Can 11% More Profit Really Be This Easy?

There is a sales triad that correctly suggests to a buyer, “You can have price, quality or convenience. Pick any two.”

The wisdom and continued applicability of that maxim is evident when somebody at your organization pipes up with, “Just imagine how great our sales would be if we had all three.” Can’t be done.

A rational buyer perceptually gleans that price parallels convenience and quality. The higher of the former suggests the other two are higher. The inverse is also true. Case in point:

I recently shopped for leather luggage to compactly fit in my “new” 6-year-old car that is all engine and no trunk. I located 4-piece sets (for motorcycles) online priced from $79-$440. A big disparity. They were all real leather, copy claims were similar and some had “brand” names that meant nothing to me. However --

I found myself automatically moving away from both the highest and lowest priced goods, toward the upper middle. I “assumed” quality was commensurate with price, yet didn’t want to overpay. Many of our inner voices say, “If it’s that cheap, something must be wrong with it.”

Countless studies of 5-price tiers show bias toward the 2nd and 3rd highest prices. Flint McGlaughlin of Marketing Experiments (of which we’re members) found that if you don’t have formal tiered pricing, you can easily add 11% more profit:

1. Take your most chosen product option and add 11% to the price.
2. Create a higher and lower priced option sandwiching the above in the middle or slightly above in price.
3. Done correctly, sales conversions remain constant, and you will sell some of the higher priced options. There are many for whom “the best” and “most expensive” are inextricably linked.

(Note: We’re attending a 3-hour webinar in early November entitled, The Value Proposition Course, which goes deeper into this topic, upon which we’ll report. I’m also headed to Dan Kennedy’s Information Marketing Summit in Nashville next month. I have a feeling my brain may leak out of my ears.)

Okay, so the above is a bonus to you that should pay for your SMI subscription for a few years, but we’re not done yet. Since pricing has elasticity (which too many contractors refuse to believe), which adds more to that elasticity without creating sales friction: quality or convenience?

For eons, it was quality. Everyone touted it, discussed it, dissected it. And though it is clearly a reason for brand loyalty, that loyalty suggests that a purchase preceded it. Yet today, for the prospect, the answer is migrating toward convenience.

Convenience is the byword of instant gratification. Think of it. A search for 24 different sets of compact black leather luggage would’ve taken me days of grueling shopping and research just a few years ago. I did it all in 7 minutes in a chair.

Your prospect searches for “Heating Contractor in Milwaukee” and sees a RANK of “most active and most relevant to less active and less relevant” in .02 seconds.

In the Yellow Pages, this was alphabetical and/or based on “money spent” via larger to smaller ad hierarchy. Or you’d ask a neighbor. Now you see “Reviews” online; who needs the neighbor?

Your prospects want to be fixed now or they can call 4 other contractors. If they used Service Magic, Angie’s List or another online lead generator, it’s nearly a foot race to get the job. Quality is a “concept”; price is “relative”; speed is an absolute.

So, how do you portray and increase your convenience to and for customers? A few suggestions.

4 Ways to Raise Your Price and Image with Convenience

1. Be there. If your Local Listing (this is NOT your website) doesn’t appear on Page 1, you are not convenient. Current stats show that 94% of consumers stop searching on PAGE 1. How many pages do you scroll down to find a vendor? If your listing is past page 1, it doesn’t matter how cheap you are or how good you are, you’re being ignored by a majority of online searchers. (Click to email a coach about getting on Page 1. We can send you a report of “7 Things You MUST Do to Get on Page 1 of Google.” Currently, 84% of our clients are on page 1.)
2. Be transparent. Request and display your reviews. (Even if your “average” is 4 out of 5 stars, it shows credibility.) Show your testimonials. Display any awards, memberships, charities in which you’re involved. Rate your Service Window Success, such as “94% of our service calls handled within 24 hours.”
3. Prove and Guarantee. Basically, your proof must be overwhelming, and the guarantee supports that proof. Everybody says something like, “We’re fast and reliable!” but the modern method must be more forceful. “If we don’t make our time appointment window, we’ll give you a $50 Gift Certificate” (A discount on service). That reeks of convenience. Everyone says, “We help you save energy!” but now you must prove and guarantee with “If our system doesn’t save you 26% in energy from last year to this year, we’ll refund you the difference.”
4. Follow Up. Nearly every successful online retailer has found that a discount certificate offered within 72 hours of purchase has nearly a 1 in 4 chance of being redeemed. You are making it convenient to do business with you. Every service or installation should be followed up similarly. A move to a maintenance agreement following service. A “better” filtration option, an “upgrade” to warranty, basically an incremental sales bump immediately post-sale shows you’re willing to deepen the relationship and raise the convenience.

