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February 2013



About Us


We create great looking online advertising campaigns that enhance your brand, we use scientifically proven online advertising methods to drive visitors to your website and adverts and then we optimise your site to make sure those visitors become paying customers that tell all their friends and come back for more.

02 / A Note From The Editor

Our team is different, we live in the UK so we understand how & what brits love to buy. We’re successful online entrepreneurs, world class copywriters, website optimisation specialists, online advertising mavericks and the geekiest SEO people!

03 / How To Track What’s Working In Your Business 05 / Idiots Guide To Life Time Customer Value 09 / The 5 Types Of Prospect And How To Sell To Each Of Them - Part 3 11 / How To Screw Up Your Marketing 12 / Entrepreneur Insights 13 / Get In Touch & credits


A Note From The Editor

First a warm welcome to February’s edition of the Digital Marketing Insider, produced by

If this is the first time you’ve received this a hearty welcome to you! You’re receiving this because we want to show you what we’re all about and also give you some usable strategies to help your businesses grow. This month starts a new collaboration for Roarlocal with the agency now looking after all the online marketing for Angels Den. Angels Den is the largest angel network in the UK and EU so we’re justifiably happy to count them as one of our clients. So look out for some posts from their CEO Bill Morrow about raising money for your business. Everyone in the Asher house had chicken poxs this month so it’s been chaos at home! My little daughter Charlotte had them first then passed them on to the rest of us... I ended up looking like a sunburnt Dalmatian :o) I hope you’ll enjoy reading this month’s magazine it’s jam packed with our usual level of brilliant content and as always if we can help you in any way please get in touch.

Neil Asher / CEO ROARlocal / 01273 78 21 44


How To Track What’s Working In Your Business

There’s an acronym out there: KPI. It stands for Key Performance Indicators.

by Neil Asher

1. Monthly Recurring Revenue (AKA cash flow forecasting) For a most businesses, all the investment is upfront. Before you can acquire your customers, you need to have built the product and spent the money it takes to acquire those customers. You’ll be collecting revenue as your customers come back for repeat purchases. In the long run, you’ll have a steady cash flow from these repeat purchases. But you have to survive long enough to make it that far. You need to ensure that you’re building a business that’s sustainable.

 It’s a fancy way of saying “the most important metrics for tracking your business.”

This is why we track monthly recurring revenue instead of just monthly revenue. Monthly recurring revenue is the amount of revenue you’re adding (or losing) that you expect to receive every month. It really doesn’t matter if you have a record-breaking month for revenue. The real question is “Will that revenue be here tomorrow?”

But if you research KPIs and try to figure out which metrics are the most important ones for your business, you will find HUNDREDS of these things. I regularly stumble across blog posts with headlines like “The 50 KPIs You Need to Be Tracking Right Now.”

You’ll need to dive into your finances to pull this number. But it’s one of the most important number you should be tracking if you have a business, and it will serve as your primary benchmark for progress.

Guess what? Those posts are a complete waste of time.

How many of your customers keep coming back to buy more of your stuff? Retaining customers for the long haul determines whether or not you’ll survive. And churn measures the percentage of people who leave every month.

Here’s the deal: you need to carefully select the key metrics you will use to measure the success of your business. In fact, you should avoid tracking more than 10 at a time. Limiting yourself to a few key metrics will make it a lot easier to keep track of how your business is progressing. It’ll also be a lot easier to pull out the insights that will help your business grow. When you’re tracking dozens of metrics at once, it’s nearly impossible to focus on the most important trends and act on them. There’s just too much going on. So help yourself focus, by limiting what you track from the beginning. For instance ROARlocal is a boutique digital marketing agency, we offer an outsourced digital marketing department where we map out an online strategy and then implement that strategy for a select group of entrepreneurs so what we track is going to be different to what one of my other businesses total business cart tracks. There are however some metrics that we always track for our clients and so today I’ll run through each of them for you.

