The 1-Page Marketing Plan by Allan Dib
This is one of the first marketing books I’ve read and I learned a lot from it. It covers marketing strategies, systems, and specific tactics to utilize in your marketing plan. My favorite quote from 1PMP is “Struggling business owners will spend time to save money. Successful business owners will spend money to save time.”
My Favorite Quotes
- Struggling business owners will spend time to save money. Successful business owners will spend money to save time.
- Knowing and not doing is the same as not knowing.
- Professionals never just wing it.
- Having a plan dramatically increases your probability of success.
- 80% of effects come from 20% of causes. Doing more of the 20% stuff is your fast track to success.
- To be a successful small business marketer you need a laser-like focus on a narrow target market.
- A specialist is sought after rather than shopped on price.
- By charging higher prices you attract a better quality client.
- Most people don’t know what they want until they have been presented with it.
- People will generally take you at your own appraisal unless proven otherwise.
- How would you feel about engaging the service of a doctor who just wings it?
- If I remove your company name and logo from your website, will people still know that it is you?
- What can you do in your business that is remarkable?
- What problem are you sure you can solve for a member of your target market?
- How do I measure the success of my marketing campaign?
- Why would you consistently pay for marketing and not know what result it is generating?
- If your marketing is working, that is giving you positive ROI, why would you limit it with a budget?
- Are you building your marketing infrastructure?
- Are you constantly building-on and improving your marketing systems?
- Could you create a similar sense of theater and publicity by demonstrating your ordinary product being used in unusual ways? [speaking about the Blendtec video series]
- If your business were 10x the size that it currently is, what roles would exist?
- What business do I need to be in?
- What technologies are coming that are going to disrupt my industry?
- How can I take advantage of the coming changes in technology rather than fight them?
If I have seen further than others, it is by standing on the shoulders of giants. -Isaac Newton
The author says he is a collector of elegant ideas, he rarely invents anything himself.
Model things that are known to work reliably rather than trying to reinvent the wheel.
Creativity and invention should come after you’ve mastered the basics.
Allan Dib Credits many of the ideas in this book to Mal Emery, Dean Jackson, Joe Polish, Pete Godfrey, Dan Kennedy, Jim Rohn, James Schramko, Frank Kern and Seth Godin.
Knowing and not doing is the same as not knowing.
Concepts are timeless but the implementation of concepts can change dramatically over time.
Special resources section available on the 1-page marketing plan website. marketingaudiobook.com
Author’s summary of the essence of this book in one sentence:
The fastest path to the money.
Nothing kills a business faster than a lack of money.
Money is like oxygen for a business.
Reasons the author is focused on money:
- There is almost no business problem that can’t be solved with more money.
- When you’ve taken care of yourself, you have a chance to help others.
When people blame their industry, they are playing the blame game. The industry is rarely the real problem.
A good plumber is not necessarily the best person to run a plumbing business.
You must resolve to become good at the business of what you do; not just the technical thing you do.
The point of this book is to take you from confusion to clarity, so you will know what to do to have business success.
Professionals have plans.
Professionals never just wing it. (Doctors, pilots, soldiers, etc)
How would you feel about engaging the service of a doctor who just wings it?
Having a plan dramatically increases your probability of success.
Vilfredo Pareto and the 80/20 rule (Pareto principle).
80% of effects come from 20% of causes.
Doing more of the 20% stuff is your fast track to success.
In this book success is defined by making more money from doing less work.
The 64/4 rule.
Get this by applying the 80/20 principle to the rule itself. 80% of 80 and 20% of 20 is 64/4.
64% of effects come from 4% of causes.
96% of what you do is a waste of time.
The best-kept secret of the rich.
One thing that differentiates the wildly successful and wealthy business owners from the ones who are struggling and broke.
Struggling business owners will spend time to save money. Successful business owners will spend money to save time.
You can always get more money but you can never get more time.
Look for leverage points.
Pay attention to and expand the things that give you the most leverage.
Look for massive leverage. Exponential improvement not incremental.