For all of the above, these can be displayed in your local listing, website, marketing copy, service vehicles, taglines, CSRs, techs, invoices, follow-ups. As you make yourself more convenient, you automatically make yourself more valuable. This means price resistance and competitive pressures ease.

I greatly encourage you to seek ways to build convenience into your marketing, pricing and selling strategy.

It's About Lead Generation, Pure and Simple

Lead generation seems to rule the day. True enough, it’s darn hard to sell without a lead.  That’s why Direct Response copywriters are highly sought-after marketing experts. The best in their craft weave words that flip “buy” switches, turning calls turn into cash… for their clients and themselves.

Top Direct Response copywriters can command up to $25,000 to write a sales letter, plus a percentage of sales generated. (Our fees aren’t quite there yet!) Usually these fees are paid by deep corporate pockets with millions to gain or lose, yet they still give mere mortals sticker shock. I understand.

But wait…

Shocker of the Day:

The amazing lead generation results of solid Direct Response ads have a dark side that no one in my field talks about much: if you only use Direct Response, your image will suffer.

In fact, all ad types have an “inverse”. If you only use TOMA ads, don’t expect a big lead count. If you have no Retention effort, don’t wonder why you lose customers. Balance is critical to your success.  So, if you agree on that point, you’re ready to find how to boost leads “on demand” by intelligent use of Direct Response lead generation.

Direct Response Ads are hard-edged offers.  They turn heads. They jolt the reader. If they’re doing their job right, the prospect gets pulled in – sometimes by asking, “How can they offer this?” Remember, the end of scanning is the beginning of selling. That’s done using these ingredients.

      You aren’t the target audience.  So stop talking about yourself.  Forget bragging  about your own self-serving virtues or knowledge.  Point your Direct Response ads at your customers.  Enter their subconscious. Address them personally.  Use "you" and “your” instead of "us" or "we" in every conceivable case.

      Make your headline powerful. It’s responsible for 80% of your readership, so make it count or lose the prospect. Powerful headlines can be immediately beneficial such as “How to Get a $157 ‘Super Tune Up’ Guaranteed to Save You At Least That Much in Utilities… For Just $89”.  They can be imperatives also, like, "Get A New Water Heater that'll keep your showers steamy all year … but please don't pay me a dime for 6 months!"  Now, doesn’t that make you want to take a second look?

      Write about benefits, not features. Tell prospects how they will benefit – and if measurable – to what degree they'll benefit. Then tell them when they'll benefit. You can even try a “damaging admission”, such as “We’re offering this because we’re having a slow season and we want to keep all of our techs on staff and busy.” Your reader must be able to see and feel the gain (or loss) becoming emotionally involved in the process.

      Inform your reader with meaningful specifics and reversal of risk. If you just use the same dumb phrases as everyone else, you're wasting their time and your money. 

Tell them specifically what they’re going to get and how you can guarantee it. Instead of “We’re fast, reliable, and have the best quality in town!” (which is like, a major snoozer), try "Over 93% of our calls are handled within 24 hours."  Instead of the worn-out "Satisfaction Guaranteed," try "You’re guaranteed same day service and satisfaction". Instead of “We can save you money on time”, try "You'll reduce utility bills by 17% or get a check back for the difference." Get creative and tell prospects how you'll be accountable for their comfort, gain, and the competitive advantage only you offer.

