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the danger of customer acquisition

Why Customer Acquisition is Dangerous

the danger of customer acquisition

Listen to this post! Click play to hear George & Mary-Lynn on The BIGG Success Show Podcast (Duration 5:48)

Is it dangerous to think about customer acquisition? We say yes – it may have been fine in the past but the best customers today can’t be acquired.

[George] As a money guy, I loved it when I first heard the term “customer acquisition.” I could easily wrap my mind around the concept. But I’ve come to realize it’s a way of thinking which hurts the bottom line today.

We think the concept is dangerous because you can’t “acquire” customers. They can’t be bought. They can’t be owned.

[George] I learned that the hard way: My biggest customer replaced us, but not with a competitor. They got bought out and the new owners brought the service we had been providing in-house. They did it themselves.

If you’re with us – if you agree that customer acquisition is a dated concept, what can you do?

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Small Businesses Can Sell the Black Friday Way

black_fridayHere we are … it’s Black Friday – the day when, historically, retailers get into the black. So they’re hoping that people shop, shop, shop.

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marylynnBlack Friday has almost become a sporting event. I just don’t enjoy shopping that much so it’s not for me. But plenty of people sure do enjoy trying to find that irresistible bargain.

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georgeI don’t like standing in line for anything but I especially don’t like doing it to spend money! Crowds are great – at a concert or a ball game!

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In honor of Black Friday, we want to talk about merchandising in your business. We’ll discuss four lessons you can learn from retailers about selling your wares.

Price check in Lane 123
If you’re a true retailer – you buy goods at wholesale and resell them – it’s easy to determine your cost.

If you’re a service business, it’s more difficult. But you have to know how much anything you sell costs or you risk charging too little. A lot of small business owners fail for this very reason. 

Attention K-Mart Shoppers. There’s a blue light special on …
K-Mart had scrapped this program. They brought it back earlier this year.

Surprise your good customers with a special deal now and then. We heard about a car dealer who would occasionally pick a customer whose car was getting serviced and give them their service that day for free. It created tremendous goodwill.

It would be a customer who had bought the car from him and did all their service with him. In other words, a customer on whom he made a lot of money. Occasionally giving them free service was just a small rebate.

But it paid dividends to the car dealer as well – he got a lot of word of mouth advertising.

Manager on duty to the front of the store please
The front of the store makes us think about the psychology of buyers. Have you ever noticed how most grocery stores have a fairly similar layout?

Research shows that most people walk into a store and turn to the right. So what do you want to put in the front of the store on the right side?

High margin items, of course!

In a grocery store, you notice the milk and eggs are usually in the back – nowhere near the bread. They want you to walk through the whole store so you see more things you might buy on impulse.

Every business has customers who behave in similar ways. Get to understand how you can naturally show your customers more of your products and services.

Clean up in aisle 5
Just about every business that handles inventory ends up with some slow moving items. You need to clean them out so you can get new inventory in that will turn faster so you make more money.

The mistake some small business owners make is being afraid to discount an item – especially for lower than cost. But the sooner you get an item that isn’t selling off your shelf, the better.

Another version of this is displaying a discounted item with a full-priced item. Think about it …

How many times do you see a skirt that’s on sale displayed with a full-priced top?

You like the combination so you buy it. You may be able to do the same type of thing in your business.

Retailers have become pretty sophisticated at discounting items to draw people to their store. They know the law of averages means these people will buy a lot more than just the sale items. Find the lures to bring in your customers and you’ll be a bigg success!

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Thanks so much for reading our post today. Please join us next time when we’ll look at the only three ways to get more done. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

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Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00526-112709.mp3

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Shape Shifting Leads to Bigg Success

dog-shape-shifting.jpgLast time, we discussed the two ways to create wealth: other people’s money and other people’s labor (i.e. their time and talent). Historically, there’s been more focus on other people’s money as the lever to riches. Now, other people’s labor holds more promise.

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Today’s show extends that concept and is inspired by one of the characters from the HBO hit series, True Blood. Sam Merlotte, who owns the bar, is a shape-shifter. He can change forms – from human to dog and back.

