(1st of an 18 part series)
Insider Basics of Business Marketing:
18 Principles Every Business Owner Must Know to Survive & Prosper
by Jeff Zadzilka, Freelance CopywriterSEO Website Content SpecialistIntroduction:
After many, many years of struggling with my marketing efforts and searching for the right know-how and skills, I ran into the written works of Jay Abraham, a man that many CEO's and others believe to be one of the great masterminds of business marketing. Much of what I'm about to tell you is his take on the basics of business marketing. No one should attempt to go into any kind of a business without knowing at least the basic parts of Jay Abraham's business stategy. The other half of these basic business principles come from a variety of highly credible and proven resources along with my own comments and additions for clarification about what is needed to succeed in business and marketing.
"Without Effective Marketing, there is no Business ... and Without Effective Copywriting, there is no Marketing."
- - - Jeff Zadzilka, Freelance Copywriter / SEO Web Content Marketing Specialistwww.SEOWebcopywriter.com
"I'm the best at what I do, yet those who aren't as good as me are making good money while I'm going broke!"
Most people going into business have a technical expertise they used working for an employer.
They break away to create a one person business expecting to use their technical expertise and be hired by many other businesses.
What they lack is marketing skills and administrative skills. They may be great at what they do, but don't know how to market their skills or what it will cost in time and money to market their services. They must realize that they need to sell themselves. They also need to do the bookkeeping and every other part of what makes a business run. They are one person now attempting to do six jobs, only one of them that they are skilled and experienced to perform. They get overwhelmed. They invest too much time to get a few jobs that don't pay them enough to continue paying for what they already have. They usually quit and go back into the market as an employee after their dream dies.
You're not alone. Some of the most profitable entrepreneurs failed many times in business before they succeeded. Each failure drove them to figure out what went wrong. What could they have done differently? What should they have known? What do they yet need to learn? They learned from each failure what it was that was missing. It often took several failures to learn step by step what was still missing in the equation to succeed. So if you really want success, you have to earn it by learning it.
You may already know many of the insider principles that follow. Look for the subtle differences in what is being taught versus what you already know. Some very small difference may be the difference that is the missing link in the "wild success" formula. At least 80% of your business success will depend on your skills in marketing and sales ... if not your skills, the skills of those you hire for this reason. As one business millionaire entrepreneur told me, If you're not putting yourself in front of your potential customers, whether face to face, on the phone, in print, reaching out via social media networks or email, you're not earning money; you're not really working; you're just spinning your wheels and throwing away your time and money.
Let's start the learning ...
Being great at some technical expertise is a great foundation for a business ... but you must also be great at "being in business" ... the business of being in business. Being in business means knowing how to market yourself, your skills, and what sets you apart from the competition offering the same technical expertise. So let's talk about the insider basics of business marketing.
Principle One:
Find out where the market is going, where the cash is flowing, (being at the early part of the trend) and as a business,
put yourself in front of itl
Experienced business investors find out where the market trends are flowing and put themselves right in front of the ongoing
business traffic. If you stand in front of rush hour traffic, you are sure to get run over by it. So in business, it's a good idea to
get in front of the traffic flow, the massive movement of buyers, as long as you are prepared to competently deal with it. In doing so,
less marketing is needed. The job opportunities or purchases get off to a fast start earning money, needing less marketing and less
marketing skill. That means less marketing time and costs ... higher profits. That's a good thing! ... but do not mistake this as needing
no marketing. This is marketing.
If you're already invested in a business or too heavily invested in a skill set that puts you into a specific business, you'll need to find
some part of the business that is a niche. That niche should have a reasonable amount of demand for providers or suppliers with
a base of your competitors for this business that cannot handle the amount of business or not handle it as well as you can. In this
case, it will be wise to supply yourself with some added marketing, selling and copywriting experience in order to grab your share.
