How To Grow Your Customers By Focusing On Existing Customers

Conventional wisdom on small business marketing is to focus on acquiring as many new customers as possible, even though existing customers account for a majority of revenues. Joseph Jaffe advocates focusing resources on existing customers so that they will become loyal customers and attract new customers through positive recommendations. See the following post from Cool Marketing Stuff.

Prolific podcaster, writer, and all around nice guy, Joseph Jaffe recently released his third marketing book entitled Flip the Funnel. This book mainly focuses on the idea of flipping the sales funnel to focus marketing on existing customers. The reasoning for this shift in marketing strategy is sound: existing customers are far less expensive than acquiring new customers and highly satisfied customers can become a powerful sales force that will attract new customers.

My Review of Flip the Funnel

This book provides a solid argument changing your marketing strategy, although I found it somewhat tedious to read because Jaffe would often switch between straight talk to a overly complicated and corporate-like writing style. I personally think this book could have cut out a hundred pages and been equally effective. I would say about half of the case studies have been beaten to death, but there are also some fresh case studies that you probably haven’t heard of like how CEO Bill Marriott’s blog has earned more than $5 million for Marriott from people who clicked through to the reservation page after viewing his blog.

Key Takeaways:

Shift marketing spend from acquiring new customers to wowing existing customers

Jaffe describes the current norm where disproportionate amount of marketing dollars is going toward acquiring new customers, even though existing customers account for about 65 to 75 percent of revenue. For example just 12 percent of shoppers account for 80 percent of Coke sales. Jaffe writes:

“We pull out all the stops to woo a stranger to sample our wares, yet we ignore the very people who essentially fund our acquisition efforts”

Enthusiastic customers often increase new customers through their recommendations, which could be a more effective acquisition strategy than what Jaffe calls “fishing with a wide net that is full of holes”.

Reward customers for generating new customers

Jaffe advocates rewarding customers who provide referrals or spread the word about your business. This can be a monetary reward or a virtual currency like points. Jaffe writes:

“For the most part – the existing investment into customer referrals has until now been essentially zero.”

“You’ll need to figure out ways to formalize structure and ultimately incent people who are inclined to talk about you.”

Customer service should have its priority elevated

Customer service is often neglected and treated as a cost center even though it is one of the best opportunities to have a direct conversation with your customer. Jaffe talks about the remarkable insurance company USAA, where 95 percent of customers plan to be lifelong members. One employee worked 600 hours of overtime in a year and customer service reps have been known to help customers with totally unrelated issues.

Jaffe writes:

“Give them [employees] the freedom and confidence to go beyond the manual or playbook” to describe how companies can improve their customer service.

Full disclosure: I received a review copy

This post has been republished from Cool Marketing Stuff.

How To Market Your Business For Free With Online Marketing

If you have a small business, your website can be a great source of leads. Unlike newspapers and television advertising which requires payment for both content creation and the broadcast mechanism, the cost of spreading the word about your business if often much lower. Once you have set up a website with a blog, the cost of distribution of your marketing is essentially free. While not always the best approach, you can create a blog for your business on Wordpress or Blogger for free.

Creating interesting and useful content on your site (primarily through your blog) can help drive more traffic to your site through search engines. By creating content that is relevant to your business, you will attract traffic that is already interested in the service or product that you provide, which will make it easier to convert this visitors to leads and then to customers.

How does creating content increase traffic to your site?
In order to show up in Google search results, you must have pages that Google can add to their index. The more pages of content that you have on your site, the more pages Google will likely add to their index. If you have 100 pages that are indexed in Google, you will generally show up more in Google search results than if you were to have 1 page indexed in Google. The more often you show up in Google search results, the more likely people will click through to your website, thus increasing traffic. Additionally, Google will check your site more often for updates if you are constantly adding new content.

What should I write about on my business blog?
Creating content on your business website or blog can be daunting to many small business owners. Common objections are: I am not an experienced writer, I don’t know what to write about, I don’t have time to write articles. My advice would be to write about what you are an expert on. If your business is interior decorating write about your advice on interior decorating. You can also answer the 10 most frequently asked customer questions as 10 separate articles, or the 10 questions customers should ask as the next 10 articles. You do not have to write in an academic tone. Business blogs can be very conversational and informal. Another option is to hire someone to write articles for you. You can post projects on Elance and freelance writers will bid to write articles for you for as little as $50 for 5 articles.

Charles Sipe is an online marketing specialist for Sparkplug Digital, an online marketing firm.

Rework: Contrarian Ideas For Starting A Business

Rework by Jason Fried and David Heinemeier Hansson, takes an alternative look at starting and building a successful business. Jason and David founded the successful Chicago software company 37 signals based on business principles that often contradict with traditional thinking on business. Here are a few of my favorite ideas from the book.

Get Enough Sleep

In Rework, the authors discuss that entrepreneurs often brag about how little sleep they get. The problem with sleep deprivation is that although you work more hours, you will not be able to think very well if you are tired and this can lead to poor decisions.

Don’t Advertise

One of the drawbacks of buying advertising is that you know that some of your advertising isn’t working, but you don’t know which part. 37 Signals uses non-traditional media like their blog, Signal Versus Noise, which has over a hundred thousand readers. They are able to reach a large number of people with their message at no cost besides the time to write thoughtful blog articles.

