Author – Allan Dib

The Black Swan – Nassim Taleb
The E-Myth – Michael Gerber
The book of survival – Anthony Greenback

Introduction

This book summarized in one sentence: “The fastest path to the money.”

“Money isn’t everything, but it ranks right up there with oxygen.” – Zig Ziglar

There’s almost no business problem that can’t be solved with money.

When you’ve taken care of yourself, you have a chance to help others.

One of the major mistakes made by most small business owners: They go from working for an idiot boss to becoming an idiot boss.
Just because you’re good at the technical thing you do doesn’t mean that you are good at the business of what you do.

A business can be an amazing vehicle for achieving financial freedom and personal fulfillment, but only for those who understand and master this vital distinction and figure out what they need to do to run a successful business.

Vilfredo Pareto – The Pareto Principle aka 80/20 Rule

• 80% of the land of Italy was owned by 20% of the population
• 80% of a company’s profits come from 20% of its customers
• 80% of road traffic accidents are caused by 20% of drivers
• 80% of software usage is by 20% of users
• 80% of a company’s complaints come from 20% of its customers
• 80% of wealth is owned by 20% of people
• Woody Allen even noted that 80% of success is showing up.
  The Pareto Principle predicts that 80% of effects come from 20% of causes.

So essentially you can cut out 80% of the stuff you're doing, and you'll still get most of the result you're getting.

success = more money with less work.

The 64/4 Rule
Take 80% of 80 and 20% of 20 and end up with 64/4.
So 64% of effects come from 4% of causes.
Put another way, the majority of your success comes from the top 4% of your actions.

Or put yet another way, 96% of the stuff you do is a waste of time (comparatively).

Struggling business owners will spend time to save money, whereas successful business owners will spend money to save time.

Leverage is the best kept secret of the rich.

If you want more success, you need to start paying attention to and expand the things that give you the most leverage.

By far the biggest leverage point in any business is marketing.

When it comes to business, the reason we want to focus so heavily on marketing is because that’s where the money is.

In every business I created and ran since, the marketing plan ended up being the 20% part of the business planning process that produced 80% of the results.

What is marketing?
If the circus is coming to town, and you paint a sign saying “Circus Coming to the Showground Saturday,” that’s advertising.
If you put the sign on the back of an elephant and walk it into town, that’s promotion.
If the elephant walks through the mayor’s flower bed and the local newspaper writes a story about it, that’s publicity.
And if you get the mayor to laugh about it, that’s public relations.
If the town’s citizens go to the circus, you show them the many entertainment booths, explain how much fun they’ll have spending money at the booths, answer their questions and ultimately, they spend a lot at the circus, that’s sales.
And if you planned the whole thing, that’s marketing.
Yup it’s as simple as that—marketing is the strategy you use for getting your ideal target market to know you, like and trust you enough to become a customer. All the stuff you usually associate with marketing are tactics.

Strategy is the big-picture planning you do prior to the tactics.

You can’t do anything worthwhile successfully without both strategy and tactics.

Good, even great, products are simply not enough. Marketing must be one of your major activities if you’re to have business success.

When does a prospect find out how good your product or service is? The answer of course is—when they buy. If they don’t buy, they’ll never know how good your products or services are.

“Nothing happens until a sale is made.” – Thomas Watson

A good product or service is a customer retention tool.
However, before customer retention, we need to think about customer acquisition (AKA marketing). The most successful entrepreneurs always start with marketing.

Do NOT follow the same type branding, mass marketing, and ego-based marketing as the large corporations do. They have completely different agendas and marketing budgets.

Small and medium businesses should do direct response marketing. It’s focused on the specific problems of the prospect and aims to solve these problems with education and specific solutions. It is also the only real way for a small business to affordably reach the consciousness of a prospect.

• it’s trackable
• it’s measurable
• it uses compelling headlines and sales copy
• it targets a specific audience or niche
• it makes a specific offer
• it demands a response
• multi-step, short-term follow-up
• maintenance follow-up of unconverted leads

The marketing journey has three distinct phases:

1. Before
2. During
3. After

Before

• People are labeled prospects.
• The successful completion of this phase results in the prospect knowing who you are and indicating interest.
• Get them to know you and indicate interest.
  During
• People are labeled leads.
• The successful completion of this phase results in the prospect buying from you the first time.
• Get them to like you and buy from you for the first time.
  After
• People are labeled customers.
• The after never ends.
• Results in a virtuous cycle where the customer buys from you repeatedly and is such a fan of your products/services that they consistently recommend and introduce you to new prospects.
• Get them to trust you and buy from you regularly and refer.

ACT 1 – The “Before” Phase

Selecting your Target Market

To be a successful small business marketer you need laser-like focus on a narrow target market, sometimes called a niche.

• Being all things to all people leads to marketing failure.
• This doesn’t mean you can’t offer a broad range of services, but understand that each category of service is a separate campaign.
• Once you dominate one niche, you can expand your business by finding another profitable and highly targeted niche, then dominate that one also.
• So figure out the one thing your market wants a solution to, something that they’ll pay you handsomely for. Then enter the conversation they’re having in their mind, preferably something they go to bed worrying about and wake up thinking about.

How to identify your ideal customer

• Who is your ideal target market? Be as specific as possible about all the attributes that may be relevant. What is their gender, age, geography?
• What keeps them awake at night, indigestion boiling up their esophagus, eyes open, staring at the ceiling?
• What are they afraid of?
• What are they angry about?
• Who are they angry at?
• What are their top daily frustrations?
• What trends are occurring and will occur in their businesses or lives?
• What do they secretly, ardently desire most?
• Is there a built-in bias to the way they make decisions? (Example: engineers = exceptionally analytical)
• Do they have their own language or jargon they use?
• What magazines do they read?
• What websites do they visit?
• What’s this person’s day like?
• What’s the main dominant emotion this market feels?
• What is the ONE thing they crave above all else?