No worm on the end of your hook means no fish regardless of how much business is just underneath the surface.
xxxxxx
Business depends on "Supply and Demand." There is no reason for a business to exist without the presence of significant demand. There is no business or chance of business success without being able to provide the supply that is in demand. The more uniquely effective you are at supplying that which is in demand, the greater your opportunity to be profitable ... if and only if you also know how to effectively market your supply to those needing or demanding it." - - - Jeff Zadzilka, Freelance Copywriter / Web Content & Marketing Specialist
In marketing, speaking of 'supply and demand,' that's thinking in the wrong direction. Let's reverse it to understand it better. It should be "demand and supply.' There is absolutely no reason for a business to invest in creating a supply until there is sufficient demand to be profitable. Putting this in layman's terms, 'Demand and Supply' is about 'Problems and Solutions.' ... the impact or size of the problem or problems and the effectiveness of the solution and quantity of those able to provide the effective solutions ... quantity of competitors/quality of solutions. The bigger and more important the problem is for someone, the more they are willing to pay for a solution.
If many people have this same problem and you can supply a solution, the profit opportunity is multiplied due to the volume of the demand for the solution.
The second factor in 'supply' is how many people there are offering to provide/supply a satisfactory solution. The greater the supply of effective solutions, the less one can charge for that solution since more competitors are offering to supply that solution.
However, the more your solution is unique in some way ... it's faster, more convenient, less intrusive, takes less training time, requires less labor to provide and maintain, lasts longer, or has some other unique advantage over your competitors solutions, then the less competition you'll have. That uniqueness, if desireable, will increase the value of your solution .... if you can market it properly. That's your U.S.P. or Unique Selling Proposition.
Great copywriters invest alot of time on crafting the headline on any project. We may write 50 or more versions of a possible headline before we come up with the one we believe is best. We do this because the "headline" is the Advertisement for the Advertisement ... or sales letter or article, etc. If the headline doesn't pull in the reader, the written copy never gets read. If the headline is really good, it may pull in five to ten times more readers than an average headline. If 20,000 direct mail packages are sent out with an average headline, maybe 200 people will read the package and 20 will buy. For the same mailing and production cost, this 20,000 test mailing of the package is sent out with a great headline that may attract the eyes of 1000 readers and perhaps 100 or more will buy. If your profit margin is $90 per sale, the first package earned you $1800 which means you probably lost money because the mailing and production costs were more than this. In the second mailing where 100 readers bought, your gross profit was $9000. That's quite a difference in profit for the same mailing cost.
The point I'm making that a Headline to a Copywriter is like a U.S.P. to a Business Owner or Marketer. Think of your U.S.P. like I have defined it in the story above and if you are in any kind of business or thinking of going into a business, invest a great deal of time coming up with a U.S.P. for your business and a U.S.P. for each product or product line you carry or service you provide.
Principle Two:
The Three Ways to Grow a Business
1. Acquire new customers.
2. Get every customer to buy more with each transaction.
3. Get customers to buy more frequently.
I believe there is a fourth way to keep a business growing.
4. Learn how to please and keep your customers.
Let's say you are able to acquire 100 customers.
Each customer left to their own instincts buys $50.00 or services or merchandise.
Your profit margin is half or $25.00 after expenses.
$25.00 x 100 customers = $2500.00 (let's say for the month)
We'll talk more about "how" in another principle, but let us say you find a way to have each customer buy just 20% more
when they visit. They now buy $60 per visit times 100 customers which equals $6000 in purchases.
At 50% expense, that's $3000 in profit, or $500 additional.
So in the third way, you find a way to have your customer buy more frequently. That may require adding related services
or products they would want to buy or already buying elsewhere, but because you have their trust and loyalty, they have a
need to buy from you more frequently as you notify them of these new items or that these items are on a special discount
ONLY for your best customers once a month, the first week you receive the inventory or some other logical reason for the
buying window.
