3 Tips for Uncovering Your Customer Lifetime Value “Acres of Diamonds”

There’s an old story about an African farmer who heard about other farmers making millions by uncovering new diamond mines. The farmer became so excited about the idea of finding diamonds, he sold his existing farm and spent the rest of his life traveling around Africa prospecting, unsuccessfully, for the new property that would make him rich.

Sadly, after a lifetime of searching, the farmer ended up penniless and threw himself into a river and drowned.

Now in the meantime... the man who purchased the farm one day happened to notice a sparkle in the stream running through the property. He waded out into the water and literally picked up one of the largest diamonds ever discovered!

Turns out the farm was already sitting on what turned out to be one of the largest diamond mines in the world.

So what’s the moral of the story?

The moral is: you can often find a fortune, literally, in your own backyard if you just take the time to look for it!

Unfortunately this "grass is greener" behavior is also much too common among many businesses today.

Businesses who spend so much of their time, money, and energy on the pursuit of new customers, day after day... when their high ROI (Return on Investment) customers are actually right in front of them — with their wallets already open!

Earl Nightingale once wrote, “It's been said that if the other guy’s pasture appears to be greener than yours, it could be because it’s getting better care.” I would argue that this same statement could be made about any businesses’ existing customer base.

So with the Acres of Diamonds story in mind… here’s 3 tips for using the principle of Customer Lifetime Value Maximization (CLVM) to increase your businesses’ revenues, gross margins and total profits… by selling more to your existing customers.

           1) Calculate Your Customer Lifetime Value (CLV)  

a.       Customer Lifetime Value is the most important metric you’ll ever calculate

b.      It’s the starting point for everything you do in marketing your business

c.       You can’t make effective marketing plans without knowing this number

Unfortunately, Customer Lifetime Value is one of the most often overlooked and least understood metrics in business even though it’s one of the easiest to figure out… and although many in the academic world make calculating it sound like rocket science, it doesn’t have to be that complicated.

For a quick tutorial on how to easily calculate Customer Lifetime Value, Geoff Fripp at the University of Sydney has some great tools and video tutorials you can see here: http://www.clv-calculator.com/videos-clv

2) Have a Customer Retention Marketing Plan

For most U.S. businesses today, Customer Retention Marketing continues to take a backseat to new customer acquisition and typically has a much smaller budget allocation than new customer acquisition.

   

This is a big mistake because study after study continue to show that 80% of your businesses’ future revenues will come from just 20% of your existing customers.

In fact, in his book The Loyalty Effect, Fred Reichheld states that “a 5% improvement in customer retention rates will yield between a 25% to 100% increase in profits across a wide range of industries.”

So if you really want to move the needle on your businesses’ future growth… take the time to uncover the “diamonds in your own backyard” by giving your existing customers the time and attention they so richly deserve.

Start a customer loyalty program with special offers and discounts…  institute a better customer service or complaint process — and most of all, engage with your existing customers using as many communications channels as possible.

           3)  Create Customer Experience “Chain Reaction” Referrals

Lastly, if you want to maximize the full Customer Lifetime Value of your existing customers, you need to have them actively advocating for, and promoting, your business by referring you to their friends and colleagues. 

Unfortunately, soliciting referrals from existing customers is a huge marketing opportunity not being exploited adequately by most businesses today.

In fact, a study by the Wharton School of Business found 83% of satisfied customers are willing to refer products and services to others, but only 29% actually do so… mostly because no one is asking them to!

Just imagine the impact on your business if 83% of your existing customers sent you just one new referral and then that referred customer sent you one referral… and so on… and so on... starting a Chain Reaction of constant referrals!

So the questions is… how do you get more referrals from existing customers?

The answer is… you need to make sure your customers have positive emotional experiences throughout every aspect of the customer lifecycle “chain of reactions” they have when doing business with your company — Chain Reactions that start at their first visit to your website, office or store, and ends when they no longer want or need your product or service.

