How to Outsell Your Competition by Treating Your Customers Like Kings

Creating first-time customers is one of the costliest things - and the riskiest - that any direct-response business does.

Consider what's typically involved in creating a new-subscriber acquisition piece for a health or investment newsletter and testing it to 100,000 prospects...

  • Copy (advance to copywriter): $25,000
  • Design: $12,500
  • Printing/List Rental/Postage & Mailing: $70,000

That's a total of $107,500. Now, consider the fact that the publisher's overhead isn't even factored into this equation. And that he'll probably have to test two, three, even four or more pieces before he hits upon a powerful new control. And that he's going to continue to test new pieces against his control every six weeks or so to make sure he's not caught flatfooted when that promotion peters out.

Bottom line: All told, the publisher is probably risking $1 million or more a year just to keep bringing in new customers. And that's for each publication in his stable!

Yeah, I know. That's direct mail, the costliest marketing medium there is. But even at the other end of the spectrum, on the ultra-cheap Internet, there are very definite costs - and, therefore, risks - associated with acquiring new leads and new customers.

Money must be spent to pay AdWords and pay-per-click costs, create and run banner ads, rent e-mail lists, write and design e-mail blasts, write and design landing pages - and more. And because there are no guarantees that any campaign will work efficiently, every test of every new campaign carries with it a very definite capital risk.

Making Secondary Sales to Existing Customers Is One of the Cheapest Things - and the Lowest-Risk - That Direct-Response Companies Do

Response on promotions sent to existing customers is usually six to eight times higher (sometimes more) than promotions sent to cold prospects. Average sale is substantially higher, too - sometimes as much as two to three times higher.

And so, compared to the breakeven return on investment most marketers get when creating new customers, ROI on promotions to existing customers is off the charts.

In short...

It's ALL About Customer Lifetime Value!

It amazes me when I see companies that seem oblivious to this simple fact of life. They risk alienating new customers with endless upsells on the initial inbound call, then utterly abandon them, failing to follow up with direct-mail and e-mail promotions. Or they ship faulty, shoddy products that blatantly under-deliver on the benefit promises made in their customer-acquisition promotions.

If they only knew how much money they're leaving on the table, they'd turn over a new leaf in no time flat!

I mean, what would you rather have - a 50 percent net profit on one sale to one customer? Or SEVEN FULL YEARS of sales to each customer... making four to five or more sales to each one every year... and, because there's a cost involved in delivering world-class products and stellar customer service, settling for a slightly smaller net on each sale?

It's a rhetorical question. We both know the answer.

So now the question becomes... what can YOU do in the next five days to begin treating customers like gods?

Ask yourself...

1. "Do my promotions tell the truth, the whole truth, and NOTHING BUT the truth?"

Ask any soft-offer marketer and he'll tell you: Promotions that create unrealistic expectations for the product invariably result in lower pay-up on the back end. Hard-offer marketers know that over-the-top promises result in much higher cancellation rates and much lower response to secondary sales and renewals.

What can you do to narrow or eliminate the gap between your promotional promises and the reality of the benefits your product or service delivers? Or, even better, what can you do to deliver MORE than your promotion promises?

Could you, for example, add unadvertised premiums to your welcome packages or product shipments? Promise 12 issues of your newsletter a year, but include the previous month's issue - a 13th - in your welcome kit? Schedule a timeless "Gala Bonus Issue" to hit new subscribers' mailboxes two weeks after they come on board? Maybe insert a gift certificate offering a substantial discount on something? Perhaps send an unexpected free report or other inexpensive gift to every subscriber or customer before Thanksgiving... "just because" you're thankful for them?

2. "Do my promotions begin the bonding process with the new customers they create?"

Do you establish yourself or your spokesperson as an advocate who has a greater, higher vision for your prospect than he has for himself? Do you demonstrate this by giving away valuable, actionable information or advice in your promotions? What insights into your spokesperson's life can you give away that make him feel more human, more like the prospect in his harmless little foibles, loves, and values?

When selling newsletter subscriptions, I avoid saying things like "When you subscribe..." Instead, I say something like "When you join me..." On the order form, instead of calling my product a subscription, I call it a membership. What could you do to position your initial sale to a customer NOT as a sale, but as the beginning of a beautiful friendship?

3. "Does my product over-deliver on the benefit claims made in my promotions?"

Goes without saying: If the product is faulty, fix it. If it can be improved, improve it.