Well worded specifics keep readers’ attention and supercharge leads.

      Tell the prospect what to do. This is the "call to action," so give clear directions. If there are any special conditions to your offer, tell the prospect or you're asking for confusion. As an option to increase  immediacy of leads, impart a sense of urgency – such as a specified length of time or number of available units.  I’ll go so far as to say that a Direct Response offer without a limitation is not an offer.

Many contractors are scared to make offers that differentiate them from other contractors, which is great news for those who will. So use intelligent Direct Response for your next lead generating campaign. Direct Response can also be used in newspaper, as inserts, for radio and even television. It works great for service and upgrades. Use it wisely and profit accordingly. 

Readers can get free access to the industry's number one training resource, the Sales&Marketing Insider. Sign up here. 

Copy the “Old School” Success of Amazon

I recently wrote about Contractor Media Integration to help dispel the myth that online and offline are somehow separate. They’re not. The web is merely a means of message delivery, like any media. However…

There is one element of web marketing that remains profoundly different from other media. (It’s also “conveniently” left out of most every web media salesperson’s pitch.)

Not knowing it can be crippling to contractors. It even posed a lethal limitation to web-based sales giants like Amazon, eBay, Pro-Active and J. Crew. Yet, they quietly “discovered” a very old school way of exploding their profit that you’ve already known for years, but have probably been told to avoid…

As a Direct Response marketer (meaning, focused on sales and leads, not on “soft” advertising results), promotions have one of two goals:

1. Direct Sales – Asking for the order in the promotion.
2. Lead Generation – Getting a warm lead, prospect.

Now, if you want to tilt the response heavily in your favor, you will use the leads from Item 2 to make the offer of Item 1. (This is one way we can guarantee to outperform any previous marketing campaign or you get a refund. Yes, it’s that simple but most people miss the simple stuff in pursuit of the complicated.)

Profit Point 1: The target is the most important factor. (My most alluring promotion for generators will fail if wagged in front of people who’ve never lost power.) Having more contacts on this list is the bedrock to meteoric and consistent business growth.

Profit Point 2: You would do well to constantly build your “target list” through any means available, all year, to constantly “prime the pump” and never ignore a previous warm lead or customer. Identifiable targets are gold.

Profit Point 3: The “profoundly different” element in web marketing is that you have no definable target. Don’t gloss over this point, as it ties the lesson together.

All former media – mail, TV, Yellow Pages, radio, billboards, you name it – were “pushed” to a known audience. (Direct Mail was and continues to be the absolute king of reliable, controllable Push Marketing.) We pushed to some hopeful group, expecting a little interest and eyeball, then waited for the phone to ring. We chose the market.
With web marketing, they choose you. They choose the search terms, based on their needs, whims, and desires, instead of just staring at the television or opening the mail. You don’t have a target without knowing their thoughts or having their permission.

That’s why the most successful online marketers must rely on Pull Marketing.

Profit Point 4: You must master “Pull” marketing to build your list. This means becoming magnetic through the following methods, in order of importance:

a) Your local listing
b) Your own site’s “attractor factor” (SEO)
c) Your Pay Per Click campaigns
d) Your social “interactivity” to drive leads

Ordinarily, I’d stop here. The above is enough to rouse any contractor who’s sick of seeing his web-based lead generation remain as flat as Snooki’s brain activity during Scrabble. (Or doing anything for that matter.)

If you only pursued the 4 Profit Points, you’d soar above your competition, as we have seen many contractor clients do. Yet there’s a twist to the story.

What if you were primarily web-based and had already built a business using those principles? How would you grow the coveted list?

Amazon spent 8 years out of 11 losing money. Then they correctly figured out that they’re not in the “online retailing” business, they’re in the list-building business. Now they “retail” to that list. A lot. And they have burst through the logjam into fortunes previously unknown.

eBay spent 9 years parasiting its own list of auction junkies without much target growth and a dead stock price to show for it. Then they figured out they’re not in the auction business, but are in the list-building business for buyers and sellers. (Points 1 and 2, restated.)

