“LIKE” IF YOU REMEMBER MYSPACE

MySpaceIs it just me, or has there been an explosion of people posting nostalgic photos on Facebook and asking you to click “Like” if you can remember a black and white picture of some fifties TV icon or a once popular consumer product from your youth? Time has a way of reducing our past to warm, fuzzy memories. Heck, show me a photo of a macho guy enjoying a cigarette on the back of a horse and I might even forget that three of the Marlboro Man actors died of lung cancer!

Digital media has done more than merely provide a medium to share the recollections of our youth. It has greatly diminished the time span during which products and services move from broad acceptance and popularity to distant memories. Allow me to offer two well-known examples.

Gutenberg’s 1440 invention of the printing press revolutionized communication. It made possible the sharing of ideas and information through the mass production of books. It took another 555 years, until 1995, for an upstart company named Amazon to start selling those same books using something that had been introduced just three years earlier. That something was the Internet.

It took another 12 years to popularize eReaders like their famous Kindle. Within four years, Amazon was selling three times as many eBooks as hard covers. Their success obviously does not include a plethora of competitors including the hugely successful Apple iPad. It seems almost certain the paper book will soon be a candidate for Facebook friends to ask you to “Like” if you can remember owning one.

Still, 600 years from invention to impending obsolescence is not a bad run! Now consider a more recent service life span.

MySpace was introduced in August 2003, six months before Facebook. Just two years later, it was the most visited social networking site on the planet. Rupert Murdock was so excited about its prospects that he paid $580 million for it in 2005. In 2006, it reached 100 million accounts, a level that required 1,600 employees to support.

Facebook over took it in April 2008.

In June 2011, Murdoch’s News Corporation sold MySpace for $35 million, a 94% loss on their six-year investment. With uncharacteristic understatement, Murdoch pronounced the purchase a “huge mistake”.

These examples illustrate three critically important points for all 21st century marketers.

  1. Communication trends change faster than businesses can anticipate. Most lack the resources to manage that change.
  2. Faced with a constantly expanding stream of free choices, your target audience no longer uses communications channels popular just a few years ago.
  3. Neither do your successful competitors.

The cost of failure is high. Even the most carefully designed marketing communiqué, be it a press release, an ad campaign, a newsletter, etc., will fail if it is not transmitted in the optimal channel.

The only way to avoid that mistake is to communicate a consistent message and single brand to over-lapping audiences across multiple channels. That is what successful digital media marketing is all about.

© 2013 by CFO America, LLC

You Can Have Any Color You Want, As Long As You Want Black (Part 2)

Today I conclude the article on product driven versus market driven companies. I began by discussing the cultural differences between the two. Product driven companies concentrate on achieving and maintaining technical superiority. Market driven companies devote resources to brand development and customer communications.

Companies and industries sometimes attempt to adapt their marketing strategy in response to changing competition and other market forces. For example, conditions slowly but dramatically changed for the entire American automotive industry over the next 50 years. Detroit’s response to the 1973 oil embargo was a textbook case of a failed attempt to adapt. Faced with the first ever non-wartime limit on the availability of cheap gasoline, the American consumer suddenly became very conscious of gas mileage.

At the time, Japanese and European companies dominated the market for fuel-efficient sub-compacts. American manufacturers’ knee-jerk response was to jump headfirst into a market they had ignored until recently. They stepped up production of the notoriously undependable Ford Pinto (voted the worst car of all time), the Chevrolet Vega and the AMC Gremlin.

Detroit’s failure took a personal toll on an entire generation of consumers. My first car was a red, white and blue Pinto. It was a cornucopia of expensive mechanical problems, unrelenting frustration on a 94-inch wheelbase. I sold it just before a massive recall for an exploding gas tank problem that would eventually cost Ford millions of dollars in legal settlements.

My next car, a Toyota, sparked a love affair with foreign cars that continues today. It was 30 years before I bought another Ford, a pickup truck for my son. It took almost as long for American manufacturers to overcome the image of producing inferior cars. It remains to be seen whether they will ever regain the world market share they once enjoyed.

How have things changed since I bought that damn Pinto?

