Customer Relationship Management for IM Dummies
Posted on 09. May, 2011 by Daniel Levis in Articles, Blog, customer, intelligence, logic, pareto, relationship, resource, Small Business Internet Marketing, Small Business Marketing, spending, spreadsheet, system, tracking
The Pareto Principle says 20% of your customers produce 80% of your sales and profits. This has profound implications to the wealth and wellbeing of ANY business…
Resources are finite. There is only so much time, money, and energy to invest.
One of the keys to increased conversion, customer value, and retention — and the increased profits they bring you — is the strategic application of your resources.
If you can deploy them with surgical precision… obtaining the highest possible return on resources invested… while avoiding their squander in places where they have negligible or negative contribution to your bottom line, you have a decided competitive advantage.
So why do so many online marketers pursue the quick fix, churn and burn school of marketing that treats all customers alike? Chalk it up to ignorance… temporarily too easy pickings… shoddy products that are anathema to repeat business… laziness… stupidity… pick your poison…
Despite the obvious logic and benefit of the surgical, systematic strike, few entrepreneurs have even considered it… still fewer pursue it. And as a result, billions of dollars are left on the table. Worse, businesses that flourished in cushier times are now floundering on the rocks of extinction.
The first step to avoiding this fate is to start tracking the behavior of your customers… and using that intelligence to take specific actions that encourage continued and increased spending…
Doesn’t it make sense to spend more money marketing to people with a proven propensity to buy from you?
What do you think might happen on your next product launch or promotion if you were to separate your best buyers from the great unwashed? What if instead of just sending them a series of emails you send these VIPs a series of print pieces as well?
What do you think might happen if you were to send your very best buyers a surprise gift in the mail once a year? Or your bread and butter buyers a free printed catalog once a quarter?
Do you think that might increase sales far and above your mailing costs?
Do you think it might also make these customers more responsive to your regular email promotions?
Does the Pope wear a beanie?
But here’s the real million-dollar question:
How do you know which customers are likely to respond enthusiastically to this special attention?
Here’s what I told one of my brightest coaching students who asked this question just the other day…
Your first step is to create an RFM value for each record in your customer file.
R stands for RECENCY (customer purchased within the last x days). F stands for FREQUENCY (customer purchases on average every x days). M stands for MONETARY VALUE (customer’s total purchase volume).
So let’s say Jill Customer made her first purchase a year ago. Her most recent purchase occurred 7 months ago. In between she made 2 additional purchases. And her total spend with your company is $2,780.
How do you compute Jill’s value in order to make a resource-leveraged decision about how much you should be willing to spend to convert her into a customer for your latest offering?
First, you need to create a few simple rules that make sense for your particular business. DISCLAIMER: Every business operates around different purchasing patterns and customer lifecycles so this is a purely an illustrative example…
Recency Rules:
- Customers who last purchased within the last 30 days get an R value of 5.
- Customers who last purchased within the last 30 to 60 days get an R value of 3.
- Customers who last purchased within the last 60 to180 days get an R value of 1.
- Customers who have not purchased within the last 180 days get an R value of 0.
Frequency Rules:
- Customers who purchase every 60 days or less on average get an F value of 5.
- Customers who purchase every 60 to 180 days on average get an F value of 3.
- Customers who purchase every 180 to 360 days on average get an F value of 1.
- Customers yet to make their second purchase get an F value of 0.
Monetary Value Rules:
- Customers who have spent $2,500 or more with your get an M value of 5.
- Customers who have spent between $1,500 and $2,500 get an M value of 3.
- Customers who have spent between $500 and $1,500 get an M value of 1.
- Customers who have spent less than $500 with you get an M value of 0.
You now have a system for ranking the relative value of your customers on a scale of 0 to 15. So what kind of customer is Jill?
Well she hasn’t purchased for 7 months. That pegs her R value at 0.
During her 1-year history as a customer she made 4 purchases. That gives her an F value of 3.
And her total spend with your company is $2,780. That gives Jill an M value of 5.
You now add these figures together to determine Jill’s RFM value — 8. This is Jill’s relative value as a customer.