By far the biggest leverage point in any business is marketing.
What is marketing?
Definition: marketing is the strategy you use for getting your ideal target market to know you, like you and trust you enough to become a customer.
Contains elements of advertising, promotion, publicity, public relations and sales.
Strategy versus Tactics
Understanding the difference between strategy and tactics is key to marketing success.
Strategy is the big picture planning you do prior to the tactics.
Strategy without tactics leads to paralysis by analysis.
Tactics without strategy leads to the ‘bright shiny objects’ syndrome.
Strategy must come first and it dictates the tactics you use.
Strategy changes with scale.
Large Company Marketing
Small and Medium Business Marketing
Direct response marketing.
Main characteristics of a direct response add:
- Uses compelling headlines and sales copy
- Targets a specific audience or niche
- Makes a specific offer
- Focuses on the prospect rather than the advertiser
- Demands a response (call to action)
- Includes a means of response and capture of responses
- Multi-step short-term follow-up
- Maintenance follow-up of unconverted leads
Three Phases of the Marketing Journey
- Before (Prospect)
- During (Lead)
- After (Customer)
Act 1: The Before Phase
Dealing with prospects.
In this phase you will:
- Identify a target market
- Craft a compelling message for this target market
- Deliver your message to them through advertising medium
The goal of this phase: get your prospect to know you and respond to your message.
Chapter 1: Selecting Your Target Market
Highlights of this chapter
- Why targeting everyone with your product or service is a terrible idea
- Why mass marketing can be harmful to your business
- How to use the “PvP Index” to select your perfect target market
- Why you should focus on a niche and become a big fish in a small pond
- How to make price irrelevant
- Why you should stop advertising a long list of products and services
- How to go deep into the mind of your prospect
Your target market is not everyone. Everyone means no-one.
Excluding customers is actually a good thing.
To be a successful small business marketer you need a laser-like focus on a narrow target market.
Niching: Harnessing the power of focus
A niche is a tightly defined portion of a sub-category.
Being all things to all people leads to marketing failure.
Go after niches an inch wide and a mile deep.
Once you dominate one niche, you can expand your business by adding another niche.
Niching makes price irrelevant.
You can charge far more for your services than by being a generalist.
Example heart doctor compared to a general practice doctor.
You are perceived differently by your prospects and customers.
A specialist is sought after rather than shopped on price.
How to identify your ideal customer.
Use the PVP Index to determine your ideal market segment.
Value to the marketplace
Rate each market segment 1-10 in these three areas.
Photographer example. Comparing these market segments.
- Weddings (5+7+9=21)
- Photojournalism (9+7+2=18)
- Corporate photography (3+6+9=18)
- Family portraits (9+8+9=36)
Ideal customer based on this score is people wanting family portraits.
Who is your idea target market?
Consider all relevant attributes: gender, age, geography, etc
Ask yourself these questions about them:
If you have one, look at a picture of your customer while doing this.
- What keeps them awake at night?
- What are they afraid of?
- What are they angry about?
- Who are they angry at?
- What are their top daily frustrations?
- What trends are occurring or will occur in their businesses and lives?
- What do they secretly ardently desire most?
- Is there a built-in bias to the way they make decisions?
- Do they have their own language or jargon?
- What magazines do they read?
- What websites do they visit?
- What’s this person’s day like?
- What is the main dominant emotion this market feels?
- What is the one thing they crave above all else?
Answering these questions is key to success.
Create an avatar of your ideal customer.
Chapter 1 action item: fill out section 1 “my target market” on the 1-page marketing plan.
Chapter 2: Crafting Your Message
Chapter 2 summary: most marketing messages are boring, timid and ineffective. To stand out from the crowd you need to craft a compelling message that grabs your target market. Once you have their attention the goal of your message is to compel them to respond.