So now they are buying $60 on the first visit and another $40 two weeks later. Many people don't like to spend their money
all at once. It seems to them that they're spending less when they don't spend it all at once. Of course, there are exceptions
like when they travel 20 or 30 miles for an outing to your store (because they like it and they like you) or if they order online
and want to cut down on the shipping and handling by doing so in one order. Then, they may want to spend all at once.
But back to our equation.
They now are spending $100 per month at 50% expense with $50 profit. $50 profit times 100 customers is $5000 in profit.
So out of the same 100 customers, you have found a way to go from $2000 in profit up to $5000 in profit.
Now, you can't force people to buy more, more often. If you do, you will lose them quickly. You need to create an environment
or relationship or both in order for this increase in transactions to occur.
And ... fourth. If you lose two customer every time you gain one, you will soon be out of business. If you can gain two, three
or ten customers or clients for every one you lose, you're business wll grow. To do this, you need to know who your customers
are and if they all of a sudden, stop coming in to shop or stop hiring you to do your service work for them. You will need to do
everything in your power to find out what's wrong so you can make it right if possible, perhaps even give then an incentive
to come back. The longer you can keep customers, the less new customers you'll have to acquire and acquiring new customers
costs money.
Principle Three:
Lifetime Value of a Customer
Once you get a customer and can keep them loyal to your business as a customer, they will come back repeatedly
to buy again and again. The second, third, fourth sale and on, are easier sales to make than the first sale. Let's
say a customer buys an average of $100 per transaction from your business. Your costs per transaction are $70.00
with a $30.00 net profit for yourself. Your customer buys from you once every other month for three years and moves
on to something else, leaves town, or for whatever the reason, their circumstances change. You have earned $30.00
six times a year ($180.00) for three years ($540.00). That is what is called the lifetime value of that specific customer.
Let's say you have some that buy less and some that buy more, all on different schedules. when you average all your
customers together, you personally profit $500 per customer before they drop off the radar and you are unable to get
them back. There is alot to learn from your average "lifetime value of a customer."
Principle Four:
To acquire a first time customer with a first sale, it often costs more than you can make in profit from that sale.
Should that stop you?
1. Most marketers believe they cannot invest $100.00 in marketing to sell a first time customer a product for $100.00 which is why they fail. It almost always costs more, much more, than the profit of a first time sales. However, if the lifetime value of each one of your customers is $500.00, then you can spend up to that amount before long term loss occurs. Should you invest the total of your profit from a single customer? Probably not, but it would not be unreasonable to pick a figure far beyond your $30 profit margin for that first sale. Perhaps investing $100 or $200 to acquire each customer, would be well worth the investment in the long run to accumulate a large quantity of loyal customers who trust you, your work and your recommendations.
Principle Five:
Marketing to Acquire a New Customer - The Problem of Must Sell Right Now - Prospect Nurturing
This is number one of the three ways to grow a business. It is the main focus of too many businesses. Many businesses promise the world to get a prospect to buy from them. The focus for the sales person and the business seems to be on the "right now" moment as though if you don't sell something to a prospect right now, you will never see them again. Because of this, businesses and salespeople push hard for an appointment, twist the truth, exagerate benefits, and pretend not to know about the product of services problem side. They may alienate a good prospect that just needs a little time, a little nurturing and several gentle call backs over time to build some trust. That prospect will be gone forever. But maybe the sales person got in front of the prospect. Maybe they got a first time sale because of their assertiveness, but the product may be returned or the service not accepted ... the sale cancelled. If the customer felt pressured and uncomfortable before they said yes to a purchase, you may keep than sale, but it is unlikely that you will ever see that customer back again to buy from your business. Let's say the customer left feeling great with product in hand. A week later, he or she goes to use the product or install the product. The customer calls for help with installing the product .... just some simple instructions or a questiion answered. Your service department has no product training and the customer gets passed around from one department to another searching for someone with an anwer ... but no one has the answer the customer needs. Suppose no installation is needed and the customer goes to use the product. The product doesn't work as your sales rep promised and that gets the customer frustrated. The customer comes in angry and wants their money back. Will this customer come back again to buy from you? The answer is definitely "NO" if they have a difficult time getting their money back. ... but a sincere apology and a speedy return of the customer's money may make the customer consider coming back again if they thought this was just one of those errors a business occasionally makes ... but as long as they are willing to "make things right" for the customer, it will possibly be worth doing business again with this company.