The major takeaway: monthly recurring revenue is the single most important metric that a business should track. 2. Churn

If you have a high churn (double digits) for your business, there’s something fundamentally wrong with your product/service. So don’t worry about growth or marketing at all. Instead, get back into your product and fix the problem. You’ll need to reach out to your customers directly. Get in touch with people who have left and ask them why. Also get in touch with people who have been around the longest. What’s keeping them here? And start talking to customers who are thinking about buying. What do they need the most? It’s time to understand every last detail of your customers so you can fix your product. Getting your churn rate under control is the first critical step toward building a sustainable business. Don’t make this more complicated than it needs to be. Talk to customers one-onone and get a better feel for their main problems. Then you’ll be able to build a product they truly love (and get control of your churn). And to stay connected to your customers over the long run. For membership type busineses, it’s easy. Customers repurchase every month, so we build churn around that. But you might have a customer base that purchases only 2-3 times per year. In that case, you’ll want to look at annual churn rates. Out of all the new customers you acquired in 2011, what percentage of them also purchased in 2012, how many do you expect to purchase in 2013? 3. Cost Per Acquisition Marketing can get expensive. And the wrong channels can quickly DESTROY profit margins. The only way to avoid this is to track the cost per acquisition of campaigns. To start, simply add up all of your expenses for marketing and sales last month. Divide that number by the total number of customers you acquired in the same period. This will give you the average amount that you spend for each new customer. The figure isn’t nearly as detailed as we would like (averages hide all sorts of insights), but it’s a quick check on the health of your business.


How To Track What’s Working In Your Business

The next step is to get the cost per acquisition for individual marketing campaigns. Unfortunately, this gets a lot trickier. Not only do you have to pull data on how much you’ve spent (which is usually in a bunch of different places), you need to track those campaigns over the long term to see which ones actually bring you customers. For any hope of getting this to work, you really need to have customer analytics. Regular web analytics won’t show you where customers originally came from, only were they came from most recently. And when a customer makes multiple purchases over time, there’s no way to know. But customer analytics ties all that data back to the customer so that you can see which marketing brings you the most profit.

The Funnel Every business also needs to track its marketing funnel. Here’s what one looks like for a subscription business: •

Visit Your Site

Freemium or Free Trial Sign up

Activation (use the core feature of your product for the first time)

Upgrade to Paid Plan

4. Average Revenue Per Customer This one’s pretty straightforward. It’s the average revenue you’ve already received from your customers. Once you’ve gotten your churn rate under control and have a reliable way to acquire customers, the keys to increasing the revenue you’re receiving are up-sells and cross-sells. An up-sell moves the customer to a more expensive version of your product. Cross-sells are extra features you sell with your products. Annual plans are another way to increase the average revenue per customer since they lock customers into a longer billing cycle. (They can also help you reduce churn.) The goal is to build systems that steadily increase the revenue you’re receiving from customers, and this metric will tell you whether or not you’re succeeding.

For your own business, make sure you’re tracking the number of people who move through each step it takes to become a customer. This will help you understand which part of your marketing system needs to be improved the most. Want us to look after your marketing for you? Track everything, set it all up and run it for you? Then why not check out our outsourced marketing department here

Ecommerce businesses should place a lot more focus on average revenue per ORDER. As any ecommerce pro will tell you, getting people into the order checkout is never easy. So you want to make the most of it by playing the up-sell and cross-sell cards every time. 5. Lifetime Value By combining the average revenue per customer and the churn rate, we can figure out how much revenue we expect to receive in the future from our customers. Be careful not to confuse this with your average revenue per customer: average revenue per customer = revenue you’ve already received lifetime value = a prediction of the revenue that you’ll receive in total Now, there are a bunch of different formulas for lifetime value out there. You can include your cost per acquisition, the cost to service your customers (support and retention programs), and profit margins. Some of them get pretty OTT imho, and you’ll need your finance team to help you with this. But when you’re grabbing this metric for the first time, start with the simple version. For most businesses,Take the average revenue you receive from each sale and multiply it by the average number of sales per customer. Ideally, you’d want to factor in support and acquisition costs to see if the customer is profitable in the long run. Don’t let this deter you, though. Grab the simple version first and evolve your formula over time. When you have the lifetime value of different customer groups, you’ll know exactly where to focus your time to grow you business the fastest. Let’s say you serve several different industries. Which one gives you the best lifetime value? And which traffic sources give you the most valuable customers? Lifetime value cuts through all the clutter and tells you exactly where your most valuable customers are.