Your next step is to decide what action you will take in order to maximize that value. Maybe you sub-divide your buyer’s list into three groups — 0-5, 5-10, 10-15. And on your next product launch you send all three groups a couple of postcards inviting them to consume your pre-launch content online.
The 5-10 and the 10-15 group have proven by their past buying behavior that they are quite responsive to your offers. So in addition to the postcards, you send them a sales letter and a couple of follow up reminders by mail counting down to the deadline.
And the 10-15 group — your most responsive and therefore highest value customers — also receives an amazing shock and awe package that includes all of the launch content on DVD, an audio CD they can listen to in their car, and beautifully printed transcripts.
Result: More sales, more profits, more loyalty and retention!
Parting comment. This is not rocket science to pull off. You don’t need high priced consultants or fancy pants CRM software to do this.
Anybody with elementary school math can download a .csv file from their shopping cart and perform the above calculations in a simple spreadsheet.
Will you give it a try?
Until next time, Good Selling!
Customer Relationship Management for IM Dummies originally appeared on The Michel Fortin Blog. Please visit to subscribe to it, or Tweet This.
Web Wolves, Whores, Vagabonds, and Fools
Posted on 13. Apr, 2011 by Daniel Levis in Articles, authenticity, benefit, Blog, employer, evolution, guru, market, myth, scam, selling, Small Business Internet Marketing, Small Business Marketing, trend, tweet, Twitter
The world is changing today so fast it’s really hard to keep up. Just a few years ago pretty much everybody worked for someone else. For most, it was the smart thing to do.
Safe, secure, benefits — the whole bit.
How things change. Today, manufacturing in the developed world is dead, toast, gone.
And so called "knowledge work" is now carried on by independent consultants, freelancers, and other entrepreneurs who come together virtually from the four corners of the earth. It’s cheaper, more efficient, and involves far less risk than the traditional everything-under-one-roof business model.
In this brave new world, only idiots still believe employment equals security. The average tenure in a J.O.B. is now, what… eighteen minutes?
The big, lumbering, vertically-integrated companies are failing like the dinosaurs they are, spitting out long-suffering employees like so much mulch. Since the vast majority of these employees were educated for a business world that no longer exists, they are now left twisting in the wind, clutching at straws.
And sooner or later — with the help of web wolves in sheep’s clothing — it dawns on these poor souls: Make Money on the Internet. It’s a fabulous idea. You absolutely can make money on the Internet, though most people who try don’t make a red cent.
Why?
It all boils down to a mindset that buys into these three big myths…
Myth #1:
Push Button, Make Money
From what I can tell, most newbies approach online business with the exact same mindset they bring to their jobs. They give no thought to the purposes of their labor, save a paycheck at the end of the week.
And this flawed thinking makes them prime suckers for every add-nothing-of-value-get-rich-quick scam that comes down the pike.
Multi-level schemes… auto-blogging… PPC arbitrage… software that automates some almost-useless function to such a degree that it squirts a little money… the exploitation of temporary loopholes that allow you to inject yourself into somebody else’s value chain, but without bringing anything useful to the equation.
These are the kinds of things that attract the employee mindset. Just give me some mindless activity — I don’t want to know the motivations or interests of anybody else — the less thinking I have to put into this the better.
The flimflam artists who dream up these schemes know that the less they explain about what it is they are actually selling, the more suckers they’ll enlist. No thinking person would buy from their sales copy because it fails to answer the fundamental business question: What value does this bring to anybody but me?
Contrary to popular opinion, the purpose of business is NOT to make money. The purpose of business is to fulfill unmet needs and desires — to add value to other people’s lives in some way. Making money is a byproduct of that process.
Myth #2
You Need a System, Blueprint, Roadmap, Formula, Method to "Duplicate"
Now don’t get me wrong. There’s nothing wrong with modeling. The problem is mindless modeling. The kind of modeling where Joe Newbie takes said model and applies it out of context and without adaptation.
In today’s world, there is no such thing as context. Things change much too quickly to expect that by the time a particular system, blueprint, or roadmap comes to market it’s still entirely optimal — even to the exact same situation it was originally developed for.
