Mistake #1 -- Treating Marketing and Sales as One Activity
Having worked with entrepreneurs and small business owners for nearly 30 years, I see this time and time again. Marketing and Sales are two very different disciplines. They require different focus, measurement and timeframes.
To use an analogy, Marketing plows the soil and lays down the fertilizer. Sales sows the seeds and tends the plants. You need both if you are going to be successful in your farming or gardening activity.
Marketing requires a long-term focus. Sales requires one that is short term.
John Jantsch from Duct
Tape Marketing uses a wonderful definition of marketing: "Getting people
who have a need for your product or service to know you, like you and trust you
so that when the time comes, they will want to buy from you."
You must continue to market and sell on a regular basis, or else your business will either die, or you will be living month-to-month forever.
Mistake #2 -- Out of Sight Out of Mind
The Referral Institute has the VCP model. It stands for Visibility, Credibility and Profitability. Tying it to John's definition of marketing, you can see that unless people know who you are and trust you, they won't buy from you.
My experience with solopreneurs and small business owners is that they do a very poor job in maintaining visibility with their customers and prospects.
According to Chet Holmes, best selling author of The Ultimate Sales Machine, only 3 percent of people are in the market to buy your products or services at any given time. There's an additional 7 percent open to buying your product or service because they are either dissatisfied with their current item, their provider or are just willing to take a chance and change. The remaining 90 percent are either neutral about your offering--meaning they haven't decided whether they are interested or not; or they think they're not interested; or they know for sure they're not interested.
Since only 3 percent of your potential prospects and clients are ready to buy at any given time, you need a way to stay visible with the rest. Why? So when the time comes for them to move into the 3 percent who are buying now, you are the only logical alternative for them. However, this won't happen unless you stay in regular contact with them.
A personal example has to do with buying ink cartridges for my printer. I typically buy cartridges about four times per year. I had met a fellow who represented a company that offered new and recycled ink cartridges, and I decided to get some from him. It was a convenient way to get cartridges and the prices were comparable to those on the Internet or the office supply store.
However, after I had gotten my cartridges, I never heard from the fellow again. When the time came to re-order, I couldn't find his card. So, simply stated--I ended up buying them online instead.
Mistake #3 -- Focusing on Customer Acquisition and Forgetting About Retention
Talk to a small business owner. They are constantly worrying about how to acquire new customers. There is nothing wrong with this except for when they start forgetting about the retention of existing customers. Getting new customers is sexy. Retaining customers is boring.
A survey I conducted last year showed that nine out of 10 small business owners had no formal customer retention program in place. Frederick Reichheld of Bain & Company reports: "Over a five-year period businesses may lose as many as half of their customers. Acquiring a new customer can cost six to seven times more than retaining an existing customer. Businesses that boosted customer retention rates by as little as 5 percent saw increases in their profits ranging from 5 percent to a whopping 95 percent."
A friend of mine is a financial planner. I recently found from three mutual acquaintances that they had stopped using him and the primary reason they gave was--"I never hear from him."
Mistake #4 -- Trading Time For Dollars
Most small business owners don't really have a business--they have a job instead. The only way they can make more money is by working more hours or charging more money for the hours they do work.
When you have a job, if you don't do the actual work, you don't get paid. So if you go on vacation or get sick, you don't earn any money. You are in essence trading your time for dollars.
Michael Gerber in his book The E-Myth Revisited goes into great detail about the difference between working IN your business vs. working ON your business. The bottom line is that unless you devote time, focus and money to developing systems (working ON your business), you will never turn your job into a business.
Time = money. When you are trading time for dollars, this is true. However if you want to stop following that equation and free yourself to build your business, the formula changes to Relationships = Money. The more you can build and leverage your relationships, the more money you will generate.
Mistake #5 -- Having No Systems in Place --
Particularly For Follow-up or Staying in Touch With Customers and Prospects
Most small business owners and entrepreneurs attend networking meetings and meet people on a regular basis. However as we mentioned in mistake number #2 . . . Out of Sight = Out of Mind. Since only between 3 percent - 7 percent will be purchasing right away, the rest of these prospects (who would be open to buying at a later date) don't buy because there was no structured follow-up system in place to stay in touch.
The same is true for customers who bought in the past. Many of them would buy again (or more often) if they are contacted on a regular basis. Here's another personal example. I go to my chiropractor whenever I'm in some kind of pain. While I recognize that there is value in preventative visits, I typically don't do them. Yet, every time I get a call from his office, I end up booking an appointment--especially since they point out how long it's been since my last visit. There is no doubt in my mind I would visit more often -- to both our benefits -- if he was paying more attention to me.