Idiots Guide To Life Time Customer Value

by Neil Asher

What is Customer Lifetime Value and Why Is It Important?  Lifetime Value (LV) helps to determine the economic value a customer brings over their “lifetime” with the business. At the heart of understanding LV lies the recognition that a customer does not represent a single transaction but a relationship that is far more valuable than any one-time exchange.

Why a Non-Geek Guide to Customer Lifetime Value?

However, LV is not about any one customer; it is about stepping back and taking a look at your customer base as a whole — understanding that while some never return and some never leave, on average there is a typical customer lifetime and that lifetime has a specific economic value.

The answer is no.

Understanding the Lifetime Value of your customers is incredibly important for customer service professionals and for businesses of all types. Why?

Much of the reason for this non-geek guide to Lifetime Value is the understanding that, even if you don’t whip out the slide rules and try to create a scientifically sound model, spending time on each component of the LV model can be incredibly instructive.

Because if you don’t know what a client is worth, you don’t know what you should spend to get one or what you should spend to keep one. Understanding LV allows you to drill down and understand the economic value of each customer, so you can make sound decisions about how much to invest in acquisition and retention.

The Customer Lifetime Value calculation can be an extremely complex undertaking. Both correctly identifying the underlying components and calculating the end result have been the focus of numerous academic studies. To say that it can be complicated would be an understatement. So, if calculating Customer Lifetime Value is so mathematically challenging, do we have to go full geek to effectively use LV in our businesses?

While it is smart to be cautious about using nonscientific evidence for analysis, often statistically sound approaches are not feasible. Whether due to your budget, time, or data constraints, sometimes the back of the napkin is all you have. Yet often the back of the napkin is good enough. When people apply common sense and experience to non-scientific evidence, the process can often yield extremely positive results.

Whether you are measuring the value of customers in your department, your small business, or even your blog, just thinking about LV and its parts can help you refine your marketing and retention efforts. Let’s begin by taking a look at the major components of Lifetime Value. Calculating The Profit of an Average Transaction The tendency when thinking about the lifetime value of a customer is to focus on the revenue the customer brings in over their lifetime. However, focusing on revenue will almost always overstate the value of the customer. The more accurate way to measure is to focus on what is known as the Unit Contribution Margin, which we’ll call marginal profit for short. Calculating marginal profit is simple in many industries. For instance, if a Starbucks customer buys a £3.00 latte, that transaction has costs associated with it. The milk, the cup, the coffee, the lid, and the flavoring all add to a variable cost that is incurred for that latte transaction. Let’s assume those costs are £1.00. It’s obvious that if you wanted to calculate the Customer Lifetime Value of a Starbucks customer, you would want to use the £2.00 of marginal profit as your metric, not the £3.00 of revenue. Using revenue overstates what you made on the transaction. The true economic value of the transaction is £2.00. The next step is figuring out the average of all of the company’s transactions. Not everyone buys the £3.00 latte. Some buy the £2.00 muffin, others buy the £1.50 straight coffee.