Create an avatar
An avatar is a detailed exploration and description of your target customer and their lives.

“Max Cash:
Max is 51 years old.
He owns a successful financial planning business which has grown steadily over the past ten years. Previously, he had a career working for KPMG and some other large corporates before he went out on his own.
He has a bachelor’s degree and an MBA.
He’s married has two teenage daughters and younger son.
He lives in an upper-middle-class suburb in a five-bedroom house which he’s been in for about four years. He drives a two-year-old Mercedes S-Class.
He has eighteen staff members and operates from an office building which he owns. His office is a fifteen-minute drive from home.
The business has an annual turnover of $4.5M which is predominantly service-based revenue.
He has no IT support person on staff and delegates most of the IT and tech responsibilities to his PA, Angela Assistant.
“He spends about four thousand dollars per month on the various pieces of software used in his industry which give him access to the most current financial data. He knows the software helps him and his clients, but he also knows that there are many features that are going underutilized.
His office server and systems are a hodgepodge of various computers mostly installed by his software vendors and which have had very little maintenance since installation. The backup systems are archaic and have never actually been tested.
He’s a golf nut. His office is decorated with golf memorabilia. There are photos of him playing golf throughout. The desktop background on his computer is a beautiful panoramic photo of Pebble Beach Golf Links.
In his spare time, unsurprisingly, he likes to play golf with his friends and business associates.
He reads The Wall Street Journal, Bloomberg Businessweek and his local newspaper.
He uses an iPhone, but it’s mostly used for phone calls and a little bit of email.”

“Angela Assistant:
Angela is 29 years old.
She’s single and lives in a two-bedroom rented apartment with her cat Sprinkles. She takes public transport to work and commutes daily for about thirty minutes.
Angela is organized, always smartly dressed and very enthusiastic.
Angela has been working for Max as his PA for the last three years when the growth of the company had really started to accelerate. She’s his right hand, and he’d be totally lost without her.
She organizes Max’s calendar, sets up his laptop and phone, makes and takes calls on his behalf and much, much more. She’s the glue that holds Max’s business together, and she does a bit of everything from ordering stationery to IT to HR.
Although her title says PA, she’s more than that. She’s really the office manager and probably even to some extent the general manager. She’s the one that staff go to when something needs to be fixed, ordered or organized.
She’s tech savvy but really out of her depth when it comes to the more technical and strategic aspects of IT systems.
“After work, she usually hits the gym for a workout and loves to watch new shows on Netflix. On weekends, she catches up with friends and loves the nightlife.
She spends a lot of time online reading beauty, fashion and celebrity gossip blogs.
Angela spends most of her discretionary income on going out, entertainment and online shopping which is like an addiction for her. Even though Angela is quite well paid, she always runs short of money, which has resulted in her having about $10,000 worth of credit card debt. She knows she needs to be better with money, but there always just seems to be too many temptations for her to resist.
She’s always glued to her phone, constantly texting and using social media apps.

To take a step further, find an actual image to visually represent your avatar ”

Chapter1 Action Item:
Who is your target market?
Fill in square #1.

Crafting your Message

To start marketing on purpose:

1. What is the purpose of your ad?
2. What does your ad focus on?

The rule of thumb is one ad, one objective.

If something in the ad isn’t help you achieve that objective then it’s distracting, and you need to get rid of it. That includes your company name and logo.

Rather than trying to sell directly from your ad, simply invite prospects to put their hand up and indicate interest. This lowers resistance and helps you build a marketing database—one of the most valuable assets in your business.
You need a very clear call to action—not something wimpy and vague like “don’t hesitate to call us.”
You need to be clear on what they should do next and what they will get in return. Also, give them multiple ways to take that action.

Speak to the needs and problems of the prospect.

Direct response marketing focuses heavily on the needs, thoughts, and emotions of the target market.

Know exactly what you want your ad to achieve and the exact action you want your prospect to take.

Developing a unique selling proposition

The chance of you getting your marketing perfectly right – message to market and media match on the first go is impossibly small.
Even the most experienced marketer will tell you they hardly ever hit a home run on their first go. It takes several iterations.
It takes testing and measuring to finally get your message to market and media match right.

Marketing is an uphill battle if you haven’t clearly clarified first in your mind why your business exists and why people should buy from you rather than your nearest competitor.

You need to develop your unique selling proposition(USP).
The entire goal of your USP is to answer this question:
Why should I buy from you rather than from your nearest competitor?

A good USP is designed to attract prospects before they’ve made a purchasing decision.

Positioning yourself as a commodity and hence being shopped on price alone is a terrible position for a small business owner to be in.

Answering yourself these two questions is the path towards marketing and financial success in your business:

1. Why should they buy?
2. Why should they buy from me?

The uniqueness doesn’t have to be in the product itself.
It would be fair to say that there are very few truly unique products.

The uniqueness may be in the way it is packaged, delivered, supported, or even sold.

Discover what result they are actually buying.
Once you understand this, you then need to craft your unique selling proposition based on the result your prospects want to achieve.

How CD Baby creates a remarkable experience for the customer and a viral marketing opportunity for themselves instead of a normal boring confirmation email:

“Your CD has been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow.
A team of 50 employees inspected your CD and polished it to make sure it was in the best possible condition before mailing.
Our packing specialist from Japan lit a candle and a hush fell over the crowd as he put your CD into the finest gold-lined box that money can buy.
We all had a wonderful celebration afterward and the whole party marched down the street to the post office where the entire town of Portland waved “Bon Voyage!” to your package, on its way to you, in our private CD Baby jet on this day, Thursday, June 6th.
I hope you had a wonderful time shopping at CD Baby. We sure did. Your picture is on our wall as “Customer of the Year.” We’re all exhausted, but can’t wait for you to come back to CDBABY.COM!!”

