Helping Small Businesses Owners Use Marketing Leverage to Boost Revenue and Profits

Recently, I was investigating why one of my clients email open rates were so low, hovering between 10% and 20%.

I started by examining the offers.

Every Wednesday, the same promotion promotion goes out to all of their 40,000 customers. To begin with I knew that the open rates were lower because they were treating their entire list of 40,000 as one big mass.

This company has over 30 unique products. Each product can be modified in dozens of ways. They also have a few additional services that not everyone on the list would be interested in. (Can you see where I’m leading? Segmentation.) But, even without segmentation I still felt the open rates were too low.

I moved to examining the subject lines. They were pretty good. Don’t see a problem there. I moved on to the creative. That looked good to. (The only thing I added was to make sure there was a visible call to action in each email, but that affects Click-Through Rate (CTR) not open rates.)

In the course of this I noticed something unusual. It looked like no one who opened an email or clicked a link had joined the list in the last few months… in fact, no one from the last half of the year.

Digging deeper I discovered that no one had been added to the list since July 2009!

The IT dept had been in flux during that time and when they switched from one email provider to another the process to add emails to their list from the website to their email service provider never happened. (And, no one double checked to see that it did!)

It turned out to be an additional 12,000 emails addresses!

Their list went from 40,000+ to about 53,000 almost overnight!

I segmented their list by date added and wrote an “Oops!” email and let them know what happened, apologizing, giving them a special offer and letting them know they’d soon start receiving the offers/information they asked for. Open rates were 38%.  Now, that’s more like it!

Problem solved? Not quite.

I had the resident CRM guru write a Workflow that sends a reminder email to a manager every 2 weeks to double-check to make sure email addresses are being added to the list daily.

With that solved I was still bothered that all offers were going out to the entire list. If you ask yourself WHY people don’t answer emails it basically boils down to Relevance. You aren’t sending them information they are interested in.

But, how do you get that Relevance in? When your email gathering methodology is to simply capture first name and email address, how can you possible know what they are REALLY interested in? (Remember, they have 30+ products and several other services that only apply to certain types of customers.)

You could always survey.

You could use CRM to create lists so that a person who has never ordered x-product in their history with you doesn’t get a special deal on it. But, just because they never ordered it from you doesn’t mean they wouldn’t ever… so, doing that may kill future sales possibilities.

How? How? How?

We need a way to figure out if they are at least INTERESTED in it. The company had been sending out promotional emails to their entire list every Wednesday like clockwork.

The email service provider (ESP) records the opens, the clickthroughs and the forwards. Ha! Now, we are getting somewhere. Do you open an email you are not at least somewhat interested in?

Through the ESP’s reports we can begin doing a little more segmentation of interest.

We did just that. The company has a particularly high-margin service that maybe a third or more of their clients SHOULD be taking advantage of but aren’t. Two emails have gone out regarding this service and have brought in a great deal of money (and almost all of it is profit).

The plan is to take the OPEN reports from both of those emails and mark those people as interested in this new service. About 15,000 unique opens on the two emails gives them PLENTY of prospects to boom that aspect of their business. Now, we can do more sophisticated follow-up via email, direct mail and outbound calling.

That’s the quick-n-dirty, let’s-get-somethin’-in-place-now solution. The email open rates have improved a great deal as have the Click-through rates. But, they are just a drop in the bucket. Now, customers will start getting less and less IRRELEVANT email messages which they eventually end up ignore altogether and getting more targeted and relevant emails that they open, read and benefit from.

The future holds even more possibility as my Omniture, CRM and ExactTarget integration plans move forward for this company, yielding some REAL, hardcore segmentation and follow-up possibilities.

Jason

P.S. If you’d like me to do the same type of thing for YOUR company, don’t hesitate to call me (817)734-6609.

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The most influential management guru of all time, Peter Drucker (1909 – 2005) said “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

As a successful company you probably have the innovation function covered, but you also need good marketing. It is a must… and it is changing quicker than ever.

This could be good news for you. Everyone is trying to understand how marketing strategy and advertising is changing in this new environment of the web, social media and the decline of traditional media outlets.