If you’d like to learn more about generating more loyal customers and referrals, check out my latest book Chain Reactions.

Alternatively, you can simply start by just asking your existing customers. As the Wharton study shows, 8 out of 10 will probably say yes.

So that’s my three tips:

If you're tired of spending money on new customer acquisition advertising and marketing that just doesn't work anymore... try spending a little more on your existing customer “Acres of Diamonds” in your own backyard. You may just find your fortune.

About John Weisenberger

Author of “What is Global Marketing for Small Business?” and “Chain Reactions: How Create Massive Customer Loyalty and Profits using Customer Experience Management”, John Weisenberger is passionate about sharing his experiences and systems any business can use to immediately improve their results.

With over 30 years of Fortune 500 and small business management experience in a variety of industries and global markets, today John is best known today as the creator of the Chain Reactions Marketing System™ visionary business owners and their managers use to expand their customer base, increase customer loyalty and drive higher profitability in virtually any market or industry. Learn more at http://www.JohnWeisenberger.com

Walgreens employees no longer need to greet each customer with "Welcome to Walgreens"

Walgreens employees no longer need to greet each customer with "Welcome to Walgreens" or end each transaction with "Be well," according to a new company memo they recently released. The retailer's guidelines also now *encourage employees to learn customers' names and use them in greetings.*  What a great Customer Experience Marketing idea!

Walgreens made this policy change after feedback from many of their employees stated that the mandatory greeting and goodbye "sounded like an insincere carbon copy routine."  Many Walgreens employees also believed it was somewhat ridiculous to say “be well” when someone is buying cigarettes or other unhealthy products. 

If you've followed any of my Chain Reactions posts or attended any of the my Webinars at http://www.JohnWeisenberger.com, you know that asking the customer's name and then using it in conversation is only done in a very small percentage of customer/client/patient interactions. By giving their employees more latitude in how they choose to greet customers, Walgreens employees will now be able to greet customers with a much more sincere experience that will help build stronger relationships and increased customer loyalty.  

Oh yeah, and did I mention, it costs absolutely noting to implement this idea. Now where did I hear that before?

Will you ride the Customer Experience Big Data wave in 2015?

A Customer Experience Big Data wave is building so the question is: Are you ready to ride it or will you be crushed by it?

And there really are just two choices: ride the wave or be crushed by it as pointed out by Chris Surdak in his new book Data Crush available at http://surdak.com

Let’s face it, we’re all competing in a world full of commoditized products and services from competitors all competing on price so the question becomes:  how do you plan on differentiating your product or service from all the other suppliers in your market?  

What’s your purple cow (as Seth Godin calls it) that will separate your business from all the others in the herd; because unless you have a differentiated competitive advantage, how do you plan on winning new business and retaining your existing clients?

I believe there are two parts to the answer.

Part #1 of a solution for standing out from the competition is to be able to have a better understanding of your customer’s quickly changing wants and needs. Understanding the powerful insights Big Data analytics can provide about your customers should be a big part of any Customer Experience Marketing Plan you have going forward.

Part #2 of the solution is to be aware of what you competitors are doing in the areas of Customer Experience Marketing and how they are looking at using new technologies, customer Big Data and business performance metrics to gain more insight into Customer expectations as well as how their businesses are performing against those expectations.

It’s with these two areas in mind that I want to pass on the top five Customer Experience Marketing trends for 2015 as compiled by http://Clientheartbeat.com with few of my comments thrown in as commentary.