By charging higher prices, you attract a better quality client.

Bad marketing is highly product-focused and self-focused.
Good marketing especially direct response marketing, is always customer and problem/solution focused.

We want to be remembered for what problems we solve.

Good marketing takes the prospect through a journey that covers the problem, the solution and finally the proof.

Elevator Pitch
“You know (problem)? Well what we do is (solution). In fact (proof).”

Crafting your Offer
It’s your job to create an offer that is exciting and radically different from that of your competitors.

2 great questions to think about when you’re crafting your offer are:

• Of all the products and services you offer, which do you have the most confidence in delivering? If you only got paid if the client achieved their desired result, what product or service would you offer? Phrasing it another way—what problem are you sure that you could solve for a member of your target market?
• Of all the products and services you offer, which do you enjoy delivering the most?

Some supplemental questions that can help you craft your offer include:

• What is my target market really buying? (e.g. people don’t really buy insurance, they buy peace of mind)
• What’s the biggest benefit to lead with?
• What are the best emotionally charged words and phrases that will capture and hold the attention of this market?
• What objections do my prospects have, and how will I solve them?
• What outrageous offer (including a guarantee) can we make?
• Is there an intriguing story we can tell?
• Who else is selling something similar to my product or service, and how?
• Who else has tried selling them something similar, and how has that effort failed?

One of the main reasons marketing campaigns fail is because the offer is lazy and poorly thought out. It's something crappy and unexciting like 10% or 20% off.

The offer is one of the most important parts of your marketing campaign, and you need to spend much of your time and energy on structuring this correctly.

What does my target market want?

“If I had asked people what they wanted, they would have said faster horses.” – Ford

Analyze what your target market are actually buying or looking for.

Look at products and categories that are tending on marketplaces(Amazon, eBay, PDD, JD, TB, etc)

Analyze search engine queries. Topics trending on social media and industry news sites.

How to create an Irresistible Offer:

• Value
  What is the most valuable thing you could do for your customer?
  What is the result which takes them from point A to point B that you can take them through while making a good profit?
  This really is the crux of your offer.
• Language
• Reason why
  You need to justify why you’re doing this.
  You need to answer the question: what’s the catch?
• Value Stacking
  Where possible to make the bonuses more valuable than the main offer.
• Upsells
• Payment plans
• Guarantee
• Scarcity
  You have a limited supply, limited time, limited resources.

Target the Pain

They want pain relief, not features and benefits.

If you package it up in a way that takes away my pain, then you've won my business.

Your goal is to be a problem solver, pain reliever and turn any comparison with your competition into an apples-to-oranges comparison.
People are much more willing to pay for a cure than for prevention.
Targeting existing pain rather than promising future pleasure will result in much higher conversion, much higher customer satisfaction and lower price resistance.
Look for pain points in your industry and become the source of relief.

Copywriting for Sales

Almost no other skill will reward you more richly than the ability to write compelling words.

Emotional direct response copywriting uses attention grabbing headlines, strong sales copy and compelling calls to action.

The fact is people buy from people, not from corporations.

Copywriting is salesmanship in print.

You need to write your sales copy as though you were talking directly to a single person.

People love authenticity, personality, and opinion. Even if they don’t agree with you, they’ll respect you for being real and open.
Being yourself and bringing out your personality will help you stand out in a sea of sameness and monotony.

We’re extremely interested in what other people are doing and saying.
Add video to your website.
Use social media.

People are craving something new, something entertaining, something different.

The most common compelling words:

• Free
• You
• Save
• Results
• Health
• Love
• Proven
• Money
• New
• Easy
• Safety
• Guaranteed
• Discovery

A one word change in your headline can dramatically alter the results you achieve.

Always remember, people buy with emotions first and then justify with logic afterward.

Trying to sell to their logical brain with facts and figures is a complete waste of time.
The five major motivators of human behavior, especially buying behavior are:

• Fear
• Love
• Greed
• Guilt
• Pride

Fear, especially the fear of loss is one of the most powerful emotional hot buttons you can push in your sales copy.

If you sell something that is in the best interest of your prospect or customer, then you are actually doing them a great service by using this powerful selling tool.

Enter the Conversation already going on in your Prospect’s Mind
We all have a conversation going on in our mind, all the time.

Before you ever write a single word of copy, you must intimately understand how your target market thinks and talks. The kind of language they use and respond to. What kind of day they have and the conversation that goes on in their mind. What are their fears and frustrations? What gets them excited and motivated?

In your sales copy, never blame your prospects for the position they are in.

“The enemy in common” is a great way of leveraging the “it’s not my fault” mentality. Take something relevant from your prospect’s blame list, side with them and tie it into a solution you have to offer.
A sample headline that an accountant could use:
“Free Report Reveals How To Reclaim Your Hard Earned Cash From The Greedy Tax Man”
This is a great way of bonding with your prospect while offering them a solution.

How to Name your product, service or business

• If you need to explain the name, that’s an automatic fail.
• Title should equal content.
• If the name doesn’t make it automatically obvious what the product, service, or business is it’s a terrible name.
• All the big brands spend hundreds of millions of dollars in advertising to educate people about what they do. How much are you willing to spend to do the same?
• By using a non-obvious name, you’re starting from behind and then have to make up for by spending a lot of money on advertising to rectify the situation.
• The reality is no matter how clever your name is, very few people will go to the trouble of trying to decipher its meaning or origin.
• What’s even worse is that being “clever” often creates confusion and works against you.
• If you confuse them you lose them.
• Always choose clarity over cleverness.
• Don’t ask friends or family on your clever new name. They’ll of course praise your idea and compliment you, which feels nice, but it’s unlikely to be truly helpful.