Principle Six:
Marketing to Acquire a New Customer - Understanding the Buying Cycle - Prospect Nurturing
Studies show it often takes about seven contacts with a prospect before they trust you enough to buy from you. This is an average. Sometimes it happens on the first contact, sometimes on the 5th, sometimes on the 11th, and maybe never. Based on this, it is a smart marketng strategy to plan for a series of contacts with your prospects whether it be twice a month or monthly or some other frequency ... but the contact needs to be scheduled on your part as the seller. Typically, business to consumer selling is faster. The products cost less and the decision to buy rests with one or two people. Buying is more on emotional wants and justified with logic. An individual buying a $10.00 item is unlikely to spend months or even weeks deciding if they want to buy a $10 item. They are likely to buy small cost items the first or second time they see and consider buying them. Buying a $100 item may take the average consumer a month or two before buying. Let's say they just got their tax return check for $1000 or more. Even though they may go out and buy that $100 or $200 item that week, they were probably considering that purchase for a month or two before they had the money to make the purchase. Money availability and timing are other considerations. Even if a consumer wants to buy something they really want, they may not want to go further in debt to have that item and will wait until they have that money saved before they buy. In that case, your buying cycle may be longer. As far as timing, it would be smart for a marketer to continue to contact people on their list every month so that when the timing is finally right for the consumer, you will be there for them, and you will be first in their mind because you continued to have postive and patient contact with them.
Business to business selling may take three months, six months, one year or as long as two years. Products can be low cost such as business office supplies or some piece of business equipment or machinery costing several million dollars per purchase. Obviously, the larger purchases take a longer buying cycle. Any purchase that requires a more extensive need for change in operations of some sort will require added consideration and therefore taking longer to buy or decide not to buy. If a buying decision will impact several departments, it is likely that the head of each of these department will have a say in whether to move forward in the decision to buy. This means you need to have serveral different types of approaches when contacting the decision makers. Each one of these people has different concerns. The department head of the employees most impacted by a new product or service purchase will be concerned about the new learning curve, the learning difficulties, the employee resistance, the time consumption before they begin experiencing the positive benefits of the change. If it involves computers, the I.T. department will have a say since they will have to service the department with the new equipment. They will be asked for an evaluation. The CFO will be concerned about the cost of the product and the cost of changing over to the new product. The CEO will be concerned with all of this and be collecting info and opinions from all these departments once they become interested in the purchase.
Business people buy mostly on logic, the needs of the business, but their is an element of emotion involved. The department head will worry about the resistance of the employees and how much more time he or she will have to spend at work ironing out problems created by handing a new procedure or equipment process or software, etc. That will lead into what to do about explaining extra hours to the spouse or the current schedule regarding picking up the kids and school. Considerations about the kids extra curricular activities. Will they be able to be involved? What will be the impact? ... or perhaps, will this new process save time and be simple and quick so everyone will get done with their work ahead of schedule. The I.T. person may be fully busy now and is wondering how much more time they will be required to step in to help when things go wrong. The CFO has to justify the expenditure of costs versus the saving of costs over time. Alot of this is evaluation and some is guesswork. If they evaluate or guess wrong, they will have alot to answer for ... maybe their job if the costs are high. The CEO also has to answer to investors. How do you tell investors that their ROI will be lower for the next six months, but then the ROI is "expected" to go up and more than make up the difference. What if they're wrong? So, even though the emotions takes a back seat, they do play a role in how one must market to a business.
