Why your marketing isn’t making you positive ROI and how to use Direct Response Marketing to fix this
A lot of people spend hundreds and thousands of dollars on marketing, and the vast majority of them do not generate any money? Why, because most of them simply don’t adopt a critical techniques called “Direct Response Marketing.
If you haven’t heard of Direct Response Marketing it’s a type of marketing strategy that demands a direct response from your potential customers. You use this strategy to answer questions, present your branding, products and the reason you do what you do. Customers love this, as they are offered the opportunity to respond, whether that be in the way of signing up for a regular newsletter, posting a comment on your facebook page, website blog, or purchasing a product from you.
Okay, so what does direct response marketing actually look like? Well, it comes in multiple forms, including:
- Direct mail
- Print ads
- Radio and TV ads
- Coupons or other incentives
Some of the advantages of direct marketing are:
- It’s a great way to use free time during lulls in business
- It is a productive way to communicate and empower you to create more relationships
- It is a great way to up-sell and cross-sell to current customers
- It is a low cost way to rustle up new business
- It can be used as leverage to turn small sales into large sales
- It can supplement your current marketing program
- A Cost-effective way to reach target markets
- Offers measurable results (Which is very important and useful)
- You are able to use it to reach outside your local area for new business
- You can increase the effectiveness of your sales force
These are all great things that can come from just taking a few simple steps to putting together a direct response marketing plan and executing it.
“I honestly don’t think you’ll ever find a safer, lower-risk, higher-profit method of increasing your business or profession than direct-response marketing.” Jay Abraham
Direct response marketing is one of the best ways to launch your business on a large scale and reach out to everyone in your target market whether they are in your local area or not.
This week I have prepared a special supplementary tutorial video showing you a visually what the process looks like in reality, and also have made available two sample Direct Response Marketing funnels that you can use immediately.
Download this week’s free step-by-step “Build your own Direct Response Marketing MACHINE!” tutorial HERE.
Until next week time!
Dedicated to your success!
I have recently been part of a conversation on LinkedIn, where we were talking about offering guarantees. E-Learning Marketing system members receive, amongst other things, a series of 52 weekly e-classes covering different marketing tactics. I have decided to post E-Class #27, which covers how to offer strong guarantees to convert prospects to paying customers, free of charge in this here blog. Enjoy! Jason
E-Class #27: How to Offer a Strong Guarantee
Risk reversal increases buyer confidence and encourages completed transactions.
A lot of the businesses I work with don’t have a risk reversal strategy, and aren’t really familiar with what one looks like, or the power it could have over their conversion rates.
Each time a customer completes a transaction, they leave your store or website with 99% of the risk associated with the purchase. Even if you overcame all of their objections and answered their questions about the performance of the product, the moment they hand over the money they lose their leverage.
If the product doesn’t do what you say it will, or if it breaks down, your customer has parted with their cash and hasn’t received the promised results. They’ve lost – or wasted – money.
So, risk reversal simply means taking the purchase risk away from the customer, and taking it on yourself or your business. When your business allows customers to make purchases without fear or doubt, you will encourage them to make decisions, spend money and complete sales because there is less at stake.
And whenever you can encourage more customers to buy from you, you will boost your conversion rate and your average number of transactions. So, offering a strong guarantee is a strategy that will increase conversions as well as repeat business.
In this E-Class we will cover:
- The relationship between risk reversal and conversions
- How to use guarantees in your business
- How to handle returns and claims
- A step-by-step process for creating guarantees
A strong guarantee will reverse purchase risk and increase your conversion rates.
Essentially, guarantees take qualified leads and quickly convert them into repeat customers. When you guarantee what you sell, you take away the purchase risk from your customer and assume it yourself. When the purchase risk is taken away from the customer, they are more likely to agree to make purchases and you will close more sales.
People don’t like to be wrong, or feel that they have been misled. They want to be sure that they made the best decision when they purchase a refrigerator or a new pair of shoes. They want the products and services they buy to actually deliver the results and benefits advertising. They are afraid of making the wrong choice when they spend their money.
When you provide a guarantee, you break down these natural barriers in the sales process, and the fear inherent in making large purchases. Guarantees usually shorten the sales process altogether because there is less need for discussion about objections. The customer feels that they can try the product out, risk free.
The best guarantees are big and attention grabbing, but still realistic. Like this one:
They’re bigger and better than the competition, but still something you can actually stand behind. They tell your customer that you have confidence in your product, and that you “must be good at what you do” or you wouldn’t guarantee it.
Guarantees and hassle-free return policies are also becoming the norm amongst many retail businesses and even service providers. There is a growing consumer expectation for returns policies that default to the opinion or experience of the customer. A guarantee or easy return policy can be the difference between choosing one business over its competition.
But aren’t you worried about unhappy customers? Won’t you see a pile of returns and service claims?
When I suggest implementing a risk reversal strategy to my clients, most of them are a little concerned. Most of them say something like, “sure, I’ll increase sales with a strong guarantee, but won’t the increase in returns and service claims put me out of business?”