Profit Point 5: To build your leads and sales, integrate offline and online.

The key to their success AND YOURS is realizing they had to grow their lists. They couldn’t rely on the glacial pace of “normal” growth of recession-weary consumers. They couldn’t keep pounding their well-worn house lists. (Sound familiar Mr. and Mrs. Contractor?)

They had to come up with a new way of lead generation to drive traffic to them. And this new method?

Profit Point 6: Direct Mail is back, in a big way.

Yes, dust off the pony, load up the saddle bags and start licking some stamps. They (and a parade of online giants) have rediscovered Direct Mail as a “gateway” to their sites, to build their list and to boost sales. New school, meet old school, and multiply. How?

Like this:

• A postcard gives a QR code for an offer, video or “to read more” online.
• A letter invites the reader to visit online or call, and gives the discount code in the letter. (Thus heightening the value of the letter.)
• A newsletter offers a discount for a service they read about, different recipes or archived articles online (which should include an “info capture” device for email addresses ).

The look of the cards/letters matches the landing pages. The online language references the mail piece. It is truly integrated and truly successful.

The “new” success of direct mail is being copied by such large mailers that – no matter what “mail death” news you’re hearing – commercial mailings are up 3%, direct investment in advertising mail is up 5.8%. (DeliverMagazine.com) These marketers don’t spend $48 Billion in a media that’s not returning dividends.

Summary

If media integration works for them, it can work for you. Please quit thinking of online and offline as separate entities. Integrate them. Don’t think of “our email list and our snail mail list.” Let online and offline offers be the same and offered simultaneously.

Retailers are adding tens of thousands to their email lists by using direct mail. Don’t believe the “word on the street” about other media. (How many sales have YOU made using Twitter?)

Focus on being in the list-building business for contractor services . Do it through all of your marketing, in a cohesive whole, consistently strong across the media. As you’ve always known, success starts with a solid foundation.

How to Multiply Your Leads

It’s always been the case. Since the dawn of time - or around the time my children think I was born - businesses have sought lead generation. The first heating contractor sold fire door-to-door; the first plumber offered ways to get rid of that musty smell in the cave basement. You know the rest: as soon as those first jobs were completed, the first collection agency began.  

The life-blood of business is lead generation. Our most commonly heard request in Marketing Coaching calls is “How do I generate more leads?” They’ve heard all sorts of advice; gotten all sorts of prices from various media, have seen a variety of approaches, and even get a sermon from me on the topic.

It doesn’t matter - they feel “stuck”, confused, or overwhelmed. So depending on the contractor, we occasionally list the steps, but just as often we teach how to do it for yourself (the “teach a man to fish” approach). Not long ago, we got an email…

“… kind of hesitated to ‘get started’. But I'd like others to realize they don't have to feel stuck.  Starting with a few changes can reap immediate benefits that can help them make other changes that will reap further benefits. It’s momentum.

Since generating more leads, I’m now a better sales person, closing a higher percentage. But the biggest factor is having more leads to work with. And I wanted to say, ‘Thanks for all your help.’”            Steve Scott, Comfort Technology, NY

That was very nice of him to say, but the most important word in his email was “Momentum.” Yes, that was a marketing lesson.

You see, he started off “stuck”. But Steve is the guy I mentioned a few articles ago who is getting 6-10 leads a week from a $54 ad. He closes half of those for a Maintenance Agreement. He also invests in Direct Response when the leads slow down, plus he sends all customers a newsletter – like clockwork – and follows up his leads, referrals, and sales regularly. He so “unstuck” now, he can’t even remember it. So, how do you get a dose of marketing momentum when the leads are down?

First, if you’re going fishing, it’d be nice to know what was biting right? How about where, when, on what, how often? Same thing here, so your very first clue to better lead generation is…

Track your Incoming Leads – Would you put your money in a bank that couldn’t tell you the interest rate? How about a watch with no hands? I mean come on – you’re investing in marketing for results, so think in terms of measurement.

