Increase Your Sales With Targeted Marketing

Monday, December 27, 2010 Posted by John Tabita 2 comments

In my last post, I talked about how raising prices can actually bring you in more business, reduce your workload and make you more profitable. The reason is simple: raising prices drives away the cheapskate customers. And what’s left are the ones who spend the most.

Another way to accomplish this is to deliberately target customers who spend the most. The idea here is to clone your best customers.

I spoke with Scott Channell on this very topic last week. Scott is an author, speaker and sales consultant – and an expert on setting sales appointments. I’ve been getting his marketing emails and following his advice for the past few years. I was familiar with the concept of targeted marketing, but I never got around to it with my web business. So when I read Scott’s emails on the subject, I decided to try it with my telemarketing department.

I started off by looking at sales from the previous year, 2008, and identifying what types of businesses spent the most money with us. I gave the biggest spenders – attorneys – to my best appointment setter.

The results, shown in the graph below, were nothing short of dramatic. By the end of 2009, we had increased attorney sales by more than 660 percent over the previous year.

Looking at 2009, the next graph shows how dramatically attorney sales jumped in June when we began this strategy.

Targeted marketing works because it makes your efforts more effective. You can be super-efficient and make 150 calls a day. But if those 150 calls are random and non-targeted, your results will be less than stellar. Why not focus your efforts on calling those who buy more often and spend more? We did, and the results speak for themselves.

More Business Than You Can Handle?

Wednesday, December 22, 2010 Posted by John Tabita 0 comments

Even during prosperous times, it’s suprising to hear this. Yet, even in an economic downturn, some customers will tell us, “I have more business than I can handle.” Some think that’s a good thing… while others are overwhelmed by it. When we tell them that they ought to “raise their prices,” we often receive a puzzled stare back in response.

The website FreelanceSwitch has posted a list of the “Top Ten Signs You May Be Charging Too Little.”

10. Your clients mistake your daily rate for an hourly one.

9. You’ve won every job you’ve ever bid on.

8. Even though you work 80-hour weeks, your income level qualifies you for welfare payments.

7. New clients are always asking what “the catch” is.

6. Clients pay your invoices in cash from their wallet.

(You can read the rest here.)

The Marketing Blogspot has an interesting and informative post on the concept behind how raising prices can actually bring you more business. The author says that most people believe that raising prices equals less business because fewer people will want to do business with them – when the exact opposite is actually true.

Innovate or Die

Wednesday, December 8, 2010 Posted by John Tabita 1 comments

I read a great definition of capitalism recently:

A system in which there are winners and losers, in which someone with a brilliant idea gets rich, while most of us get by.

I think of Apple CEO Steve Jobs when I read that. He had several brilliant ideas (like the Macintosh, the iPod and Pixar, to name a few). He’s rich while I’m getting by.

Then there’s Facebook founder Mark Zuckerberg. I should have been Mark Zuckerberg. I was a web designer and my partner was a web developer. We could have created Facebook… we had the technology. But Mark Zuckerberg had the brilliant idea. He’s rich while I’m getting by.

Guy Kawasaki, one of my favorite speakers, encouraged a group of high school students to “challenge the known and embrace the unknown.” The story he shared is a telling example of innovation and the lack thereof:

In the late 1800s there was a thriving ice industry in the Northeast. Companies would cut blocks of ice from frozen lakes and ponds and sell them around the world. The largest single shipment was 200 tons that was shipped to India. 100 tons got there un-melted, but this was enough to make a profit.

These ice harvesters, however, were put out of business by companies that invented mechanical ice makers. It was no longer necessary to cut and ship ice because companies could make it in any city during any season.

These ice makers, however, were put out of business by refrigerator companies. If it was convenient to make ice at a manufacturing plant, imagine how much better it was to make ice and create cold storage in everyone’s home.

You would think that the ice harvesters would see the advantages of ice making and adopt this technology. However, all they could think about was the known: better saws, better storage, better transportation.

Then you would think that the ice makers would see the advantages of refrigerators and adopt this technology. The truth is that the ice harvesters couldn’t embrace the unknown and jump their curve to the next curve.

Challenge the known and embrace the unknown, or you’ll be like the ice harvester and ice makers.

This reminds me of the company I worked for in the mid-nineties. In the 1980’s, the company developed a large-format computer painting machine. At that time, all billboards were hand-painted, but this machine could produce signs faster, with greater consistency and with colors more vivid, than the best hand painters could. For the next ten years, they dominated the industry.

But by the late-nineties, advances in technology enabled other companies to develop large-format devices whose output began to first match, and then exceed, what the company's machines could do. So now anyone with some capital could buy a $20,000 large-format printer, produce a product superior to what the company’s multi-million dollar patented painting machines could, and sell it for much less… which they did. During the dark days of plummeting profits and subsequent lay-offs, one of the VP’s told me that they had gotten “fat and complacent.” They were in danger of becoming an ice harvester.