Chapter2 action item:
What is your message to your target market?
Fill in square#2.

Reaching Prospects with Advertising Media

What gets measured gets managed.

Be ruthless with your ad spend by cutting the losers and riding the winners.

Hire experts that specialize in whatever media you decide is right for your campaign; they’re worth their weight in gold.

Our primary concern is return on investment.

One of the massive advantages of targeting a niche is that your marketing becomes much cheaper.

Lifetime value and customer acquisition cost are two of the key numbers you need to know to measure marketing effectiveness.

A successful marketing campaign has to get 3 vital elements right:

1. Market: The target market you send your message to
2. Message: The marketing message or offer you send
3. Media: The vehicle that you use to communicate your message to your target market ex: radio, direct mail, tele-marketing, Internet, TV, etc

One of the most valuable things I see in social media is being able to gauge customer emotions toward your business and engage with vocal customers who offer either praise or complaints in public form.
A side benefit of this is social proof.

Remember, people buy from people.

Email marketing
Building a database of email subscribers plays a central role in your online marketing.

Lead capture and lead nurturing are two critical stages of the marketing process.

Despite the growth and popularity of social media, your database of email subscribers remains one of the most important elements of your online marketing strategy.

Key dos and don’ts when it comes to email.

• Don’t spam.
• Use a commercial email marketing system.
• Email regularly.
• Give them value.
• Automate.
  Email is a very powerful and personal media channel. It allows you to create compelling campaigns with a high degree of automation. When done right it can be a valuable part of both an online and offline media strategy.

Postal mail or "snail mail" can be an absolute differentiating factor for marketing. No one is doing it.

If your marketing is working and consistently giving you a positive ROI, then you should crank it up and throw as much money as you can at it.

If your marketing is working (i.e. giving you a positive return on investment) why on earth would you limit it with a budget?
If I was selling $100billsfor$80, wouldn’t you buy as many as you could possibly get your hands on?
That’s why I always say have an unlimited budget for marketing that works.
There is a concern about being able to handle the demand. Firstly, that’s a great problem to have. Secondly, if you’re truly receiving more demand than you can fill, this is the perfect opportunity to raise your prices. This will instantly boost your margins and bring you a better quality of client.
The only time to set a marketing budget is when you’re in the testing phase. In the testing phase I advocate that you fail often and fail cheap until you have a winner. Test your headline, your offer, your ad positioning and other variables.

One is the most dangerous number in your business. It makes businesses brittle.

• Does your business have only one source of leads?
• One major supplier?
• One major customer?
• Rely on one type of media?
• Offer one type of product?
• A single point of failure?

Have at least five different sources of new leads and new customers.

Paid media/marketing:

1. Is extremely reliable.
2. Forces you to focus on ROI.

Chapter3 Action Item:
What media will you use to reach your target market?
Fill in square#3.

Act II – The “During” Phase

Capturing Leads

In direct response marketing, the purpose of your advertising is to find people who are interested in what you do, rather than trying to make an immediate sale from the ad.
When you interested leads respond, you put them on your follow-up database so that you can build value for them, position yourself as an authority and create a relationship built on trust.
After doing this, the sale comes (if it’s right for them) as a natural consequence.
This will take a mindset shift but is an absolutely vital concept to understand.

The vast majority will not be ready to make a purchasing decision on the very day they read your ad, even if they are interested in what you do.

If you don’t put them in a database then you’ve lost them. They might have been ready to buy in a month, six months or a year.

All other things being equal, the more money you can spend marketing to high probability prospects, the better your chances are of converting them to a customer.

The goal is simply to generate leads. Avoid the temptation of trying to sell from your ad.

The other big reason you want to avoid selling directly from your ad: at any given time (on average) about 3% of your target market are highly motivated and ready to buy immediately. These are the prospects most mass marketing hopes to convert. However, there’s a further 7% who are very open to buying and another 30% who are interested but not right now. The next 30% are not interested and finally the last 30% wouldn’t even take your product if it was free.

If you tried selling directly from your ad, you’d be targeting only the 3% who are ready to buy immediately and losing the other 97%.
By creating a lead generating ad, you increase your addressable market to 40%. You do this by capturing the 3% who are immediate buyers but also by capturing the 7% who are open to talking as well as the 30% who are interested but not right now.

A sample campaign might have an offer of a free report or video series promising to educate your clients about the things they need to be aware of, how to avoid being ripped off and what they should look for. Once your prospect receives the value-packed information, you’ve delivered on all the promises made in your advertisement.

Some businesses have built a marketing infrastructure which constantly brings in new leads, follows them up, nurtures and converts them into raving fan customers.

Build infrastructure—a system whereby a cold lead enters one end and a raving fan customer comes out of the other.

The CRM system is your marketing nerve center. It’s where you manage your goldmine.
You want all your leads, all your customer interactions to end up in your CRM.

Chapter 4 Action Item:
What Is Your Lead Capture System?
Fill in square#4.