A national chain of men’s discount stores advertised, “An educated consumer is our best customer.” For a product driven company in 2011, an educated consumer might be more aptly described as their worst nightmare. Service industry executive and strategic planning expert Michael O’Loughlin recently summarized the reason. He said, “Thanks to the Internet, the consumer has come to believe that no concessions are ever necessary. They expect unlimited choices in meeting their needs.”

Potential customers are only a few clicks away from a myriad of rival goods and services. A consumer with a smartphone can compare competitors’ prices on the spot. Any business, even the smallest local operation, ignores those powerful market realities at their own peril. Broadening your product line or services can help fend off competition by better addressing market needs, and improve customer retention in the process.

The men’s store chain recently filed for Chapter 7 bankruptcy. One analyst said they had failed to keep up with the increasingly competitive off-priced clothing market.

My final point is that few successful companies employ an entirely one-sided strategy. They operate along a moving spectrum on which there are few absolutes, and no strategy guaranteed to bring success or failure.

Consider Ford one last time. Product limitations notwithstanding, they still managed to sell over 15 million units between 1908 and 1927. At one point, half of all the cars in the world were Model T’s. That production record stood until the Volkswagen Beetle finally surpassed it in 1972.

The correct strategy for your business is the one that is executable within the constraints of your cost structure and marketing budget, and that produces the highest net cash flow given all the relevant factors at work in your market and your competition.

I began this article with an old quote. I end with another. A marketing adage says, “You have to sell from your own wagon.” It refers to a bygone era when merchants plied their trade by pushing handcarts up and down urban streets. The adage may be true. However, today you get to decide how big your wagon is, and what products or services it carries.

Go forth and sell!

 © 2011 by Dale R. Schmeltzle

You Can Have Any Color You Want, As Long As You Want Black (Part 1)

This week, I get to incorporate two of my favorite topics, history and old cars, into a two-part article. My title is one of Henry Ford’s most quoted statements. He actually said, “Any customer can have a car painted any color that he wants so long as it is black”.

He said it in 1909, ironically at a time when black was not available. The Model T originally came in grey, green, blue and red. He did not implement his all black policy until 1914. However, He could have accurately said customers can have any model they want so long as it is a 2-door. But his quote sounds better, so I’m throwing journalistic accuracy to the wind and going with it!

I use it to introduce my real subject, product driven versus market driven companies. Henry obviously believed in a product driven strategy.

My first goal is simply to understand the difference between the two strategies and the corporate cultures that define them at the most basic level.

If you were involved in Ford’s marketing efforts back then, your job was to convince potential buyers they needed a black Model T, period! Your marketing approach was something like, “Here is what I have to sell, and this is why you need it.”

Contrast that to a market driven strategy that asks, “What do you need, and how can I best meet that need?”

The cultural differences between product and market driven companies run deep. Product driven companies will spend relatively more resources on product development. Their primary goal is to achieve and maintain technical superiority. In extreme examples, they believe their products are so good they simply sell themselves. Engineers will always outrank marketing in the corporate pecking order.

Market driven companies will devote more resources to brand their company and products, and on customer communications. Technical superiority is secondary to understanding customer needs and anticipating market changes. Product development is less mission critical than advertising, since the marketing department rules the roost.

My second point is that if you are going to sell a limited product or service line, you need to be very good at it. Ford was fanatical about producing cheap, dependable cars. He managed to reduce the original $850 sticker price to $290 by the 1920s. At that price, he owned the working family automotive market. He was so confident that the cars’ features and low cost could generate sufficient sales that he did no corporate advertising from 1917 to 1923.

Unfortunately, being first to market with a technically superior product offered at an affordable price is no guarantee of long-term success. As Ford Motor Company subsequently learned, competitors (increasingly on a global basis) have a long history of unseating early market leaders who grow complacent about ever-changing customer needs and wants.

Being a product driven company is certainly easier if you exercise some degree of control in your relevant market, and if consumer tastes are stable and predictable. Perhaps Ford was lulled into a false sense of security by assuming past market conditions, under which they flourished for decades, would continue indefinitely.