Highlights of the chapter
- Why most advertising is totally useless and what to do instead
- How to stand out from the crowd even when you’re selling a commodity
- Why you should never compete solely on price
- How to craft a compelling offer for your target market
- Examples of some of the most successful advertising headlines in history
- How to enter the mind of your prospect and join the conversation going on in there
- How to effectively name your business, product or service
Summary of most ads from small to medium businesses (boring and ineffective)
- Company name
- Company logo
- Laundry list of services offered
- Claims of best quality, best service, or best prices
- Offer of a free quote
- Contact details
It is time to start marketing on purpose.
Look at two vital elements:
- What is the purpose of your add?
- What does your add focus on?
By trying to do too much, you will achieve none of your marketing objectives.
One ad = one objective.
Remove anything from your add that does not help achieve the objective. That includes your company name and logo.
Include a very clear call to action.
Develop your Unique Selling Proposition (USP).
Starbucks has a USP for selling coffee.
The entire goal of your USP is to answer this question. Why should I buy from you instead of your nearest competitor?
If I remove your company name and logo from your website, will people still know that it is you? Or could it be any other company in your industry?
Quality and great service should not be part of your USP. Those are expectations, they are just part of good business practice and not something unique.
Try not to sell as a commodity, based on price alone.
Answer these questions to develop your USP
- Why should the customer buy?
- Why should they buy from me?
These questions should have clear, concise, quantifiable answers.
What unique advantage are you offering?
People rarely want the thing you are selling. They want the result of the thing you are selling. Example: compare the motives of a person who buys a $50 watch compared to a person that buys a $50,000 watch. Telling time is not the core motivation.
If you confuse them you lose them.
Confusion leads to lost sales. A confused customer will not contact you.
Get out of the commodity business as soon as possible.
By being remarkable.
Look at how CD Baby created an incredible customer experience. Derek Sivers.
Example of coffee shop adding coffee art.
Example Apple promoting iPod by “1,000 songs in your pocket” slogan.
What can you do in your business that is remarkable?
Stay out of the lowest price game.
By charging higher prices you attract a better quality client.
You get far less grief from high-end customers than low-end ones.
Add value instead of lowering costs.
Try to create an apples-to-oranges comparison.
Create your elevator pitch.
Succinctly convey what problem you solve.
Bad marketing is highly product-focused and self-focused.
Good marketing is always customer and problem/solution-focused.
We want to be remembered for what problem we solve.
Take the prospect through a journey that covers the problem, solution, and proof.
- You know…(problem)…?
- Well, what we do is…(solution)…
- In fact…(proof)…
Crafting Your Offer
Two questions to ask yourself when creating your offer:
- Of all the products and services you offer, which do you have the most confidence in delivering? What problem are you sure you can solve for a member of your target market?
- Of all the products and services you offer, which do you enjoy delivering the most?
Supplemental questions to help you craft your offer:
- What is my target market really buying? For example, people buying insurance are really buying peace of mind.
- What is the biggest benefit to lead with?
- What are the most emotionally charged words and phrases that will capture and hold the attention of this market?
- What objections do my prospects have and how will I solve them?
- What outrageous offer, including a guarantee, can we make?
- Is there an intriguing story we can tell?
- Who else is selling something similar to my product or service, and how?
- Who else has tried selling them something similar, and how has that effort failed?
Most marketing messages fail because the offer is lazy and poorly thought out.
Spend much of your time and energy and structuring your offer correctly.
What does my target market want?
You can try asking them.
Most people don’t know what they want until they have been presented with it.
“If I had asked people what they wanted, they would have said ‘faster horses.'” – Henry Ford
Supplement asking with observing.
Create an Irresistible Offer
Essential elements of an irresistible offer
- Value. What is the most valuable thing you can do for your customer?
- The reason why
- Value stacking (including bonuses)
- Payment plan
- Guarantee. Make dealing with you a risk-free transaction.
Package your offer in a way that solves the pain of your customer.
Elements of great copy.
Visit marketingaudiobook.com for a list of some of the greatest headlines ever written.
Understand your target market and their emotional triggers.
Part of the job of good copy is to tell people who your product or service is not for.