According to Clientheartbeat.com, the top five Customer Experience Marketing trends for 2015 are:

1. Customers will expect more. Customers feel like they have the power in today’s business world. They aren’t afraid to switch to a competitor and they aren’t scared of voicing their opinions via social media.
2. Companies will increase their investment in customer experience. In 2014 Gartner research revealed that digital marketers were spending almost as much to retain customers (45%) as they do to gain new ones (55%).
3. Tracking and measurement will become [more] important. Research from the Temkin Group reveals that two key customer experience metrics will become more commonly used in 2015 to measure the effectiveness of customer experience marketing efforts: #1) The percentage of customers who plan on repurchasing products, and #2) the Net Promoter Score (NPS) customer loyalty metric that asks the question:  “How likely is it that you would recommend our company/product/service to a friend or colleague?”
4. Customer experience technologies will integrate with existing marketing technology. That’s good news for us small business owners’ as no one wants worry about even more new software tools and IT headaches. However, we need to make sure that the tools and methods we use for measuring the customer experience deliver a good experience so keeping your marketing tools and technologies up to date should be an important part of your Customer Experience Marketing Plan in 2015.
5. Companies will strive to create a one-to-one, cross-channel experience. Companies will strive to create one-to-one relationships with their customers integrated across all their favorite channels – email, social media, telephone, in store and on desktops, mobiles and tablets. The companies that can bring all this data together and treat customers like individuals will be the ones that quickly create customer advocates, see growth in revenue and create sticky, strong competitive advantages.

So are you ready to ride the Customer Experience wave in 2015?

If you’re sick of competing solely based on price, it’s time you consider implementing a Customer Experience Marketing Plan by heading on over to http://www.JohnWeisenberger.com.

By improving the customer experience, you’ll increase customer satisfaction and boost customer loyalty which will lead to the creation of more customer advocates who can spread the word about your business and provide you with more referrals. It will also help you create a point of differentiation that will help you fight off competitors and win new business. And what could be better than that?

Leave a comment and let me know if you agree.

How to Listen Faster for Competitive Advantage

I once had a boss who told me the secret to being more productive was to sleep faster. And while I’m sure he was only joking, I have learned that the secret to staying ahead of the competition is to “listen faster” by monitoring and responding to Voice of the Customer (VoC) feedback in near real time.

So what does listening faster mean and how can solo-preneurs and local business owners implement a real time process for collecting and responding to VoC feedback? The following article provides practical tips you can use to collect, analyze, and take action on the feedback (solicited or unsolicited, positive or negative) your customers are only too happy to provide your business in today’s always on, 24x7, social media connected world.

Practical Tips for Monitoring What’s Being Said Online

Tip #1) Place links to highly visible feedback forms everywhere on your website. New technologies such as Speakpipe.com allow your customers to leave a voice mail directly from their computers without having to pick up their phone - you can see an example on my website at JohnWeisenberger.com. The listening faster competitive advantage here is to make yourself so easily accessible (and responsive) that your customer is never tempted to lash out using other channels such as Twitter, Facebook, Google+, Yelp, etc.

Tip #2) Set up Google Alerts (google.com/alerts) to monitor any mention of your company (and your competitors). Monitor your company name, product/service name and the names of any prominent people at your company. Be sure to include any conceivable misspellings, abbreviations and slang names for your product or company name too.

Also be sure to set your Google Alerts frequency to “as-it-happens” to make sure you are getting them in real time. This is your listening faster competitive advantage as many solo-preneurs and local businesses owners set their Google Alerts frequency to once-a-day in order to avoid interruptions during the day.

Tip #3) Set up your TweetDeck (tweetdeck.twitter.com) or Hootsuite (hootsuite.com) accounts to automatically monitor for your @name, hashtags about your company name, product name, conference name, etc. For example, you can monitor for hashtags such as #yourcompanyfail or #yourbigevent.

You can also use Twitter’s manual search engine (twitter.com/search-advanced) to look for past instances of Tweets about your brand or manually search it regularly to see what’s being said about your brand.

 Regardless of the tools you use, you need to be aware of what’s being said/tweeted about your business and be ready to respond to any negative comments as quickly as possible before the retweets escalate what could have been a small issue into a major public relations fiasco. Listening faster can help assure you’re never caught off-guard by an upset customer who could have been communicated with directly, one-on-one, outside of a public forum without thousands of others knowing.