Nurturing Leads

Joe Girard, Guinness book of world records, the world’s greatest salesman
“He sent a personalized greeting card every month to his entire list of customers. In January, it would be a Happy New Year card and inside it would say, “I like you.” He would then sign his name and stamp it with the details of the dealership where he worked. In February, his list might get a Valentine’s Day card. Again, inside the message was the same, “I like you.”
He would vary the size and color of the envelope, and each was hand-addressed and stamped. This was critical to getting past the postal mail equivalent of spam filters, where people stand over the trash can and discard all the items that look like ads, scams, credit card offers and other types of junk mail. He wanted his customers to open his envelope, see his name and the positive message inside and feel good. He did this month after month, year after year in the knowledge that they would eventually need a new car. And when they did who do you think would have been top of mind? By the end of his career, he was sending out 13,000 cards per month and needed to hire an assistant to help him. By the time he was a decade into his career, almost two-thirds of his sales were to repeat customers. It got to the point where customers had to set appointments in advance to come in and buy from him.”

When it comes to marketing, the money is in the follow-up.

Immediately after you’ve captured a lead, they should go into your system where repeated contacts are made over time.

Accept the fact most people will not be ready to buy right away.

How to be a marketing farmer:

1. Advertise with the intention of finding people who are interested in what you do. Do this by offering a free report, video, CD, etc. Any kind of relevant, free information that presents a solution to a problem they have will work. This positions you as an expert and as an educator rather than a salesperson. Which would you prefer to buy from?
2. Add them to your database.
3. Continually nurture them and provide them with value. For example, a newsletter on your industry or information on how to get the most from whatever it is you do or offer. Important point—do not make this a constant sales pitch. That will become old very quickly. Be sure to offer them valuable information with an occasional pitch or special offer. Most important of all, be sure to keep in contact regularly, otherwise the prospect will forget you and your relationship will then be relegated to that of a cold prospect and pest salesperson.

Send your high probability prospects a continuous stream of value until they're ready to buy.

Assets deployed in marketing infrastructure:

• Lead capture websites
• Free recorded message info lines
• Newsletters
• Blogs
• Free reports
• Direct mail sequences
• Email sequences
• Social media
• Online videos and DVDs
• Podcasts and Audio CDs
• Print ads
• Hand written notes
• Email auto-responders
• SMS auto-responders
• Shock and awe packages

Are you building your marketing infrastructure?
Are you constantly building on and improving your marketing systems?

Lumpy mail
Which of your envelopes is going to get opened first and get the most attention? If you’re like most people it will be the lumpy one.

Grabbers

• trinkets purposefully inserted for attracting attention
• often set the theme of your sales letter. If done right, it gets great results.
• These items generally don’t get thrown away.

Shock and awe package

• perhaps one of the most powerful direct response marketing follow-up tools in existence.
• so powerful it essentially annihilates your competitors and puts you in a class of your own.
• Even when your competitors find out what you’re doing, they usually won’t dare copy you. Practically no one does this.

Some things you can and should include in your shock and awe package:

• Books – people are conditioned to almost never throw books out.
• DVDs or CDs introducing yourself and the specific problems your product, service or business solves for your prospect.
• Testimonials from past clients in video, audio or written form.
• Clippings from media mentions or features about you, your product or industry
• Brochures, sales letters or other marketing material
• Independent reports or whitepapers proving your point or demonstrating the value of your type of product or service.
• A sample of your products or services. Coupons or gift cards with a face value on them can be powerful as it feels like “wasting money” to just throw these out. They also motivate the prospect to try you out.
• Unusual trinkets and gifts that entertain, inform and wow. I’ve heard of everything from personalized coffee mugs to iPads being included.
• Handwritten notes thanking them for inquiring or recapping a conversation you’ve had with them over the phone.

Shock and awe pack should do three things:

1. Give your prospect amazing, unexpected value
2. Position you as an expert and trusted authority in your field
3. Move your prospect further down the buying cycle than they would otherwise have been”

It takes 3 different “types” to make a business work:

1. The Entrepreneur – This is the ideas person or visionary. They see a problem or gap in the market and are willing to take risks so they can solve that problem for a profit. They make it up. E.g. Seeing a gap in the market for a particular product and hiring all the right people needed to get it up and running.
2. The Specialist – This is an implementer of your vision. They could be an engineer, a venture capitalist, a graphic designer. They take your vision, or part of it, and help make it reality. They make it real. e.g. Building the factory to produce the product, getting the tooling right, creating the product packaging.
3. The Manager – They come in every day and make sure things get done, work gets delivered and the vision is on track. They make it recur. Running the factory, making sure shipments get out on time, making sure quality is right.

You need a marketing calendar:

• Daily: Check social media for mentions and respond appropriately.
• Weekly: Write a blog post and send the link in an email blast to email list subscribers.
• Monthly: Mail customers and prospects a printed newsletter or postcard.
• Quarterly: Send past customers who haven’t purchased recently a reactivation letter.
• Annually: Send all customers a gift basket thanking them for their business.

After you’ve locked in what needs to be done and when, the only other question you need to answer is who will be responsible for delivering on each of these scheduled marketing activities.

You need to consider event triggered marketing activities:

• You meet a potential prospect at a business event: Transcribe their details from their business card into your CRM system and put them on your monthly newsletter/postcard list.
• You get an inbound sales inquiry: Send them a handwritten note and your shock and awe package.
• You get a new email list subscriber from your blog: Add them to your CRM system which automatically emails them an educational five-part video series over the next thirty days.
• Received a customer complaint: After the issue is resolved send them a handwritten apology note and a $100 discount coupon on their next purchase.

Make these event triggered activities someone else’s responsibility.

Spend a lot of time doing things that aren’t your area of expertise or aren’t a good use of your time can quickly become a very expensive exercise. Remember you can always get more money but you can never get more time.

If someone else can do it 80% as good as you can, then you should delegate it.