Here's something else that boggles my mind. Most small business owners don't collect email addresses from their customers. And of those who do, 92 percent don't have a systematic way to stay in touch with them via email.
In Conclusion -- A Solution
If you are making any of the above mistakes, you will have a tough time surviving in the current economic climate.
The good news is that there is tremendous opportunity for those who fix the above five mistakes through bonafide Client Relationship Management (CRM) systems. Some affordable contact management programs are: online newsletter services like Constant Contact, Topica, MyNewsletterbuilder, Mail Dog to name a few, as well as email daily message systems like QuoteActions.
Learn more about the author, Rick Itzkowich.
I think Rick has made some very important points in this article. He covers mistakes that business owners are making every day and are totally unaware of their consequences. In addition he provides viable and easy ways to correct the problems.
Sue Almon-Pesch, CME
Thanks for the article, Rick. I'm gratified to see I'm doing 80% of what I should be and I'm having the best year ever!
However, as a "solopreneur", doing massage therapy in my late 40's it's ever more clear to me that I'm a classic example of "trading time for dollars".
When your "job" is doing well where do you find the time to come up with a business that makes the money? Comments, suggestions, resources?
Toni Natoli, LMP,MSW
Toni,
Finding time comes after the commitment to doing the thing that you need time for. So you first have to make a decision and fully commit to finding an alternative way to make your money. Once you are committed to doing this, your mind will automatically start looking for opportunities to achieve your goal.
There are many opportunities available to you right now that you "can't see" because of your mindset.
It sounds pretty weird, however it really isn't. An analogy I can give you is that if you've ever decided to buy a new car or go on a vacation to an exotic location, it seems that all of a sudden there are lots of cars like the one you are considering or lots of articles and advertisements about the location you are intending to go. This is all a function of our mind's focus and attention.
All that aside, as a practical matter, you don't really find the time. You designate the time in your schedule to work ON your business and then you do it. You treat this time no differently than if you had a client who had booked a massage appointment with you (working IN your business.)
Great insight Rick. Relationship building creates client acquisition. Clients are different than customers. Clients will buy from you several times. When you acquire clients, you build a business.
Without clients you just have a job.
Paul Masick
Rick,
Thank you for taking time to share your experience. I like the sayings - you need to do what you have to do in order to do what you want to do.
As small biz owners, there is a "have to" do list; for example, establishing systems to duplicate operations and save time. And we often overlook that part because it's not as interesting as "want to". it does require a shift on mindset.
Rick!
Thank you for your article and for bringing into light some very valuable ideas and concepts we should all be thinking about! I absolutely refuse to participate in a down economic climate mindset. A main reason why this does not seem to effect me is due to the fact that I have multiple follow up systems in place. I would hope anyone that stumbles across this article will contact the many people on Biznik like you and myself that have these systems in place to discuss how it has worked for us.
Thank you Rick for the well written article and the voice of wisdom. Mistake # 3 seems to be a life issue. I see people get something and then move on without actually appreciating it, and its value, let alone celebrate it. Have you ever noticed how many want a relationship and then don't care for it? Seems like the fun is in the getting and we run out of steam with the maintenance. All we need see is the divorce rate. Business client care is similar with lots of divorces going on because clients do not feel special, appreciated, noticed or cared for. I agree we could all put some more "WOW" in caring for our clients. Have you ever read how much it costs to "catch" a client and how much to retain one? Maybe you can address that in the future. Love your message, Kathy Nelson, CCPC (http://www.OnTrackSuccessCoaching.com)
Rick, I really appreciate some of the substance and numbers you use to substantiate your points. This is compelling. For those of us in the service professions and those with strong relationship skills, we have special assets we can use to help us show appreciation for and develop relationships with clients. Also, I've heard a lot of good things about Aweber as an auto-responder service that is affordable, easy-to-use, and has high deliverability rates.
Rick; This is sage advice for anyone wanting to start their business or get a leg up on the competition after you've been "at it" for awhile. I believe that building relationships is a key component to a successful business. What better advertising can you get than word of mouth advertising! Your idea of putting your name in front of your clients on a daily basis is wonderful. I can always use some wisdom, inspiraton or a good laugh to start out my day. What a great way to brand yourself. Great stuff! Well done! John Mecklenburg
Valuable article Rick. Thanks for all the resources. I'm one of the people who still doesn't have an email list. I don't like getting a ton of e-mails, so I have resistance to sending them. What are your thoughts about blogs replacing newsletters? What differences do you see, how can they support each other?
Pamela
Rick:
Excellent commentary! Loved your comments in #3 about building trusting relationships, and supporting existing clients. We can relate to the sentiment that our business is an extension of who we are choosing to be. As you point out, fostering trusting, and mutually beneficial relationships is the natural modus operandus of a business that understands and practices the principle that giving is the same as receiving.