Car buyers in the 1920s were unsophisticated by today’s standards. They could not have imaged, let alone demanded the range of choices, options and features currently available. Ford was not the first company to replace dangerous hand cranks with electric starters. Cadillac beat them to market by seven years. However, when the world’s largest car manufacturer finally made the change in 1919, consumers and the rest of the industry fell in line. Ford defined the new standard, not Cadillac.

I will conclude this article on Friday, when I write about how companies sometimes attempt to adapt their strategies to changing market conditions.

Until then, best wishes for a joyous Thanksgiving holiday.

 

© 2011 by Dale R. Schmeltzle

Customer Service #101: Buddy, Can You Spare a Sandwich?

I had an experience last week I feel compelled to share. It was Friday night, the end of a long week. After fighting construction traffic for 45 minutes, I stopped at a national fast-food chain. I ordered three sandwiches. Mind you, I didn’t order drinks, chips or dessert, just three sandwiches. The bill came to $27.14. Since I didn’t have much cash on me, I handed the salesclerk a credit card. I was informed their “system” only allowed credit card charges up to $20.

Since I have previously  bought takeout from this chain many times without encountering this problem, I’m not certain whether it is a new corporate policy, a misguided rule imposed only by this franchise, or if the employee was simply mistaken.

Regardless of the reason, it points out a common business failure. The problem is creating unnecessary obstacles for people who might otherwise become loyal customers.

I have written many times that competition is based on price, product or service. Those are your only three choices.

Perhaps spurred by the current slow economy, price competition is clearly the most promoted basis of competition. It is especially prevalent in the food service industry. Witness Applebee’s “Two eat for $20” or Pizza Hut’s “$10 any pizza, any size, any toppings” campaigns, just to cite two.

Low prices are completely objective, easily communicated and quickly adjusted as necessary. Unfortunately, while coupons, discounts and sales may bring more customers through your door, they always cut into your gross profit. You simply cannot consistently sell a product or provide a service for less than your cost and survive!

Price competition also presents a more immediate challenge. In a high-tech world where any customer with a Smartphone can quickly determine if your competition is offering a better price, the strategy is certainly no guarantee of marketing success. The risk is escalated if low-price guarantees are common in your business. Furthermore, if someone purchases only because you are the cheapest available option, he or she is unlikely to develop any customer loyalty unless you are always the low-price provider. Few businesses are large enough or profitable enough to be in that enviable market position.

Competing mainly on product also carries risks. Even if you think your product or service is unique, the reality is there are probably countless options that are close enough to serve as a substitute for customer needs. A classic example is the difference between a Lexus and a comparably equipped Toyota that sells for thousands of dollars less. Product competition is also complicated by the widespread availability of on-line shopping and free shipping.

That leaves service as the only basis of competition on which your business can truly distinguish itself. It is also the only one that doesn’t have to increase your operating costs, or cut gross profits. A friendly smile and prompt, courteous service cost nothing! More importantly, superior service cannot be instantly matched by the competitor up the street.

Superior service encompasses the entire customer experience, starting with the moment they enter your facility or contact you. It continues until the product or service produces the level of satisfaction the consumer expected. It includes point-of-sales services such as allowing credit cards, answering questions, gift-wrapping and perhaps even walking packages to their car. It also includes after-sale services like satisfaction guarantees, generous refund policies and warranty service.

What’s the lesson here? Ask yourself two questions. First, are your policies and procedures primarily designed to make your life easier, or to increase customer satisfaction? Secondly, are your employees adequately trained in those policies and procedures, and are they consistently delivering a customer experience that will keep shoppers returning year after year?

I’ll end with a quote from Mark Cuban, billionaire owner of the Dallas Mavericks. He summarizing the essence of Customer Service # 101 with this, “Make your product easier to buy than your competition, or you will find your customer buying from them, not you.”

© 2011 by Dale R. Schmeltzle

It’s Nice to be Lucky

Someone recently asked why I prefer consulting to corporate positions. The truth is I am not sure I do. However, the question got me thinking. That got me writing, so here I go.

A number of years ago, family circumstances forced me to leave the corporate arena, where I had established a 25-year record of success. Consulting offered the only viable opportunity to feed my family.