Some timeless wisdom from Jim Rohn:

• Learn how to separate the majors and the minors. A lot of people don’t do well simply because they major in minor things.
• Don’t mistake movement for achievement. It’s easy to get faked out by being busy. The question is: Busy doing what?
• Days are expensive. When you spend a day you have one less day to spend. So make sure you spend each one wisely.
• We can no more afford to spend major time on minor things than we can to spend minor time on major things.
• Time is more valuable than money. You can get more money, but you cannot get more time.
• Time is the best-kept secret of the rich.

Chapter5 Action Item:
What is your lead nurturing system?
Fill in Square#5.

Sales Conversion

The people you’re selling to have been bitten too many times and now think all dogs bite.

Trust is the major barrier to a sale.

Once you’ve reached a level of competence, the real profit comes from the way you market yourself.

Joshua Bell one of the world’s best violinists, makes upwards of The most beautiful sounding violin ever crafted, a Stradivarius, is played by him, the finest violinist in the world. He participated in a social experiment to play his violin for one hour at a local subway and earned a grand total of $32. This is the power of positioning: $1,000 per minute.

If you’re a professional musician and you position yourself as a subway busker, your “customers” will treat you as such and pay you accordingly. Conversely if you position yourself as a professional concert performer you attract a totally different customer and once again get paid accordingly.
In other words, people will generally take you at your own appraisal—unless proven otherwise.

Transition from being a pest to a welcome guest.

You need to move towards the model of… educate, educate, educate. With education, you build trust.
With education, you position yourself as an expert. With education you build relationships. With education you make the selling process easier for both buyer and seller.
The first thing you do is offer your readers something of value that educates them about a problem they have. A free report, free CD, free DVD, online webinar, etc., are all great educational tools you can use.

You must stop selling and start educating, consulting and advising prospects about the benefits your products and services deliver as opposed to each and every competitor in your category.
If you think about yourself as a doctor who diagnoses and then prescribes solutions to people’s problems, then I’m sure you’d be much more comfortable selling under those circumstances—as a trusted, educated, knowledgeable, qualified, confident, capable adviser.
That is exactly who you need to be perceived as in the eyes and mind of your prospects—someone who educates them and solves their problems.

You must see yourself as an agent of change, a creator of great value, benefit and advantage in the lives of your customers and prospects.
Become the expert in your category or industry.

Consultative, advisory selling is the most cost-effective, the most enduring, the most impactful and the most powerful marketing strategy a business owner could ever devise.

Stop selling and start educating and advising.

Pricing Strategy
If you position yourself as an educator and a trusted advisor price becomes much more flexible.

If you aren’t thinking about the marketing or the psychological implications of price then you are likely leaving huge sums of money on the table.

• Reverse Risk with “Unlimited“
  Most people are extremely risk averse.
  If you can remove this risk for them, you greatly increase the opportunity for a sale.
  An excellent strategy for removing this risk is to offer an “unlimited” variation of your product or service at a fixed price.
• The Ultra High Ticket Item
  If you don’t make them available among your normal product mix, then you’re definitely leaving money on the table.
  A rule of thumb often used is that 10% of your customer base would pay ten times more and 1% of your customers would pay one hundred times more.
• Resist the Urge to Discount
  Unless you have a very special loss leader strategy, try to avoid discounting at all costs.
  A better option than discounting is to increase the value of your offering. Bundling in bonuses, increasing quantities or adding peripheral services can be of genuine value to your customer but cost you very little to do.

As a business owner you should make it abundantly clear to all staff that sales are the lifeblood of the business and that everyone is in sales.
Every staff member at some stage will have the opportunity to positively or negatively influence a sales opportunity.
One of the best ways to get this point across is to have an incentive program where sales get rewarded regardless of the position of the person they came from. You might even discover some hidden sales talent.

“try before you buy”

Offer a payment plan or finance for your higher ticket items.

Chapter6 Action Item:
What is your Sales Conversion System?
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ACT III – The “After” Phase

Delivering a World Class Experience

Tribe: a group of people connected to one another, connected to a leader, and connected to an idea. For thousands of years, human beings have been part of one tribe or another.

One of the things that separates extraordinary businesses from ordinary ones is that they lead tribes, tribes of raving fans, not just customers.

Qualities of extraordinary businesses that become tribe leaders:

• They continually focus on wowing their customers which turns them into raving fans.
• They create and foster lifetime relationships.
• They make it easy and fun to deal with them.
• They create a sense of theater around their products and services.
• They have systems so that they can reliably and consistently deliver a great experience.

When it comes to delivery of your product or service, we need to give our customers not just what they want but what they need.

Our goal is for our customers to achieve results.

You need to spoon-feed them through the process of getting results.

A common misconception is that the innovation has to be in the actual product or service itself.

Innovation can be applied to how the product is priced, financed, packaged, supported, delivered, managed, marketed or a myriad of other elements related to any part of the customer experience.

One area where businesses fail spectacularly is creating a sense of theater.
Your customers don’t just want to be serviced. They want to be entertained. Give them what they want by creating a sense of theater around your product.

Could you create a sense of theater and publicity by demonstrating your ordinary product being used in unusual ways?

The purpose of any new technology in your business is to eliminate friction.

As small business owners we must ensure technology is being used in our businesses in ways that remove friction rather than creating it.

How can you use technology to reduce the friction between you and your customers?
What tasks can you streamline and make seamless?
More importantly how can you ensure technology isn’t hindering your relationship with your customers?
Here’s how I do it. Think of each piece of technology as an employee.

• What am I hiring this employee to do?
• What are its key performance indicators (KPIs)?

Every smart entrepreneur uses technology with very specific goals in mind that are measurable.

Part of delivering a world class experience to your customers is becoming a voice of value to them. You need to be a thought leader in your industry. Someone who is sought out for opinion and comment. You do this by becoming a creator of content.