Your receptionist can keep up with this in a number of ways. I’ve seen very effective companies use a “tick mark” system of noting an ad’s response that is then fed into a weekly results sheet for leads and sales.  I’ve also seen sophisticated contact management software that had a field for incoming leads per media type. Any method is better than no method. The essence of tracking is to find what works and how well it’s paying you back.

How are you going to figure an ROI if you don’t look at the R and the I?

Look who’s buying – Your customer list shouldn’t be viewed simply as one large category, but as multiple levels of information.  Avoid the frustration of making offers to the wrong group by taking your full list and dividing it to select the best targets. 

How do you determine your most valuable customers? Here’s a quick list segmentation method I like called “RFT”.

Recency: Those who have spent money with you in the last 24 months;

Frequency: Those who have used you with the greatest frequency in the last 24 months

Transaction size: Those who have spent the most with you in the past 24 months.

1. Rank the BEST candidates according to the above and determine how big a list you can effectively contact.

2. Assemble your RFT list for a PostCard offering $20 off ANY service call, PLUS a $20 gift certificate for referrals who get service work done within the next month (or whatever time period you determine). 

Oh, I can hear the cries from some of you already… “I’ve got to pay $20 for each new customer?!”  Actually, you’re already paying more than that.  The average customer acquisition cost is $275, so this is mighty cheap by comparison, and you only “pay” when they pay you.

The gift certificate can be for a lunch/dinner, which is a nice gift. (A wise restaurant owner will sell you blocks of 10 or so certificates for as little as HALF the face value to put more diners in the seats. They may have certain night limitations.)

Now, not only will you generate leads and nearly free referrals with the right offer, but you’ll determine the value of this list to help find commonalities for a much broader contact list later. Bear with me for a sec.

3. Make the call – Follow the PostCards with a call saying, “Did you get our money-saving PostCard in the mail?” (If the answer’s is “no,” check your records.) “Great, our technician will be in the area on Thursday and Friday.  Which would be a better day to stop by to evaluate any plumbing needs?”  This is an alternate-of-choice close and not pushy if said by a PLEASANT smiling voice. Modify for your tastes, but you get the idea.  

If your caller runs into a person who doesn’t need any work, can’t think of a referral, but says nice things, jot it down and request to use it as a testimonial.

From your customer list, a 1.3%-2.5% response is the “range” depending on quality of list and offer. Getting 50 leads from a 1000-2000 piece mailing is not a bad result for an hour to get the mailing ordered. (We had a direct response piece get 11%, but that was freakish, and not to be expected. Of course, we brag about it endlessly, like I just did again.)

This is a small mailing, to a high quality list. As you generate appointments, sales, and referrals, you’ll have made some money to keep the momentum going. Since you tracked your leads (Remember? You did, didn’t you?), you now have a “guide”…

Once the “commonalities” of your list are determined profitable, go get a list of similar demographics. A Mail List Broker (in the dreaded Yellow Pages or at www.amerilist.com ) can create a list based on the best respondents using combined income, age of home, education, and other parameters. This is a simple list to obtain.

In fact, this whole list is simple to do, doesn’t cost a bunch, and can generate a flood of leads when you need ‘em most… like now. Can you think of a reason not to get started?

Let your marketing momentum begin!

You May Not Judge a Book by Its Cover… But covers sell lots of books, colleges and contractors

Woe is me. I was the hero. I was the king. I was the father made of steel. As invincible as any spandex-wearing, building-leaping protector with fake but superbly sculpted abs. And then my children grew up.

They became people with actual opinions. And I became human and fallible, almost (!), with receding hair and all. Darn it.

We are entering a new phase in life; my cherished “little girl” has left the nest and gone to college.

I stand in her room full of whimsy, Viewing posters of musicians and past heartthrobs. A handsome teen vampire dude looks broodingly my way. I don’t approve of him either. I scan the lavender walls that made me initially cringe when painted while she was at summer camp. Upon returning, she “ooohed” with delight, swooning dramatically into a round plush chair. Only an echo remains. Even the heartthrob’s smile seems to have faded a bit.

