Your Competition Wants Your Customers

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Competition is a part of business life. Some would argue that competition forces businesses to strive to get better at what they do for the fear of losing customers to rivals. Losing a few customers periodically is inevitable. However, losing too many (especially your best customers) must be avoided at all costs.

For most businesses, the top 20% of their customers account for 80% (or more) of their profits. While much thought and strategy typically go into bringing in new customers, not enough is spent on retaining existing customers. That’s where the real gold lies.

It may be a little uncomfortable to think that some of your best customers might be looking at making a change, but it’s something you must consider if you want to avoid having it become a reality. Everyone talks about taking care of their customers, but in many instances that’s a phrase not truly backed up with action. To build a fence around your customers and keep them far away from the prying arms of your competitors, you mus truly care, protect, and guide them.

Gather customer feedback on an ongoing basis.

Most businesses put a lot of hard work into getting a new customer. But after they become a customer, little effort is put into nurturing that relationship. A customer should never be taken for granted.

It’s easy to get wrapped up in the day-to-day operation of your business and lose touch with what’s happening outside your doors in the marketplace. Phone calls and emails to customers can be a great way to communicate and stay connected. But to do it on a large scale can be unrealistic. Informative company newsletters and surveys can help keep your customers up-to-date and give them a way to express their needs and concerns. These efforts can provide an early warning system to catch a customer jumping ship before it happens.

Tell them what you do.

Your competitors will do anything to steal your customers, including promising the moon. You know that some of these are false claims or teasers to get their foot in the door. Some of your customers may not know that. Your job is not only to provide a great product and service but also to continually remind customers about the value you provide that your competitors can’t match. If you don’t tell them, no one else will either.

Informing your customers through educational marketing content is a powerful way to keep them engaged while differentiating your company as one that truly cares about their success (not just your own).

Where are the weaknesses?

To help plug the holes in your business, start thinking about things from your competitors’ point of view. After all, they’re always looking for any weaknesses they can exploit, so you should, too. That way, you can shore up your weak spots before they get out of hand and, in the process, strengthen your position in the marketplace.

To discover your weaknesses, talk with your customers. Ask them about the areas you could improve. Stay up-to-date with industry trends that could create a possible gap in your defenses, too. You can’t buy every bit of technology as soon as it hits the market, but you can stay informed so you can address concerns with your customers when they arise. Sometimes the best defense is a good offense. Be proactive in your customer communication.

“There is only one boss: the customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.” ~ Sam Walton, Wal-Mart

Customer retention starts with providing great service and value. Getting to the top is hard work, but staying there requires just as much effort. Being aware of the competition while shoring up the weak areas in your business can go a long way in helping keep your customers coming back.

Monopolies and the lack of competition aren’t in anyone’s best interest. Keeping your best customers satisfied is. Use competition as a motivating factor to continually improve your services. Communicating with and showing appreciation for your customers will give you an invisible force field to keep the competition out of your backyard.

How Premiums Work Better Than Coupons and Discounts

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What is a Premium?

A premium is anything of value that you offer a prospect or client in exchange for taking an action that you direct them to. This could include an incentive or a gift.

The right premium could encourage someone who might otherwise set aside the mail to act now instead of later (or not at all). This works especially well when there is a limited quantity available or you state a deadline for responding. An example of this would be offering a Starbucks coffee gift card in exchange for filling out a survey or submitting an honest testimonial.

Premiums can also be used to generate demand for your products and services, to reward fast response, or to boost the size of an order.

Why Does a Premium Work?

Everyone wants something for free, but they also want to reward those who rewarded them.

Premiums work because of the “rule of reciprocation” made famous by Robert Cialdini, a psychologist and author of Influence: The Psychology of Persuasion. According to Cialdini, “We are obligated to give back to others the forms of behavior that they have given to us. Essentially, thou shalt not take without giving in return.”

How Premiums Improve Direct Mail Response?

Any direct mail campaign includes the following components:

  1. The Mailing List
  2. The Design
  3. The Copy
  4. The Offer
  5. The Print & Packaging
  6. Timing & Delivery

How do premiums fit into this? They are part of the offer.

Most premiums have low costs but a high perceived value. Although premiums add to the cost of a mailing, the gain in response and the attention they provide outweigh the additional expenses.

Premiums can be delivered in several ways, depending on the goals of the campaign. The premium can be delivered as a front-end offer, when you want your mailing to stand out. It can also be delivered as a bonus or incentive, if the recipient responds to your call to action. In this case, a photo or graphic image of the premium would work well.

