Insights Blog

Useful tools, tips and strategies to help your business learn, develop and expand.

Are You Creating Loyal Customers?

Do you know where on the “loyalty ladder” most of your customer base lies? Are they just customers or are they something… more? If you want to increase your profits and the speed at which your customers buy from you, this video about customer loyalty is a must-watch.

How important is customer loyalty in your business? Has this video sparked some ideas for moving your customers up the ladder?

Let us know in the comments! You may also want to read this about the importance of customer relationship management in building customer loyalty.

Prefer to read rather than watch and listen? No problem – here’s everything I said in the video as text:

What I want to do today is to introduce you to something called the Ladder of Loyalty. This is nothing to do with marriage, it is actually a business concept.

Suspects

So it’s start with our Suspects, an interesting word. But what it really means is that a Suspect is anyone who you can do business with. That is, anyone to whom you could provide value to with your products or services. This is like your market size.

Prospects

Now what you ideally want is for your Suspects to move up to Prospects. Who is a Prospect? A Prospect is a Suspect who has shown some interest in your product or service. This person has done something to engage with you to take that first step to say, “Hmm, this is of interest to me.” Especially with the digital age and the kind of of things that we can be doing online, with the whole database system availability and social media, it’s actually becoming quite easy to track how our Suspects are engaging with us, how they are becoming Prospects. Is it that they are reading some blog of yours? Is it that you know you they have engaged with an email that you have sent out? Or maybe on social media? Basically they have taken that first step of engagement.

Shopper

Now ideally with all the marketing that you are doing in your business you want your Prospect to become shopper. Now a shopper is different from a Customer or a client. A shopper is a person, is a Prospect, who has transacted with you for the first time, who has actually given money in exchange for your product or service. So a shopper is a person who has had that first transaction with you and your business.

Customer

Now I just want to make something very clear to you, that up to this point this is all marketing, right? It is quite expensive because generally speaking the margin that you make on the first transaction with your shopper is not very high, assuming you have spent some money, invested some money in marketing to get that result. Now where you actually make good margin and good money is with the repeatability of transactions, the repeatability of business, which is where your shopper becomes a Customer. As soon as your shopper transacts for the second time and third time, the person is actually becoming a Customer.  He is having more transactions with you – there is repeat business happening.

Member

Now, from this level you want your Customer to move to something called a Member. You want your Customer to become a Member, which means they have not just this transactional relationship but something more than that.  They have a relationship with you, they are engaging with you, they feel a part of what you are doing. And, again, with the technology the kind of things that are possible now, you can achieve this. Some companies have login places where you can login and go and track your order, and see how it is moving forward, that is a kind of membership area. When you have some kind of loyalty scheme running, it is a kind of a membership area. You can do something special for your customers, take them out for an event or something special designed for them, it is like giving them a sense of membership. This is a group, this is a community, this is a team that we a part of.

Advocate

From this Member level the next is Advocate. An Advocate is someone that when asked about what to expect from you as far as your services or products are concerned, would give very positive reviews for you. They would actually say, “Yes, it’s amazing, I work with them and they are absolute fine yeah.  Would highly recommend them, you should work with them. The point is an Advocate is someone when asked they will give positive reviews for your business.

Raving Fans

I am sure you would want more Advocates in your business. You would want more Members in your business but just try and make the distinction of how this ladder works and the top thing where you really, really want your Customers is something called Raving Fans. A Raving Fan doesn’t need to be asked; they just so delighted with what you do, they will actually go around sharing that secret that they have found with everyone. They are the people of abundance and they would want to reach out because they have found something amazing, which is you, and they want to tell more people about it. Now do you think you need to do any marketing as far this person is concerned? No. They are doing marketing for you. They are not just Advocates but Raving Fans for you.

The Speed of Business and the Profitability of Business

Now the interesting bit of this ladder, if you look carefully from Suspects to Raving Fans is that the speed of business goes up as you climb the ladder. Pretty logical – people who are coming to you through Raving Fans, or through Advocates obviously will want to engage your services a lot faster because they heard from someone who is reliable. Also, if you think about the profitability of the business that you are doing, the profit will go up as your Suspects and Prospects move up the ladder.  Why? Because you are not spending too much time and effort on marketing – you have built a good base who are actually giving you a better lifetime value. They are actually referring clients; there is a proper strategy that is working.  There is a proper membership strategy that is working here. There is a strategy working to increase the repeatability of the business.