Let alone the inevitable differences of situation that exist between where it was developed and where it will be applied.
Yet this is exactly the expectation. The average employee expects his or her employer to show them step-by-step how the job is to be done. If the output is less than ideal, it’s the employer’s fault. And this idea gets carried over into the entrepreneurial world. If it doesn’t work, it’s the guru’s fault.
And so yet another disillusioned newbie begins wandering aimlessly through the Internet marketing streets like a hapless vagabond in search of something that actually works. There is no such thing as a plug and play business. Doesn’t exist, never will.
It’s up to YOU come up with your own system, blueprint, or roadmap that solves the specific problem that defines your business.
Myth #3
You Don’t Have to Sell, Just Make "Friends", "Followers", and "Connections"
The promise of social media marketing is this: Make fans, they’ll do your selling for you.
It’s all about authenticity and connection and interacting with your public on the same stage, where everybody gets an equal voice. While it’s certainly true that liking is important to persuasion, it’s just part of the equation.
The social media marketing game is at best foreplay that can never succeed without getting down the "ugliness" of direct marketing and actually asking people to buy stuff. It is this fear of selling that causes newbies to flock to social media marketing in the first place.
At its worst, social media marketing is prostitution. What was supposed to be a pristine oasis of authenticity and a sanctuary from blatant commercialism is turning into a cesspool of disingenuous opinion and endorsement — a media that is inherently unreliable, and therefore destined to devolve in value.
Case in point: Twitter now offers a revolutionary new suite of pay per click advertising services. With Promoted Tweets you can now buy celebrity endorsements at the push of a button.
The service is only available to large advertisers at present, but pretty soon the little people should be able to log on and use their plastic money to get plastic people to tweet about them.
It’s incredibly genuine. They’re keepin’ it real.
Or how about Promoted Trends? Yes, you can actually buy your own trend. Who’d have thunk it?
Or the ultimate in pimposity, Promoted Accounts. This is where Twitter will help you turn a quick trick by soliciting followers on your behalf.
The wonders money can buy. Whatever happened to good old-fashioned, honest direct marketing?
Until next time, Good Selling!
Web Wolves, Whores, Vagabonds, and Fools originally appeared on The Michel Fortin Blog. Please visit to subscribe to it, or Tweet This.
Why Email Marketing Doesn’t Work…
Posted on 30. Mar, 2011 by Daniel Levis in Articles, Blog, brand, buzz, email, hype, open, pitch, professional, promise, proof, publicity, Small Business Internet Marketing, Small Business Marketing, Traffic
Despite all of the buzz and excitement swirling around social media marketing — much of it driven by hype I might add — email remains the killer app for online marketers who demand an immediate and measurable return from their marketing efforts.
Given a choice between 100 visits driven by social media and 10 from email marketing I’ll take the 10 any day of the week.
My professional opinion is that traffic is only as valuable as the conversion (leads and sales) it brings you. “Buzz” should never be a primary aim, rather a by-product of generating leads and making sales. And in most markets, email driven traffic is 15 to 20 times more likely to convert than social media traffic.
So why are so many marketers struggling these days to make email marketing work?
One reason is because they’re wasting too much of their time with social media.
Here’s the pop theory…
Social networks are like backyard barbecues. You head on over and sit around the barby sippin’ a few proverbial wobbly pops, chatting up the locals, making friends, talking about the weather and the game and other idle gossip. And sooner or later somebody is sure to ask: So what do you do?
And that’s your chance to invite ‘em over to your place — your blog, I mean. And on your blog you’ve got plenty of hearty hospitality that proves you’re a swell guy or gal definitely worth knowing the next time your new-found friends ever need what you’re selling.
Now, even a hair-on-fire social media fanatic will tell you your next step in the long and winding road to revenue is to try and get these visitors to sign up to your email list. So you’ve got an email sign up box on your blog with a delicious free gift your new friends can take home with them. That way you can market to them on demand — well into the future.
Just one problem with all this awesomeness: Way too much work for too little return. You have to sift through far too many of these social media butterflies to find a serious prospect. I mean, why do people go on social media sites? To socialize! That’s why they’re called “Social” networks.
