Miscellaneous Briefs

“Welcome Gauntlet”

No Comments

Every business consultant these days talks about developing “relationships” with customers. They say, quite correctly, that this will lead to more sales, fewer problems, and greater profits.

When you get a new customer, you have the potential to double or triple his lifetime value. By lifetime value, I mean the net dollars he will eventually send you. It starts with the very first experiences the customer has with you. These experiences are crucial. They make an impression that will last forever.

My colleague Dan Kennedy encourages his clients to send what he calls a “stick letter” to new customers. A good stick letter, Kennedy says, reduces refunds by restating the promises and benefits made in the sales letter and then giving them a bonus.

But I think you should do more than that. My recommendation is to create a “welcome gauntlet” – a series of communications that go beyond delivering what the customer is expecting.

A welcome gauntlet should be so good that it not only satisfies the customer, it surprises and delights him. By doing that, you are showing him how much you care about him… and laying the foundation for a strong, mutually beneficial relationship.

Continue Reading

Miscellaneous Essays

Stop Selling When You Are Ahead

No Comments

“I saw the most amazing movie last night. You’ve got to see it,” Jane says.

“Tell me more,” says Mary.

“Well, Ryan Gosling stars in it. And also Jennifer Lawrence.”

“My favorite actors,” says Mary.

“They have a hot romance going on in the movie…”

“Sounds great…”

“And there’s this scene where Ryan has his shirt off and…”

“Say no more,” says Mary. “I’m going!”

“And he takes his shirt off and all of a sudden this horrible thing pops out of his chest and…”

“What?”

“This creature from another dimension pops out…”

“What kind of movie is this?”

“Sort of science fiction/horror…”

“Ugh. Forget it. I hate horror movies.”

What’s wrong with this conversation?

In an attempt to persuade her friend Mary to see the movie, Jane made a big mistake – a mistake that is very common in the world of business: She continued to sell the product after the customer was already sold.

In their textbook Hospitality Sales: Selling Smarter,
 Judy A. Siguaw and David C. Bojanic said:

If you have made a good presentation and the prospects are satisfied that the benefits offered will improve their situation, and are believable, any further presentation is overselling. Overselling can create, in the mind of the prospects, a feeling of disbelief as to the validity of the owner benefits. It can also result in the loss of favorable attention because excessive repetition of benefits and use of other motivational tools can lead to boredom or confusion, which, in turn, causes an unfavorable emotional reaction.

In other words, “overselling” will kill your sale.

You can prevent this from happening by learning how to recognize the moment your customer is ready to buy. If you continue to sell beyond this point, her enthusiasm for the product is going to wane. Not only that, but you risk saying something – like Jane’s description of the creature bursting from Ryan Gosling’s chest – that will quash her interest in an instant.

In this regard, people who do their selling face to face have an advantage over those who do their selling via direct mail or the Internet. By paying close attention to the effect their words are having on their customers, they can custom tailor each sales presentation. If the customer looks doubtful, they can pile on proof of their claims. If the customer looks confused, they can clarify the point they’re trying to make by restating it – over and over again, if need be.

And when a customer begins giving signals that he is ready to buy, astute salespeople know the time is right to swoop in and close the sale.

These are the clues they look for in the customer:

  • A relaxed position – arms open, facing the salesperson
  • Excitement in the eyes
  • Nodding the head
  • Oral affirmations – saying “yes,” “right,” “uh huh”

When you are writing direct-mail or online sales copy, you don’t have signals like these to guide you. So you have to find another way to keep your sales message on track. To my knowledge, there isn’t any generally accepted way to do this. But I’ve experimented with a few techniques, and have hit upon one that works pretty well.

I’m talking about putting your copy through a peer review.

The process I recommend is the same one that many of my best clients use. Basically, here’s how it works:

You put together a group of five or six people – ideally, experienced marketers and copywriters. You ask them to rate the various parts of your copy – the headline, lead, body, and close – and give specific suggestions for improving them. You also ask your reviewers to indicate any sections that are boring, unbelievable, or confusing. And you ask them to highlight the point in the copy where they feel ready to buy.

That point should be about two-thirds to three-quarters of the way through the copy. If it comes much earlier, you know you have to delete some of the “overselling” you do after that point and move directly to the close. (If it doesn’t happen at all, you know you have to completely revamp the sales copy and make it stronger.)

Don’t make the mistake Jane made and “talk” yourself out of a sale. You’ll be blowing a perfectly good opportunity… and you’ll never know why.

Continue Reading

Miscellaneous Essays

The Advantages of Running an Ethical Business

No Comments

A year or two ago I got a letter from a small-business owner and “avid” reader of Early To Rise who was struggling with an ethical question.

This woman, whom I’ll call “Renee” to protect her identity, was successfully selling investment software to customers, but she had discovered that 85 percent of them were trading accounts of $10,000 or less. She said that she knew from previous experience as a broker that it was very difficult to make money with such a small capital base. She wanted to know how she could continue to sell the software, knowing that most of her customers “were not going to have a profitable experience because they are starting off too small.”