Taking Action

My final tip for beating the competition by listening faster is to use a Virtual Assistant (VA) that has the responsibility of monitoring and analyzing your collected feedback and identifying those issues that require immediate attention from you or your designated Customer Experience Manager (CEM). Using a VA service that provides 24x7, follow the sun, phone and email coverage can be a very cost effective way to implement a faster customer service and VoC feedback monitoring process.

Remember, in today’s business environment, a small mistake combined with a slow response can quickly become a huge public relations problem for even the best run business. Don’t let a delayed response itself become more of a problem than the initial customer complaint. Listening faster can be your competitive advantage.

Jim Beam Bourbon launches first Global Marketing campaign

As I pointed out in the opening Chapter of my first book, "What is Global Marketing for Small Business?" much of the world actually likes American made products. In particular, American food and beverage brand such as McDonalds, KFC, Coca-Cola, Pepsi and others have a long history of advertising and distributing their brands globally. In September 2013, another iconic American brand announced its plans for "going global." That iconic American brand is Jim Beam Bourbon. 

Beam Inc.'s campaign will start at the end of 2013 in the United Statues and Australia and then will be rolled out to more than 100 other markets around the world in 2014. 

According to Matt Shattock, president and CEO of Beam Inc, “We’re excited to announce the launch of ‘Make History’, the first truly global advertising campaign for Jim Beam. This multi-year campaign reflects sharp global consumer insights, substantial investment in the continued growth of our flagship brand, and our sustained commitment to the attractive and fast-growing bourbon category around the world. ‘Make History’ is a big brand idea that resonates with consumers across global markets.”

Beam Inc.'s "Make History" campaign will promote the full line of Jim Beam products and will feature advertising on television, digital, social, print and out-of-home platforms.

In 2012 Beam Inc. sold more than seven million cases worldwide and figures have shown increased sales for the first half of this year. With an increase emphasis on global marketing and markets, I expect they'll do even better in 2013 and 2014!

So as you've so often heard me say, "every business can be, and should be, a global business." What's your global marketing plan for 2014?

Getting Attention For Your Business Around The World

If you’re a global sales or marketing professional responsible for growing the sales of a business around the world, your biggest Global Marketing challenge is gaining the attention and interest of new international customers when most (if not all) of them probably don’t even know your company exists. So the questions becomes, how can you easily and cost effectively raise the visibility and discoverability of your business in other markets?

For example, will prospective customers in other countries find your company’s website, or your product promotional campaigns, when they search online using the most popular search engines in their country? Search engines such as Baidu.com which has a 78% market share in China, or Yandex.com with its 59% market share in Russia, or Naver.com which controls over 65% of the search engine market in South Korea.

If you answered no to the last question that could be OK. That is if you have no desire to market your products and services in any country other than your home country. However, if you plan to expand your business beyond your home country, the first thing you’ll need to do is recognize the fact that you’ll need to promote your business in the native language of your target market.

The good news is, it’s not necessary to translate your entire website and marketing collateral in order to be discovered in the world’s other big search engines (i.e. other than Google, Yahoo and Bing.)

Multilingual SEO to the Rescue

To gain more global online visibility and discoverability many small businesses today are employing what’s known as a Multilingual Search Engine Optimization (MSEO) strategy where a single web page (called a Doorway Page) is created for each of the target markets/languages you want to reach. Essentially this Doorway Page is a quick overview of your company with an invitation for your website visitor to “click on over” to your English language website to continue their research or purchase objective. And from a lead qualification perspective, if that visitor is not willing to continue their research/purchase in English, then they probably aren’t really a good sales prospect for your business anyway.

Getting Started

Implementing a simple Doorway Page strategy is quick and low cost because it doesn’t require you to translate your entire website in order to submit it to the non-English search engines. What your website does need to have, however, is at least one Doorway Page in your targeted local language and it must be optimized with keywords and meta tags in that local language in order for it to be found by the non-English search engines.

For example, if you want to market to the global Hispanic community, your website needs to have a Doorway Page optimized with Spanish keywords and enough Spanish content to describe what your company does. To achieve this, the most common form of MSEO Doorway Page typically describes (briefly in the non-English language) what your company does and then offers your website visitor an invitation to “click on over” to your main website where all further interactions and communications with them will be conducted in English.