Why not start with quality traffic in the first place…
… People who are actively searching desperately for an answer to the problem you solve. Duh!
Beware the social media cool aid that says you can get all of the traffic you could ever want for free. Nothing’s free. You got into business to leverage yourself, not to become a $2 an hour social media slave.
Go out and buy yourself some decent traffic, or do some good old-fashioned joint ventures, or publicity. And build you list on a solid foundation.
Another reason marketers struggle with email these days — even those who understand that you need quality traffic to begin with — is what I call the curse of voluntary anonymity.
I see this all the time and it breaks my heart.
What am I talking about?
Simply this: Business owners hiding behind their “brand”… or their “product” instead of interacting personally with people.
There is an epidemic of distrust on the Internet…
Unless you’re a known brand like Apple or Amazon, the first thing a new prospect does when they come to your website or blog is try to figure out who the heck you are.
Before they engage with your promise and sign up to your email list, they want to know if you seem honest, competent, and sympathetic. And if they do decide to connect with you via email they want to be subtly reminded of these qualities each time you drop in to say “Hi”…
Yet you’ve seen it a thousand times before… flashy html emails from waxing poetic about — the whole piece written in disembodied voice.
This kind of an approach might work fine in the offline world, but it’s just not how email works. Think about it: email is the most personal marketing medium on the planet. You trade emails with your friends and family. And you do it in plain text. You read those emails. You trust those emails.
If you send flashy looking html masterpieces, instantly you go in the spam folder of your prospect’s brain. Your email looks and feels like an intrusion.
Even if someone does open your email, they’re ten times more likely to trash it. You failed to make a human connection. Email is a one-to-one medium. Get personal, or go home.
One more reason email doesn’t work (the last one I’ve got time for today)…
It’s when marketers become extremists. Instead of walking the middle road between providing valuable information and asking for a purchase, they’re either all content or all pitch.
You need both. If you run your list like a soup kitchen you’re just training people not to buy from you. On the other hand, if you’re emails are just pitch, pitch, pitch — nobody’s going to open them.
Mix it up for heaven’s sake.
Email may not be the idiot proof marketing money machine it once was, but make no mistake, it’s still the cornerstone of Internet marketing.
With a little ingenuity, it’ll work for you just fine.
Until next time, Good Selling!
Why Email Marketing Doesn’t Work… originally appeared on The Michel Fortin Blog. Please visit to subscribe to it, or Tweet This.
Marketing Lessons From a 74-Year Old Blues Legend
Posted on 22. Mar, 2011 by Daniel Levis in action, Articles, Blog, blues, campaign, creative, fear, Inspiration, legend, lesson, prospect, skepticism, Small Business Internet Marketing, Small Business Marketing, strategy, target, testing
I’m having the first barbecue of the season on my back porch. And I’ve got Buddy Guy’s raspy vocals and stinging guitar riffs pumping through the speakers…
The man’s chops are clearly massive, yet oh how he plays… with such exquisite humility. Not the slightest need to show off… preferring to surrender himself totally to the music… allowing his audience to shower him with never before revealed inspiration.
74-year old Guy has been noodling around the same three-chord blues progressions for almost 60 years. Imagine how terribly easy it would be to fall into a million ruts over them kind of eons.
Yet with each new album this guitar legend seems to find an ever-widening expanse of fresh, new and exciting truths to explore.
I think the same can be said for the honest practitioner of sales and marketing. The more experienced we become, the more we should realize we don’t know, and the more there is to discover…
To the genuinely inquisitive, the mysteries of the universe expand in direct proportion to our efforts to unravel them.
Like Buddy Guy, we should be continually murdering the predictable, finding ways to combine things that don’t seem to go together, and discovering the new and exciting hiding within the familiar.
Useful as they may be, the rules of thumb and best practices we live by as marketers should never become lodged in our minds to such a degree they crowd out critical evaluation, simply because they satisfy a desire for certainty.
The list of marketing truism is long and comforting. But the truth is: Long copy doesn’t ALWAYS out pull short copy. Video sales letters don’t ALWAYS out pull text. And the fear of loss does not ALWAYS trump the desire for gain. Insert your favorite doctrine here.
