The Value of a Single Customer

The Value of a Single Customer

When a person walks through the doors of your business, in-person or online, and purchases something from you for the first time, at that moment, they become your customer, your patient, or your client.

The question is, what is the value of that individual to your business or practice?  Is it the amount of profit from this one-time purchase or, is it the potential lifetime value they create?

Most experts will tell you that the cost to acquire a new customer is ten times more than what it costs to keep them.

With that said, most successful business owners have a well thought out advertising plan, or at minimum, an advertising budget intended to acquire and attract “new” customers, but very few have a plan to keep their “current” customers, patients, or clients.

Since we agree that keeping them is far less expensive than acquiring them, understanding the true Lifetime Customer Value should be enough to persuade you to at least consider implementing a plan to keep them.

There are 4 factors we need to consider when calculating a “Lifetime Customer Value”:

1) Average profit per individual sale including upsells and add-ons

2) # of purchases per year

3) # of years they will remain a customer

4) Word-of-Mouth – average # of people they persuade to do business with you

Paid media advertising is the best way to acquire new customers. Word-of-Mouth advertising is the best way to multiply your customers, and over-the-top customer service is the best way to ensure your customers become repeat customers.

Understanding the “Lifetime Value” of your customers will inspire you to create a strategic plan to serve each customer with more passion.

Click here to get our Lifetime Customer Value Worksheet to help you calculate the LCV of your customers.
 
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The Right Way to Use Radio Advertising

The Right Way to Use Radio Advertising

Most businesses don’t know how to use radio advertising to increase their business.

I know, that’s a pretty “out there” declaration coming from the guy who has spent a few decades in radio advertising and currently leads the most successful local advertising sales team in our city.

But it’s because of my background that I have the experience to know that Most businesses don’t know how to use radio advertising to increase their business.

It’s not just my experience but because of my background, training and research, because I know others who have been involved in radio longer than me that don’t understand what I’m going to tell you today.

Most advertising sales people are taught how to sell advertising.

That’s important but do you know what’s more important?

Knowing how to use advertising to help a business market themselves to reach their goals.

This month I reviewed with my sales team the difference between Brand Building Advertising Campaigns versus Event Oriented Advertising Campaigns.  I’ve discovered that at least 80% of the people who are wanting to sell you advertising, are clueless about this so you are about to become smarter than them.

Too many advertising campaigns wrongly focus on short term sales when they really should building  brands.

For example, how often do you buy a car?  A quick Google search told me that the average person keeps a car for 6 years.  My wife and I each have a car so on average, you could say we are likely to buy a car every three years.

Most car dealerships advertise sales.  They are usually annoying ads, stereotypical sleazy used car guys come to mind when I think of most of the ads I’ve seen or heard.

Since 2013 my wife and I have bought 4 cars, which puts us above average.  Three of those 4 cars were to replace a car we’d worn out. Only one was because I wanted to upgrade my transportation.  But no matter what the reason for buying another car, it never was because of a sale that I heard in an advertisement.

I used to buy all my cars from a friend who had an impeccable reputation.  The two cars my wife and I had in 2013 were from him.  Then he retired from the business and it was time to do some true car shopping the way most people do.

We did our research online to see which used vehicles would fit our needs.  All four cars I bought passed three criteria:

  1. The car was recommended on all the review sites we researched.
  2. The price was appropriate, not too low or too high
  3. I either trusted the dealership and/or the salesperson.

I passed on some that cost less because of the lack of trust.  Even the last car I bought this year was from a dealership that I was unsure of, but I trusted the salesperson, a friend that I’ve known for more than a dozen years and his “brand” is excellent.

Most radio advertising campaigns, heck probably most advertising campaigns on any media, should be brand building, not event oriented sales campaigns.

When I was talking with my sales team about this in a recent meeting, I shared with them a five minute video featuring this guy with a funny accent.  He had the research that showed over time businesses that focused on Brand Building instead of the short term sales event advertising messages multiplied their investment.  Those that did it the other way never built a trusted reputation and the sad part is that when they had competition that was trusted, they usually lost.

In reality, you need both.  The last line in the video says, “Aim for Fame”.  The very best ad campaigns use a formula that I learned when I first went from the being on the radio to developing advertising campaigns and it was a four step process that I learned in Detroit at WMUZ and Crawford Broadcasting.

  1. Image Building
  2. General Benefits
  3. Specific Benefits
  4. ReCreation Benefits

I’ll do another article and podcast focused on this formula but the basics is before you make a sales push with your advertising, you need to spend time introducing the company or product.

I’ll wrap this up with a quote from Jeff Schmidt, Senior VP with RAB:

Radio works to create awareness of a brand BEFORE people need it. That is the very purpose of advertising:To help a business become known before they are needed. People don’t respond to ads; they respond to needs. When the guests at a restaurant discover they are hungry and want to go out, that’s when they search their minds for brands they already know. They know them because of the strength of the long-term advertising that is and has been done.

These are the concepts my Local Advertising Sales Team at WOWO Radio have been trained on and we continue to review and tweak our skills.  Want our help?  Contact me.  Scott@WOWO.com

Top of Google or Top of Mind

Top of Google or Top of Mind

In today’s changing media world, when it comes to your current customers and your future customers, is it more important to have Top of Mind Awareness or be at the top of the page on Google?

Of course, it’s great to be recognized by both customers and Google, but if your competition wins in your customers’ rankings, a good Google ranking for you won’t change their minds.

Study after study has proven that when searching on Google, people will click on a business that they “know” and are “familiar with” far more than clicking on a name they don’t know. In fact, 71% will click on a name they are familiar with before clicking on a name at the top of the page.