According to the MSEO specialist at MSEO.com, 99% of all searches on the Web are first done in the searcher’s primary language. When a non-English searcher comes across your Doorway Page, about 10%-15% of them will choose not to visit your English website. The good news is, that means 85% to 90% of these non-English searchers will choose to continue on to your English language website. In actuality, this is a great way to separate the simply curious searchers from the potentially serious sales prospects.

So why does using a MSEO Global Marketing strategy work for so well for so many small businesses?

Well the simple fact that someone in France will enter keywords related to your product or service in French on the French version of Google or on the French Yahoo site doesn’t mean that the person doesn’t speak English.

The reality is, there are, literally, millions of people in other countries who do speak English but conduct their initial online searches on local search engines using keywords in their native language. These are the global customers you are looking for: English speaking individuals who search for products and services in their own native language but who can, and will, do business with you in English! In fact, if a visitor is unwilling to do business with you in English, then that visitor is probably not a very good prospect for your business to begin with.

What it all boils down to is this: it’s not about translating your entire website and doing business in another language but, rather, it’s about encouraging your visitors to do business with you in English. Your task is to get them to your English website by giving them an “invitation” in their own native language.

So with that said, let me show you a few examples of small businesses that are successfully using this simple MSEO Doorway Page strategy.

Travel Industry Example

Tanzania - Voted the #1 best African tourist destination in 2012 by the New York Times, Tanzania’s Tourist Board is a government organization which is responsible with promotion and development of all the aspects of the tourism industry in Tanzania. Being an English language country (along with Swahili), Tanzania’s Tourist Board also wanted to reach potential visitors from many other countries so they developed MSEO Doorway Pages for various targeted markets. For example, take a look at their Portuguese language Doorway Page at the following link: http://www.tanzaniatouristboard.com/intl/portuguese.html

Manufacturing Industry Example

Custom Mold Making China Limited (CMMC) is a 200 employee manufacturer in Dongguan City, China (a city I’ve visited by the way) that specialized in making complex components and precision moulds for plastic injection, die casting, aluminum extrusion, and other complex products. Take a look at their Italian language Doorway Page at the following link:  http://www.cmmcltd.com/intl/italian.html

Real Estate Industry Example

NoFeeRentals.com is owned by Jakobson Properties, LLC, a family-run New York real estate company that owns more than 2000 rental apartments throughout Manhattan and Queens. In order to attract more tenants from other countries NoFeeRentals.com implemented a MSEO Doorway Page strategy for multiple target markets. Take a look at their Korean language Doorway Page at the following link: http://www.nofeerentals.com/intl/korean.html

Software Industry Example

TimeWriter is a time billing software program that helps its Users track all the hours spent on various tasks. TimeWriter software gives you everything you need for invoicing and managing your time billing information. Based in the Netherlands, TimeWriter has developed multiple Doorway Pages for other nearby countries. You can see their Danish language Doorway Page at the following link: http://www.timewriter.com/intl/danish.html

Simple MSEO Doorway Pages like the ones I just described can typically be outsource to a MSEO specialist like MSEO.com who will write the local language copy and submit your site to the various local search engines all for around $500 per language. As an alternative, you could write your own MSEO Doorway Page copy and then use the services of someone from Fiverr.com or eLance.com to do the localized translation and submission to the non-English search engines which could save you some money.

Either way, the bottom line is, if you haven’t considered using MSEO as a Global Marketing strategy, this is the year to pick another country/market (or two) and give it a try.

Ten Global Business Trends for 2014 You Can’t Ignore

So here we are again about to enter the fourth quarter of the current business year; a time when many of us are preparing our Annual Operating Plan (AOP) for the coming year. As I was researching what is going on in the global business world, and how current events and trends are likely to impact my business in the coming year, I came across an interesting video by Australian marketing expert Kane Minkus of IndustryRockstar.com. In his video, recorded in early 2013, Minkus described ten global business trends that he predicted would change the face of small business in 2013 and beyond.