Idiots Guide To Life Time Customer Value The trick for Starbucks is figuring out how many of each and calculating an average profit profile per customer. In the end, Starbucks would hopefully come up with something like: the average Starbucks customer spends £4.30 at an average cost per transaction of £1.10 — thus the marginal profit for an average transaction is £3.20. (PS. All of these numbers are made up to illustrate.) It is important to note that in this case, labor (their employees) is not a variable cost. Ignoring anomalies like sending staff home on a slow day, Starbucks’ labor is constant. They are paying the staff whether that cup of coffee is purchased or not. Thus, it does not contribute to marginal profit. Labor would be included, however, if labor costs vary based on whether a service is performed or a product is sold. For instance, maid services that pay only per job or spas that pay per service performed. Product companies can also have variable “labor” per unit, if for instance, there are commissions paid on sales. For consultants or solopreneurs, the calculation can be tricky. If your hourly rate is £50 and you provide 10 hours of service, £500 will be your revenue, and £500 will be your cost. How do you value the cost of your time compared to your hourly rate? Use opportunity cost. The presumption is that you charge a different hourly rate yourself than you would presumably receive as an employee. Calculate what hourly rate you would be earning in an alternative employment situation and use that opportunity cost as the cost of your time. If you made £20/hour at your last job or you think that’s about what you would get if you sought employment, then use that number as your cost. Since your primary cost is the value of your time, you have to determine the opportunity cost of taking that hour away from other economic alternatives and spending it on that client. It might be a wild guess, but it can still be instructive.

What is Your Customer’s Lifetime? (Customer Retention Rate) To understand LV, you must know the lifetime of your customer. Now, we will have to do a little math here, but it is just dividing a couple of numbers. Calculating customer lifetime can actually be fairly simple if you have the data. The first step is to calculate your customer retention rate, and then do some simple division to get your customer lifetime. To calculate your retention rate, take the number of customers from last year who are still customers this year — that is your retention rate. If you had 100 customers last year and 45 are still doing business with you this year, then your retention rate is 45%. (For a more sound approach, you would want to track it over multiple years and take an average.) Once you have the retention rate (RR), then it is easy to determine customer lifetime. Simply apply this formula: Customer Lifetime = 1/(1-retention rate) In this case, customer lifetime = 1 / (1 – .45) = 1.5 | Your customer lifetime is 1.5 years. An important consideration is whether your business has time-bound contracts with customers. Mobile phone companies and fitness clubs will have different characteristics to consider when approaching this metric than businesses that don’t have contract periods as part of their customer relationship. The Last Piece is Your Discount Rate… In non-geek, the discount rate is the interest rate you borrow money at in your business, and it is essential to knowing the true value of your customer’s future cash flows. The concept is based on the time value of money, the premise that a pound today is worth more than a pound tomorrow. If the lifetime value of a customer is fairly short, the calculation, while methodologically sound, might not be material. However, if you have a long time horizon, the time value of money is a real consideration. To make this real for you ask yourself, would you rather have a £100 from your customer today or twenty years from now? Of course, we all know the answer to that. 20 years from now you’ll be lucky if £100 buys you a round of drinks at the pub. For our back of the napkin purposes, you are probably safe to ignore the discount rate in calculating your Customer Lifetime Value. Just understand that the longer you calculate your customer lifetime to be, the more important the discount rate becomes and the more inaccurate your model becomes when you ignore the rate. Now That You Have the Parts: Understanding Customer Segmentation At the heart of customer segmentation is the belief that all customers are not created equal and that understanding the differences among customer segments is key to effectively acquiring and retaining customers. Depending on the nature of the business, customer segmentation can require some serious mathematical analysis to be done properly. However, in the spirit of our idiot guide, we will approach customer segmentation by asking one simple question: How would I group my customers if I wanted to customize my marketing, retention, or product offerings?

