Diy Cash Flow

As a service professional what steps do you take before investing in the development of a new product or service?

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” -Sun-tzu, The Art of War

Innovation has an opportunity cost of both  time and resources.  So what criteria should you use to  determine the value of developing a new product or service?  Defining the market in great detail IS THE MOST IMPORTANT. Nothing else really matters.

TELL A STORY

You need to be able to identify the market in terms of a story or narrative. Eben Pagan and John Carlton suggest creating an "Avatar" of your best customer for the product. With this Avatar or narrative you will know what pain your product or service will satisfy, where to advertise, how the buying decision is made, and how long the sales cycle will be.

HOW TO DO THIS?

Survey potential customer pool. Use industry Data and Statistics. Organize A Focus Group. Use creativity when writing (YES WRITING) the narrative. And don't forget to include pictures, schedules and family profile. The better you know the customer Avatar the better you'll be able to market and sell to your potential customers.”

Some other ideas:

• Clearly state how it will make money or save money.
• Develop a list of 100+ potential buyers and clearly know where they can be found.
• Is the price of the service something the buyer can bear.

SMS vs. Twitter

SMS - It's a no brainer! 

I was recently asked "Taking cost out of the equation, if you had to choose one,  based on  performance, response rates and return on resources invested,which would it be?"

NUMBERS DON'T LIE

The statistics speak for themselves:

100% Opt-In
90%-97% Open
Read Rate 87% Read with in the hour
20% Redemption rate
23% forward message to a friend (i.e. it goes viral)

Twitter doesn't even come close to these stats. The reason why is that you can follow or be followed by thousands at no real cost. Therefore the quality of those "follows" is really suspect. To be honest twitter is going the way of email marketing. Yes it can be effective if done right, but most people don't have the time, skill or resources to do it right.  In our practice we find that most small businesses don't have the patience to build a "quality" email or twitter list.  It's too easy to "cheat" and build large lists that have, at most, a 10% open rate (the average is much lower than that at around 5%) and the conversion rates are in the 2-3% range.  Do the math it's pretty scary.

IF I WRITE A TWITTER  POST IN THE WOODS DOES ANYONE HEAR IT?

It's so easy to "follow" someone on twitter that most people never read the messages. In fact, I beleive that most of the "followers" never intend to read the tweets.  They are just trying to buidl a following themselves.  Email marketing results are similar because most people have multiple emails - some of which are dedicated to Opt-In lists and are never check, forget about being read.

SIZE MATTERS - BUT IN REVERSE

So far it seems that SMS may result in a smaller list because customers are not that quick to give up their only mobile number to opt-in.  But when they do it's because they really want to hear from that company or want to receive the specials that are promised. Of those texters who recall seeing some form of advertising while using text-messaging, 45% say they have responded in some way. In short the quality of the interaction is much higher through SMS.

ALL ABOARD

Of course this will change over time and then some new technology will take its place. Get on board early while the results are still great and always be ready to move on. You can no longer afford to ride the same race horse for a long period of time. That is the nature of marketing in the information age.

Make Buying Easy For Your Client

Grow Your Sales Tenfold - It's Not As Hard As You Think

A few months ago I cleaned out a drawer in my office and found a sealed Texas Instruments  calculator – I remember initially getting it on sale at some store closing a few years ago… thinking “oh this will make a ter
rific graduation present for a college bound math lover.”   Two or three graduation seasons have passed since then, and I’ve have come to terms with the fact that college-bound math lovers prefer cash.  

So I figured I’d get rid of the sealed gadget in the modern garage sale way – eBay. I did my homework, of course, and noticed that previous sales of the same model ranged from $80-90 new, and I figured it would be worth a few minutes of my time. I quickly copied & pasted a description, without much thought, and then answered a dozen questions posed by eBay (shipping charges, bold header options…etc).  It’s been a few years since I’ve listed anything on eBay, and I was impressed that one of the questions required me to specify a “return policy” – whether I’d take the item back and under what terms.  eBay also offered a little pop-up tip introducing me to the feature, saying that 85% of items sold on eBay allow returns.  I instinctively picked the “you may return this item” check box… then I had an idea.