The purpose of advertising is to accomplish one of two things: sell products immediately or create brand awareness.

The best way to create brand awareness is to create stories that move customers from unawareness of you to awareness of you, and onto creating an emotional connection with your business or product, long before they need you. Then, and only then, can you be assured of having your name clicked on when they search for your product or service.

Einstein said, “Genius is making the complicated look simple.” Effective marketing need not be complicated.

A simple strategy of using broadcast to tell your story to create a pre-search preference for your business and using online to close the sale will create the revenue results you need to make your marketing more profitable.

Click here to receive our Ten Powerful Storytelling Tips to create stories that will have your customers choosing you when they search online.
Who Are You and What Do You Do?

Who Are You and What Do You Do?

Who Are You and What Do You Do?

Does your business name say what you do, or does it leave the public guessing?

In a perfect world, the name of a business clearly says what they do or sell…names like Valvoline Instant Oil Change or Lawn and Snow Company instantly “says” what the company does.

If your business name doesn’t say what you do, we’re not suggesting that you change the name, but, it’s not too late to develop and promote a slogan that can be every bit as strong for your identity as the name itself.

Strong slogans not only say “what you do” but more importantly describe “what” you want your business to be “known” for.

GEICO’S “Fifteen minutes could save you fifteen percent on your insurance” is a prime example of a slogan that tells the prospect “what” they want you to remember about them.  They will save you time and money!

For several years, I had an advertising partner that had a name that was confusing because it made them sound like they were an investment company, but they really were an alternative real estate company.  Problem was when the company was created, the name the used was geared to attracting people who wanted to invest in Real Estate, but when I got involved, they were looking for their end users, people who were buying or selling homes.  Our campaign worked because we used WOWO radio to tell listeners of our afternoon talk show, exactly what they did.  The message was out there every hour, 15 hours every week, between 3pm and 6pm.

If your business name says what you do but you don’t have a strong slogan, a good, strong advertising campaign can cure some of these ills. Today, there are simply too many names, too many competitors, and too much fragmentation for you to be remembered for your name alone.  On my radio station we have 7 or 8 heating and cooling companies.  You can’t just toss your name out there and hope that you get some of the business.  I work with 4 of them and each one has a different and distinct slogan and advertising campaign that reflects their unique selling points.

A strong slogan, used consistently over time, will differentiate you in your prospects’ minds and give you a competitive advantage.

Having strong Top of Mind Awareness (TOMA) is even more important in the age of electronic media. Studies suggest that 70% of people will click on the first business they are aware of or have a preference for, rather than clicking on the first name revealed at the top of the search engine page.

In the new electronic era, radio and internet are the perfect combination.  Having strong TOMA (Top of Mind Awareness) is always the best SEO (search engine optimization).

Click here to receive “7 Secrets of Successful Slogans” that will help you create better Top of Mind Awareness for your business.

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One Size Does NOT Fit All

One Size Does NOT Fit All

Sometimes business people want a proposal from me before we even talk about what they need or want.

That’s like going to a doctor and sayin, “Just give me some pills, the kind that everyone else is buying”.

That is more than ridiculous, it is stupid and dangerous.

But I don’t blame the business people who ask, I blame the advertising sales people who walk around selling packages.

Before I get to far ahead of myself, this is part of my continuing series I am doing this summer based on Roy H. Williams Advertising Oversimplified.

Today I am examining his 6th point:

Two ways to use mass media:(A.) Used consistently, mass media will cause your company to be the one customers think of immediately – and feel the best about – when they finally need what you sell.(B.) Used short-term, mass media will give urgency and importance to a special event when you purchase high repetition for a period of time, usually between 1 and 14 days.

I actually prefer to do the A Option because it is really what most businesses need.

However I can do Option B when it makes sense.

What’s the reasoning between the two?

Mass Media, or at least the mass media that I work with, WOWO Radio in Fort Wayne, has a larger mass of listeners than your business can handle.

But that’s okay because we as a group of people don’t really do most things at the same time.  We buy a car only when we want to buy a car or have to buy a car.  We buy gas for our cars only when we need to, not everyday, and not at the same place.  Advertising can not change this… usually.

So the purpose for advertising with the A Option is to create Top Of Mind Awareness for you and your business.  In nearly any buying opportunity, I have a choice of what to buy and where to buy.  

The last time we were selling our house, I had a problem because I knew 26 realtors, none of them were favorites of mine, so instead of listing our house with any of them, I invited all of them to find a buyer for my house.  The one who brought us a buyer, earned his commission.

That’s not the way it should work.

Go back to the car buying situation and I have had a favorite used car dealer that I have bought a half dozen cars from.  He usually gets the first opportunity to sell me my next car.  Dale is Top Of Mind with us.  However the last two cars I purchased from someone else because Dale, my favorite used car dealer did not have what I wanted.  The last two cars I bought from other dealers that I also trusted, but it was a combination of the right car from a reputable dealer that got me into those last two cars.

Top Of Mind Awareness and Preference is what you build with a regular advertising schedule on mass media like WOWO Radio.  It’s up to you to be able to convert the people we send you into paying customers.

Option B that Roy talks about I also use when appropriate.  A great example is a concert.   Right now I have a concert promoter from Canada that is bringing in a group next month and once the concert is over, there in no need for them to advertise.  So we have a more focused short term game plan in place.

A problem I see with many of the advertising sales people out there is that they don’t understand what I just shared with you regarding when to use Option A and when to use Option B.

In many cases, the best is a combination of the two options, and that takes strategic thinking, research and planning.  Very few of the ad sales people that try and get you to buy their “packages” go through this planning and thinking process.

I do.

And I can help you.

Just contact me:  Scott@WOWO.com

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