So here’s a little behind the scenes here at Bigg Success: we often get asked how we get ideas for our shows. We’ve been thinking about this shape-shifting thing for some time as a possible fun topic. Then we saw a Harvard article about a new business strategy.

The words “a shape-shifting enterprise” leapt off the page. Voila … a show was born!

Back to the article – it discusses how many large companies are starting to outsource core activities in order to focus resources on solving customer problems.

The author postulates that the future value of companies will be the sum total of all their arrangements. Let’s emphasis that – using words we use more often here at Bigg Success – the future value of businesses, both large and small, will be in the total value of its relationships.

But a key thing to keep in mind is that businesses don’t have relationships; it’s the people in those businesses who have relationships.

You may have a relationship with a customer who has a problem. How many other customers like this customer have the same problem? With how many do you have relationships?

Once you’ve identified that, who in your network can best solve that problem? By becoming the customer’s go-to person (or company) – by delivering the right product or service at the right time for the right price, you’ll create value for your business.

The Harvard article we talked about references a Fortune article about how Chinese and Indian companies are structuring themselves. The answer: they’re positioning themselves to be shape-shifters!

Shape-shifting is a key for us, as entrepreneurs, to survive and thrive in all economic conditions. It extends well beyond outsourcing. It’s an even deeper relationship, which will create more opportunities for small businesses to work with large companies.

To become a shape-shifter:

Watch your operating leverage. The more fixed costs your business has relative to its total costs, the greater your degree of operating leverage. Just like with financial leverage, higher operating leverage can work against us if things take a downturn.

That’s one of the secrets to being able to be a shape-shifter. If you keep your fixed costs low, you can quickly maneuver your organization to take advantage of opportunities that may present themselves.

Seek out strategic alliances. Explore opportunities to collaborate or joint venture with other people and organizations. The do-it-all-yourself mindset is so yesterday. Focus on what you do best and work with people doing what they do best. This is another key to shape-shifting.

Work with anyone and everyone where it’s mutually beneficial, including your competitors. You may find ways to do more together than either of you can do on your own.

Sometimes you may take the lead; sometimes they may take it. You don’t care. You’re shape-shifting yourself to bigg success!

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Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

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We thank you so much for reading our post today. Please join us next time when we’re “getting to know you.” Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00417-061609.mp3

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(Image in today's post by wundel)

A Costly Cost Cutting Measure

cutting_costs.jpgBigg Success is life on your own terms. Today, we’ll focus on one of the five elements of bigg success – money.

We’re all looking for more ways to save money. That’s understandable. However, we need to think about not just survival, but “surthrival.”

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Many business owners and managers, small and large, are cutting back on their advertising. This cost-cutting practice can be very costly in the long run.

Could not advertising cost you $1.5 million?

A McGraw-Hill study, about the recession in the early 1980s, found that companies that maintained or increased their advertising had sales 256% higher three years after the recession ended.

Think about that … two companies, each with a million dollars in sales go into a recession. The company that holds tight on its advertising, or perhaps even increases it, will do over $2.5 million within a few years after the recession ends if the second company, the one that cut its advertising, treads water.

Signaling the end of your business

A recent study by Ad-ology found that 56% of the people surveyed thought that retail stores that cut back on advertising must be struggling.

In other words, your advertising sends a “signal” to both your existing and potential customers. Just like a company cutting back on its dividend, you’re telling the public you don’t expect your future to be bright when you cut back on advertising.

The signal is so strong that 15% of the people surveyed thought it meant that the firm who cut back on its advertising wouldn’t be in business much longer.

The time – money trade-off

One of the other elements of bigg success is time. If you’re a regular here you’ve heard it before, but it bears repeating:

If you don’t have money, you have to spend time. It’s part of the price of bigg success.

So if you really feel the need to cut back on how much money you spend on advertising, it will pay to spend more time promoting your business.

That means networking

Depending on your business, you may primarily build relationships offline or online. However, you will probably be well-served to do both. Integration is one of the keys to success in business today.

If you have employees with down time, make good use of it. Tell them that you want to keep spreading the word so you all surthrive.

What you ask them to do will also depend upon your business. You may have them put out door knob hangers or give away free samples of your product. Perhaps they can make some phone calls or send e-mails to your list of customers.