PRESENT A TRANSPARENT RISK REVERSAL
I went back into my listing, and typed in large letters at the top of my listing “I GUARANTEE THAT YOU’LL BE SATISFIED. IF FOR SOME REASON THIS CALCULATOR IS NOT IN PERFECT AND BRAND NEW CONDITION WHEN YOU RECEIVE IT, JUST SEND IT BACK.”  A week later, I got $117 for the item, and a glowing review from the buyer.  I easily made 30% more than anyone else selling the same thing in the past 3 months.   Was it a lucky listing date? Maybe. Or maybe it was the fact that I took on more of the risk in the transaction than my buyer – and that that made it so much easier for my prospects to place a bid. The funny thing is that I (and apparently 85% of other sellers) promised to do this anyway by clicking the tiny check box that would appear in small font at the bottom of my listing – but clearly advertising the “RISK FREE” approach to my buyers made me different.  

EASY CASH
I’ve consulted companies where sales have grown from 20-200% when a specific and clear risk reversal has been communicated up front, and used as part of the sales process.   Almost everyone has some sort of return policy or guarantee – but very few companies actually offer a strong, powerful and compelling risk reversal as part of their selling process.  

USE WHAT YOU ALREADY HAVE
Think about why your clients choose your company when they do business with you, and then turn your advantage into a guarantee “If our certified and knowledgeable and cost effective technicians can’t service your house within four hours, the service call is free” , “If our professional tax review doesn’t get you every single deduction that you’re entitled to and could be frequently overlooked, we’ll pay for your tax return”…

YOU’LL STAND OUT
Very few businesses in any industry ever tell you that they are willing to take on the risk and guarantee your results or satisfaction.  This is an incredibly powerful technique - the Dominos Pizza 30 minute delivery guarantee (delivered hot in 30 minutes or it’s free) absolutely revolutionized the industry – sales shot up by 25% in the first sixty days.   FedEx’s “on time” guarantee helped create and pay for the hub-spoke concept of package delivery – also helped grow high margin shipping (express deliveries) by 33% in one year.  

START MAKING MORE MONEY
If you’re confident in what you offer, take the risk away from your client, the technique will pay you huge dividends.  There are only a few requirements to make this work: 

1. Know what your business does well - be clear about your “competitive advantage”.
2. Understand the financial and emotional reasons your clients would buy from you.
3. Find a way to craft these reasons into a measurable and specific guarantee while leveraging something you already do well.

It’s simple – if you’re a nail tech and your edge is a long-lasting manicure – say something like “If your manicure doesn’t last longer than any manicure you’ve had before, we’ll gladly refund or reapply”.  If you’re a financial adviser, you might flaunt that “I guarantee that I’ll spend at least fifteen hours reviewing every possible way to invest your money – you can have a copy of my analysis without any cost or obligation, and if I find that my competitors’ products are a better fit for your financial situation, I’ll even introduce you to someone you’ll trust.”  In the financial industry, the client is often worried about “agent bias”.  If you guarantee that you’ll be impartial, and you’ll get the prospect. 

THERE’S NOTHING TO WORRY ABOUT
Every time I’ve implemented this strategy, business owners are always worried about a high return rate.  Everyone is scared tells me – “well what if I can’t deliver – then they’ll all bring everything back, and I’ll lose all this money”.   Here’s how you know if your business is a fit (and I would never suggest this to anyone who’s not).  Start by evaluating  your “dissatisfaction rate”.  If 1 of 100 customers complain, you have nothing to worry about.   I’d even argue that if less than 25 of 100 customers complain the RISK REVERSAL strategy is a fit for your business.  If you have a high complaint rate, you should find ways or hire someone to fix it immediately, but should certainly avoid this strategy in the meantime, and probably rethink your offerings in general.
Understand that your return rate will increase, but every time I’ve implemented this strategy, sales increase by 20-200% and returns increase by .05-3%.   Not much to worry about.  