Principle Seven:
Capturing Your Visitors Contact Information
Once you've invested a whole lot of marketing time and money getting the prospect into your store, to visit your website, or to allow you to visit with them, you need to "capture the contact information for that prospect." What that means is asking them to allow you to contact them via email if possible (least expensive), by mail or by phone in the future. For email, this is called "opt in." It means agreeing to allow you to contact this prospect by email in the future. Once a prospect buys something from you, they are a customer and as such, you have the right to contact them by email unless they tell you to stop. Even if face to face and you've provided your presentation, it is still a good policy to ask the prospect if they mind a future contact as new information becomes available, if they haven't made a purchase from you on that visit. Perhaps you've invested money in ads and you have a storefront. It would be worthwhile, actually valuable to you, to collect the contact information from every visiting prospect or customer that walks through your door. Name, email, address and phone number ... this is the important information. Customers tend not to like giving a phone number and marketers, especially sales people don't really enjoy prospecting by phone. We'll address this issue in principle 11 and 14. If you can also get information on what they usually look for in a store like yours, why they visited your store, what was their honest opinion, ask for feedback and suggestions from customers. This can be done in a survey by mail, online or in the store face to face in private, or even on the phone. It can be done all at once or over some time. In order to get this information, you may need to acknowledge that their time is valuable and although you are not in a position to compensate them very much for their time, five or ten minutes, you will give them a discount on their next purchase. This discount can be a set $5.00 or it can be a set percentage like 10% off their entire purchase amount or some other arrangement. In exchange for opt-in or the survey, you may offer some free report on buying or investing or something related to your business. You may offer a newsletter with valuable and useful information or maybe discount coupons and announcements of special ourchase options.
Knowing who your custimers are, how to contact them directly, and what they expect of you can be valuable information. You can build trust and rapport over time. Customers may feel more comfortable buying from you and also from telling you why they didn't and what you can do to fix that. You have a much better chance of making them a loyal customer at a lower price when you don't have to spend you marketing dollars on ads reaching people that will never be a customer. Direct contact is more personal and effective if you can make you message to visitors, prospects and customers meaningful to them.
A few key points. Don't contact them too much. Don't give them too much to read. Don't just write to them just to write to them. Don't waste their time. Treat them as you would like to be treated as a customer. Better yet ... treat them the way they want to be treated as a customer if they will tell you how.
Creating a saleable business asset ... That's what a list can be. In most cases, you promise the customer that you will not sell or rent your list to anyone else. You can take another businesses product if you think it has alot of promise, and pre-sell the product in an email with a link to a website landing page describing the benefits of the product. You would of course, expect a percentage of the profit from the sale. As a legal note in the terms for obtaininig your list, you might add something to the effect of "your contact information will only be provided to a new owner of this business should we ever sell our business." The value of a business rests mostly in its customer list, its procedural documents, its trainng documents and its marketing operation and document, and perhaps the website. The name of your business may have some value if it has become a well known name in the area and is successful as a business. If the business is a person and the skill of that person, the value leaves when the person leaves.
Principle Eight:
Buying More Per Transaction
Principle Nine:
Buying More Frequently
Principle Ten:
Keeping Your Customers as Long as Possible
Principle Eleven:
A business can seldom survive on one product. The most profitable businesses tend to be those that either
carry consumable products that need to be bought month after month or a business carrying a series of
related products.
Principle Twelve:
Marketing Leverage - Change the Words, Change the Impact
Principle Thirteen:
Marketing Leverage - Pre-Selling
Principle Forteen:
Your employees can be Costs or Assets
training
Principle Fifteen:
Number of Marketing Sources
Principle Sixteen:
The Value of No in Getting to Yes
Principle Seventeen:
Customer Nurturing Efforts Result in Future Sales
content
Principle Eighteen:
Multiplying Income by Leveraging Time