Or, it could be really bad. If your competitors understand this area before you do it could vault them ahead and keep them ahead.

You are probably barely able to keep up with tech news as it is, fortunately there are a few great blogs you can read to begin shoring up your marketing side.

I’ve listed them below, each one for a specific reason… I have these in my feedreader and I’ve read nearly every previous post on each one.

Those blogs will do the following for you:

• Give you a sound understanding of branding and marketing strategies using real world examples (Ries),
• educate you on real world use of Social Media in today’s environment, (Chris Brogan)
• show you how a CEO uses Social Media and Web2.0 to sell more of his companies’ software (Tim Berry), and
• show you tactical and optimization (where the rubber meets the road) (Grokdotcom)

1. Ries’ Pieces. This is Laura Ries’ blog. Her and her Dad, Al Ries, have published the best marketing strategy books bar none. The only book that comes close to any of their books is “Blue Ocean Strategy” which provides a step-by-step guide to DOING what Ries’ recommends.

2. Chris Brogan. From his website: Chris Brogan advises businesses, organizations, and individuals on how to use social media and social networks to build relationships and deliver value. His recent post on “Social Media Starter Moves for Tourism” can easily be applied to selling more using Social Media.

3. Tim Berry. You probably don’t need his business plan software since you already have a functioning business. But, I think you should read his blog because he is one of the few Software company CEOs who “gets” how to use Social Media and Web2.0 to actually sell more of his company’s software. He doesn’t do it in a pushy way. He uses the “Strategy of Preeminence” to serve his target prospects.

4. Grokdotcom. They are experts at website optimization. Read it not so much for the technical skill of optimization but with an eye towards HOW they structure the experiments and the underlying strategies and principles.

As always, feel free to contact me with any questions.

Jason Bedunah

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It is a common mistake to believe that the best product wins. History tells us that is not true. In fact, it is RARELY true.

Do you remember the “New Coke” fiasco? Blind taste tests ‘prove’ that more people enjoy Pepsi than Coke. With Coke losing ground to Pepsi at an alarming rate, Coke executives created a formulation that beat Pepsi (by a large margin) in taste tests.

When they made the switch to New Coke the public outrage was so intense and widespread they quickly replaced it with the classic formula.

This means that the market leader in Colas (Coca-Cola) is no better than third ‘best’ according to blind taste tests!

We could cite example after example but the REASON this happens is because “best” is more a function of perception, not objectivity.

‘Perception’ happens in the mind.

Many entrepreneurs have crashed and burned by the belief that building something better or having ‘the best’ will give them the greatest chance of success.

The ability to create and manage perceptions is what gives you the best chance of winning. (Of course, you have to have decent quality as well or you will create Detractors who will limit your growth and make you vulnerable, “Case Study: Using the Net Promoter Score to Boost Sales and Lower Attrition Rates.”

How? Here are 5 ways to help control perceptions:

1. Develop a Core Message and Stick to It. By constantly hammering your unique point of differentiation in all communications in the marketplace you will put yourself in prime position to attract the prospects most likely to become customers. Knowing your core message also allows you to more thoroughly target the prospects who need it. If done right, you should have almost no direct competitors. Most companies should look like “almost what I need but not quite” vendors. To read more about this read “To Sell More, Focus and Diverge.”

2. Leverage Social Proof to Sell More. People are busy so they use Social Proof to help them decide quickly (or narrow their choices to a more manageable level). If their “tribe” thinks it is a good idea then it creates the perception that it must be good for them. FreshBooks has a great use of social proof on their website. They display the following graphic prominently on the right side of their web page. The sheer number is a great sign. I think they can make it better by giving the exact number… perhaps even making it a live counter.