ONE MORE PIECE OF ADVICE
Understand that the goal is to place the risk reversal in the sales process, taking away barriers for the customer and getting them to buy from you – but the customer has to know about it up front for you to see results.

As I always suggest – “Test, test and test”.   Try at least three different versions of powerful risk reversals with a few prospects at a time – carefully observe and measure their reactions.  You’ll see very quickly if it makes the sale easier, getting your prospects to ask buying questions. 

You can make a lot of money, without changing a whole lot about your business.  Just remember, you have to know your customer, understand how you’re different than the rest, and communicate CLEARLY your risk reversal.  

More business is on the way.    --Eugene

Your Business Could Be Growing On A Dime

The most overlooked sales tactic is often the most effective.
 
How Could You Say No?

If I called you today and said that your closest friend or business partner thought you should hear me out… how could you say no?

Do You Understand This Key Difference?

Typically, most sales are made from leads.  The better the lead, the higher the cost.  When you buy a lead, the person you contact often has one of the qualities that some of your current customers have: their location, their income, their line of business...etc.  The lead isn't likely to buy from you because they don’t know you.  They have no perception of the value you deliver and no idea that you'll be calling.  A lead is just a pathway to a cold call. That's why so many leads take sales people down a long and winding road that ultimately end with; NO SALE. 

The Tool Most People DON'T Use
79% of Business  Managers Fail to Take Advantage of The Credibility They’ve Established.

Very few business owners ever ask for referrals. Even fewer ask in the right way or at the right time. And only a tiny group of business owners ask for referrals as an ongoing marketing strategy. Across dozens of industries, business managers agree that a direct referral from a satisfied client frequently yields a new client.

A direct referral is more likely to appreciate your product or service, and thus easier to convert. The result is enviably low acquisition costs and a high return on investment (ROI).  Particularly, if your investment is a targeted marketing strategy that involves a strategic process for obtaining these referrals. 

Don't Argue With the Facts

The results speak for themselves.  My clients (as well as business managers nationwide) report that relative to the average client, prospects acquired through direct referrals:

• Cost less to contact
• Generally make purchasing decisions faster.
• Are nearly 3 times more likely to become repeat customers.
• Require less investment to make a sale.
• Are twice as likely to make referrals of their own.

Start Making More Money

I tell clients all the time - If you don't have FIVE effective strategies for generating referrals from every satisfied customer - you're under preforming.   We're not talking about the "bring me a client and I'll give you $20" -- that's not a strategy.  A calculated, measured, and effective strategy is consistent, clear, value-driven, and performance driven.

If You Don’t Know Me, You Better Go First!

In the “information age” you must share your best information.

Have you ever filled out an online form only disappointed with the contents?  I think we all have.

The problem is that too many entrepreneurs believe the FREE REPORT is the end of the interaction and that the sale should shortly follow.  That somehow after reading this one or two page report the prospective customer will realize how smart the author is and quickly hand over his cash and become a long term client.

FREE REPORTS ARE NOT THE END BUT THE BEGINNING...

There is SO MUCH INFORMATION on the internet.  However, TOO MUCH of it is superficial, practically useless and usually poorly packaged information that is meant to DAZZLE.  At best it wets the tongue and sparks interest.  At worst it completely bores and disenchants the reader.

Now don’t get me wrong there is nothing wrong with wetting the tongue as long as it’s followed by more detail, deeper insight and generally useful information.  Too many business owners are either too scared or too lazy to share their “secrets”.  Whatever the reason they’re leaving too much business on the table.

IT’S A RELATIONSHIP...

Your Websites, Blogs, Brochures and Articles are your image.  It’s what a potential “spouse/client” sees from across the room.  It’s what you “put out there” to attract the “people/prospects” you’re interested in.  It helps them get your name, figure out who you hang out with and learn your basic belief system and views.