 06

Idiots Guide To Life Time Customer Value (cont)  Customer segmentation can occur

on many bases: demographic, psychographic, behavioral, and so forth. The key is knowing which breakdown is most valuable for your business. The most logical first step is to break down the segments based on differentiated products or services. For instance, say your department provides support services both to small businesses and individuals. If the offerings to these two types of customers are distinct, you would probably want to segment your customer base into business customers and individual customers. If your business does not have obvious divisions like the one above, you should consider what factors have the most impact on customer buying characteristics — or segment on behavior itself. In the first case, you would simply ask yourself what impacts purchasing. Do men and women have different buying patterns? Is household income important to purchasing behavior? Is there a psychographic factor like “plays golf more than twice a week” that really differentiates activity?

by Neil Asher

How To Use This Technically, the calculation of Lifetime Value should include acquisition and retentions costs. To know a customer’s true lifetime value, you need to subtract the cost to acquire and keep that customer. However, I find it helpful to calculate LV without acquisition and retention costs. To me, this is the best way to isolate variables and to see their effect when using the back of the napkin approach. This is similar to the EBITDA concept in accounting — figuring out your earnings before taxes, depreciation, and amortization. It gives you a sense of the purely operational figure, outside of the other inputs. Let’s start with acquisition… What Are Your Customer Acquisition Costs? Knowing what it costs to get a customer in the door is one of the most valuable pieces of information any business owner can have. Customer acquisition costs are generally the easiest of the metrics to compute. While each industry and business is different, the broad brush approach is simply to take your marketing expenditures for a period and divide by the number of new clients in the same period. Try to find a period that is relevant for your business based on how you approach your marketing, and how much lag time there is in your business between marketing and acquisition. If you are a small business / solopreneur, you would need to measure time spent on blogging, social media, or content creation. If your web site and social media are your only sources of new customers, you would take the time spent on these items in a month, multiply it by your hourly rate, and calculate your marketing cost. Whatever method is appropriate for your business or department, the goal is to figure out exactly what it costs to acquire a customer.

Sometimes behavioral data, how the customer behaves with your business, is the best way to segment. Do you retain customers who buy your premium product at a significantly greater rate than all others? Is three purchases the magic number that makes a customer stick significantly longer? Do customers who remain after 9 months increase their average lifetime purchases by more than double? As you can see, your ability to segment your customer base is directly related to what you know about your customers (or are willing to find out). However, in the spirit of our non-geek approach, let me advise you to start with your gut. If you know your business, you probably have an innate sense of what types of customers act what way.

What Are Your Retention Costs? If a customer stays with you, on average, for 2.5 years, what are you spending to keep them coming back? Most companies put money into retaining customers, and much of the focus of customer service and customer experience writing is about the retention of customers already acquired. Calculating these costs can be a challenge, because there is a much greater mixture of hard costs and soft costs in this area than are found in the marketing bucket.

For example… Customers who are over 55 tend to retain longer. Customers who subscribe to the newsletter tend to have much higher average purchases.

Start with any obvious hard costs: perks for longevity, discounts for existing customer, freebies for certain buying behaviors, etc. These are the costs that can usually be calculated easily and accurately. When making the calculation though make sure to average the cost out across the entire customer base.

Go with your instinct first, then dig into your data to try to prove or disprove your hunch.

In other words, if you gave $1,000 in longevity discounts last month, but only 25 of your 5,000 customers received the discount, you would still spread that cost across your entire database of 5,000, not just the 25 who received the discounts.


Idiots Guide To Life Time Customer Value Soft costs are trickier. If you add a parttime person so that your manager can focus on customer outreach, is that a retention cost? If you send your sales staff to a customer service seminar, is that a retention cost? If you redesign the help section on your web site, is that a retention cost? While it can be difficult to determine how to treat soft costs when looking at retention, it is well worth the time to evaluate.

Finally The End….

One question that should help determine if a soft cost belongs in the retention “bucket” is this: what is our primary reason for incurring these costs? If customer satisfaction, retention or any similar customer service-based sentiment is the primary reason, it is probably safe to consider the expenditure a retention cost.

1) Customer Lifetime Value And Acquisition

A final note on acquisition and retention: If you are segmenting your customer base, you will need to apply these calculations for each segment, not the customer base as a whole. In fact, these acquisition and retention analyses truly show their power when applied to meaningful customer segments, as you will see when we begin…

Now that you have your LV and a grasp on your marketing and retention costs, it is time to start putting the two together. Even when taking the scientific approach (which we are not), this part of the process can involve a good bit more art than science. A few extremely hypothetical (and yes, very simplistic) examples will hopefully get the wheels spinning on how to approach this final phase in your specific situation. While we are only going to break down acquisition and retention, there is a third strategy that is important to bear in mind: customer expansion. Instead of purging customers with low or negative CLVs, you attempt to expand your business with them and help them become more valuable customers.