Where to place your focus

We stated it subtly in that last sentence. We should emphasize it – focus on your existing customers to get the best return on your investment (of money and time).

Research has shown that it costs between five to eight times as much to get a new customer as it takes to keep an existing one. So, at the very least, make sure you’re communicating with your existing customers at least four to six 6 times a year.

Find out what their problems are. Find a solution – even if you can’t solve it directly, help them find the answer to build your relationship.

The most cost-effective way to grow your business

Building relationships with your best customers is the most cost-effective way to grow your business. When you can “wow” your customers, they will …

  • buy more
  • buy more often
  • tell others

Segment & tailor

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marylynnWhile we’re talking about your existing customers, can you segment them into smaller groups so you can tailor your communications more precisely?

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georgeI used to own a heating and cooling service company. We got our technicians to note the age of the furnace or air conditioner when they were in our customer’s home or business. Then we wrote a letter specifically to this group. We generated over $300 of sales for every letter we mailed!

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This highlights another point we alluded to earlier – get your staff involved. Help them understand how it not only makes their jobs more secure, it also means you continue to grow as a company so there will be more opportunities for everybody. That’s bigg success!

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Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

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Thanks so much for reading our post today. Please join us next time when we discuss what the underlying meaning of “I don’t have enough time.” Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00411-060809.mp3

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(Image in today's post from hisks)

How to Start a Business

green_light.jpgA lot of people have an idea for a business, but they don’t know how to turn that idea into a money-making enterprise. Bigg success is life on your own terms. If that means owning your own business, we encourage you to get started – even if it’s just part-time.

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Talk with potential customers to find out if your idea might make money. Tell them about your product or service.

Ask questions. What do they think about it? Do they like it? What would they change? Is it priced correctly?

The difference between “would” and “will”

Imagine yourself being asked these two questions: Would you buy this product? Will you buy this product?

There really isn’t a consequence if you say “yes” to the first question. However, your pocketbook will take a hit if you respond affirmatively to the second one.

As you talk with potential customers, keep in mind that you’re getting hypothetical answers. It’s play money. Once you launch, you’re looking for real money.

Research is great, but it’s important to understand its limitations.

We have a friend who was a very successful business person before he retired. He had a great solution to the question, “How do I get started in business?” He said:

“Find a customer.”

If you have a customer, you’re in business! What do you do next? Get another customer!

You don’t want to depend on just one to support your business. When you have two customers, get a third.

His advice didn’t end there. Would you like to know when to hire an employee? When you’re too busy to do all the work yourself!

We love it! He had reduced this complex subject down to its core.

So do you want to start a business? Find a customer.

However, there’s something you must find before you try to find a customer:

Find an unmet need

We’ll discuss three ways you might go about doing that:

  • Do you need something?
    This is one of the best ways to find unmet needs. If there’s a product or service that you could really use, you might have discovered an opportunity!

    You may have purchased a similar product or service, but it’s not quite right. You’ll deliver a product that completely meets the need that you’ve noticed.

  • Does someone you know need something?
    It’s the same idea as the first one. The trick here is to listen closely to what people around you are saying.

    You may hear them register a complaint or show dissatisfaction with a product or service. Your two ears may help you find your business!

  • Does your area need something?
    When you travel to other regions of the country or even to other countries, are there products or services there that aren’t offered in your area? There are a lot of examples of people who have done this successfully.

    We caution you to be careful – there are differences in tastes and preferences between regions and countries. However, the world is getting smaller all the time!

So do you want to start a business? Find an unmet need. Then find a customer.

Getting your bigg start really doesn’t have to be any more complicated than that!

If you’re already in business, how did you find your bigg opportunity?

Please share that with us by leaving a comment below, calling us at 888.455.BIGG or sending us an e-mail at bigginfo@biggsuccess.com.

Thanks so much for sharing your time with us today!

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Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

___

Please join us next time when we’ll talk about fun time with family for free. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00384-043009.mp3

Related posts

How Opportunity Often Presents Itself

Get in the Loop to Gain a Competitive Advantage

6 Factors to Help You Succeed When Opportunity Knocks

(Image in today's post by asifthebes)