Examples of premiums can be found in daily life outside of direct mailers. The McDonald’s Happy Meal is often purchased because of the toy premium inside rather than the food. Many cereal boxes are sold because of the trinkets inside as well. Premiums are often used at sporting events when the ticket attendant hands out a calendar or a bobble head to the first 1,000 attendees. Premiums are also found in many non-profit mailers, where a free set of mailing labels with your return address printed on them are included, along with the request for a donation. Our society at large is conditioned to appreciate premiums.

Premiums can also be used to encourage your existing clients to give you referrals and testimonials. They can be used as great reminders to motivate your best clients to help you get more customers.

But will premiums work for you?

Remember that your premium is only one part of the direct mail package. You must still follow best practices and essential principles of direct mail. Although a premium can improve results, premiums alone do not guarantee success.

Just because premiums work for many companies does not guarantee that they will work for you. Test different premium offers, and keep careful records of your costs and sales (or leads) generated.

Although the recipients are not obligated to respond, history, case studies, and human psychology indicate that offering premiums can significantly boost your response rates. Direct mail + a premium can be a winning combination to boost business for your company.

Your Unique Selling Proposition

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What’s a unique selling proposition (USP)? First the <em>Wikipedia</em> explanation:

<blockquote>”The unique selling proposition (a.k.a. unique selling point, or USP) is a marketing concept that was first proposed as a theory to understand a pattern among successful advertising campaigns of the early 1940s. It states that such campaigns made unique propositions to the customer and that this convinced those buyers to switch brands. The term was invented by Rosser Reeves of Ted Bates & Company. Today the term is used in other fields or just casually to refer to any aspect of an object that differentiates it from similar objects.”</blockquote>

A strong USP can mean the difference between being “just another company” and one that’s unique and memorable in the minds of customers and prospects. To do this, a USP must accomplish three things.

<ol><li>Each USP must make a strong appeal to the target audience. Not just words, not just product puffery, and not just window advertising. It must say to each reader: “Buy this product, try this service, and you will get this specific benefit.”</li>

<li>The benefit must be one that the competition either cannot, or does not, offer. In other words, it must be unique.</li>

<li>The proposition must be strong enough that it can attract new customers to your product or service on its own.</li></ol>

Here are some USPs you might recognize:

<ul><li>Nike: “Just Do It!”</li>

<li>Apple: “Think Different.”</li>
<li>Miller Brewing: “Tastes Great, Less Filling”</li>
<li>KFC: “Finger Lickin’ Good”</li>
<li>Subway: “Eat Fresh.”</li>
<li>Energizer: “It Keeps Going, and Going and Going…”</li>
<li>Head & Shoulders: “You get rid of dandruff.”</li>
<li>Domino’s Pizza: “You get fresh, hot pizza delivered to your door in 30 minutes or less — or it’s free.”</li>
<li>FedEx: “When your package absolutely, positively has to get there overnight”</li>
<li>M&M’s: “Melts in your mouth, not in your hand”</li>
<li>Metropolitan Life: “Get Met. It Pays.”</li>
<li>Southwest Airlines: “We are the low-fare airline.”</li>
<li>Walmart: “Always Low Prices. Always.”</li></ul>

Your USP is your unique answer to these questions:
<ul><li>Why should I listen to you?</li>
<li>Why should I do business with you instead of anybody and everybody else?</li>
<li>Why should I do something instead of nothing?</li>
<li>What can your product do for me that no other product can do?</li>
<li>What will you guarantee me that nobody else will?</li></ul>

There are two types of USPs: explicit and implicit.

<strong>Explicit USP</strong>
<ul><li>The message you lead with</li>
<li>Clearly stated in your marketing materials</li>
<li>Involves promises & guarantees</li>
<li>Aimed at new customers or first-time buyers of a particular product or service</li></ul>

<strong>Implicit USP</strong>
<ul><li>What customers love most about you</li>
<li>Things that keep existing customers coming back to you</li>
<li>May get mentioned by customers in testimonials & word-of-mouth referrals</li>
<li>You may go for years and never state it publicly: “We operate with absolute integrity.”</li></ul>

Whether you have a new business or an existing one that needs a stronger USP, here are some ideas to help you come up with a USP that translates to a benefit the customer wants. A strong USP can have some or many of these characteristics.

<ul><li>Faster service</li>
<li>More personal service</li>
<li>Services above and beyond the basics</li>
<li>Guaranteed on-time completion</li>
<li>Guaranteed delivery</li>
<li>Guaranteed friendliness</li>
<li>Guaranteed live phone support</li>
<li>Better prices</li>
<li>Exclusivity (“Ours is the only package that includes ‘x.'”)</li>
<li>Superior quality</li>
<li>Convenience</li>
<li>A better promise or guarantee of results</li></ul>

Your USP should be unique, useful, simple, and memorable. A well-thought-out USP can help you position your company in a powerful and strategic way. It’s never too late to strengthen your USP. Start today.