Such dogma – even when arrived at through valid testing and experience in our own private marketing sandboxes – should always be questioned within the context of the situations we find ourselves in. Shop worn theories should be tested against other less accepted ideas. Indeed, we should demand that they prove their validity every time out.
The curse that kills higher response is marketing-on-auto-pilot …
If a given strategy works in one place, there is no guarantee it will work in another. Even within the same context, there is no guarantee that if something has worked in the past that it will work the same way now. The very fact that something works well means it will be overused in the marketplace. Eventually people become resistant. And response drops like a stone.
I say none of this to discourage you or to dissuade you from adopting those things that work in one contest and applying them in another. Just keep an open mind. Accept little as gospel. Experiment tirelessly. And let YOUR market be your guide.
Of course, it is difficult to see things from different perspectives, isn’t it? Bringing new concepts and ideas into your marketing is difficult.
Think back to the process of creating your last campaign. You began with a reasonably blank slate. Your mind was open, actively inviting new ideas. But sooner or later you had to commit to developing one of them. And pretty soon, the forest began obscuring the trees. And you lost your objectivity.
How do you get it back?
The ultimate creative exercise …
Give this a try. Before you finalize your next piece of sales copy, put it in front of somebody whom you know is a good prospect for whatever it is you’re selling. And ask them to read the copy out loud. Don’t email them the link. Go to their house or office and give them the link to type into their computer while you’re sitting there with them. Pay them to do this if you have to.
Now, as they’re reading your copy out loud, sit quietly with a print-out of the page they’re reading. Watch and listen as they read while you make notes on the print-out.
Do they smile here? Sound confused there? Do they add extraneous comments under their breath in different places as they read? Do they ask you questions when they come to a certain point? If so, engage them in dialog about their questions, concerns, and skepticisms? And mark up your printed copy with notes.
Find several more qualified prospects and repeat this process to see if there are common reactions that need to be addressed… that fly in the face of accepted sales and marketing dogma… and that lead you to some new angle or approach.
I promise you this simple little exercise will open your eyes to things you can’t possibly see on your own, either because you’re too close to your own business, or because you’re not part of the target market. In either case, you’re likely to find some popular marketing truisms shattered.
Try it on for size with your next important project. Feed off your audience like the father of screamin’ guitar blues.
Until next time, Good Selling!
Marketing Lessons From a 74-Year Old Blues Legend originally appeared on The Michel Fortin Blog. Please visit to subscribe to it, or Tweet This.
Universal Truth Of Selling On The Web: Easy & Simple Wins
Posted on 07. Sep, 2010 by Aaron Wall in Business Optimization
The following is a guest post by Jim Kukral.
Google knows this. Now you do as well. Easy always wins. Take a moment and picture your website or your blog or your product or service in your head right now. Now, think of Google’s. Which one is easier? No, you’re not a search engine, you’re probably a small business owner with a variety of products services, entrepreneur with a business idea, or blogger . But the comparison remains because regardless of what it is you do easy will always win.
So keep thinking about your Web business. Is what you’re selling easy to buy? By that I mean; when somebody comes to buy from you, or to simply get information from you like a phone number or to download a white paper… is it easy to do? Or are you making it too hard?
Picture Google.com again in your head. It’s pretty darn easy, no? There’s a logo and a big input box underneath it. You put in what you’re looking to find, and hit search and boom, you find it. Easy. Google understands that customers use them for one reason, to have a problem solved, and therefore, that’s what they deliver, without all the frills that other search portals like Aol or Yahoo! try to offer.
Your opportunity right now is to figure out the main one or two reasons people visit your website, because despite what you might think, your customers probably have only those one or two things on their mind when they visit you.
If you visit the home page of Orbtiz.com, you’re probably there to do one of a few things only. Book a flight, find a car, or make a hotel reservation. Possibly all three at once. But honestly, that’s pretty much it, right? I would bet that 99% of their traffic is trying to do one of those things. The same goes for you and your website, blog, membership site or anything you produce online.