Years later, we added an adjoining bathroom so she’d not have to share one with her decidedly less preen-prone brother. Plus, he left the toilet seat up. Forever.

Many evenings of prom-like perfection were achieved there, as teenage girls aplenty tossed, flossed and glossed themselves for exceptionally undeserving young men. (I’ve been male all of my life; believe me – we don’t deserve any of you!)

A misty reflection stands in the full-length mirror checking to see which shoes look best. “They’re both fabulous,” I whisper, knowing I’m answering the most deadly question a man is ever asked. Okay, it’s in the top 10.

Just before I get sad, I smile…

I smile at the independence of her thoughts, artistic pursuits and ability to mount “reasons for or against” faster than Congress approves their own pay raise. She’s also got a laser-like opinion on aesthetics.

I can ask her about the design of a car, the face of a watch, the arc of a boat’s hull or a pediment detail on a Greek Revival façade and the answer – fully formed – comes blazing back in acceptance or dismissal. She can be equal parts sweet vanilla or pure venom, each indiscernible until dispersed. You ask her opinion and you’d better have your seat belt on.

And using these powers of decisive independence, she virtually chose her own college. Yes, a multi-thousand dollar, 4-year life-path commitment 700 miles away, largely made without ever leaving this lavender room.

Say hello to a tidal wave of how your current and future buyers buy.

See, using the powers of prehistoric parenting, we dragged her up and down the eastern U.S. to visit schools “best-suited” to her (in the opinion of real and trusted college counselors). We “suggested” others, including our beloved alma mater and nearby University of Alabama that offered her a full scholarship. Yet, she knew what she wanted and these weren’t it.

So, she did what millions of thinking, independently-minded, focused people on a mission do: She went online.

She searched and researched “Graphic Design Education” like I research marketing behavior. She scoured discussion boards, social sites, the schools’ websites, student and parent reviews, plus everything from enrollment to weather to job placement. (I approved that last entry.)

Eventually, she gathered and presented mounds of convincing evidence about a school called “TCU” in Fort Worth, Texas. I thought Fort Worth was a really large ranch, surrounded by a split-rail fence, where steer walked around saying “Howdy” and doing stuff, most of which is ruinous to good shoes.

Yet, she convinced us to make a visit. And my, oh my…

It was like my daughter and TCU had met on eHarmony. They virtually snuggled and called each other pet names. I had to admit, this place was a dialed-in match for her, and Fort Worth is a beautiful, culturally-advanced jewel of a town. In a 3-day visit, we were completely sold, which is relatively difficult. Especially considering this –

We knew zero current students, no alumni, no teachers and had no “advisor” endorsement.

Yet, her “Book Cover Research” triggered a rather significant sale. Before this, I could barely spell TCU. Now I wear purple and scream “Go Frogs” for no apparent reason.

Let me clarify the money part: She got a seriously good partial scholarship (THANKS to good test scores and my new best friends in the Admissions Department). Plus, I’d saved 10 straight years for this occasion. Yet the “package” value remains, like many colleges today, firmly in the nosebleed section.

TCU ticked every box for her. They dispensed their every advantage online; they linked a world of strangers to become a welcoming spot for friends. They organized their best “features and benefits” for maximum findability and impact. (My daughter sometimes dismissed a school because “Their website was unnavigable; they looked unprofessional.” Talk about death by book cover!)

In short, we were “sold” almost before we arrived. We didn’t know the book, but we knew the cover well. By the time they told us the story, we were signing admission forms.

I come to my senses standing in her now-empty room. I know she’s happy. Very happy. And so is the once superhero, who is still prone to fly to TCU as needed, perhaps accidentally knocking the undeserving jerk from the dorm porch upon landing, since he’s not good enough for her. Ever. Some habits die hard.

Adams Hudson

Questions for you:

If someone was searching for your trade services online, without any prior knowledge of you, what would they find?

Are your reviews positive and powerful?

Does your online “book cover” present convincing evidence that your company is a great choice?

Does your Local Listing show up on PAGE ONE of Google? If not, why not? (Get your no-cost Listing Grade here.)