- Filters out people who aren’t part of your target market, or those who wouldn’t be a good fit for what you have to offer.
- Immediately makes it more credible when you tell them who the product is for.
- The prospects who it is for will feel the product or service is much more tailored for their needs.
The enemy in common is a great way of leveraging the “it’s not my fault” mentality.
Take something relevant from your prospect’s blame list, side with them, and tie it to a solution you have to offer.
Chapter 2 action item: what is your message to your target market? Fill in square #2 of your one-page marketing plan.
Chapter 3: Reaching Prospects with Advertising Media
Chapter 3 Summary: Advertising media is the vehicle you will use to reach your target market and communicate your message. It is typically the most expensive component of your marketing, so it needs to be selected and managed carefully to ensure you get a good return on investment.
Highlights of Chapter 3
- How to measure the effectiveness of a marketing campaign.
- Why “getting your name out there” is a losing strategy.
- How to get a good ROI when advertising.
- The lifetime value of a customer and how this is split up between the front end and back end.
- The role that social media plays in your business.
- How to effectively use email and postal mail as part of your media strategy.
- How to protect your business from a single point of failure.
Not tracking where your leads and sales come from is the mark of an amateur.
You have to track and measure the results of your marketing efforts.
Hire experts that specialize in whatever media you decide is right for your campaign.
They are worth their weight in gold. DO NOT try to do it yourself.
How do I measure the success of my marketing campaign?
Did the campaign make you more money than it cost you?
What was your ROI?
Response rates are largely irrelevant, what is important is your ROI.
Marketing to a small market is more cost-effective.
Front End and Back End Value
Front end = the money we make up-front on a campaign.
Back end = the money we make on subsequent purchases.
These two figures combined make up the lifetime value of a customer.
Lifetime value and customer acquisition cost are two of the key numbers you need to know to measure marketing effectiveness.
Constantly testing, measuring, and improving these numbers is how you build a high-growth business.
The goal of your front end offer is to create a customer and make enough profit from the first transaction to at least cover the customer acquisition cost.
A successful marketing campaign has to get three vital elements right:
- Market (covered in chapter 1)
- Message (covered in chapter 2)
- Media (covered in this chapter)
A great place to create and extend relationships.
Your social media page and profile are the property of the social network.
Build and own your own marketing assets, then use social media to drive traffic to your own marketing assets.
Build an email database of subscribers.
A prominent part of your website should be an email opt-in form.
Key dos and don’ts of email:
- Don’t spam
- Be human (don’t write like a robot, be informal)
- Use a commercial email marketing system (never use outlook, Gmail, etc)
- Aweber, MailChimp, etc.
- Email regularly (monthly at the very least)
- Give them value
Three challenges of email marketing:
- Getting your email delivered
- Getting your email opened (have a compelling subject line)
- Getting your email read
If you write compelling content, it will be read.
How to Have an Unlimited Marketing Budget
When spending money on marketing, one of the following three things will occur:
- Your marketing fails (you make less in profit than you spent on marketing expenses).
- You have no idea if your marketing was a success or failure because you don’t measure the results.
- Your marketing succeeds.
Why would you consistently pay for marketing and not know what result it is generating?
If your marketing is working, that is giving you positive ROI, why would you limit it with a budget?
Have an unlimited budget for marketing that works.
Have a marketing budget during the testing phase. In the testing phase, fail often and fail cheaply until you have a winner.
Chapter 3 action item: what media will you use to reach your target market? Fill out square 3 of your 1-page marketing plan.
Act 2: The During Phase
The during phase section summary.
In the during phase, you are dealing with leads.
The goal of this phase is to get your leads to like you, and what you have to offer, enough to buy from you for the first time.
Chapter 4: Capturing Leads
Chapter 4 Summary: Capturing leads in a database system for future follow-up is critical to your marketing success. This is because only a very small percentage of interested leads may be ready to purchase from you immediately. Lead capture is all about properly handling interest and building your future sales pipeline.