What exactly are your customers looking for? You need to find out and find out right now! Check your analytics (I recommend Google Analytics, it’s free! www.Google.com/Analytics) to find out things like the most viewed pages of your website, as well as the most exited pages too. You may find out that 90% of your visitors are focusing on the free white paper download page and ignoring the other pages you thought were important. That’s great news! Now, you at least know what your customers want. And now you can make it easier for them to get it. You may also find out that a large percentage of your visitors always leave your website on one specific page, giving you the insight that perhaps they aren’t finding what they’re looking for, getting frustrated, and surfing away. That’s bad.
So what should you do with that knowledge to make things easier for your visitor, and better for your business? If you’re getting a lot of traffic to your free white paper download, go ahead and take that download information and make it stand out on your home page. If done right, you’ll make it as easy as possible for your visitors to get what they were looking for, and you’ll see even more downloads, and happier visitors because you didn’t make them work so hard.
Now, you may also find out that the page you really wanted your visitors to see is not being viewed enough. This could be the specials page on your e-commerce site, or the packages page on your consulting site or maybe your customer support contact information page. Whatever it may be, once you know what it is, that page obviously needs to be viewed more, and while you can’t force it down your visitors digital throats, you can redesign your page so that it limits the other choices that can distract your visitor.
Make it easy and simple, then win!
For over 15-years, Jim Kukral has helped small businesses and large companies like Fedex, Sherwin Williams, Ernst & Young and Progressive Auto Insurance understand how find success on the Web. Jim is the author of the book, “Attention! This Book Will Make You Money“, as well as a professional speaker, blogger and Web business consultant. Find out more by visiting www.JimKukral.com. You can also follow Jim on Twitter @JimKukral.
Are You Thinking Like Google?
Posted on 03. Sep, 2010 by Aaron Wall in Small Business Marketing
The following is a guest post by Jim Kukral highlighting one of the most fundamental tips to succeeding online.
Have you ever really taken a step back from all the technical SEO stuff and thought about why Google wins? The real reasons why they have mass-market share and why they continue to dominate? It’s time you should, because once you understand how to start thinking like Google, you can finally begin to go beyond just ranking better, but also how to be a master Internet marketer so you can get more sales, leads and publicity.
After all, once you’ve been found, you now have to convert. Otherwise, it’s a waste of time.
So why does Google win? Because Google is the world’s biggest, and best, problem solver. The truth is that there are only two reasons why we all go online, using Google or not. Those two reasons are:
1. To have a problem solved
2. To be entertained
That’s it. Everything, and I mean everything you do online falls under one of those categories. For example, let’s say you’re planning on cooking your wife her favorite chicken marsala dish for your anniversary. You go online and do a search for “chicken marsala recipes”. Boom, you now have recipes, and videos, and images and cookbooks and all kinds of information to help you solve your problem.
As another example, let’s say you wanted to relax after work and watch your favorite musician play some of your favorite songs. You go to YouTube and do a search for “Rolling Stones Videos” and boom, you’re now watching video content that entertains you.
YouTube, which is owned by Google, is already the number two most searched search engine on the Internet (behind Google of course). That means that today billions of people are actively searching the Internet for video content. That also means that because of the public’s fast-growing massive hunger for content in video form, that regular people and businesses alike are now able to profit from the creation of that said video content.
The truth is, Google (and your business) has to solve problems for their (your) customers, the Internet searcher. If they (you) can’t do that, they (you) lose customers. It’s that black and white.
So I’ll ask you again. Are you thinking like Google? Have you sat down and figured out what your target audience’s biggest problems are? If you haven’t done that you need to do it now. Anticipate what they need. Figure out their pain and then create products/services that take that pain away.
Just like Google.
For over 15-years, Jim Kukral has helped small businesses and large companies like Fedex, Sherwin Williams, Ernst & Young and Progressive Auto Insurance understand how find success on the Web. Jim is the author of the book, “Attention! This Book Will Make You Money“, as well as a professional speaker, blogger and Web business consultant. Find out more by visiting www.JimKukral.com. You can also follow Jim on Twitter @JimKukral.
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