Then do this: Order a product from yourself, for yourself. Do it by phone so you get the live experience of dealing with the customer service rep. Throw up roadblocks.

I once called a client's toll-free number and said I wanted a three-year subscription to his newsletter. "We don't sell three-year subscriptions," she said. "Just one-year and two-year subscriptions." So I asked if I could buy a one-year subscription and a two-year subscription and have them run consecutively. That really pissed her off. "I've never heard of such a thing!" she said.

Challenge the operator and take notes. When the welcome kit or shipment/first issue arrives, note how long it took. Imagine that you're a new customer who has been waiting for this delivery, anxiously checking his mailbox every day. Then open it.

How do you feel? What are your first impressions? Are you bowled over by the quality and quantity of what you see? Do you feel closer to the company and/or its spokesperson? Does the experience leave you looking forward to your next contact with them?

Even if your experience was 100 percent positive, get your best people together and spend a day brainstorming how you can make it better for your customers.

4. "Do my people go the extra mile to make customers feel like part of the family?"

Call your customer service number. How many times does the phone ring before someone answers? Are you put on hold? (Take notes.) Have a complaint. Be angry. Be insulting. (Scribble, scribble!) Call back with a gazillion questions. (More notes.) Try telling the rep about your cat. (Still more notes.) Then call with a big compliment. (Getting writer's cramp yet?)

Now, have a meeting with your reps and set them on the straight and narrow.

5. "Does each promotion to my in-house customer file contain a component that strengthens the bond with them?"

I tell my clients that every promotion sent to existing customers must do two things: (1) It must, of course, produce profits. (2) It must make the customer feel greater allegiance and loyalty to the company and/or its spokesperson.

More important, no promotion should ever produce profits at the expense of the relationship we worked so hard to establish with our customers. When max short-term profits and max bonding go head-to-head, bonding must always win.

6. "Am I doing everything possible to retain customers who complain or cancel?"

A client of mine spends an average of $24 to generate each new customer. Does it make sense to spend less to keep one? That $24 could buy a LOT of tender, loving care for an irritated or disappointed customer. It could easily cover an apologetic telephone call or a FedEx package with a $10 "I'm so sorry!" gift enclosed.

Take a look at the process customers go through to cancel, and brainstorm everything you can think of to keep them in the fold. Think outside the box. How about a "Hell NO!" letter: "Hell NO, I won't cancel your subscription. The information I have for you in coming months is far too important to you! I've already refunded your subscription - that's one thing. But denying you the critical guidance in XYZ newsletter is another. So please accept the next three months with my compliments..."

This gets you three more months to win your disgruntled customer over.

[Ed. Note: What do you do to treat your customers like kings? Let us know right here. Master copywriter Clayton Makepeace publishes the highly acclaimed e-zine The Total Package to help business owners and copywriters accelerate their sales and profits. Claim your 4 free moneymaking e-books - bursting with tips, tricks, and tactics that'll skyrocket your response - at MakepeaceTotalPackage.com.]

This article appears courtesy of Early To Rise, a free newsletter dedicated to making money, improving health and secrets to success. For a complimentary subscription, visit http://www.earlytorise.com.


SecurityMetrics for PCI Compliance, QSA, IDS, Penetration Testing, Forensics, and Vulnerability Assessment

Share/Bookmark


Many of the 1000+ articles on Frugal Fun and Frugal Marketing have been gathered into magazines. If you'd like to read more great content on these topics, please click on the name of the magazine you'd like to visit.

Ethics Articles - Down to Business Magazine - Frugal & Fashionable Living Magazine
Global Travel Review - Global Arts Review - Peace & Politics Magazine
Frugal Marketing Tips - Frugal Fun Tips - Principled Profit
Why The Business Ethics Pledge Campaign
Clean and Green Marketing

Our Privacy Policy



Click here to order Shel's books on cost-effective and ethical marketing

This site is brought to you by Shel Horowitz,
Director of Accurate Writing & More--bringing you marketing,
writing, and career assistance since 1981.
(413) 586-2388

For information on reprinting articles from this site, click here.

You're also invited to visit our sister sites:
http://www.principledprofit.com
(ethical, cooperative, and profitable business success) http://www.frugalfun.com
(How to have more fun and spend a lot less money)
http://www.accuratewriting.com
(marketing, writing, and career services)

Social networking icons by komodomedia.com.

Disclosures of Material Connections:

Site copyright © 2000-2011 by Shel Horowitz