One of the major distinctions between successful entrepreneurs and “wantrepreneurs” is that successful entrepreneurs are predominantly content creators whereas wantrepreneurs are predominantly content consumers.

Education marketing is twofold:

1. It’s about positioning yourself as an authority in your target market. Everyone wants to hear from an authoritative source. By being a content creator, you position yourself as an authority and expert in your niche.
2. It’s about building relationships—becoming the trusted advisor to your target market rather than just a salesperson. By regularly releasing valuable, educational content to your target market, you lay the foundation for a relationship—and after all who would you prefer to buy from, a trusted source who has been giving you a lot of value or a stranger who wants to make a quick sale?

Tell your audience about all the effort that goes into delivering your product or service.
In your sales copy and even in your packaging give them the details of how you painstakingly prepare or manufacture your product.
Tell them about your skills, how you acquired them, all the checks and balances you have in place and how you train your staff.
The backstory to your product or service is an absolutely essential part of your marketing. Don’t let your efforts and skill go unnoticed. It gives them an assurance that there is substance and quality behind your product. This is especially important if you are pitching a premium product or service.

No one cares about your logo, company name, or some dubious claim about being the leader in your industry.
They want to know about what your product will do for them, and your backstory is essential to this.

Products make you money, systems make a fortune.

There are 4 main types of businesses systems you need to create regardless of what type of business you’re in. You’re almost guaranteed to make a fortune if you can create scalable and replicable systems in these 4 areas of your business:

• Marketing system – Generate a consistent flow of leads into the business.
• Sales system – Lead nurturing, follow-up and conversion.
• Fulfillment system – The actual thing you do in exchange for the customer’s money.
• Administration system – Accounts, reception, human resources, etc. Support of all the other business functions.

Business systems start with documented procedures and processes that allow your business to run without you. Most often this is in the form of checklists. Collectively these materials are referred to as an operations manual.

Benefits to implementing systems in your business:

• It builds a valuable asset.
• Leverage and scalability.
• Consistency.
• Lower labor costs.

Your job as an entrepreneur is to be an innovator and a builder of systems.

3 step process:

1. Identify all of the roles in your business
2. Define what tasks each role performs.
3. Create checklists for properly completing these tasks.

Chapter7 Action item:
How will you deliver world class experience?
Fill in square#7.

Increasing Customer Lifetime Value

A person is 21 times more likely to buy from a business whom they’ve bought from in the past compared to one they’ve never purchased from.

The real profit is in figuring out how to sell more to existing and past customers and increasing their lifetime value:

1. Raising prices
2. Upselling
3. Ascension
4. Frequency
5. Reactivation

Raising Prices
You’ll generally find your customers are far less price sensitive than you imagine. Especially if you’re positioning yourself correctly.

The key to raising your prices in a way that makes it palatable to your clients is giving them a reason why.
Explain to them the increases in quality of your product or the increased input costs that you’ve borne. Explain to them the benefits they’ve already received from your offering and how they’ll benefit from your future innovations.

Upselling
‘Would you like fries with that?’

A great way of framing an upsell is 'most customers who bought X also bought Y.'

When the prospect is ‘hot and heavy’ and in the buying state of mind, they’ll be much more receptive to other offers to buy.

Upselling can instantly increase your customer life-time value.

Ascension
At a minimum you need to have a “standard” and a “premium” option. Also have an ultra high ticket item among your product mix.

Frequency
Reminders. Posts, email or SMS to remind them to do business with you again. Send them regular reminders.

Give them a reason to come back.

ex: Give a voucher worth $30 for every hundred dollars spent with an expiration date.

This is completely different to discounting. This encourages, and almost forces future purchases.

Help them buy repeatedly with subscriptions.
Sell monthly subscriptions to cosmetics, underwear, fruit, socks, pet food, etc.

If you sell consumables of any type, couldn't you turn your product into a subscription service?

Reactivation
Reactivation campaign:

1. Start by going through your customer database and pulling out names of past customers whom you haven’t heard from or who haven’t bought from you for a while. Obviously, you want to filter out any bad customers who you don’t want back.
2. Create a strong offer to induce them back to you. A gift card, coupon or free offer with a strong call to action usually works well.
3. Contact these past customers and ask them why they haven’t returned. If it’s something you did wrong and if it’s appropriate offer an apology and describe what corrective action you’ve taken. If they reactivate and start buying from you again, follow up with them afterwards to make them feel special.

Some great reactivation campaign themes and headlines are “We Miss You” or “Have We Done Something Wrong?”

Key numbers of marketing you need to know:

• Leads. This is the number of new leads that come to your business
• Conversion Rate. This is the percentage of leads you converted into paying customers
• Average Transaction Value. This is the average dollar amount that leads spend with you
• Break-even point. This is the dollar amount you need to make to keep your doors open. It encompasses such things as rent, staff, utilities and any other ongoing operating expenses.
  All of these numbers are typically measured on a monthly basis but depending on the size of your business you could measure them weekly or even daily.

The key point being that measuring, managing, and improving your key marketing numbers even by an incremental amount can have a massive impact on the end result.

Small hinges swing big doors.

Your business should have a subscription or recurring element to it.
Key metrics you need to measure and manage in a subscription or recurring business model:

• Monthly Recurring Revenue. Your total recurring billings. You want this number to be growing over time. If it’s flattening out or declining you may have either a churn problem or a customer acquisition problem.
• Churn Rate. This is the percentage of recurring customers that cancel subscriptions or stop buying from you. Filling the bucket is great but not if it’s leaking at a rapid rate.
• Customer Lifetime Value. The key metric that that this chapter is focused on. Increasing this number is where the money is.
• Measuring, managing, and improving your numbers daily, weekly, or monthly is key to building a high growth business.