What You Need To Ask Yourself

The question that you have to ask looking at this ladder is where does bulk of your base, your customer base sit? Where do most of your people sit?  What I have realised working with business owners is that a lot of business owners are still at the Shopper and Customer stage. They work with their clients and customers at arms length. They have some people who they are very close with but there is no systematic approach or systematic strategy to move these people up the ladder. Because this is where you are building the asset value of your business.  You are improving the speed and profitability in your business. So the question therefore is where do your customers sit in this ladder? And what are the kind of strategies that you are implementing to help people move up the ladder?  

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3 Things You Need To Know About Your Marketing

Do you find yourself constantly confused by the marketing advice out there? It can be hard to figure out what you need to focus on when you’re being told to do 10 different things at once.

One of my clients asked me, “If there were only 3 things I need to know to make my marketing work, what would they be?” So I made this video.

Prefer to read rather than watch and listen? No problem – here’s everything I said in the video as text:

What I want to talk about today is basically what are the three things that you need to know about your marketing to make it work in your business. Actually, I’m covering this topic because in today’s coaching session, one of my clients asked me this question saying, “There is so much stuff going around this whole marketing thing. Everybody talks about 10 different things. Tell me Shweta if there are only three things I need to know to make my marketing work, what would they be?” So let’s go.

The 3 Things You Need to Know About Your Marketing

The first thing you need to know in your business to make your marketing work is the lifetime value of your customer. The second thing you need to know is what is the acquisition cost of your customer? What does it cost you to acquire one customer? The third thing that you need to know is whether this acquisition cost is less than your lifetime value of the customer or not. So these are the three things – lifetime value, acquisition cost, and how is this equation stacking up?

1. Lifetime Value

Now just very quickly lifetime value of the customer again is based on three simple things. On average what is the risk retention of your business, how long does one customer stay in your business on an average? The second thing is on average, how much would this customer spend over this period of lifetime? The third thing is what is the margin that you make on that spend and therefore what is the gross profit you make on this particular spend? Then you can identify what is the lifetime value of your customer in your business.

2. Acquisition Costs

As far as acquisition cost is concerned it again is based on certain variables. The first thing is what is the marketing spend on a particular channel for which your are getting leads? The second thing you need to know is how many leads are you getting when you are spending that money in that particular channel? The third thing is based on your sales team’s conversion percentage, how many clients are you getting from those leads? So again, what is the spend?  How many leads are you getting and how many are you converting, which is, how many people are actually buying from you?  That determines the acquisition cost per customer.

3. Compare Acquisition Cost to Lifetime Value

When you compare these two figures, which is the lifetime value and the acquisition cost, while the acquisition is cost is less than the lifetime value of the customer you have actually created yourself an unlimited marketing budget and your marketing is actually working. If you don’t know these figures then very simply put you are playing a game in a blindfold manner and I’m not a big fan of that. It just leads to a massive waste of time, money and efforts. You start questioning whether marketing is a cost or an investment and I promise marketing is an investment, if you know how to go about it in the right way.

Need more marketing advice?

I’ve put together a six-element framework for businesses to focus on in order to stimulate sustainable growth in their business.

At the Web Event I dive particularly into the Marketing M.A.X.I.M.I.S.E.R. and run you through a few of the marketing strategies that are working. Join us!


I Hate Brad Sugars

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Brad Sugars is one of the top coaches in the world. In 22 years, he has owned more than 50 profitable businesses, all the while building ActionCOACH to over a 1000 offices in 50+ countries. He’s written 15 books on business and investing and has a regular column in Entrepreneur Magazine. By most standards, he is what people would call extremely successful. However he is reviled by enough people to make me want to investigate…. I called around a lot of people who had heard Brad speak at one of our events, or had dinner with him, to try and first find the ‘Brad haters’ and then figure out their reasons. Interestingly, most business owners I spoke to said that once they understood his personality and style, they actually looked forward to meeting him and hearing him speak again and again.

There were a few people though who thought that they did not care for his ‘Australian-American’ attitude at all and would keep away from him as much as possible. This is where I probed further to dig deeper into what had really ruffled people’s feathers. The most interesting insight I got turned out to be from someone who had heard Brad speak on stage for an hour in 2010. It was a three hour session and he had walked out in one hour – he had not been able to stand what he perceived as extreme arrogance.

