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| Subject: How well do current marketing options work for your business? | |
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Author: Dennis S. Vogel |
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Date Posted: 22:00:09 05/18/08 Sun Below is a warning about “word-of-mouth”. What I’ve written below may seem a bit complicated either because you haven’t learned this essential part of marketing or because I didn’t describe it clearly. Either way, please let me know if I should clarify this. To paraphrase what Jay Conrad Levinson & Jay Abraham wrote, the only expensive marketing methods are those that don't work optimally. If you pay $1 for a lead that doesn't convert (purchase/become a customer/client), it's an expensive lead. If you gain more money than you pay to attract a client & fulfill his/her order (sell a product or service), it's inexpensive. You may seem to lose a bit of money on the front end (the 1st transaction) but you can gain more profit on the back end (in the later transactions). If you invest $50 to gain a client who invests $2,000 in what you offer (whether it's in the next transaction or multiple transactions) you have an inexpensive lead. If you invest $50 & attract somebody who invests only $25 in what you offer, but refers 2 others who invest $100 each, you had an inexpensive lead. You may need to determine why you attracted the $25 client when s/he probably isn't in your market niche. You may need to improve your aim. Determine the different traits of the $25 client & those who were referred. In this example, we’ll assume you delivered the same message on the same day to 20,200 unique individuals (there’s no overlap in these sets [don’t you just love it when somebody uses Algebra?]). Would you rather invest: 1- $50 to reach 200 people of whom 50 convert? –OR— 2- $200 to reach 20,000 people of whom 500 convert? Choice #1 would get you 50 leads for $1 each. Choice #2 would get you 500 leads for 40¢ each. Don’t answer yet! In Choice #1, you converted 25% of those who received your message. In Choice #2, you converted 2½% of those who received your message. Maybe a different headline, offer, call to action, sales copy or a totally different message (ad) would drastically change your results. Choice #1 is more efficient, but we don’t know yet which choice is more effective. What I’m writing seems to depersonalize people. I hope I’m not perceived just as cold & calculating, because I have other good traits besides these. I’m not going to get into formulas, just simple math. Before I continue with this simple math, I want you to understand converting prospects to clients. Let’s say each of these people (your converted leads) bought from you today. Would you be able to serve (pay sufficient attention to) 550 people & supply what you offered (fulfill their orders)? You may feel burnt out & have frustrated 250 of them. Those you did adequately serve may’ve been satisfied enough to buy, but not impressed enough to refer others to you. The frustrated 250 may give you negative word of mouth. In general, many people complain more than they praise. They expect—at least—adequate service, if they get less they complain. If they get better service from you, they may think about referring others if you fit into their conversations. They may not complain to you because they may think it wouldn’t do any good & maybe because you don’t seem to care or you may retaliate. If they never bought from you before, they may think inferior service is typical. If you’re tired, you may seem apathetic & they may think complaining to you would be a waste. While we’re on this subject let’s study “convert”. When people get your message/ad, then buy from you, they conVERT. If you serve them as well as or better than they expect, they’ll buy from you more often. Then they become CONverts. It’s not quite religious, but the process is similar. In effect, when you’re marketing, you’re proselytizing & trying to get current proselytes to be zealots. (NOTE- I know there’ve been things written about terrorists who claim to be religious zealots. But they just use religion to recruit others & to try to justify killing others who are “infidels”. Please focus on positive connotations of “zealot”.) Why would you want zealots? They’re more apt to spread the word. They’re also less apt to be proselytized by others. Anybody who doesn’t buy from you may be buying from somebody else. You can’t afford for your nonzealous customers to talk to others because those others may say something like ‘I buy from (competitor’s name) because I get (list of valuable benefits).’ You may lose nonzealous customers because they’ll be convinced somebody else will serve them better. It’ll also strengthen the conviction of the competitor’s customer because somebody else (your former customer) reaffirmed the wisdom of buying from that competitor. Too many business owners say they want word-of-mouth, but they don’t know much about it. Some call it word-of-mouth advertising or word-of-mouth marketing. But, except for the current practice/malpractice of paying others to do it, word-of-mouth isn’t advertising or marketing. NOTE- Paying somebody to spread the news about your business is a legitimate practice as long as s/he discloses the paid relationship. A small gift isn’t what I consider to be a payment. A finder’s/affiliate fee is a payment that should be disclosed. It’s malpractice when somebody depends on converting others for income & it’s not disclosed. It’s a malpractice when somebody refers others who don’t fit a business’s market niche & still gets paid. Advertising or marketing are things a business pays for, so it can & should be controlled, tested & improved. Referral marketing is NOT word-of-mouth. Unfortunately I don’t have space here to give a full education about referral marketing. I plan to continue this discussion thread later. Please submit your comments, insights & questions. Dennis S. Vogel thrivingbusiness@email.com How long is "too long" to wait for sales from your marketing efforts? It depends -- when do you need the results? When will you need the profit? If you need it now, let's get started. http://www.lakefield.net/~thrivingbusiness/ http://www.voy.com/31049/ [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| Avoid Financial Problems like Recessions | Dennis S. Vogel | 20:43:53 06/30/08 Mon |
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| What does it profit a man to sell at a loss? | Hank | 17:19:17 10/09/08 Thu |
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