This is a valid concern. Of course there are going to be customers who come back to you unhappy, or who want to take you up on your promise or guarantee. When you offer your customers a strong guarantee, you need to make sure that you stand behind what you are selling and believe in the benefits or results you’re promising.
Don’t guarantee anything you don’t believe you can deliver.
Before you even think about guaranteeing results or benefits, you need to make sure that you stand behind what you sell 100%. You need to believe that your offering is a quality product or genuine service that is of value to your target market.
If you’re concerned about the quality of your products or the service you provide, consider making improvements internally before you promise anything to anyone. If you employ staff who perform a service, make sure they’re qualified and skilled at what they do. If you sell merchandise, put stronger quality controls in place, or consider buying from other vendors.
The reality is that you will get returns. Some customers will come in to scam or to take advantage of you, and I’ll show you how to create a system to handle this. However, the point of offering a guarantee is to increase conversion rates (and revenue), so as long as the increase in sales is greater than the cost of the returns and claims, the strategy is working.
The majority of your customers would never take advantage of your guarantee.
The second important point I want to make is that most customers are too lazy or afraid of confrontation to take you up on your guarantee – regardless of how satisfied they truly are.
Your customers are too lazy to return to your store or send back the item they purchased. The same goes for services. Most let the specified time period go by, and simply forget about your promise. You may have even done this yourself.
Also, the level of confrontation involved in returns and service claims is usually more hassle than the customer is willing to deal with. Telling someone that you don’t like their product or service can be challenging, and many don’t have the confidence to do this.
So, once you’re ready to stand behind what you offer, work through my easy, step-by-step process for creating your guarantee.
1. Decide what you are going to guarantee, and what you will offer customers if the product or service doesn’t deliver.
Based on your knowledge of your target market, brainstorm a list of things that they look for or value in your products and services. Then, brainstorm a list of things that may frustrate them about the purchase experience in general. Perhaps they hate it when contractors show up late, or when take-out takes forever to arrive. Or, maybe it irritates them when they open a product package and items are missing or broken.
Here are some questions to ask yourself when brainstorming for your guarantee:
- What does your target market value most about your product or service?
- What frustrates your target market about your industry, or product line?
- What objections do potential customers raise most often?
- What is the level of risk that your customers take on in a purchase?
- How much time do customers need to truly evaluate the product or service?
Guarantee results, not features or benefits.
As I’ve discussed in earlier E-Classes, people buy results, not products or services. You buy younger-looking skin, not a spa facial. You buy a fresh-cut lawn, not a built-in lawn sprinkler system. Therefore, the strongest guarantees are made on results not features or benefits.
Take the items in your brainstormed list and identify a number of things that you can guarantee won’t happen or will happen. Don’t be afraid to think big – you can promise a lot more than you think. Once you have chosen a few things you can guarantee, make sure you:
- Get detailed. Be clear about what you are guaranteeing, and phrase your promises carefully. Different words mean different things to different people, so ensure you are claiming something measurable. Two customers may have different ideas of what makes a product “work” or “last a long time.”
- Get specific about timeframes. Give customers a realistic amount of time to experience the product or service – very few companies can guarantee any product or service forever. Usually 30-days to 90-days is an adequate timeframe, depending on the purchase. This gives customers a deadline, and protects your business.
- Are bold, yet realistic. Don’t be afraid to get a little unbelievable you’re your guarantee – it will grab your customers’ attention and may make you stand out above the competition. Just be sure to be realistic and make promises you can deliver on.
- Clearly explain compensation. If the product or service doesn’t do what you say it will, what will the customer get, or how will you resolve the situation? Make this a big part of the guarantee, be specific about money, and try to go above and beyond a simple money-back refund.
Here are some examples of strong guarantees:
- All of our products are guaranteed to make you feel stronger and healthier in seven days, or double your money back – no questions asked.
- Our services are guaranteed to be the lowest in the region. Find a lower price, and we’ll beat it by 20%.
- You’ll be completely thrilled with your haircut and color treatment, or we’ll make it right, right away, at no extra cost to you.
- Buy any product in the store and test it out for 30 days. If for any reason – or no reason at all – you’re not completely satisfied, return it for a full refund.
- We guarantee you won’t find a lower price in town – or we’ll pay you double the difference.
- If you find any defect in our installation within 90 days, we will fix it within a single business day at no extra charge, guaranteed.
2. Tell your customers about your guarantee.
Just like you did with your marketing message and your powerful offer, put your guarantee in places where your customer will read about it.
Include guarantees in your advertising, on your website, on receipt tape, in-store signage and newsletters. There are also many small ways to place visual reminders of your guarantee around your business. For example, put a small sticker that says “results guaranteed” on your merchandise or price tags, and modify all in store signage to mention your promise.
You can also send a newsletter or email to your database of existing clients to let them know about the new guarantees. You may encourage past customers to return, and single-transaction customers to become lifetime customers.