At this point, if you have sparked their interest they may choose to introduce themselves by requesting the FREE REPORT or “a first date”.  Only now does the “sale/courtship” begin.  Now you begin to share your best material, insights and knowledge.  This is when you get to impress, develop a relationship and BUILD TRUST.  Only after this stage should you even contemplate “closing the sale” or proposing a marriage.

Of course how long the process takes or how much you'll need to share depends on the size of the transaction.  The higher the price, the longer the cycle and the more you'll need to reveal.

If I’m Not Interested, THERE IS NOTHING YOU CAN DO!

How constant communication will help you shed dead wait.

I’m a big fan for looking to other industries for best practices.  Why reinvent the wheel when someone else already took care of it?  Why not borrow it, paint it a color your target market likes and sell it?

My good friend Eugene Loj from EugeneLoj.com wrote this article:

“Event Marketing and Being Persistent with Email”

He took the words right out of my mouth.  Remember that Eugene specializes in Event Promotion using some tried and true internet strategies.  When you read “event” think website or business.  When you read “ticket”, think your products or services.

I truly believe that YOU WILL NEVER SELL ANYTHING TO SOMEONE WHO DOESN’T NEED IT.  So the lesson to take away from the blog post is you have to fight through the volume and noise of email to find the people that need what you’re offering.  Those that opt-out don’t want it, so let them go.  At least you know your email got through to someone.

A FEW COMMENTS:

Eugene writes “…that the average email broadcast open rate is BELOW 50%.”  THAT’S GENEROUS!  In my experience it’s less than half that.  If you’re anywhere near 20% to 25% consider yourself blessed.

“There is a thin line between being persistent and being a pest.”  You got that right.  It sure is a fine line and you had better learn to walk it.

I used to think that sending 1 email a month was a lot.  It wasn’t until I started sending 1 a week that I started seeing results.  I now take pride in the fact that with every email that goes, so does one more person from that list.

World Wide Whatever?

You might as well delete your website and stop wasting your money and time.

Does your website look professional?  Is the front page catchy with a detailed listing of your products?  Do you have a well written description of your company’s services.  Was your website designed by graphic artists using high quality images?  Do you have easy to find links that help your visitors navigate?  Would you say that your website represents your company like a well made brochure?  Does the “contact us” page contain your phone number, email and mailing address?  Than do yourself a favor and DELETE YOUR WEBSITE!

Interactive Newspaper or Magazine...

If your website resembles the description above, it’s really no different than a printed newspaper or magazine advertisement.  In fact it may be worse.  You see, when reading a newspaper or magazine, if you suddenly get the urge to take a second look at an ad you just flip back to the appropriate page.  On the web it’s much easier to move on and lose site of where you were.  More often than not, it becomes impossible to find your way back to the page you now really want to take another look at.

Why Do You Even Need A Website?

Lead generation, information or both?  I find too many business owners don’t have a good answer to this very important question.  If you can’t tell me what your website is supposed to do than how do you know what it’s supposed to look like?

If all you want form your website is to give information to visitors, than a website like the one above might just fit the bill.  But if you expect your website to generate leads, than you really have to think twice about its layout.  Maybe your contact information should be on the first page and not buried on the “contact us” page.  Think about placing an Opt-In form right at the top of your home page, or maybe even every page.  Make it as easy as possible for visitors to contact you.  More importantly, make it as easy and enticing as possible for them to leave their information so that you can keep in touch with them.

Have Something For Everyone...

If you have the systems and processes in place than the more the better.  Some buyers like web forms, especially if you are giving away something for free.  Just make sure you are using some form of auto responder.  Others want to talk to a live person.  Again, depending on your organization’s bandwidth and systems you might even consider accepting a web chat session.