Back then, the World Wide Web as we called it was still in its infancy. Only large companies had websites. E-commerce was virtually nonexistent. Facebook would not be introduced for another four years. My personal computer provided email access. However, many people still lacked an email address, especially at home. I cannot recall whether I could attach documents. I suspect not. Cell phones typically cost hundreds of dollars per month, largely due to a now antiquated practice of assessing “roaming charges” for long distance calls. Blogging? That sounded more like something my Rottweiler does after she eats grass than a mass communications tool.

I did not have a marketing clue, let alone a marketing plan!

What I did have was a telephone. It attached to the wall with a long wire. You may remember the device, having seen one in your grandmother’s house or perhaps a museum. It could serve as a fax, but only if the recipient also had one. Although it sometimes seemed to weigh 500 pounds, I was occasionally able to muster the strength to use it.

The third phone call I made landed a million dollar client. It also launched what became a 15-person consulting firm. You can choose to characterize the call as pure dumb luck, divine intervention or anything in between. I will find no fault with whatever label you assign. The bottom line is consulting supported a comfortable life style for several years, while allowing me to address challenging family issues.

A decade later, circumstances beyond my control again forced me into consulting. Since then, I have defined my value proposition (I had no idea what that was 12 years ago) by offering cost effect advice to small and medium sized businesses. My advice is usually very specific, lengthy and often somewhat technical.

Today I will depart from my recent path. Instead, I will present two brief and decidedly nontechnical suggestions. I share both from very personal experience.

1. Mr. Tom Lewis, an online marketing consultant from “across the pond” put the whole concept of small business marketing in a rather interesting and concise perspective. He said, “All these new media buzzwords like social networking and technology like LinkedIn are just new ways of complementing (some would say avoiding) personal contact. Get out there and get your face known! Pick up the phone and call some potential clients. Speak at some networking events. Knock on some doors.”

As Mr. Lewis’ quote insinuates, there is a significant difference between merely communicating and actually connecting with customers and prospects. I can instantly communicate with thousands of people with the click of a few buttons. Yet even with the myriad of now common “high tech” options, the only better way of really connecting with someone other than the lowly telephone is in person. Unfortunately, that option is often unavailable.

My first suggestion is therefore quite simple. Include some “low-tech” tactics in your marketing plan. Pick up the phone and start dialing. Your next large client may be waiting at the other end! Mine was.

2. As of July 2011, 13.9 million Americans (9.1% of the civilian workforce) were unemployed. Over 6 million people are deemed long-term unemployed, Washington-speak for out of a job over six months and desperate. Motivated by a lack of alternative employment opportunities, large numbers eventually migrate into their own business or consulting, as I did. Unfortunately, many are fundamentally unprepared for the operational and emotional challenges that line the road to successful self-employed. Nevertheless, they are more in need of a simple word of encouragement than business advice.

I end with a quote by Thomas Edison. He said, “Many of life’s failures are people who did not realize how close they were to success when they gave up.” That is as true in today’s difficult economy as it was in 1879 when Edison perfected the light bulb after experimenting with over 10,000 different filaments.

That leads me to the shortest and most basic suggestion I have ever dared offer. Hang in there!

Until next time, I wish you good fortune in all your business endeavors. Let me know if I can be of assistance.

 

© 2011 by Dale R. Schmeltzle

When Every Second Counts

Wikipedia defines an elevator speech as “a short summary used to quickly and simply define a product, service, or organization and its value proposition.” Every business needs one. Moreover, unless you only hang out  on the top floors of very tall buildings, you need to be able to delivery your elevator speech in 30 seconds or less.

I have recognized for some time that my elevator speech needed some work. Frankly, it lacked punch and left audiences wondering exactly how I could help them. In the process of “sprucing it up” a little, I came across a blog post by my good friend John Carroll of Tres Coaching (http://www.trescoach.com/) in Keller Texas. John wrote an article on June 20 titled “Are you Speaking to me?” that nailed the issue of elevator speeches so well that I got his permission to share it with you.

John writes:

Three important elements that lead to success in a typical networking setting when positioning yourself, your business and your value proposition to other group members include:

  1. Preparation and planning,
  2. Tailoring the message to your audience, and
  3. Follow-up.

This article will address #2 “Tailoring the message to your audience”, and I will provide you with some ideas and an example that should help you raise your profile, obtain more quality referrals and effectively promote your business through networking.