The answer is easy. Selling bad products to your customers (or good products to customers that can’t take advantage of them) is a very bad idea.

It may seem like a smart thing to do – if, that is, you have no scruples. But if you have a conscience, the shame of what you are doing will take its toll on you. And the expense of that toll will be far greater than whatever monetary compensation the business is likely to bring you.

And even if you don’t have a conscience, it is still not a good idea to sell products and services that can’t help your customers. In the long run, you will end up working harder and harder to make the same amount of money (whatever it is), because your customer base will be constantly slipping away – like sand running through a sieve.

There is, indeed, a sucker born every minute – but most suckers get wise after being cheated. And they will pay you back by badmouthing you to everyone they can, including regulators that have the power to put you out of business.

I understand Renee’s temptation to come up with a rationale to keep selling her software programs. They are well designed. The advertising isn’t false. And she isn’t holding a gun to her customers’ heads … they are choosing to buy from her.

The only problem is that the wrong kind of customer is buying the programs. In fact, most of the buyers are the wrong kind.

Continue Reading

Miscellaneous Briefs

How to Be a Great Negotiator

No Comments

You don’t have to be tough. You don’t have to clever. You don’t have to be ruthless. You must understand that in the long run the most important things you negotiate – the things that will make you wealthy and improve your life – are not transactions but relationships.

With that in mind here are some tips

  • Figure out what value it has to you – what dollar range you would give it if the shoe were on the other foot. Never deviate from that range.
  • Make a judgment about the person you are making a deal with. Don’t negotiate with people you don’t trust.
  • Always get the other person to make the first offer.
  • Knowing beforehand what you think is fair, be nice but absolutely immovable.
Continue Reading

Miscellaneous Essays

10 Dumb Ways to Start a Business (and Waste a Ton of Money at the Same Time)

No Comments

Entrepreneurship is based on selling. You test the market with a product you think will sell well. If it does, you keep selling. If it doesn’t, you try something else.

This approach lent its name to my best-seller: Ready, Fire, Aim. The main idea is that to start and grow a small business you must develop a pragmatic, action-oriented mentality. Rather than spend too much time and money refining theoretical ideas, you develop a prototype quickly and then see if the market will buy it.

As I said in the book, for every business that fails because of poor planning there are a dozen that never get off the ground because of too much planning.

The Ready, Fire, Aim approach obviously doesn’t apply to surgical procedures and rocket science. But it will be very useful for 90 percent of the new-business ideas you are likely to come up with.

Want to start a business selling diamond-studded collars for kitty cats? Fine. There are two ways to go about that:

• You can spend most of your time and money manufacturing a line of such collars – and only after that is done, start to think about how you can sell it.

• You can make a single collar and go down to the local flea market or your neighborhood pet shop and see if you can find a customer for it.

Most people start businesses the first way. That’s why most businesses fail.

But with the Ready, Fire, Aim approach, you devote 80 percent of your initial resources to discovering an efficient way to sell the product. Once you have done that, you have found the key to successfully market it. With that key in your pocket, you don’t have to worry about all the other problems that will arise in the natural course of business. You won’t have to worry, because you will be able to create the one thing that can solve almost every business problem: cash flow.

Here, in a nutshell, is what I mean by Ready, Fire, Aim:

Ready: Get your product idea ready. Make it good enough to sell. Don’t worry about making it perfect. There will be time enough for that later.

Fire: Start selling it. Sell it every way you can. Test different offers. Test different ad copy. Test different media. Keep testing until you discover something that works. This is your Optimum Selling Strategy (OSS).

Aim: Expand your customer base by focusing on your OSS. As your customer base grows, develop business procedures to accommodate that growth. Hire the best people you can to manage your business. Discover, through “back-end” marketing tests, other products and services that your customers will buy. Use those discoveries to refine and perfect a fast-selling line. As this back-end business flushes cash into your company, invest a good deal of that cash into front-end marketing.

That is the cycle of a successful start-up venture.

Continue Reading

Miscellaneous Essays

Winner Take All? The Yin and Yang of Negotiating

No Comments

Sid had done it. He had convinced the IRS agent to forgive the mistake my partner Joel and I had made. He had spent three weeks with the guy, working mornings, golfing with him in the afternoon, and taking him out to dinner.

If the IRS had stuck to their ridiculous position, it would have cost us $10 million. But Sid’s logic and diligence and charm had persuaded one of its bulldogs to do the right thing.

A month later, Sid’s bill crossed my desk. It was for $85,000. “That’s odd,” I thought. “I could have sworn Sid was billing us by the hour.”

Had he done so, the bill would probably not have exceeded $15,000. Still, $85,000 was a small price to pay for the service he had provided. I signed the invoice and sent it on to Joel.

The next day, Joel called me into his office.

“You saw his bill.”

“Yes, I signed it.”

“I saw that. But you know he was supposed to bill us by the hour.”

“Yes, I know. But what he did was worth a lot more than eighty-five grand.”

“Maybe so, but that wasn’t our deal.”

I shrugged.

“We have to bring him in and negotiate the amount.”

“Okay.”

“But we have to plan this thing. We have to rehearse.”

Continue Reading