Gretchen Seitz, L.Ac.
Pamela,
Regarding your questions about blogs vs. newsletters, I do think that they serve different purposes. I don't believe that one will replace the other any more than TV will replace radio.
Blogs can be many different things. The biggest difference between a blog and a website is that the content of a blog changes much more frequently than that of a website. I personally use a blog as a combination of several things: -- A place to voice my thoughts and opinions. -- A place where I can offer valuable resources that are not appropriate for EVERYONE of my clients. This way only those people who find it appropriate and useful can get them.
We use our newsletter as a way to keep people informed with what is new at our company as well as having an article of interest.
We also have the "QuoteActions" program that gives us a way to keep connected with our clients in a more frequent basis.
As far as how can they support each other, I often use the newsletter to direct people to specific blog posts. I also use my newsletter to refer people to my podcasts.
If you are interested, you can see this in play by visiting my blog at www.productivelearning.com/blog
Rick, I woke up thinking about the systems you have that help keep contact with clients, ie. Quote Actions, and then the Send Out Cards system etc. I am inspired to look at turning up the caring and touching more often. I do it for my current clients with my private ezine and then offer a public ezine too for opt-in online. Now I will add the Quote Actions too. Thanks for the great answer to Pamela's interesting question. Keep it coming. Kathy
Rick,
Thanks for the reminder about SYSTEMS.
Great businesses rely on result-producing SYSTEMS, not on extraordinary people... because you can duplicate SYSTEMS, but not extraordinary people.
Here is an article that might help people develop a result-producing SYSTEM!
http://www.seniormanagementservices.com/pvt-22F-score-yourself.html
Mike
Good stuff Rick . . . thanks for sharing your wisdom! Your summary is very thorough.
I work with many small- and medium-sized businesses to create more results. Making these mistakes is common.
Staying in touch is easier than people think, but you must have the right tools in place to do so. What is incredible is that all the marketing tools you mention are very cost effective so there is no excuse for not using them. I have personal experience with Constant Contact and QuoteActions and they were both easy to set-up and use immediately!
John
Hi Rick, You've made excellent points. I'm a huge fan of Duct Tape Marketing. I met John at a Microsoft conference earlier this year and gained great insight speaking with him about some of my own personal branding questions. I think your point about acquisition cost of acquiring new customers versus retaining existing customers is largely overlooked by companies of all sizes. Why is our human tendancy to take what we have for granted? I have worked with companies who neglect to put money into their budgets to properly take care of customer and employee issues and then wonder why it is difficult to gain increased sales and team commitment in subsequent years. This point resounds with me. If readers only remember one point from your writing today, I would urge them to choose this one. Thanks for sharing with us.
Angie A. Swartz, Executive Coach Sixfiguremomsclub.com
Great article..I cannot believe how many mistakes I made! Rick made a good point on business trying to acquire new customers instead of retaining. But i have to add that it easy to say that done..I have constant contact but it does not really work for me...Is there a WRIGHT tool we can usex
VERY GOOD POINTS!
Thanks Rick, I will check out your site. And the reminder about SYSTEMS is key.
Hi Rick, Thanks for your great suggestions. I was impressed with #1 Marketing and Sales are Different. I do a monthly newsletter, blog posts, and sendout cards. Are there other marketing tools you can suggest? Thanks again! Best, Beth Barany Creativity Coach for Authors http://www.bethbarany.com
Beth,
Congratulations on using all the methods you are already using. As I mentioned in my article, the vast majority of small business owners don't even have one system in place to connect with their customers. A monthly newsletter is a great way to keep people informed about what's new with your company or industry. A blog allows you to get more personal with your audience and start a conversation. Send Out Cards are a wonderful way to maintain contact during special occasions such as birthdays, Thank You's etc.
I use all of those channels plus a couple more that you may want to consider:
I also have a monthly podcast. That is one channel that you may consider adding to your marketing mix. The technology has gotten to the point that it is very easy to do. Having your customers hearing your voice is a great way to build your relationship with them.
One other tool I can recommend is the "QuoteActions" system I created. It is designed to increase your visibility and generate goodwill with your audience. It greatly supplements your other channels and it gives your recipients another way to refer you.
Hope this helps.
Rick,
I couldn't agree more with a ton of what you wrote in the article. But what made the most sense to me was working on your business. We all want to just jump into action, get clients and start earning money. Working on your business can be time intensive and seemingly on the surface not helping to generate revenue. When in fact, it is the exact opposite.
