How can you most effectively grow your business?
To find out, I interviewed Mark Paul, an expert at attracting more customers. He’s the author of “How to Attract More Customers in Good Times and Bad.” His firm is Synergy Consulting.
Unlike most sales-and-marketing conversations, this is truly about strategy — it’s uniquely pitched to the CEO because it involves decisions only the CEO can make.
Mark has a background in physics and had P&L responsibility at Northrop Grumman where he built a 250 person unit. He then went out and did interim executive work and consulting, and quickly gravitated toward customer attraction as a distinctive way to add value for clients.
– For a healthcare services provider, in 6 months they doubled their number of customers, increasing monthly income over 70%.
– For an IT Services firm, reduced average sales cycle from 7 months to 2 months.
– Increase company valuation from $1 million (best prior offer) to $20 million in 6 months. Additional income to owner: $19,000,000.
Mark uses a very specific process for first evaluating and then improving a firm’s customer attraction activities.
- Qualitative Assessment
- Quantitative Assessment
- Customer Research
- Test Assumptions – lots of metrics
- Roll out
Go over all the existing marketing activities to get an intuitive sense of what’s happening currently. In particular, look at whether the marketing is focused on products, features and benefits, or on the customer’s motivations for buying.
Look over all the customers to find what it is that makes an “A” customers. Get clear on what sort of customer this is — anything from demographics to size to industry to geography, and on and on. These are the ones we want to attract more of.
Go out and ask “A” customers who they are, ask them what messages they like, find out why they buy, and how they obtain the information that helps them buy. We are seeking to understand their fundamental underlying motivation to create a preferred customer profile.
For example, suppose you sell to CIOs, and you know CIOs typically lose their job in 5 years. To that person, you might (if it were true) talk about how your product will help them keep their job.
We also look to find out, based on the data from the prior step, how each customer came to us — direct mail, trade shows, web based marketing, or whatever. This becomes crucial.
Successful companies are especially prone to making assumptions – they tend to assume everything they are doing is correct. For example, if we find that customers are actually coming because of referrals, and they then do a web search for due diligence, you might mistakenly believe the web site brought them in — you have to ask the question.
Once you suspect that referrals are what’s really driving your sales, you run a small controlled test to find out for sure. If we find out we’re mistaken — perhaps our supposed “A” customers don’t stick around, or perhaps the referrals aren’t really the source of new customers — then we go back and analyze and test some more, based on the new data.
Only after the Test phase is successful do we commit the resources for a full size rollout.
It is very common to find that, of the 12 to 18 marketing activities the company is engaged in, there are 1 to 3 that have a huge ROI and pay off very well — perhaps $40 per dollar spent — and there are another dozen that only return maybe $2 per dollar invested.
By cutting back on the ineffective activities, we save a lot of money, and we can drop half of it to the bottom line and put the other half into increasing the marketing activities that we’ve discovered work the best.
Every one of these steps adds value. For one client, changing the direct mail materials to actually show people using the product instead of just mug shots of products, their response rate went from 1.85% to almost 9% and the cost per customer dropped from $200 to $80.
There are lots of ways to get started, from free resources on Mark’s web site, to his book for about $20, all the way up to a full engagement.
His newest offering is a 15-minute assessment that both provides the CEO with a diagnosis and a plan to improve the firm’s practices.
Included in the assessment is a ranking of that firm compared to all others who have taken it, as well as compared to others in their industry. They also get compared to “best in class” firms on two axes — “Personal Readiness” and “Professional Readiness.”
Listen to the full interview here.