Far too often, I see people just going through the motions when it comes to their networking activities. You know what I’m talking about. When it’s time for 30-second introductions they start with their name,  business name and offer little additional information to enable them to connect with the audience. What a waste of time!

Your 30-second introduction is the entry point upon which to build those great new business relationships, so take the time to do it right.

A 30-second introduction should answer three important questions, “Why should I do business with you?” and “How can I help you?” and finally, “Are you speaking to me?” It is important to tailor the message to  your audience, so people don’t walk away scratching their heads trying to figure out what you’re all about and to whom you are speaking.

Now, what do I mean by tailoring the message to your audience? Glad you asked.

In a typical networking setting there are four groups represented – potential customers, partners, suppliers and DNAs (Does Not Apply). So, don’t get up and just ‘spray and pray’ when it is time for your introduction. Recognize that how you speak to a potential customer is different than a prospective partner or supplier, and your message should reflect those subtleties and differences. Targeted group members in the audience should be keenly aware that you are speaking directly to them by what you say and how you say it.

Here’s an example of a 30-second introduction that a branding/marketing expert might use to promote their services and target new prospective clients …

“Effective marketing is much more than a slick brochure or a high-tech web site. More importantly, it’s about connecting prospective buyers with your business, and delivering measurable results.

At (Your Company Name), we are experts at helping clients find the right “connections” with their customers, so they buy more and more often.

If you are a small business owner and want to improve your marketing results, please see me after (breakfast, lunch, etc.) to schedule a FREE evaluation to determine how we can help.

(Your Name) with (Your Company Name) – from great ideas to your bottom-line.”

The above example answers the three important questions, and it is clear you are speaking to those small business owners in the audience who want to improve their marketing results.

Similarly, if your target audience is potential new partners or new suppliers, your message should reflect what is important to those particular groups and not be generic. Tailoring the message to your target audience should enable you to build positive new business relationships through networking and obtain more quality referrals.

I hope the information contained in this article has been helpful. Please share any additional thoughts and comments here that you think would be valuable.

Enjoy the journey!

John

COPYRIGHT © 2011 John Carroll

The Horse Comes Before the Cart

 

 

 

 

 

 

I advocate a simple twelve-word marketing strategy. Communicate one message, promoting one brand, touching multiple audiences at no cost. It is made possible by an abundance of free and low-cost tools that afford simultaneous experimentation in multiple channels. However, successful implementation presupposes you first established a comprehensive marketing plan.

Your marketing plan will be our subject matter for the entire week. Today I will present a planning framework and discuss the importance of goal setting.

Diving into a marketing campaign without first having a plan is analogous to the old phrase “putting the cart before the horse.” You are vulnerable to what Gordon Andrew of Highlander Consulting calls tactical soup. He defines the phrase as “getting bogged down in a flurry of marketing activity without placing enough emphasis on how it will generate revenue and profitability.”

Describing a complete marking plan is beyond the scope of this document. However, I will discuss some basic elements of your plan. Here are a few suggestions to keep in mind.

  1. Constructing a marketing plan is not a “once and done” task. It is a continuous process, as illustrated by the 5-step diagram at the top of today’s article.
  2. The first requirement of a plan is to define your goals, preferably in writing. Let me return to my horse analogy for a moment. Can you image a race where the jockeys did not know where the finish line was? The situation would quickly become chaotic. Horses would run into each other as jockeys individually decided which direction was best. It may sound like a ridiculous example, but it is no different than running a business without a clear direction. Just like a race, knowing where the finish line is and staying focused on it is critical to success. Goals provide us with that direction. As Zig Ziglar says, “A goal, properly set is halfway reached.”

The ultimate purpose of marketing is to influence consumer behavior in ways that accomplish your goals. What exactly do you want to accomplish? A logical place to start defining your goals is by answering a series of questions. They include areas like:

  • How many new clients do you need; how many can you currently accommodate?
  • How will increased sales affect your cost structure? For example, will you need to hire more sales associates or increase inventory levels?
  • What is your target revenue per new client?
  • What is the minimum revenue per client that you can profitably accommodate?
  • How would you describe your target customers in terms of key demographics like age, gender, location, education, income level, professional profile and so on?
  • Who is the ultimate decision maker in target organizations?
  • Where are potential customers likely to turn (Internet, newspaper, Yellow Pages, etc.) to learn about your products or services and to find businesses that provide them?