FreshBooks' Use of Social Proof and Credibility Indicators

3. Use Credibility Indicators to Dissipate Friction. Most people have a natural friction or sales resistance. A believable credibility indicator can help alleviate that friction and make selling more of your company’s product easier. An example of a Credibility Indicator is the Testimonial. If you have strong testimonials from customers just like them it goes a long way. Almost all companies use testimonials (though very few use them effectively) but very, very few use another version that can be even more powerful… the endorsement from more well-known and trusted companies, advisors or category celebrities. The ‘Watch an interview with FreshBooks on Fox Business News’ provides the perception that this is not some fly-by-night website… getting an interview on Fox Business News puts you in the big leagues. I’d see about using the Fox Business News logo underneath it to give it even more impact.

4. Use Social Media to quickly nip competing perceptions in the bud. With Social Media and tools like FiltrBox it is much easier to keep a pulse on market conversations around your product/service. Joining in the conversation while it is still ongoing will allow you to tighten the feedback loop and improve any areas that are causing the negative perceptions. Conversely, you can monitor market conversations around competitors.

5. Use the Strategy of Preeminence. Become a Trusted Advisor to your client in the category of your solution. If you sell Time Management software, you should seek to educate your clients all about Time Management. If you give, give and give so well that even people who DO NOT purchase your solution are getting value and passing your information along then you will go viral. It must be all about them. They should become better at time management just by reading your sales material! This is such a different outlook but if you “get it” you will have to do a lot less “selling” to boost sales. The following quote is from marketing genius Jay Abraham from his article “The Strategy of Preeminence (Secrets to Market Domination in Your Industry)”:

The strategy of preeminence simply means that you will not let your clients buy more or less than they need to get the results they seek. It’s a powerful yet simple strategy that can transform your business.

I’m always amazed at how many business people will say and do whatever it takes to make a one time sales rather than taking time to understand the client’s desired outcome.

And then having the courage and moral obligation to tell the client what they really need.

Sure, you may end up with a smaller initial sale, but you will have made a new friend. And they will buy again and again and send you referrals.

You must set the strategy of preeminence at the beginning of your relationship before someone buys from you. You can do this by becoming a trusted friend or advisor- so this needs to be a part of your presentation.

How many of these are you doing?

Jason Bedunah

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When you use CPA networks you leverage the brains AND money of accomplished affiliate marketers to make you money. It CAN help you make more money selling your software, getting free trials or introductory offers.

Most people are familiar with Affiliate Marketing’s power to drive sales. About 6 weeks after I set up the affiliate program for a recent client they were making around $3000 per day in extra sales. It is probably over $10,000 per day now.

But, I think CPA networks could be just as good in the long run. Particularly IF you offer a free trial AND you deliver a great user experience. The way CPA networks work is you (the advertiser) pays the affiliates (also called Publishers) a set cost for each action a user performs. The action can be filling out a lead form, starting a free trial, downloading a white paper or any other action that can be measured reliably.

You provide the creative they use so you remain in control of the messaging and branding.

The top affiliates are absolute masters at finding out how to drive leads to your website.

But, will it work out for you?

To properly test CPA networks I suggest analyzing all the current ways a customer gets to your website (SEO, PPC, Affiliates, Banners, etc). Then, find out what percentage from each channel becomes a paying customer. Also, you want to use the data to make an assumption about the Total Customer Value from those channels (for more information see “The Biggest Marketing Mistake I See Software Companies Make”).

What you are trying to do is figure out how much the “Action” is worth to you and pay as much as you can to entice the affiliates leverage their expertise, brains and money to promote your offer. But, pay as little as you need to because you have to make a profit.

While it sounds like a lot of gritty, dirty work it is actually not that difficult when you put the right tools in place and get your team trained in USING the input to make decisions.

Your Affiliate and Banner channels are most likely to approximate your CPA numbers.

Once you have these numbers run a test through the CPA network and watch the results.

You are looking at ROI.

If you do your tracking right, you can look at individual affiliates and discover if the leads they generate for you are profitable or not. If not, end the relationship with them.

When you use CPA networks you leverage the brains AND money of accomplished affiliate marketers to make you money. It CAN help you make more money selling your software, getting free trials or introductory offers.

For a few thousand dollars you can discover if this is a rich new source of sales for you.

Worth a test, don’t you think?