Highlights of Chapter 4
- Why you should never try to sell directly from an advertisement, and what to do instead.
- How to transition from “hunting” to “farming,” and ensure you always have a full pipeline of new business.
- Why you shouldn’t treat all prospects equally.
- How to use an “ethical bribe” to uncover high-probability prospects.
- How to instantly increase the effectiveness of your advertising by 1,233%.
- Why some businesses get a constant flow of leads and prospects while others struggle.
- How to be seen as an expert and authority by your target market.
Hunting vs Farming
The purpose of direct marketing is to find people who are interested in what you do, rather than trying to make an immediate sale from the ad.
When interested leads respond, put them on your follow-up database so that you can:
- Build value for them
- Position yourself as an authority
- Create a relationship built on trust
The resource page at marketingaudiobook.com has a pie chart showing the market for your product or services. Below are the stats from the chart:
- 3% = ready to buy
- 7% = very open to buying
- 30% = interested but not right now
- 30% = not interested
- 30% = would not take it even if it were free
Try to capture the top 40% with your direct marketing. If you try to make an immediate sale from your ad, you are only targeting the 3% that are ready to buy.
When you educate and teach, you are seen as an expert and authority.
You must build a marketing infrastructure for your business.
Sporadic, one-shot, random acts of marketing usually end up costing more than they bring in.
You need to have a customer relationship management (CRM) system to manage your database successfully.
Chapter 4 action item: what is your lead capture system? Fill out square 4 of your 1-page marketing plan.
Chapter 5: Nurturing Leads
Chapter 5 Summary: Nurturing leads is the process of taking people from being vaguely interested in what you have to offer, to desiring it and wanting to do business with you. The lead nurturing process ensures that leads are interested, motivated, qualified, and predisposed to buying from you before you ever try to sell to them.
Highlights of Chapter 5
- The secret behind the Guinness World Record’s “world’s greatest salesman.”
- Why the money is in the follow-up and how to leverage this.
- How to annihilate your competitors and put yourself in a class of your own.
- A simple strategy for quickly moving prospects into the buying cycle.
- Why a marketing infrastructure is critical to your business success, and how to create one.
- The three major types of people you need in your team to make your business work.
- How to leverage international talent to ensure your business success.
Marketing Like a Farmer
The average number of times a salesperson follows-up a lead is once or twice.
Create a lead nurturing ladder. See visual example at marketingaudiobook.com.
The three-step of becoming a marketing farmer:
- Advertise with the intention of finding people who are interested in what you do. Do this by offering a free report, video, CD, etc.
- Add them to your database.
- Continually nurture them and provide them with value.
Building Your Marketing Infrastructure
Your marketing infrastructure will be made up of assets.
Here are a few of the assets the author has successfully deployed in marketing infrastructures:
- Lead capture websites
- Free recorded-message info lines
- Free reports
- Direct mail sequences
- Email sequences
- Social media
- Online videos and DVDs
- Podcasts and audio CDs
- Print ads
- Handwritten notes
- Email autoresponders
- SMS autoresponders
- Shock and awe packages
A lot of your marketing system can be automated.
Are you building your marketing infrastructure?
Are you constantly building-on and improving your marketing systems?
Lumpy Mail and the Shock and Awe Package
Lumpy mail is an attention-getter.
With your first few interactions with prospects, you have the opportunity to make one of the following three impressions:
- Mind-blowingly amazing
Almost no business chooses to be option three. Your job is to devise a way to be option three.
A shock and awe package is a physical box that you mail or deliver to prospects full of unique benefit laden assets related to your business and industry.
Here are some things you can and should include in a shock and awe package:
- DVDs or CDs introducing yourself and the specific problems your product or service solves for your prospect.
- Testimonials from past clients in video, audio, or written form.
- Clippings from media mentions or features about you, your product, or industry.
- Brochures, sales letters, or other marketing material.
- Independent reports or white papers proving your point or demonstrating the value of your type of product or service.
- A sample of your products or services.