Take a look at your competitors’ websites.  I am willing to bet that they keep the contact information on the “contact us” page.  Many of them will have very little contact information or make it very hard to find.  Some will hide behind a web form because they don’t feel confident in their phone skills or they live in India, Russia or China.  So the more ways a prospect has to contact you the better your competitive advantage.

Think about how annoyed you get when you have a quick question.  You know it will be a 2 minute conversation but you can’t find a phone number.  Or how really pissed off you get when the company wants you to register with their customer relationship management (CRM) system and then wait 24 hours.

Don’t be guilty of doing the same thing to your customers and prospects.

Are You On the Way of Doubling Your Sales Tomorrow?

Turn Your Company Into a Sales Powerhouse By Using One Frequently Overlooked Tool. 

Every time I meet a new client, I ask them to give me their best sales presentation.  Recently, I met with a technology firm.   The CEO and CMO sat in front of me for 25 minutes, told me how incredible their products were, and then concluded with a Powerpoint presentation where they read the slides one by one.  If I were a client, they lost me five minutes into this experience.   The one lesson most businesses absolutely struggle with is this:

No Matter How Great Your Product Is, You Need To Be Able To Present It.

In my experience, an effective sales presentation has to increase clients’ closing rate from 20% to 80%.  The key element missing from most presentations is visual.   This is a huge mistake.  No matter how much you talk about your product, you can’t change how the human mind works:

• Our brains are designed so that 80% of all information is taken in through the eyes.
• We retain 20% what we hear.
• We retain 20% of we see.
• When we hear and see – we actually retain 50% of a presentation.

Triple Your Closing Ratio.

Most companies make a huge mistake by not using professionally-prepared visual aids.  Visual aids enable a presenter to tell 40% more story in the same time and more than double the retention of the presentation.  This is a significant increase in the impact of any sales pitch.  A professional-looking presentation immediately raises expectations of the communication experience.  

Don’t Make This Awful Mistake:

It’s absolutely not enough to put all of your talking points on a slide and read them.  Believe it or not, this is actually what 80% of presentations look like.  Studies show that these presentations are ineffective and lose the audience after the fourth slide.  We’ve literally tripled our clients’ closing ratios by simply following a few key guidelines for preparing their presentations:

• Make certain that every slide reinforces the talking points with short and visually attractive content
• During the presentation, the speaker should preempt every slide: “and what I’m going to show you now, is precisely why our product is so popular”.
• The presentation should show that you understand your prospect and define their problem in the beginning.
• When defining the problem, the visuals should use the color red to show growing dangerous trends. (Red attracts attention 166% better than any other color when used sparingly, but it communicates “stop” and “danger” – so don’t put your company’s slogan in red).
• The presentation should draw conclusions tailored to the individual customer – the customer should be crystal clear about the product’s ability to solve their problem.
• Every slide with numbers and graphs should show actual numbers growing – bigger letters & bigger numbers – make the biggest numbers bigger than the graph.
• Include appropriately placed graphics –as they always improve the presentation.
• Include people in professional graphics – facial features tend to attract attention.
• Remember to research your subject and include statistics – without this you lose credibility. “Studies show…” (If you’re not up on the latest research, hire a professional research firm to get you data to support your sales proposition).
• Tell stories – research from Brown University shows that a customer is 26% more likely to buy if the sales presentation includes a story.
• Keep slides / panels very fast paced – do not ever spend more than 45 seconds on a single slide if you want your visual content to be effective.

If you forget everything else, remember these two things:

1. The meaning behind the words you actually say is only 7% of any communication experience. 38% is your tone and 55% is everything else – your body language, your visual presentation…etc. If you hope to get by only on the meaning of your words (telling people how great your product is), you’ve basically taken the wheels off your car before it’s even left the garage.
2. The average person is exposed to 30,000 commercial messages per day. We all consistently (consciously and subconsciously) discriminate between the effective ones and the ineffective clutter. Make sure you’re the content and not the clutter – come prepared, be professional, and bring your bets visual tools.