It also reminds me of the industry I’m currently in, the Yellow Page industry. In the mid-nineties, when companies like AT&T and Ameritech were enjoying high profits from their Yellow Page monopolies, two Stanford University students were quietly setting up shop in a garage in Menlo Park, CA. I’m sure that the multi-billion dollar telecommunications companies could never have imagined that this newly-formed company named Google, with its measly $100,000 of investment capital, would ultimately be poised to topple them as the preferred medium that consumers would use to search for local business information.

So what’s the lesson for the small or medium-sized business today? Never assume that the products and services you sell today are going to be the same ones you sell tomorrow. If you focus exclusively on the how and neglect what you do and why you do it, then you’ll find yourself in the same position. Yellow Pages have been extremely successful “connecting buyers with sellers,” but they were asleep at the wheel and didn’t see that the Internet could fulfill that role and be in position to eventually displace their print directories. With all of their capital and resources at their disposal, they could have been Google. They should have been.

Internet Marketing 102

Saturday, December 4, 2010 Posted by John Tabita 6 comments

In my previous post, Internet Marketing 101, I explained the difference between Search Engine Optimization (SEO) and Pay-Per-Click (PPC) advertising. (If you missed that, I suggest you read it first before continuing.) In Internet Marketing 102, I’ll explain the pros and cons of each to help you decide which might be best for you.

PPC Pros and Cons

Pay-Per Click (PPC) ads have the advantage of getting you instant ranking. You can create an ad today and be #1 on the search results tomorrow… provided you are willing to pay top-dollar for the search phrases you want. For this reason, many marketers use PPC to test a product. You can create a short campaign, set a limit on how much money you’re willing to spend, and quickly know if there’s an online market for your wares.

And here’s another tip for product testing. More people use Google than any other search engine. (Over 90 percent of all searches are done using Google.) That means that if you’re serious about selling online and determined that PPC is the way to go, then you’ll want to use Google’s PPC program, AdWords. But because of the high volume of traffic, Google can command top dollar for their cost-per-click prices. So smart marketers test their product on Yahoo! instead, because their prices are more affordable and their ad program simpler to use than Google’s.

Another advantage of PPC advertising is that it’s do-it-yourself. I say that somewhat reluctantly, however, because in Google’s world, “do-it-yourself” doesn’t mean easy. One expert describes it as “not rocket science… but darn close.”

The only reason PPC is remotely do-it-yourself is because Google offers an extensive (and free) online training course to help you learn their AdWords program. (In case you were wondering, they don’t offer one for SEO, because they want to sell advertising, after all.) And while SEO may not be rocket science, it is computer science – and Internet marketing savvy, all rolled into one.

The disadvantage of PPC is that you’ll be bidding against similar companies for the search phrases, or “keywords,” you want… and the highest bid gets the best ranking. In a highly-competitive field, such as weight loss or work-at-home jobs, the cost of your keywords may simply be too high for you to see a return on your investment. Compounding this is that, if you jump in without really taking the time to learn how it works, it’s easy to lose your shirt.

SEO Pros and Cons

If the main advantage of PPC is instant ranking, then the biggest disadvantage of SEO is that it takes a long time – too long, in fact, if you’re testing a new product for marketability. Achieving top ranking in the natural results can take several months. But the good news is, once you’ve gotten a top ranking, it cost much less to keep you there than it did to get you there. Here’s where one of SEO’s main disadvantages – its initial high cost – becomes an advantage if you’re in it for the long haul.

SEO has a much higher cost to get started – anywhere from $5,000 to $8,000 in your first year. But most experts will tell you that SEO is cheaper in the long run. Here’s why.

With PPC advertising, your costs will never decrease. In fact, they may increase as your keywords become more competitive. But that’s not the case with SEO. Most SEO companies charge an initial $2,000 - $4,000 to do keyword research and optimize your site’s code, structure and content. This is Phase 1.

Phase 2 is getting your site to begin to climb the long ladder to top ranking. To make this happen, a good SEO specialist will do things like write press releases and articles or create videos and distribute them on various sites across the web. They will also look for ways to get top sites to link back to yours. These help to improve your Page Rank. This phase may cost $300 or $400 a month for 6 to 8 months.

But once you get top ranking, they may only charge $150 a month to keep you there. So your first year investment may total more than $6,000, but Year 2 may cost you less than $2,000. And if your total online sales gross a quarter-million a year… well, you do the math.

I once met with the owner of a casket manufacturing company who was very successful selling caskets online with PPC advertising. But they were spending several hundred dollars a week to do so. In the scheme of things, even if they were spending $20,000 or $30,000 a year for PPC, they were still getting a return on investment. But if they could invest in SEO and ultimately reduce that to $2,000 a year, why wouldn’t they? (Which is why they were talking to me.)

That brings up another advantage of SEO. More people look at (and click on) the natural search results than the paid ads. So ranking high there may drive in more business over the long run than PPC.

To recap, PPC is great for achieving instant ranking and is more do-it-yourself than SEO, but it’s easy to lose your shirt if you don’t know what you’re doing. SEO takes longer and has a higher up-front cost, but is usually less expensive in the long run. But it’s much harder to learn than PPC, so it usually requires hiring an expert to do it for you.

But PPC vs. SEO is not always an either/or proposition. Many successful companies use both. The key is to measure and monitor both to be sure you’re seeing a return from each.