Thinking back to the seminar 4 years ago, he said, “I’m not someone who gets easily upset, but some of the things he was saying that day just made me walk out.” He then paused and continued, “Funnily enough, when I walked out that day, there were two strategies he had talked about that just stuck with me –1. Prioritise Conversion over Leads & 2. Stop working with C and D customers These two strategies have literally saved my business from going bust!”

So here is the interesting insight I got from that conversation – sometimes we don’t particularly like a person’s style, either because they are different from us, or because they are like us! When you go to a business seminar, first pick the seminar to make sure you are listening to someone with immense practical credibility. Then when you hear him/her speak, try to focus on how what you are learning can help your business rather than on the ‘noise’ of who is delivering the message. In the end, even if you don’t like them, just one or two of their ideas may help you build, grow, or even save your business.

If you’d like to find out if Brad Sugars’ business strategies could be useful for growing your own business, you may want to check out Profit Masters.

This is Brad Sugars’ own structured, online course that is designed to empower businesses to drive sales and increase profits. You may love him, or hate him, but you cannot deny the value that he can bring to your business. And that value is available to you now.

Click here to get a free 60 minute sample training video from the Profit Masters series.

Also click here to see Brad Sugars live when he is doing his tour of the UK!


Business Reading: Get to Know Your Chimpanzee

Some books we read once, maybe twice. Some books, and usually the best kind of books are like workbooks that we keep returning to time and again. Every time we read it, we get something new out of it for our current context. The Chimp Paradox is one of those business books. Most of our clients know about this book – mainly because we always recommend it as essential business reading. Recently, we opened it again and simply had to write a recommendation to every business owner out there.

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For those of you who haven’t read it, the Chimp Paradox:

  • Helps you understand the three parts of your brain and how they each affect your decision-making.
  • Describes how the “chimp” part of your brain, the emotional part, can hijack your thought processes, leading to self-sabotaging thoughts or behaviour.
  • Uses metaphors to make the concepts easier to understand combined with case studies and practical examples the illustrate them clearly.

The concepts that are explored here are critical for business owners to understand. In today’s world, there is almost no margin for error – every business decision you make must be as precise and accurate as possible to give you the best chance of survival. If you haven’t read it yet, then bump it up the list of books to read this month – I would call it essential reading for any business owner. And if you have read it before, consider picking it up and reading through a few of the chapters again. You might be surprised at what you find there.

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Top 20 Killer Sales Questions

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Making a sale is very much an art – the art of education and persuasion. Similar to a lot of art forms, there are those with a natural flair for it who can do it without even thinking. However, boosting your sales by becoming better at persuasion is an art that can be taught, can be learned, and can be mastered.

This set of 20 questions is a collection to keep in your arsenal for whenever you need to get that little bit more information to understand your prospect better and help them make the right choice.

Print them out, memorise them, and when you get stuck in a sales conversation, pull one of them out. You’ll be surprised how well #19 and 20 work!

1. What is the most frustrating thing to you about…..? Why is that?
2. What makes you say that? (Why do you say that? / Can you give me some background on that? / What draws you to that conclusion?)
3. What do you see as the purpose of the meeting exactly?
4. What do you think causes … ? (Do you have a perspective on that?)
5. What have you done so far to address the problem?
6. What would you do differently if…?
7. What is likely to happen if…?
8. What won’t happen if…?
9. What are the implications for you if…?
10. Who benefits most from…?
11. What would you like in the future? / In an ideal world what would you have? / What would success look like for you?  What would make this perfect for you?
12. Is anyone else involved in the buying decision?
13. What are the key drivers for the other people involved?
14. Have you spoken to anyone else about this?
15. What is the most pressing issue you are facing in the business right now?
16. What would be easiest for you?
17. How important is that to you?
18. Will that be enough for you?
19. I agree you should think about it.  Often when our clients say that it’s because there is a particular issue they need to address. Is that the case with you? 
20. What would we have to do to make you go ahead with this?

Do you have any killer sales questions that work for you? Post it in the comments!

business strategy consulting LondonFound this post useful? It’s not as hard, or as complicated as it seems to be one of the top 4% businesses. Register for my online webinar and learn the language of money that top business owners speak and ways to significantly improve your sales and profits.

 

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