No B.S. Maximum Referrals and Customer Retention

In the first article in the series, I introduced this book which EVERY business owner and manager needs to read and employ. YOUR business needs to have INTENTIONAL SYSTEMS in place to:

1. Retain expensive, hard-earned customers.

2. Multiply the customer base through referrals - that is, a friend brings a friend.

The No B.S. Guide to Maximum Referrals & Customer Retention makes the inarguable case that REPEAT customers and REFERRED customers deliver the highest profits - and ultimately determine the value of a business.

Dan Kennedy has been called the "Professor of Harsh Reality". He has written and coauthored dozens of books - now collected under the No B.S. Marketing brand. This library now includes the book I consider to be REQUIRED reading for my marketing clients: the No B.S. Guide to Maximum Referrals and Customer Retention: The Ultimate No Holds Barred Plan to Securing New Customers and Maximum Profits.

In this book, you will confronted with the harsh reality that NOTHING IS COSTLIER OR MORE DIFFICULT THAN GETTING A NEW CUSTOMER. You can turn this into a competitive advantage!

Here are the FACTS:

• Loyal customers buy more, and more often.

• The referred customer is far superior (buys more readily, buys more often, and remains a customer longer) than other first-time buyers.

• Lifetime Customer Value is the measurement that REALLY counts - NOT acquisition or conversion.

Obviously, you want new customers. Another painful fact is that, on average, businesses lose between 15% and 33% of their customers each year. Roughly 10% move away, die, or no longer have any use for your products and services. So 10% loss is the best case scenario.

Another 5% to 10% are strictly price shoppers. They might leave to save a nickel - but they might come back when the other supplier raises prices a dime. Either way, they don't provide any profit and likely are complainers - so DON'T spend money to attract them. There is NO security being the cheapest in town!

Less than 15% of customers leave because of a dispute or unsatisfactory service. With an intentional customer retention system, MOST of these customers can be retained, and often converted into the most loyal brand advocates.

The rest of your customers are "satisfied". But don't pat yourself on the back and relax!

"Satisfied" customers (that is, proven BUYERS) are the BEST prospects for your competitors!

"Satisfied" only means they aren't dissatisfied. They are "free agents", ACTIVELY looking for someone - anyone - to WOW them, show some UNEXPECTED appreciation!

For reinforcement of this fact, Jeffrey Gitomer wrote a book with a title that makes the case painfully obvious: Customer Satisfaction Is Worthless; Customer Loyalty Is Priceless. How to Make Customers Love You, Keep Them Coming Back and Tell Everyone They Know

You know in your GUT that repeat customers are the key to profits, growth, and long term stability. If you are continually chasing new customers, you are operating at a loss. You are chasing (desperately) tomorrow's customers to pay yesterday's bills!

There can only be ONE cheapest option. The race to the bottom is not a sustainable business model.

Most advertising has no tracking, no performance measures. (See also the article that discusses the Fourth LAW of No B.S. Marketing: There will be Tracking and Accountability.) Let's use a very basic example:

At best, you HOPE that a $1,000 series of ads produces more than $1,000 in profit while attracting new customers. But you are missing the larger picture. If you attracted 10 new clients, then each cost you $100.00.

ONLY Buyers count! You can't deposit likes, shares, or views!

Now the math gets harder: What are your OTHER operating expenses? If your fixed costs total $100,000 per year, and you have 100 customers, then each costs $1,000 per year to serve.

You gained a new customer at a REAL total cost of $1,100.00, not just the $100 per customer spent on advertising.

The reality is that most businesses are willing to acquire new customers at a LOSS.

But this is not a viable strategy UNLESS you are assured of repeat purchases, many times per year, for multiple years. What assurance do you have? What claim do you have on "your" customers?

What is the cost of a lost customer? Add up the TOTAL cost:

1. It is NOT only the $100.00 investment in the advertising promotion, in the example above, to gain a new customer.

2. You are also spending $1,000 per customer to provide the baseline services.

3. What is this customer worth? For this example, let's assume that you have a 100% markup service. That is, you earn $1,000 net profit on the $2,000 invoice. This means that every lost customer must be replaced with another $2,000 in revenue ONLY to stay even.

You KNOW that there is no STANDING STILL in business. You are either GROWING or you are DYING!

4. If your average customer buys only three more times over their "lifetime", you need to replace $6,000 in lost gross revenue.

5. If the lost customer would have referred only ONE similar customer, you also need to replace another $8,000 in gross revenue.

In the example above, the lost customer isn't worth the $100.00 spent on advertising per new account. The TOTAL cost could easily be $2,000 in lost revenue PLUS $6,000 in lost sales over the next years PLUS $8,000 in lost sales from their referrals = $16,000 or MORE!

Now - imagine that your lost customer becomes a loyal repeat customer who refers all their friends to your COMPETITION!

Your goal must NOT be first time customers but the SECOND sale!

In the No B.S. Guide to Maximum Referrals and Customer Retention: The Ultimate No Holds Barred Plan to Securing New Customers and Maximum Profits, Dan Kennedy and his coauthor, Shaun Buck (CEO of Newsletter Pro), dare you to STOP chasing new customers and BUILD an iron cage around the ones you already have. You will replace income uncertainty with reliable, sustainable income through retention and referrals.

In No B.S. Maximum Referrals you will learn how to:

• Apply the #1 best retention strategy (hint: it’s exclusive).

• Catch customers before they leave you.

• Grow each customer’s value (and have more power in the marketplace).

• Implement the three-step customer retention formula.

• Use other people’s events to get more referrals.

• Create your own Customer Multiplier System.

• Calculate the math in favor of customer retention - and the costs of neglect. How to spend pennies to bolster RETENTION and REFERRALS versus endless dollars on acquisition and conversion.

• Discover the referral-getting, sales-increasing, battle-tested tactics designed to help you build a thriving business for the long-term.

No B.S. Guide to Maximum Referrals and Customer Retention: The Ultimate No Holds Barred Plan to Securing New Customers and Maximum Profits should be the NEXT book in your library.

A word of warning: Like me, once your eyes have been opened to the TRUTH of No B.S. Direct Marketing, you can't "unsee" the waste and inefficiency of modern "advertising" and "branding"!

No B.S. Marketing covers many topics including sales, business operations, time management, as well as marketing to sub-groups like Seniors and the affluent. Most of these topics involve increasing sales revenue, while also employing direct sales methods with accountability.

But we are not finished with this crucial discussion of maximizing customer retention and employing an intentional system to generate referrals. I repeat: customer retention and referrals provide the HIGHEST return on your marketing investment! It is not even close - and yet NONE of your competitors know this "secret"!

In the next article in this series, I will outline specific No B.S. Marketing strategies and tactics to achieve these objectives. Click HERE to continue...