Jason Bedunah

The Leader in Helping Software Companies Sell More Software Using Social Media, Web2.0 and Direct Response Advertising.

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For those of you who don’t know about The Net Promoter Score (R) it is one of the best (and simplest) metrics to help a company grow.

I’ve written a case study about it here Case Study: Using The Net Promoter Score in Software Companies, ISVs and MicroIsvs to Boost Sales and Lower Customer Attrition Rate

And, I’ve come across a nifty little primer on it that takes only about a minute to read and get the ‘gist’ of it… It is a PDF called “The 2-minute guide to the Net Promoter Score: All you need to know about NPS in a cartoon format” and you can get it (without even giving your email address or registering) by clicking the link.

The folks at Directness BV in Amsterdam, The Netherlands created it.

Jason Bedunah
The Leader in Helping Software Companies Leverage Social Media, Web2.0 and Direct Marketing Principles to Sell More Software.

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Yes.

I believe you should be using both. As great as Twitter and Facebook are, it is still difficult to scale. It would take me about an hour to get on the phone and have one of my database marketing friends hand me the name of every man and woman in the United States who is ever likely to buy your product or service.

For example, if I had a “stop smoking” product I could buy a list of 2,455,650 and have it at my Lettershop by end of business. (36,211 people were added to this list this month.)

Try getting that level of targeting on Twitter or Facebook. You can’t… but that’s ok because that is NOT what it is all about.

So, what is it about?

It is about conversations… finding them, joining them, adding to them, pushing them forward and helping EVERYONE out in the process.

How can Twitter, Facebook and other Social Media make your Direct Marketing Campaigns more successful?

Here’s how: Along with your direct mail (or print ad) include your social media information. The way direct mail works is that only a very small percentage of people will be ready to buy RIGHT NOW… that leaves a bunch of people who ARE interested but, for some reason, just won’t move ahead right now… and, others who aren’t interested and may never be.

Direct Response Advertising is structured to get the BUY RIGHT NOW part of that group. But… what about the WILL BUY BUT NOT NOW group? It is LARGER than the NOW group. Probably five times, maybe even ten times, larger.

This is where the social media comes in. Invite them to join you. I put the invitation OUTSIDE of the main sales pitch on another slip of paper or postcard. Appeal to their self-interest… “For more tips on curbing smoking cravings follow me on Twitter/Facebook/MySpace/Wherever”

Now, when they get ready they’ll know where to find you and your campaign becomes much, much more profitable.

Jason Bedunah
The Leader in using Social Media, Web2.0 and Traditional Direct Response to help companies sell more software.

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Oh man…

My life just got easier.

Whenever I want to watch “market conversations” about a product and category I used to go to search.twitter.com and search for the product, the category, the search terms AND the major influential figures…creating a new “Feed for this query” and putting each on a tab in Google reader.

Then, I’d go to Google News… do the same thing and create Alerts. Same with blogs…etc, etc, etc.

But, now I don’t have to!!!

An ingenious piece of software has been created that does all this automatically and quickly! And, it does it with a LOT more sources than I can reasonably manage. It monitors MILLIONS of sources for your search terms and has them ready for you to peruse whenever you log in.

They monitor Social Media, Mainstream Media and Blogs. You can even add your own sources if they don’t cover them (unlikely).

It’s amazing.

I don’t have any special interest or a business consulting relationship with FiltrBox… but I DID become a customer a couple of days ago.

Imagine having someone in your company go through the blog postings mentioning your company/product and commenting corrections or adding to the conversation…

…imagine noticing a trend in user’s complaints via social media sites, investigating and responding hours later, to make sure a small hiccup doesn’t turn into a tsunami of discontent.

Watch your competitors like a hawk! Know MORE about what the market is saying about them than they do!

Hey, hopefully I’ve convinced you it’s worth a look! http://www.filtrbox.com

Jason Bedunah

P.S. If you currently use it and think it’s great comment below how you use it… Or, if you’ve used it and think it’s not all it’s cracked up to be, comment that as well.