- Unusual trinkets or gifts that entertain, inform, and wow.
- Hand-written notes thanking them for inquiring or recapping the conversation you’ve had over the phone.
It is now easier than ever to get through with physical mail, especially a package.
A shock and awe package should do three things:
- Give your prospect amazing unexpected value.
- Position you as an expert and trusted authority in your field.
- Move your prospect further down the buying cycle than they would otherwise have been.
Become a Prolific Marketer
Make more compelling and more frequent offers.
Making regular offers will make you a better marketer.
Getting good at the science of marketing is the key to rapid business growth.
Three types of people you need to make a business work:
- Entrepreneur: ideas person or visionary.
- Specialist: the implementer of the vision.
- Manager: come in every day to make sure things get done and the vision is on track.
It is rare for a single person to be good at all three.
Create a marketing calendar to outline what needs to happen on a daily, weekly, monthly, quarterly, and annual basis.
Sample marketing calendar:
- Daily: check social media for mentions and respond appropriately.
- Weekly: write a blog post and send the link in an email blast to list subscribers.
- Monthly: mail customers and prospects a printed newsletter or postcard.
- Quarterly: send past customers who haven’t purchased recently a reactivation letter.
- Annually: send all customers a gift basket thanking them for their business.
Assign a specific person to be responsible for these events.
Consider these event-triggered marketing activities:
- Meeting a new prospect at a business event.
- You get an inbound sales inquiry.
- You get a new email list subscriber from your blog.
- Received a customer complaint.
There are few business activities that pay as highly as working on your marketing. Hire help to work in your marketing and execute the individual tasks so you can work on your marketing plan.
Chapter 5 action item: what is your lead nurturing system? Fill out square 5 of your 1-page marketing plan.
Chapter 6: Sales Conversion
Chapter 6 Summary: sales conversion is all about creating enough trust and demonstrating enough value to motivate interested leads to become paying customers. Positioning yourself correctly will make the sales conversion process easy and natural for both you and your customer.
Highlights of Chapter 6
- Why positioning is the critical factor when it comes to charging high prices for your products and services.
- How to position yourself as a welcome guest rather than a pest.
- Why the odds are stacked against you if you are a small to medium business, and what to do to level the playing field.
- How to massively reduce the perceived risk that customers see when it comes to buying from you.
- How to instantly generate trust and credibility when selling.
- How to correctly price your products and services.
- How to remove the roadblocks that are preventing people from buying.
Once you have reached the level of competence, the real profit comes from the way you market yourself.
How much does a world-class violinist make? That depends on how he markets himself.
Joshua Bell is one of the finest classical musicians in the world, he makes upwards of $60,000 per hour.
The Washington Post asked Joshua Bell to perform a social experiment where he played at a local subway for an hour, he earned a grand total of $32.
Here is the video of the experiment linked from marketingaudiobook.com:
People will generally take you at your own appraisal unless proven otherwise.
Stop positioning yourself as a commodity and competing solely on price.
Offer risk-reversal in the form of an outrageous guarantee. This means that if the product or service doesn’t work out for the prospect, you are the one who will have something to lose rather than them.
Avoid using vague statements that everyone else uses such as “satisfaction guaranteed” or “service, quality, dependability.”
Your guarantee should be very specific and address the fear or uncertainty that the prospect has about the transaction.
Chapter 6 action item: what is your sales conversion system? Fill out square 6 of your 1-page marketing plan.
Act 3: The After Phase
The after phase section summary.
In the after phase, you are dealing with customers.
Customers are people that like you, and what you have to offer, enough to have paid you money at least once.
Chapter 7: Delivering a World-Class Experience
Chapter 7 Summary: by delivering a world-class experience, you turn customers into a tribe of raving fans who want to buy from you repeatedly.
Highlights of Chapter 7
- Why building a tribe of raving fans is crucial to your business success, and how to do it.
- The two critical functions of your business.
- How to innovate even when the product or service you sell is boring and ordinary.
- The purpose of technology in your business and how to leverage it in your marketing.