4 categories of your customer base:

• The Tribe. This is a set of customers that are raving fans, supporters and cheerleaders who promote your business and are actively conspiring for your success. This is healthy revenue that builds your business. Growing these types of customers is the key to being successful and achieving hyper-growth.
• The Churners. Churners are customers who really can’t afford you on the basis of either time or money. Because they can’t afford you, you might have engage in overly aggressive sales and marketing tactics, overhyped promises or heavy discounts to get them to sign up. Then when they discover they’re not a good fit, they churn out. They leave you and if you have too many of these, you catch a “churn flu,” which can be fatal to your business. These types of customers can also create brand problems for your business as they often turn around and go back out into the marketplace and tell everybody that you’re a liar or label you as dishonest.
• The Vampires. Unlike Churners, Vampires can afford you but you can’t afford them. They consume a massively disproportionate amount of resources compared to your average customer while paying the same amount as other customers do. They usually aren’t content to work with the teams that you have in place. They always need to talk to the CEO and they often terrorize and manipulate the CEO into terrorizing the team in their interest. They just suck the blood right out of your business.
• The Snow Leopard. This might be your biggest customer, one who makes up a very large chunk of your revenue and pays you a lot of money. They’re exquisite and beautiful but extremely rare and almost impossible to replicate. Most businesses have a client like this. They also tend to be customers who are fun to work with. They’re so wonderful that the team and the leaders in the business love to spend a lot of time with them. Overall they’re a bad investment because they’re so rare and therefore don’t represent a great growth strategy.

Another more formal way to categorize customers is using the Net Promoter Score (NPS). It is a way to measure customer loyalty and satisfaction.
“How likley is it that you would recommend your company/product/service to a friend or colleague?”
-Add survey questions at the end of sales and manage the people who are wiling to promote for us CMS.

Without exception, across multiple businesses and industries, found that it’s the low value, price sensitive customers who complain the most, waste huge amounts of your time and who always need to be chased for payment.
The high value customers who are the most profitable tend to pay on time, treat you with respect and value your services

Don't give the squeaky wheels oil. Replace them.

Chapter8 action item
How will you increase your customer life value?
Fill in square#8.

Orchestrating and Stimulating Referrals

You need to actively orchestrate and stimulate referrals, rather than just hope and wait for them to happen.
-> Make it more deliberate and reliable.

Most people have about 250 people in their lives who are important enough to invite to a wedding or funeral.

“Ms. Customer, it’s been such a pleasure working with you. If you know anyone who’s in a similar situation as yourself we’d love you to give them one of these gift cards which entitles them to $100 off their first consultation with us. One of the reasons we’re able to keep the cost of our service down is because we get a lot of our business through referrals from people like you.”

“Ms. Customer, I’m going to do an awesome job for you, but I do need your help also. Most of our new business comes through referrals. This means that rather than paying for advertising to get new clients, we can just pass the cost savings directly to you. We typically get about three referrals from each new customer. When we’re finished working together and you’re 100% satisfied with the work we’ve done, I’d really appreciate it if you could keep in mind three or more other people that we could also help.”

One awesome strategy involves creating a gift card or voucher for your products or services.

Look at who has your customers before you and after you and find ways to creating value in both directions. This can become an important source of new customers and new revenue for your business.

Brand: is the personality of a business.

• What attributes make up its personality?
• What’s its name?
• What does it wear? (i.e. design)
• How does it communicate? (i.e. positioning)
• What are its core values and what does it stand for? (i.e. brand promise)
• Who does it associate with? (i.e. target market)
• Is it well-known? (i.e. brand awareness)

What came first, the sales or the brand awareness? The sales of course.

The best form of brand building is selling. If a brand is the personality of a business, what better way is there for someone to understand that personality than by buying from you.
Branding is something you do after someone has bought from you, rather than something you do to induce them to buy from you.
Brand equity is the goodwill you build up that compels people to do business with you rather than your competitor.

Chapter9 Action item:
How will you orchestrate and stimulate referrals?
Fill in square#9.

Conclusion

As entrepreneurs, we only get paid for bringing value to the market, not for time.

The money we make as entrepreneurs is an automatic side effect of creating value.
If our focus is on bringing value to the market, it will stop us from making all kinds of foolish mistakes.
We’ll treat customers with the long-term in mind rather than being transactional or trying to make a quick buck.
The products we create or the services we deliver won’t be half-baked.
Focusing on the cause (value) rather than the effect (making money) will lead to much greater long-term success.

The more times we create value by getting, retaining and satisfying a customer, the more we get paid.

Winning in business requires you to have a relentless focus on the activities that deliver value.

For the entrepreneur time is not money. Value is money.

In times past almost all the value of a business was in its physical assets. Things like real estate, plant and equipment, inventory and distribution infrastructure.

Today, almost all the value of a business is in the eyeballs it has access to and the customer base it has acquired.

Constantly ponder these questions:

• What business do I need to be in?
• What technologies are coming that are going to disrupt my industry?
• How can I take advantage of the coming changes in technology rather than fight them?

What resources are you investing in emerging technologies and trends in your industry?

Having a culture of innovation, anticipating what’s coming in your industry and running some skunkworks projects in your business will give your business a massive competitive advantage.

One of the commonalities amongst high growth businesses is that they have a strong focus on marketing.
Conversely, failed and struggling businesses either neglect marketing altogether or do random acts of marketing with no plan or structure.

If you’re serious about business success then now’s the time to take decisive action. It’s time to decide to become a great marketer and transform yourself from a business owner to a marketer who owns a business.
Once you make this exciting transformation you and your business will never be the same again.

Marketing is the master skill of business.

Knowing and not doing is the same thing as not knowing.