P.P.S. Here’s a great blog post by Marc Harty on 30minutepr.com from a social media monitoring and PR stand point: “What’s Your Buzz Quotient? Social Media Monitoring with FiltrBox”

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I’ve pasted a short proposal I created for a project for a software client last year.

After studying the company for a bit I decided we needed to create better Feedback Loops between the customer’s and marketing. We had almost NOTHING in place other than a team of 10 customer service reps who, of course, only got called when the customer had a question or a complaint.

The CSRs were trained to handle the situation BUT the types of questions and the contents of the complaint weren’t being recorded in a way that could help us get to the root causes to know what to change, drive the change and, eventually, preempt the problem/complaint/question before it even occurred.

Here is the initial report I emailed to the CEO to begin discussions…

The Net Promoter Score Initiative (Rough Draft)

Main Points:

· All customers are not equal. Some customers (called Promoters) actively promote the company via positive word of mouth and referral. Others (called Detractors) HURT the company by negative word of mouth.

· A company can increase its GOOD profits by decreasing its number of Detractors and increasing its number of Promoters.

· Management needs an Operational Number related to customer satisfaction to measure, watch and improve. Traditional Customer Satisfaction Surveys don’t work. They are considered a nuisance by most customers, mainly due to their length. However, most customers don’t mind answering 2 simple questions.

· The Net Promoter Score, the % of Promoters minus the % of Detractors, provides a metric that has been proven empirically to be related to revenue growth.

o NPS = %P – %D

· On a scale of 0 to 10:

o 0 to 6 are Detractors,

o 7-8 are Passives, and

o 9-10 are Promoters.

· The NPS provides a way for management to gather information and use Root Cause Analysis to improve operations and the customer experience. By watching changes in NPS, management knows if its efforts are having an effect on customer loyalty.

· I am proposing we measure NPS at two customer contact points.

o When customers call the Call Center (The Call Center NPS)

o By surveying a percentage of completed orders from 7 days ago (The Completed Order NPS).

§ The information system should remove customers who have already been surveyed in the last 30(?) days to keep from becoming a nuisance.

· There are trade-offs in the two main methods for conducting NPS surveys, via phone and via email.

o Email

§ Negatives: Assumed lower survey completion rates.

§ Positives: Candor, Less labor intensive, automation.

o Phone

§ Negatives: More intrusive, less candor, more labor intensive

§ Positives: Assumed higher completion rates

· The survey method needs to use the same data gathering method at each measurement point and across time to be meaningful. I suggest using email for both The Call Center NPS and The Completed Order NPS because the Candor factor allows us to dig deeper into Root Causes.

· To establish a baseline NPS I recommend pulling a random set of customers who have placed an order in the last 3 months (starting from September 1 and working backwards 3 months) and asking those customers the Ultimate Question via email.

· The Ultimate Question: “On a scale of 0 to 10, how likely is it that you would recommend our company to a friend or colleague?”

o Follow-up question: “What’s the most important reason for the score you’ve given?

o Or, “What is the most important improvement that would make you rate us closer to a ten?”

The Call Center NPS

o After handling the customer’s concerns ask:

o At the end of the call “In a few minutes you’ll receive an email with a link to a survey that will help us improve our customer service. The survey has 2 or 3 simple questions to answer and it takes most people less than 60 seconds to finish. Can you help us by opening the email and answering the questions?” (By getting their explicit commitment I expect we’ll see higher completion rates.)

o “Okay, the subject line of the email is “X” and you should receive it shortly.

o The CSR Portal sends the email after the call terminates.

o If the answer to the “someone give you a call” question on the emailed survey is ‘yes,’ then the NPS system emails the information to the CSR Manager for follow-up.

o The CSR Manager calls, apologizes and probes for the root cause of the customer’s disappointment, develops an appropriate solution and records the root cause for future review by the management team.

Completed Order NPS

o Every day the NPS System pulls the orders shipped 7 days ago, filters out the customers who have interacted with the Call Center (because they will have been surveyed already) and sends them the NPS Survey Email.

o If the answer to the “someone give you a call” question on the emailed survey is ‘yes,’ then the NPS system emails the information to the CSR Manager for follow-up.

o The CSR Manager calls, apologizes and probes for the root cause of the customer’s disappointment, develops an appropriate solution and records the root cause for future review by the management team.