- Why systems are the key to uncovering a fortune that lies hidden in your business.
- The four main systems in your business that virtually guarantee your business success.
- How to eliminate the biggest bottleneck in your business.
Building Your Tribe of Raving Fans
Qualities of extraordinary businesses that become tribe leaders:
- They continually focus on wowing their customers, which turns them into raving fans.
- They create and foster lifetime relationships.
- They make it easy and fun to deal with them.
- They create a sense of theater around their products and services.
- They have systems so that they can reliably and consistently deliver a great experience.
Our goal is for our customers to achieve results.
Create Theater Around Your Products and Services
How can a manufacturer of blenders be innovative and create theater?
Blendtec has created an enormous viral marketing buzz by making a video series called “Will it blend?”
Here is an example “Will it Blend?” video by Blendtec:
Could you create a similar sense of theater and publicity by demonstrating your ordinary product being used in unusual ways?
The author has photos of other creative ways of marketing products and services on the resources page at marketingaudiobook.com.
Become a Voice of Value to Your Tribe
You need to be a thought leader in your industry.
Someone who is sought out for opinion and comment.
You do this by becoming a creator of content.
Entrepreneurs are primarily content creators.
Wantrepreneurs are primarily content consumers.
To become a voice of value, you need to have valuable ideas.
In our current age, the most valuable commodity is reputation.
The reputation economy requires that you transform your marketing from information and high-pressure sales tactics to education-based marketing.
The twofold point of education marketing:
- Positioning yourself as an authority in your target market.
- Building relationships and becoming the trusted advisor to your target market.
Products Make You Money – Systems Make You a Fortune
The most valuable business systems are those which are replicable. If your business relies on a genius or superstar talent at the center of it, it is nearly impossible to replicate.
Four Main Types of Systems You Need to Create
- Marketing System
- Sales System
- Fulfillment System
- Administration System
Business systems start with documented procedures and processes that allow your business to run without you.
McDonald’s is the poster-child for business systems.
Benefits of implementing systems in your business:
- It builds a valuable asset.
- Leverage and scalability.
- Lower labor costs.
- The ability to “fire” yourself.
You must think long-term and think big.
Think of your business as being 10x the size that it currently is.
If that were the case, what other roles would exist?
- Identify all of the different roles in your business
- Define what tasks each role performs
- Document exactly how each task should be performed
Checklists are a great way to document how tasks should be performed.
Chapter 7 action item: how will you deliver a world-class experience? Fill out square 7 of your 1-page marketing plan.
Chapter 8: Increasing Customer Lifetime Value
Chapter 8 Summary: increasing the lifetime value of existing customers is where the real money is made. To do this, you need to have strategies and tactics for getting existing customers to do more business with you.
Highlights of Chapter 8
- Why your existing customer base is a rich diamond mine, and how to realize its value.
- Five major ways to make more money from existing customers.
- How to win back lost customers or reactivate customers that haven’t bought from you recently.
- The critical marketing metrics you must know and manage.
- An example where slightly improving three key numbers generates a 431% improvement to the bottom line.
- Why not all business growth and revenue is good, and how to avoid polluted revenue.
- The four categories of customers in your business, and why you shouldn’t treat them equally.
Acres of Diamonds
Most businesses have a rich diamond mine in the form of existing customers, which remains largely untapped.
Five major ways to sell more to existing and past customers, increasing their lifetime value:
- Raising prices
A customer won on the price will be lost on price.
About 10% of your customers would pay you 10x more and 1% of your customers would pay you 100x more.
Consider adding an ultra-high ticket item in your suite of products and services.
If you are delivering extra value in the way of convenience, your customer likely won’t even care that you are charging them more.
You need to know and continually improve your numbers.
Here are some of the key numbers you need to know:
- Leads – the number of new leads coming into your business
- Conversion rate – the percentage of leads you converted into paying customers
- Average transaction value – the average dollar amount that leads spend with you
- Break-even point – the dollar amount you need to make to keep your doors open
It is typical to measure these numbers on a monthly basis.