If You’re Like 98% of Small Business, What You Don’t Know About Sales Is Destroying Your Company

As our definition of “sales” evolves – so does the bare minimum expectation for your company.

 “Sales” is no longer the basic exchange of stuff for money. At its basic, the term “sales” represents payment for goods and services. Our definition of sales has evolved into something more broad and includes the steps of:

•    Generating interest in a product or service
•    Managing the decision making process over a given amount of time
•    Ultimately facilitating the exchange of the desired goods and services in return for payment.

A modern sales person excels at his or her job by using a variety of techniques to identify clients effectively, qualifying their needs quickly, and maintaining relationships over time.  Most would agree that a good sales employee sells a lot. But what is a lot?

How Do You Know Who Sells Well?

When we shift our focus to sales management, its quite clear that you really can’t manage what you don’t measure. For instance, do you know the lifetime value of each client? Where do your best leads come from? How about how many opportunities you lose to competitors? How frequently do you lose a sale because of price or a feature you lack or poor follow-up? Do you even know why you’re your customers don’t buy?

How In The Dark Are You?

Perhaps your top sales person only sells to 1% of your identified target market. Is that enough? Regardless of whether the answer is yes or no, if you don’t even have this information you haven’t done your due diligence. Otherwise, you are making decisions that leave you tacitly compliant with the status quo. As an invested and qualified professional, it’s doubtful that this is your desired course of action.

So What Should You Do?

Get out there and research. Start broadly. Gather as much information as you possibly can about your market, your clients, your prospects, and your process. Then you decide what metrics are the most meaningful to you to help you run your business. If you don’t know how or you don’t have time yourself or internal resources to spare, hire someone. A good sales business consultant will pay for him or herself in dividends if they can give you insight into your business. Whichever path you choose, do it now. You don’t know what you’ve been missing and you just might surprise yourself. 

Do You Really Value Your Clients?

Without This One Metric, None of Your Marketing Makes Any Sense.

Every business is only in business when there are clients.  Clients who spend money.   An important question I ask every time I’m asked to consult a company is this “What's the lifetime value of your clients?” I typically get blank stares in response.  Here’s what I mean:

How much revenue does the average client generate for you?

This is a bit more tricky than it seems at first glance.  One client, an accounting firm, said to me “well, that’s easy, our average customer spends $450 on their tax return once a year.”  

• Ok, so how many years does your average client stay a client?  
• What about referrals, how many “free” clients do you get from the average client?
• How about audits, how many clients end up seeking services outside of their annual return?
• What about other financial services?  Do you help clients manage their portfolios?
•  …etc      

As a business consultant, I absolutely need to know the lifetime value of your clients:

You can know whether what you’re paying for marketing makes sense.

In the case of the accounting firm, they were spending about $16,000 per year on Newspaper and Print Ads.  They grew about 25 new clients per year, 10 from referrals.   Did it make sense to spend over $1000 per client?  In this case – we found that it did not – the profit from any client was just under $160 per year – and the average client stuck around for just 3 years.  They were losing money on every sale!

You can calculate whether the money you’re spending on a client internally makes sense.

My accounting client spent money on advertising, priority shipping, class A office space, an answering service…etc.   Why?  Because the firm thought that appearing ultra-professional was important to the customers they wanted to attract.   When we looked at the business together, we found that there were only a few “high value” clients who would need all of these “perks”.  (Spending money on all of these things made no sense, because the cost did not justify the value we were getting from most of their clients).  We decided to offer a “mobile” service to the “high net worth” clients who liked the Class A office space, priority shipping…etc.   We bought a fancy laptop and a mobile printer and sent an accountant on the road to visit these clients in their home offices. The clients loved it – they no longer had to go back home to look for receipts or forms – sales grew.   

There are dozens of  reasons to know the lifetime value of every type of client who walks through your door. I encourage you to  discover the lifetime value of your clients rather than to continue to miss align your resources. Otherwise, you are just losing money.