Finally, today’s picture features my wife Shelley and me standing next to a horse in Central Park. Send me your favorite horse pictures and I will select one for Wednesday and Friday’s blog posts. Email your pictures to support@CFOAmerica.net.

On Wednesday, I will continue this topic with some suggestions to help you establish interim goals and the tactics to accomplish them.

© 2011 by Dale R. Schmeltzle

12 Things I Learned About SlideShare, Part 3

Last week I began a discussion of things I learned about SlideShare.net, a free online slide hosting service. Since that time, my files have had more than 4,100 combined views, 3,200 for one file alone. On Monday, I discussed how to make SlideShare an integral part of your marketing efforts.

Today I will conclude this topic with a discussion of ways to make PowerPoint slides more effective online, and how to take advantage of SlideShare to save printing cost. Here is the final part of the list:

9. I was pleased to see that PowerPoint speaker’s notes are visible for each slide. Even if you do not usually take advantage of this feature in your presentations, you should consider using it to replace whatever narrative you would ordinarily add in a live venue.

10.  One PowerPoint feature that will not translate through SlideShare is animation. I typically have numerous visuals enter and exit slides as appropriate to support my verbal narration. In reviewing my posted slide shows, I quickly noticed that all visuals are in screen. In my case, this made for some very busy slides. Consider tailoring your uploaded slides accordingly.

11.  If you decide one or more slides do not convey the full story after you view them online, you can simply adjust your PowerPoint or pdf document and replace the original file with a new upload. This will save
having to reenter descriptions and tags, something I learned was necessary after I deleted several files to make minor changes. It also maintains continuous viewing statistics.

12.  I am always surprised by the cost of printing projects. My frustration over this expense is magnified by the need to “bring a few extra copies” just in case more attendees show up than expected, while knowing most will be left behind or eventually tossed in the trash. SlideShare presents an opportunity to reduce or eliminate this outlay. I suggest presenting only a cryptic outline of your presentation at the event, probably no more than one or two pages. The purpose of this short handout is merely to facilitate note taking. It has the added advantage of directing attendees’ attention to you rather than flipping through a voluminous handout. Allow attendees to download their own slides, either before or after the seminar. Since they will only print those of interest, this is a legitimately green initiative.

As a last bit of advice, if you are one of the almost 15 million unemployed Americans, please consider creating and posting a visual resume on SlideShare.net. It will add another venue for prospective employers to find you, while demonstrating your communication skills and knowledge of current social media tools.

Well, that is my entire list. I hope you will find something of value, and more importantly that it will encourage you in your continuing pursuit of the low-cost marketing experimentation I talked so much about in my book, Highly Visible Marketing – 115 Low-cost Ways to Avoid Market Obscurity.

Finally, for the record the other two Chinese proverbs are “May you come to the attention of powerful people” and “May you find what you are looking for.” Again, both would seem to apply to my small business and
middle-market target audience, especially when you consider that the most powerful person of all is the customer whose attention you are looking for!

Generating Repeat Sales-Part 2

I introduced Monday’s post on generating repeat sales with a quote by William Edwards Deming. He said, “Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.” A slight variation of that important principle is to harvest sales out of customers who have moved, even if they moved outside of your service area. Allow me to explain.

America has been a country on the move ever since it was founded by people who all crossed at least one ocean to get here. The U.S. Census Bureau reports that the national mover rate was 12.5% in 2009. According
to their Geographical Mobility: 2009 study, 37.1 million people changed residences in the U.S. that year. Of those, 67.3% stayed within the same county, 17.2% moved to a different county in the same state, 12.6% moved to a different state, and 2.9% moved to the U.S. from abroad.

Furthermore, the National Association of Realtors reported in January 2011 that the previous month’s existing home sales (including single-family, townhomes, condominiums and co-ops) was a seasonally adjusted
annual rate of 5.9 million. Experts tell us that the demographics of people moving, buying and selling houses are heavily influenced by age, occupation and income levels. The young, professionals and high-income earners are among the most likely candidates.