Looking back over the past year, I would have to say that Minkus was "spot on" in his predictions and that everything he described has either occurred or is in the process of occurring as the entire global economy continues to undergo the massive transformation caused by digital technology, shifting demographics and economic restructuring. And looking forward towards 2014, I see no indication that any of these trends are diminishing in importance or impact so smart business owners will be the ones that consider each of these ten trends in their 2014 AOPs and long term strategies.

So with that as backdrop, I'll save you the time of watching the 20 minute video, and taking your own notes, by summarizing the ten trends here.

Trend #1: Small and Micro Businesses will be a growing market segment to be served.

There will be more and more people leaving their big company jobs and starting their own small business or practice providing growth opportunities for established small business that serve these new startups.

Trend #2: Results Based Marketing will win and cut through the marketplace clutter and noise

People want results; not more information. Figure out what to measure to prove your value and then show your numbers. Get testimonial from those who have experienced your results.

Trend #3: Markets and Buyers are becoming more sophisticated so you must cater to an advanced mindset

This is especially true in the training/coaching/seminar market where potential clients are going to say "I've heard this all before." 

Note: In the words of Rich Shefrin, "you need to reframe their problem, make them see it in a different light" or as Glen Dietzel says, "you need to ask your client a better question."

Trend #4: Production values will be raised for media and product presentations

This means the sales process will require a more sophisticated, creative, and innovative approach to be successful. You can't be plain vanilla. You'll need to stand out in the market place and your brand marketing will need to rise to the level of your competition-or even better, you need to set the bar for your competition.

Trend #5:  There will be more opportunities for exposure by speaking publicly than ever before in history.

More people will be sharing their knowledge than you've ever seen before so if you want to stand out and build your personal/business brand you will need to be very good a speaking and presenting on videos, speaking at business conferences, at networking groups, seminars, workshops, etc. etc. You'll have to have skills as a speaker; so if you don’t, start working on them now.

Trend #6: There will be more higher priced, personalized, products and services that will actually sell easier.

More people will be interested in personalized, high value, customer experiences.

Trend #7: Several geographic regions will expand very rapidly

Asia and South East Asia will be no surprise to anyone. Russia, Brazil and India will also be high growth emerging markets for personalized expert services. The big surprise will be the growth rate of the personalized expert services market in Canada. Look north all my US compatriots!

Trend #8: Online business will expand massively

More people will be doing business on Skype than ever before. For example, have you seen all the Youtube videos showing people how to do job interviews on Skype? People will become so comfortable doing business online it will become the norm. Think Webinars, group training, tele-seminars, video conferences; you'll need to be good at doing all of these. Also, new emerging markets will be going online, new age groups (older) will be going online more.

Trend #9: A greater move towards experiential businesses

Businesses that create a positive experience for their customers will move way ahead of the pack. People will pay more for things that give them a good experience. Creative experiences will be a key differentiator and smaller micro-businesses will begin to put more emphasis on creating awesome customer experiences for a focused set of clients. Customers will begin to buy more from individuals and businesses that create the best experiences for them and the myth that you'll have to spend a lot of money, or that you have to be a large business, to create a great customer experience will begin to go away. Make sure your business plans consider the customer experience throughout the entire value chain including the buying experience, the fulfillment/delivery experience, the lifecycle support experience, etc., etc.

Trend #10: Entrepreneurs and professionals will focus more on their passions

The competition from people who are passionate about what they do will get fiercer and fiercer every year and they will soar past the people who are just doing a job. If you don't love your business, find someone else who can run it for you, or find something else to do.

Conclusion

So there you have it. If you want to be really successful you have to figure out where the world is headed and get there first. And if you want to outpace your competitors and become a market leading thought leader, pay attention to these ten trends and make sure you exploit them in your 2014 AOP and long-term strategic plans.