One of our clients who owned a fashion retail shop determined that their customer base broke down quite naturally by geography. We determined that most of their customers came from two postcodes, one to the east and one to the west, and accordingly, we decided to calculate the LV separately for each postcode. What we discovered was that the LV for the east customers was 4 times the CLV for the west customers. Once we dug into their stats, we found out how important this differentiation was. The East postcode was 30% of their customer base but 80% of their profit. The West represented 70% of their customer base and 20% of their profit. The fashion shop had been spending their marketing budget evenly east and west prior to our intervention.Now they spend money according to the return it makes, much smarter! 2) Customer Lifetime Value And Retention We started a rewards programme to help retain patients for a dentist client of ours. Patients could earn points for various activities, from receiving services, filing their own insurance, or referring other patients. These points translated into straight money off. After a year using the points program, the chiropractor found that it was being used heavily and, when averaged out among his entire customer base, represented almost 10% of LV…. not bad, not bad at all. Unfortunately, the increase in retention since starting the programme (other factors assumed constant) had only been 2-3%. What we found is that the incentive programme had not extended the life of the majority of customers; most tend to use the services until they no longer need it or move away. The programme had simply helped keep some people that previously would have defected to another dentist due to dissatisfaction with the service, the majority of whom could probably be saved by implementing better service systems. Understanding LV had enabled us to see that the programme had a cost far greater than its long-term economic value, on the face it of though it looked like it had worked and in fact our client loved it… when we did the analysis though we had to tell him to stop. THAT’S IT! Of all the many exercises in a business, computing the Lifetime Value of your customers can be one of the most eye-opening and rewarding. Hopefully, the point has been well-made by now that knowing the lifetime value of your customers can help you truly understand the value of your marketing and retention expenditures. Want us to do this in your business? Then check out our outsourced marketing department service We look after all your online marketing strategy and implementation. We plan and execute all your online activities for you from website design and build to traffic generation, social media to conversion optimisation and much more, it’s like having 15 online experts work on your business for you as an outsourced online marketing department.


The 5 Types Of Prospect And How To Sell To Each Of Them - Part 3

by Neil Asher

 Ok if you remember 2 posts ago (a looooong time online) I told you the five main stages of awareness a prospect goes through in relation to your product or service. I also told you that whenever we’re called in to help a client who’s not doing as well online as they’d like to it’s because they’re marketing to their prospects at the wrong stage of awareness. In my previous post we started the process of how to market to your prospects depending on what stage on their awareness cycle they were at, we started at phase 1- Your prospect knows about their problem and knows that your product can solve their problem. This time we move on to stage 2: Your prospect knows about their problem but does not know that your product can solve their problem. Here, your prospect isn’t completely aware of all your product does, or isn’t convinced of how well it does it, or hasn’t yet been told how much better it does it now that you’ve updated it. For 95% of people reading this will be the state of awareness of your prospects. Here we are dealing with a product which is known, which has established a brand name, which has already linked itself with an acknowledged public desire, and has proven that it satisfied that desire. Here your online ad is faced with one of seven tasks: 1. To reinforce your prospects desire for your product:

In all seven cases, the approach is the same. You display the name of the product either in the ad headline or in an equally large logo and use the remainder of the online advert to point out its superiority. The body of the ad is then an elaboration of that superiority including visualisation, documentation, mechanisation. When you have finished weaving in every strand of your product’s superiority, your ad is done. Here are sample headlines presenting solutions to all seven of the problems of this state of awareness: 1. To reinforce your prospect’s desire for your product by using: ASSOCIATION:

“Steinway—The Worlds finest Piano.”