These statistics are troubling if you provide landscaping, pest control, cleaning, HVAC maintenance or a host of other home-based, recurring services. It does not require much data extrapolation to see that if you lose 10% or 12% of your customers every year to moves (possibly more if your market is concentrated in young, high-income professionals) you will soon be in big trouble. Even if you are able to replace customers who
migrate outside of your service area, consulting firm Lee Resources International, Inc. reports that attracting a new customer costs five times as much as keeping an existing one.

Here are some thoughts and suggestions to generate continued sales from your mobile customers.

  • Offer movers a meaningful incentive to transfer your services to their new home. A free month, a 10% discount on your standard rates or a similar promotion will prove cheaper and have a higher success rate in
    maintaining your customer base than finding new customers.
  • The mirror image of this idea is to offer customers who are moving an incentive to provide a referral to the new homeowner. However, several potential issues make it less likely to generate sales. First, it usually does not apply to customers living in non-owner occupied homes such as apartment complexes. Furthermore, assuming their home has already sold (a significant assumption in the current real estate market), your old customers probably do not know the new owners. Furthermore, homeowners will not be motivated by additional discounts off your services if they are moving out of the area. Offer the original homeowner a gift card from a national restaurant chain or retailer if the new homeowner becomes your customer because of their referral.
  • Alternatively, send the new homeowner a promotional offer touting the fact that you are familiar with their home and neighborhood since you provided service for the previous owner.

Finally, Welcome Wagon’s website lists ample reasons to target new homeowners and tenants, even if you did not provide services to the previous occupant. They point out that new homeowners spend 20 times more than established residents. That includes $102 billion on move-related products. Most importantly, they have no existing buying loyalties in their new community, and are seeking information about products and services they will need.

Once again, the need to educate the consumer presents a key marketing and growth opportunity for the observant businessperson.

Generating Repeat Sales-Part 1

The late William Edwards Deming, an American author, lecturer, and consultant wrote about an important marketing phenomenon. He said, “Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.” Mr. Deming’s comment suggests an important question. If repeat customers are so valuable, what are you doing to turn first-time customers into repeat buyers?

A few weeks ago, I quoted Mary Kay Ash, the founder of Mary Kay Cosmetics. She said, “Everyone has an invisible sign hanging from their neck saying, make me feel important. Never forget this message when working with people.” The key to repeat sales is merely to remember and apply her quote. Recognize the invisible sign around first-time customers’ necks. Make them feel important, or they will not give you a second chance. Here is an example of how to generate repeat sales with a preferred customer program. On Wednesday, I will present several other tactics to generate repeat sales.

Everyone is familiar with the example of preferred diner cards where every 10th meal is free. Begin by creating your own preferred customer program, one offering substantial discounts and special privileges like exclusive “after-hours” sales and so on. Promote the program through email, social media and all other communication tools at your disposal. Most importantly, do not overlook your own workforce. Properly trained and incentivized cashiers, sales people and other employees with direct customer interaction will probably recruit more members for your loyalty program than all other sources combined.

Some stores and national chains charge a fee for their preferred customer discount programs. Aside from my reluctance to spend money for something other than actual products or services, I invariably forget to use the program when I make a purchase. I am never happy when I realize I lost an opportunity to save money. On the few occasions where I have been talked into signing up, I rarely renew the program beyond the
initial year. A better alternative to charging a fee may be to offer free membership for those who meet reasonable qualification requirements. Examples would be minimum total purchases over the previous 12 months, or a single large order over a specified amount. This method will provide an additional opportunity to touch customers by communicating their good fortune at having achieved your elite preferred customer status.

Finally, follow up recent sales to first-time customers with a personalized note thanking them for their business. Include with the note a special limited-time offer for a related item. For example, if they recently
bought a pair of shoes, offer 25% off a matching purse or belt. Include an expiration date to create a sense of urgency. Most importantly, introduce them to your preferred customer program, and offer special qualifying
incentives toward membership with their next purchase. For example, if membership requires $1,000 of purchases, offer double or even triple points for all purchases over $100 on their second visit. In short, make them feel important!

On Wednesday, I will discuss ways to generate sales from customers who move out of your area.

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