Anyone that wants to scale their business has to think about how it can run without them. This is a major hurdle for most businesses.
Thanks for bringing that topic up for discussion.
Steve
Hi Rick, Great article. I couldn't agree with you more.
I use a wide variety of marketing systems, tools and techniques to stay in front of clients and prospects including: blogging, thank you cards, weekly e-newsletters, periodic direct mail, monthly teleseminars, PR and speaking engagements. So for me the state of the economy is a non-issue.
As a Practical Marketing Expert with a variety of products and services just for small businesses, people want and need what I offer. So as long as they are aware of what I have, and can see the value, my business will continue to grow.
However, most small business owners find it really hard to make time to get any kind of regular marketing efforts going--let alone systems. So no one knows what they offer or why it's so great. So their business stagnates.
I recommend setting aside the first 15 minutes of every day (before you check your email or return calls) to doing one thing to promote your business. Work on a system...Call a past client to follow up...Write a thank you card...Post a comment on a blog, etc.
Doing this alone puts you ahead of most of your competition. Once it becomes a habit, and you start seeing results, you'll find it easier to fit even more in. And you'll be willing and able to invest in hiring a virtual assistant to help you keep marketing and growing your business.
Stacy
Rick:
Great work!!! I love the analogy that you presented for mistake #1. Too often small companies forget that marketing and sales are different animals, they place all the eggs in the sales part of the business with little or no emphasis in marketing “out of sight out of mind”. Another interesting problem that I find perplexing to me is “retention”.
One of my greatest and most expensive lessons was with one of my business venture several years ago where I plunked about 1 million dollars and as soon as we opened the doors we saw an influx of customers however, my business lacked customer service, needless to say within a years time we were loosing everything.
Retention is one of the keys to make a business successful. Small and large companies must continue to remember that “if they do not take care of their customers, someone else will”.
Vivionne Keli
Rick, wonderful article and so "spot on"! I have always enjoyed your keen insights and see many ways where I have dropped the ball over the years...some have been corrected. I'm actively working on others for the important part is implementation! So often, as you point out, we get so caught up in the daily working of the business that we do not work ON the business...We may even realize that we need to set up a follow-up drip marketing system...It is on the to-do list...someday.... Someday is NOT a day on the calendar!
I love your Quote Actions...never stop!
Rick,
I just read your article and appreciate the conciseness of your points. As I continue to add systems to my business, I'm learning how important it is for systems to meet my needs, as well as those of my clients.
I use Constant Contact to publish my twice-monthly ezine. Then I started using AudioAcrobat to record the ezine as I read it. No one ever listened to it. Audio is not how they want to stay in touch with me. That was a valuable lesson.
Thanks for an informative article.
~ Patricia
Rick, A solid summary of a few of the key aspects to making a small business work. You bring alot of references into focus and simplify the situation down to something meaningful and managable. I think that getting your hands around systems and keeping the mentality that relationships build businesses is important. Thanks for your insights. Bill
Rick, What a fantastic article! The trick is that if one is a subject-matter expect in X, then working IN the business of X feels much more natural than working ON the business of X, unless you are also a subject-matter expect in Business. Making that transition from "IN" to "ON" is not easy. Thanks for making me think. All the best,
Alina http://www.AllowAPossibility.com
Rick, Your insight is amazing. No matter how many times I read information like this, I say, "Yeah, I'm going to do all of this..." Unfortunately, like many, I don't really implement it well, if at all.
I am now in the process of getting a divorce. I have been taking courses through Productive Learning and Leisure for a couple of years now, and although I have been trying to work ON my marriage, that "marketing" take two people focused on the same goal.
This of course has made me look at all the other areas of my life and business and see where I am not FOCUSED on keeping the relationships. I have actually sat down and written a new business plan for both my solopreneur Financial/Investment Advisory Business and the "business" of my life.
Amazingly, when you look at each, in general terms, they require the same tasks and implementation. Of course the specifics depend on what relationship you are building and maintaining. But life, like business, means you need to keep in touch. When was the last time you called, emailed or even sent a card to a close friend or family member?
It is important to maintain ALL the relationships you build in your life and business to achieve unparalleled success and satisfaction in life. Remember "you reap what you sow".
Thank you again for "bonking" me on the noggin and reminding me to keep sowing.
Big shout out for the Quote Actions! Gee, I never thought I would use that phraseology. However, it is just perfect for Quote Actions. I love getting a daily dose of positive encouragement and strategy. Right now, I would say this came at just the right time. Thanks for all you do, goes without saying that this is one more of your really good articles. If you haven't read his articles, I suggest you read them all because they are LOADED with great tips.
Bookmark article
Follow article
Email to a friend
Share article