2. To strengthen your prospects understanding of how your product fulfils his need; 3. To extend his image of where and when your product satisfies that desire; 4. To introduce new proof, details, documentation of how well your product satisfies that desire; 5. To announce a new mechanism in your product to enable it to satisfy that desire even better; 6. To announce a new mechanism in your product that eliminates former limitations (as your prospect perceived them); 7. Or to completely change the image or the mechanism of that product, in order to remove it from the competition of other products claiming to satisfy the same desire.

Notice how Dove targets skin dryness in this ad aimed at men, no fluffy language required to get the click just an offer to get rid of dry skin, proof that it works (the clinically proven part) and a strong call to action (get $1 off)

2. To sharpen your prospect’s image of the way your product satisfies that desire (Much like the sensory sharpening illustrated above; but concentrating here on the physical product itself, or on the mechanism by which it works): “skip the lines” aka get VIP service with Hertz Gold, this ad worked very well for hertz prospects who wanted a more VIP service.


The 5 Types Of Prospect And How To Sell To Each Of Them - Part 3

3. To extend his image of where and when your product satisfies that desire: Alamo telling their prospects that they also serve Europe with their network of car rentals.

In part 4 we move on to the less aware markets—with their more difficult online advertising challenges, these prospects require MUCH different skills and creativity to reach them. Want to get us to look after your online marketing for you?

4. To introduce new proof, details, documentation of how well your product satisfies that desire:

Then check out our outsourced online marketing department service and watch your sales grow.

Here’s a simple example of this from weight watchers, note how the use of a man also appeals to women in this ad.

5. To announce a new mechanism in that product to enable it to satisfy that desire even better: Here Hertz polled it’s customers to find out their problems, a major one was poor quality in car sat nav so Hertz fixed it by joining forces with Tom Tom

6. To announce a new mechanism in an existing product that eliminates former limitations: Here auto trader adds new features to it’s flagship car selling platform, the addition of more images removes a former limitation that consumers had flagged.

7.Or to completely change the image or the mechanism of the product, in order to remove it from the competition of other products claiming to satisfy the same desire. Here tide differentiates itself from other laundry detergents by telling people that tide cleans their washing machine too, anyone who washes clothes will realise that their washing machine must be clean to clean so this ad works.

Here we are dealing with the State of Sophistication of our market—the amount of exposure the y have already had to similar products . Every product during its life history encounters this problem.


How To Screw Up Your Marketing

by Neil Asher

You Are Not Your Customer!

 We have a new client in our Australian office, he’s a great guy and his business is solid. He took us on to do his marketing for him under our outsourced marketing department offer where we look after all our clients online marketing strategy from website design to traffic generation, conversions to upsells and retention and much more, basically everything a growing business needs to crush it online. All was well until we sent him our first lot of banner ads and e-mails over. “I don’t like these” “it’s not what our customers will like” Says he. Now lets stop here for a moment and consider this pragmatically. First up… you are NOT your customer, you simply sell them a service that they want. Time and time again I see business owners lose out on sales because they create advertising and marketing that they want to see NOT what their customer wants to see.

When I asked him if it was working he replied it was working very well but he was sick of looking at it in the newspaper and so assumed his customers were too.

Many unscrupulous agencies make money by simply doing what their clients want, for me however that’s just dumb and short sighted so I told him we’d happily try and beat his existing ad in a straight A/B split test but to change it because he was bored of seeing it was simply dumb. In business you MUST let the data decide your actions not your preferences. The ONLY way to know for sure if something is right for your customer is to put it to the test and see what the results are, everything else is simply guessing. That’s no way to run a business. We spend a lot of time educating our clients to our way of thinking and some of them kick and scream as we drag them into the digital age but they always thank us for it after when they’re profits triple. So my job this week is to get our new client to test things instead of guessing what will work, and if you want your business to triple it’s profits then start applying the “our customers know what they want more than we do” rule in your marketing and watch it grow

Just last week one of our clients asked us to re do their marketing because they were bored with it…. BORED!