Planning is Guessing

Often new businesses create 1-year, 5-year, or even 10-year plans. But the authors argue that we can not predict what will happen in the future so plans are often irrelevant when conditions change. And often business owners will stick to their plans simply because they have invested so much time in developing a business plan.

Don’t Get Venture Funding

The authors say that one of the major mistakes that new businesses make is taking outside investment from venture capitalists, but this could also apply to other financing. The problem with having a lot of someone else’s money to spend this can take the business owner’s focus off the important thing, profitability. Often companies that have funding put off worrying about profitability until later, which the authors say is like trying to build a rocket ship without worrying about gravity.

Hire When It’s Painful
Often growing businesses hire quickly to keep up with demand, but the authors warn to be careful not to hire too quickly. They recommend hiring when there’s more work than you can handle for an extended period of time. There are several disadvantages to hiring too quickly. One problem is that it is difficult to eliminate staff once you hire them even if they are no longer needed. They also point out that it is difficult to be truthful if you disagree when there are a lot of strangers in the office as most people want to be polite and non-confrontational.

Check out Rework for more useful advice from Jason and David.

13 Reasons Why Small Businesses Should Get A Blog

If you own a small business or are thinking about starting a small business, having a blog can be a low-cost way to generate traffic and leads to your small business website. Here are 13 reasons why small businesses can benefit from a blog. See the following post from the Sparkplug Digital Online Marketing Blog.

1. Having a blog helps you create more content on your site, which often leads to more pages showing up in Google search results.

2. Every new blog post is a potential source for inbound links to your site.

3. Blogs give you a platform to speak directly to your customer.

4. Blogs are a place to publish content that solves problems of your buyer persona (the types of people who are likely to buy your product).

5. Blogs allow you to cover a wide range of topics related to your industry, which takes advantage of the long tail effect in Google searches (About 75% of searches are for unpopular phrases).

6. Blogs encourage direct feedback from your customers via comments.

7. Blogs encourage you to think deeply about your field and continuously learn so you can write insightful articles.

8. Blogs allow you to give free gifts (in the form of valuable content) which can develop a relationship with the potential customer.

9. Each blog post is a potential landing page for potential customers to learn more about your company.

10. By frequently updating your blog, Google will send its search bots to your site more often. Google often favors sites with constantly updated and fresh content.

11. Blog articles, when written in a casual voice, can show customers that there are real people behind the company and it’s not just a soul-less corporation.

12. Business websites that blog tend to get more traffic to their site. See Study Shows Small Businesses That Blog Get 55% More Website Visitors

13. Blogs tend to attract first time visitors. In a Compendium Blogware survey of 266 companies, 2/3rds reported that over 80% of visitors to their blog were new visitors.

Can you share additional reasons why every business should have a blog?

Photo by http://www.flickr.com/photos/mbowlersr/ / CC BY-ND 2.0

This post has been republished from Sparkplug Digital Online Marketing Blog.

Michael Gerber on Building A Scalable Business

Established in 1977, E-Myth Worldwide mastery programs have served tens of thousands of clients representing 145 countries. Recognizing that business ownership for many is a self-imposed prison rather than means of liberation, Gerber’s approach stresses “working on your business not in your business” by developing a finely tuned franchise model that is built for growth.

Entrepreneur, Manager or Technician?

Of these three roles, most business owners concentrate on the latter when what is required is developing into a “systems thinker”. The absence of an entrepreneurial mindset, Gerber asserts, is at the root of failure, and in fact many businesses are conceived when “a technician has an entrepreneurial seizure.” Instead of how-to and people skills, the true entrepreneurial mind is a combination of “dreamer, thinker, storyteller and leader.”

The McDonald’s Paradox

With high turnover rate among a workforce barely past its teens, McDonald’s success at delivering consistent quality is a seeming contradiction. Where they have succeeded is in developing the prototype that has allowed their model to multiply. Contrast this approach with the business owner who invests his energy in the quest for an indispensable, go-to employee only to grow overly dependent, placing his business at risk. Failing that, businesses tend to contract rather than expand since the owner is unable to find his replacement, missing the fact that this is really a saving grace.

The Dreaming Room – Awakening the Entrepreneur Within

Inaugurated in 2005 as a training grounds for implementing his philosophy, the Dreaming Room is heading for a global launch with 10,000 facilitators tasked with saving start-ups from joining the ranks of the 80% of businesses that don’t survive beyond infancy. Gerber hopes to fill a niche by teaching real-world skills to “produce a startlingly different result… for less than the cost of a minimum wage employee.” Too often, Gerber says, the fundamental systems of lead generation and conversion along with client fulfillment are lacking, leaving business owners bogged down, unable to experience the innate joys of entrepreneurship.

10 Principles of Effective Businesses

In his latest book, “The Most Successful Small Business In The World”, Gerber defines an ideal business model for a new era shaped by a new ethos. He shares the first four principles with Jason’s audience, describing a well-designed business as capable of exponential expansion and sustainable through any market conditions, where all parts contribute to a whole which is only as effective as the idea on which it is based. Above all, an ideal business must be both “transformable and scalable”, with the power to effect real world change and the ability to be replicated.

You can listen to the full podcast interview of Michael Gerber at JasonHartman.com, a real estate investment and wealth creation site.