Here are key metrics you need to measure and manage in a recurring or subscription business model:
- Monthly recurring revenue
- Churn rate – the percentage of recurring customers that cancel subscriptions or stop buying from you
- Customer lifetime value
Develop a company dashboard to monitor your key metrics.
Measuring, managing, and improving your metrics is key to building a high-growth business.
Polluted Revenue and the Unequal Dollar
Not all revenue is good and not all growth is good.
If you take on toxic customers, you will generate polluted revenue which makes your business sick.
A dollar from sub-optimal or toxic customers is not equal to a dollar from a raving fan.
Four categories of your customer base:
- The Tribe
- The Churners (cannot really afford you on the basis of time or money)
- The Vampires (consume a disproportionate amount of resources compared to your average customer)
- The Snow Leopard (your best customers, rare and almost impossible to replicate)
Another way to categorize customers is by using the “Net Promoter Score” (NPS).
NPS score ranges from -100 to +100.
NPS score is calculated based on responses to one question: “How likely is it that you would recommend our company/product/service to a friend or colleague?” based on a 1-10 scale.
Fire Problem Customers
Not firing problem customers is likely costing you huge amounts of time, money, and aggravation.
Problem customers do not get better with time.
To clarify, this does not mean customers that have a legitimate complaint or problem.
Defining problem customers:
The author has found, without exception, the low-value price-sensitive customers are the ones that complain the most, waste huge amounts of time, and always need to be chased for payment.
The high-value customers who are the most profitable tend to pay on time, treat you with respect, and value your services.
Problem customers cause you to miss out on opportunities. Firing problem customers will free up valuable time and resources.
Firing problem customers creates scarcity without being disingenuous.
Chapter 8 action item: how will you increase customer lifetime value? Fill out square 8 of your 1-page marketing plan.
Chapter 9: Orchestrating and Stimulating Referrals
Chapter 9 Summary: orchestrating and stimulating referrals is an active process, many businesses wish and hope for referrals, but don’t have a deliberate system for making them happen.
Highlights of Chapter 9
- Why relying on word of mouth is a losing strategy.
- How to ask for referrals without looking needy or desperate.
- The “law of 250” and how it relates to getting an ongoing stream of referral business.
- The psychology behind referral marketing and how to compel existing customers to want to give you referrals.
- How to create a win-win scenario with joint ventures.
- How to profit by referring your customers to others.
- What branding really is, and how to build brand equity in your business.
It is important to understand the psychology behind referral marketing before looking at specific tactics.
Think back to the last time you recommended a restaurant or movie to a friend. Were you doing so as a favor to the owner? You made the referral because it made you feel good.
Ask and You Will Receive – The Law of 250
The average number of guests at a wedding or funeral is about 250.
Most people have about 250 people in their lives who are important enough to invite to a wedding or funeral.
Every customer represents 250 potential referrals if you do a great job, or 250 enemies if you do a poor job.
The best way to get referrals: just ask.
All referrals happen through a conversation between two or more people. When these conversations are happening, three things must happen for someone to refer you:
- They have to notice that the conversation is about whatever you do.
- They have to think about you.
- They have to introduce you into the conversation and ultimately introduce you to the person they are talking to.
Chapter 9 action item: how will you orchestrate and stimulate referrals? Fill out square 9 of your 1-page marketing plan.
Entrepreneurs fail to implement for one of the following reasons:
- Paralysis by analysis
- Inability to delegate
- The “My business is different” attitude
If you want to stay ahead of change and disruption in business, you need to constantly ask these questions:
- What business do I need to be in?
- What technologies are coming that are going to disrupt my industry?
- How can I take advantage of the coming changes in technology rather than fight them?
If nothing changes in your regular routine, nothing will change in your business or personal life.
A commonality among high-growth businesses is that they have a strong focus on marketing.
It is time to decide to become a great marketer and transform yourself from a business owner to a marketer who owns a business.