Root Cause Analysis

When a customer agrees to have someone give them a call on the survey this is a chance to get feedback and look for root causes.

Until/Unless we can find a proven follow-up system that others have used successfully with NPS I’m proposing this:

Dissatisfaction stems from a difference in what the customer expected to happen versus what actually happened. Their expectations weren’t met.

Some expectations are implied and obvious. They expect to get the product on-time, in good shape, in the right quantity and with the options they selected.

Other expectations are set by product copy or competitor’s positioning.

This plan will require a few new database tables and potentially some modifications to CSR Portal.

Conclusion

Previous companies who have implemented NPS have noted that the simple act of following up with dissatisfied customers has helped lower the number of Detractors.

Both the Call Center NPS and Completed Order NPS are calculated weekly by the system. The goal is to continuously drive this number up by creating less Detractors and more Promoters.

On a regular basis (bi-weekly?), a cross-disciplinary team get together and discuss the most common ‘root causes’ to decide which solutions make business sense and put a plan in action to effect the changes in the organization.

We can also relate NPS to RFM codes and track both over time.

You can read more about NPS in the book The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld

The program was a success and continues to yield benefits. We used the actual wording of the Promoter’s responses as fuel for the ad copy in emails, web content and direct mail catalogs.

The ad copy became more real and connected more with the prospects because
it was in their own words… we were communicating like they were!

Comments from Detractors are used to probe “Root Causes” inside the company’s operations and then develop solutions with department heads.

This INCREASED second and third purchases AND lowered the attrition rate.

Promoters now promote more… and, Detractors detract less! The result is more money for the company and better product and service for the customers.

Win-Win!

Jason Bedunah

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To sell more, focus more.

Narrowing your focus allows you to hone in on your unique point of differentiation in the marketplace AND more thoroughly target the prospects who need it.

If done right, you should have almost no direct competitors. Most companies should look like “almost what I need but not quite” vendors.

To do this, take a facet of the market or some characteristic of the solution and diverge. Is the only thing differentiating your positioning statement (aka your focus) from your competitors the name before the slogan?

If you can swap the names from the positioning statement and it still be true… you haven’t found your unique differentiation point.

But, what if your solution IS pretty much the same? Then, focus on specific segment(s) you want AND serve them… not only with your software solution but by sending them great “How to” information. Letting them know about OTHER products that can help them. Having a service presence at their conferences.

In short, they should view your company as assisting their success.

The right focus can make your software solution intensely appealing to a select group of prospects. This impacts EVERY facet of your marketing communications and makes it MUCH easier. It also DROPS the new customer acquisition cost to delightfully low levels.

A unique differentiating focus provides the following benefits:

1. Clearer direction for how you spend your time, money and resources.
2. Better “word-of-mouth” marketing across the prime prospects because they look to you as the leader.
3. Higher level of loyalty, less attrition rate because there are fewer competitors and you are committed to their success.
4. A well-defined set of criteria for identifying the prospects who can benefit most from your solution.
5. Fewer competitors, because there are fewer companies who do what you do
6. Better margins, because focused solutions command premium pricing.

When prospects understand your focus, they’ll seek your solution out! Because they feel like you are JUST for them.

Then, buying your software will be a no-brainer.

To sell more , focus more.

Jason Bedunah

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Everywhere I go I see it.

The biggest marketing mistake companies make always glares at me. But, it makes me smile, because it is easy to fix (and, it makes me look like a genius-hero).

If you fix it, you’ll immediately find your customer acquisition costs seem ridiculously small. It allows you to be much bolder than all your competitors. In fact, when completely fixed, your competitors will have difficulty keeping up with you in any way whatsoever.

Sound like a dream? It’s not.

One company who fixed this problem was able to pay affiliates TWICE the initial sale price of their product.

