. Spending more time doing what you are best at must bring more to your business.
Business rules haven’t changed much since the first trader opened their doors (or tent flap?) for business. What has changed is how we do things. It all used to be face to face, then mail and telegraph allowed us to do business at a distance, then the telephone, fax and internet accelerated that trend. Now much of what we do on the internet can be automated.
Every day there are more and more technology shortcuts that allow us to generate more income and profit from the same amount of time. Think of a repetitive task and almost certainly there is a computer, tablet or smartphone application that does it. The truth is that there is probably an application for all platforms and if there really isn’t then check back tomorrow! If you think you need it then someone has figured out that you are their market.
Productivity tip number six is to share this with your staff. Let them know that they will be given tasks that suit their skills, responsibility and authority where appropriate and clear instructions with a time limit where it isn’t. Let them know that you will train them in the latest developments in their industry, and that they will be given the opportunity to put that training into practice.
Now here is an extra tip, one that will add value to all of the first six – put them into practice. Change the way you do business. You may not agree with some of what is written here, and that’s OK – the real question is: what are you going to do with the stuff you do agree with? Every tip will add value to your business, given the chance. And that’s your next job – to give them a chance.
Good luck, and let us know how they help.