Entrepreneur Insights

Welcome to Mark Wyn who is not Marc Winn only a very successful businessman in his own right but one of the Rockstar Mentors for the Rockstar Group. So I understand you’ve came from direct marketing, catalog marketing background… Yes, my background is obviously in the direct marketing environment. But still, all I’m really doing is applying the same principles, to test and learn processes that come from marketing to help new business design. That’s essentially all lean startup. Is that what you’re bringing in for the mentored clients?  Is that what they’re coming to you for? I’m lucky because I’ve been through several phases of business and the reason why I do what I do now is I lived in an environment where I saw the downside of success.   What I’m doing now is to help people build businesses in a way that actually suits them so they have businesses they enjoy and organize things around the individual. But yes, ultimately, the reason why I mentor is because I get all these fun bits that I used to enjoy about business and none of the bad bits that I didn’t. And that’s what leads you to success… Finding the right business idea for you Can you give me an example of that? You can get a brilliant idea but to be honest, ideas these days are pretty worthless.  It’s the ability to execute the idea, that’s where the value is.  From what I see, they currently need more than three companies to survive for one to survive the three year mark. I think the big reason for that is the entrepreneurs are wrong for the idea.   Can you give me an example of that, what you’ve seen? They see a really great idea but the danger is they can get into the wrong type of business, like if you’re bad at managing staff or you got into the service business or something like that, no matter how good the idea is, you’re kind of setting yourself up to fail by appraising in the area where it doesn’t suit you. This applies to anyone and everyone.

If you’re trying to run a business from a structure point of view led by what’s best for the business in the short term, it’s not necessarily the way to get you out of bed for 10 years. So, I think there’s a huge disconnect between how business is set up and what entrepreneurs want out of businesses What do you tend to see in your coaching and in your broader experience, the kind of fundamental mistakes that you see startup entrepreneurs making? A fundamental mistake I see is that, there aren’t many entrepreneurs in this world that actually know why they’re opening a business, what it’s for. The 20-year shortcut is to really understand what life is going to be like after the business set up. So, it’s not the case for you that the entrepreneur starts with the idea but the entrepreneur in fact should start with themselves and what they want to get from the business in a much more defined way.How do you think this economics situation can affect entrepreneurs? I think that it’s affecting dozens of entrepreneurs now, it’s a really effective process and it’s a great way of motivate people and get people out when times are tough. What separates people in some ways from success and failure is the ability to keep going, keep learning and keep getting up. Are you still actively involved with any businesses that you’re running or you’re solely focused on your mentoring now? Actually for the time being, my strength isn’t executing.  My strength is helping other people get the best out of themselves.  It’s really the reason why I’ve gone down the mentoring road, I found out I’m more interested in the entrepreneur and running their business. I enjoy it more now that I don’t actually feel like I have to build a business.  I’m just projecting a philosophy out there and that in itself is creating an industry. How was the process from the sale of the company to then starting up a new company, what was that like in terms of going from this big business right back down to basics of what is in effect a small business.  What was that like? I think really they should put entrepreneurs, when they sell their companies, in some kind of clinic because you go from having a pretty large structured environment with lots to do, to having nothing to do. That particular process is actually a learning curve and quite a lot of entrepreneurs get stuck during that particular process.  They end up actually not realizing why they were successful in the first place and I certainly made the same mistake. This magazine goes out to 12,000 of your perfect prospects, Marc Mark. They’re entrepreneurs, venture capitalist, wannabe entrepreneurs, that sort of thing.  So, where can people find you online? Google me, Mark Marc Winn Winn. Who is your perfect person to coach?  Who is your favorite type of person to coach? I like people with massive dreams and missions.  So, people with seemingly impossible goals that are not really arrogant but you know they want to change the world in some way. So, big mission entrepreneurs are kind of the way.  I can work with 10 people and have an impact on a billion?  Why not?


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Digital Marketing Insider | Feb. 2013  

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