Imagine this: You’re a skillful affiliate and you have the choice between promoting two products that are essentially the same. Everything else being essentially equal, you get paid DOUBLE the commissions, who are you going to spend all your time, expertise and money promoting?

The one that pays you twice as much for the sale, of course.

Now, why would a company pay out TWICE what they took in from an initial sale?

They could do it because they understood the TRUE value of their customer. It’s often called “Lifetime Customer Value” or something similar. If you keep track of what your customers purchase and when, you can derive this number AND another number called “Expected Days to Break-Even.” This is how many days it takes for customers to have purchased enough from your company to cover all the marketing and fulfillment costs.

They didn’t start off paying 200% of the initial sale… No. At first, they gave affiliates what everyone else in the category was giving, still a healthy 50% of the first sale.

They went to work creating a ton of “back-end” offers for their newly acquired customers. Some of them were their own products and services… others were products/services by reputable companies they pitched to their “house list.” They received a portion of each sale as commission.

Each back-end offer added to the average Lifetime Customer Value.

By fully developing their “back-end” offers this company had a very thorough understanding of what a client (on average) would purchase and what their value looked like over time.

Armed with this knowledge they put the nail in the coffin in their category by sucking up all the affiliates with the 200% commission rate. With the affiliates wrapped up and working like mad, the company itself not only garnered more customers, it received the branding and SEO benefits of having the best keywords getting pointed to their brand (via the affiliates’ efforts). After a few months, 8 out of the first 10 for their primary keywords were affiliates of theirs!

With such huge payoffs the affiliates were also able to bid more on ppc keywords than competitors.

Within a few months, this astute company shifted the entire category towards them. They left all their competitors gasping for air… most of those with “internet-only” strategies were put out of business. Others were forced to focus on other, less profitable, aspects of the category to stay alive.

They attained the Leadership position in less than a year after implementing this strategy and haven’t looked back. Their closest ‘competitor’ is one-tenth their size. Their dominance has kept new competitors from entering which allows their profit margins to stay incredibly high.

The biggest mistake I see software companies make is NOT (usually) on their new customer acquisition efforts. It is ALMOST always that they do not increase their back-end sales pipeline to the maximum.

Consider this:

Once a customer has purchased from you, your company is no longer a stranger to be wary of… but, a valued Advisor.

Contacting these customer is MUCH more economical because you already have their contact information.

Charging a HIGHER price is easier because they already trust you.

So, what else could you sell? What “back-end” offers can you create?

The easiest is a “heavier-duty” version of whatever you already offer. Hopefully, you are already doing that.

Here’s what I like to do…

Make a list of what OTHER things a person buys when they purchase your solution. (It doesn’t have to be software… someone who buys website software may be open to logos and/or graphic design as an example. However, offering them a wireless plan wouldn’t make sense and would probably be frowned upon by almost all of them, not to mention not likely to be profitable.)

What do they purchase BEFORE… what do they purchase AFTER… what would be optional BUT highly useful to them if they did?

I begin brainstorming in this manner until I have a list of things to work with that are directly or tangentially related… If you already offer any of it but DO NOT have a process in place to make sure it is promoted regularly then mark that down to delegate to someone.

If you do not offer it but could develop it fairly quickly then add it to a future projects list. BUT, before you begin spending resources on it, I like to discover if it will pay off. So, I find someone who already sells it and become an affiliate or vendor. I send a test promotion to my list and see if it brings in profits.

Does it look promising? If so, then we continue selling it until we are ready to launch our version of it.

Using this methodology it is NOT uncommon to double or triple your Lifetime Customer Value. Knowing this AND the days to break even will allow you to become all the more aggressive on your initial customer acquisition efforts.

By knowing your numbers you will know how much to spend on front-end advertising, how much to pay affiliates to get them to work like crazy for you, how aggressive you can be on the initial product pricing.

Adopt this strategy and mindset and you, too, will soon be able to suck the lifeblood out of your market. Poor competitors, they won’t even know what hit them.

Jason

P.S. To learn more about how I find potential joint-venture partners read “Discover Rich New Oceans of Prospects for Your Service.”

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