3. Train your staff on the details of the guarantee.
Script the details of your guarantee as part of the sales process to give your staff an easy guide to follow. Be clear on what is guaranteed, what the guarantee covers, and the process for claiming the guarantee in the unlikely case the customer needs to. If you decide to offer different guarantees for different products or services, make sure those differences are made clear.
In most cases, your employees will be the ones on the sales floor, using the guarantee to boost their sales targets. It’s easy for a staff member to make broad or false claims during the sales process to earn the sale, but it may result in an increased number of unhappy customers coming back to return the item.
Clear, in-store signage that promotes and describes the details of your guarantee can be a helpful tool for both customers and staff. It will act as a visual reminder of the guarantee, prevent staff from making false claims, and allow customers to read the ‘fine print’ if they have detailed questions.
4. Have a plan for returns and claims
Create a system to handle any returns or claims you may receive as a result of your guarantee. Ensure your staff is trained to deal with upset customers, and that you gather as much information as possible from unsatisfied clients.
Create a standard claim form.
Have every customer who makes a claim or returns a product fill out a standard form with contact information and details about the purchase experience. This will prevent return fraud and help you collect valuable information about your products or services, and about your guarantee.
- Contact Information
- Reason for claim
Create a claims log.
Use a filing system or log for all claims and returns. Organize claim forms by date so you can review them on a regular basis and identify any patterns or issues that need your attention. You may need to make your guarantee more specific, or address any performance issues with the manufacturer or service provider. Claims should also be noted in each customer’s file.
Go ahead and guarantee the products and services you offer, and show your customers that you stand behind your claims.
Big, bold guarantees generate the best results, but if you’re hesitant, test the waters with something you’re comfortable with. Perhaps start by guaranteeing a new product or service instead of including a guarantee with everything you offer.
Remember to have a system in place to test and measure the conversion rate on your guarantees, as well as a claims system to monitor returns. If a particular product or service is seeing a high number of claims, you may need to modify your guarantee.
If you have not already requested your free series of videos that show you how to use three specific marketing tactics to bring in more leads and prospects into your business, without spending a cent on marketing PLUS our “3 biggest lead generation mistakes that small business owners make, and how to overcome them all” video that shows the specific formula ALL of your marketing must follow in order to be effective, then simply go here: https://www.ecobusinessacademy.com/leadgenerationmistakes
(I wrote this article for my friends at www.reconnectafrica.com – this article is reprinted here with kind permission)
When I work with young businesses I can’t help but think of my first training in customer service and sales.
I’m always amazed by how much easy low hanging business is lost by business owners skipping a simple that can and should be implemented every single day, and it costs nothing.
One of my first jobs was working as a waiter for a world-renowned Pizza restaurant chain. We were trained to follow a very set and proven procedure to ensure the very best customer experience. We were taught to greet customers within 30 seconds of them walking through the front door, seat them within two minutes, take their drinks and garlic bread order within five minutes, serve their drinks within seven minutes, serve their garlic bread within eight minutes and so on. But two of the most important money making rules that we had to follow was to ensure that 1) we made regular eye contact with our customers every time we walked through the restaurant, and 2) regularly asked our customers if they wanted their drinks topping up.
Have you ever been in a restaurant where you were frantically waving and calling the waiter to come by just so that you could order another drink or order some more bread or just simply asking for your bill? Frustrating right? I remember a recent situation when I was in a restaurant where it took me 15 minutes to get the attention of a waiter just so that I could order a drink. By the time I managed to get his attention, it was too late and I had to leave. So not only was I frustrated and thirsty, but the restaurant lost out on additional EASY business too.
What steps can you implement in your business that would equate to keeping eye contact with your customers? How many courtesy calls can you make this week just to see how they are getting on with your product or service? It takes little time and no money at all to do this yet the implication on your business is profound.
Following up regularly creates goodwill from your customer because you show that you care, and during that conversation you have the opportunity to offer additional products or services to your customer. Even if they’re not in a purchase mindset at that time they may know somebody that they want to recommend to you.
This is called the power of the follow up. This is is the number one easiest way to create additional income for your business, yet 95% of businesses don’t seem to have any kind of follow-up system in place.
The question I then get asked on this subject is how much follow-up is too much follow-up? The answer to that is…there is no such thing as too much follow-up. That doesn’t mean that you call your customer every three minutes, however calling them once or twice a week until you get hold of them is perfectly acceptable. If they are an existing customer of course, you will already have trust built up with them. If your follow-up becomes too much, you can trust that your prospect or customer will tell you to stop calling them. No harm done.
Studies have shown on average you need to follow up at least seven times before a customer or prospect places an order with you so it is a fatal business mistake to give up after the first telephone call. Think of my example of the restaurant. Have you ever been in a restaurant when the waiter came round two or three times asking you if you want some more drinks, but each time you say no because you are not thirsty, but then on the fourth time you say yes?
You see the waiter doesn’t know when you’re going to be ready to order more drinks but he keeps checking in with you until he hits a time that you are thirsty. This is no different to any other business. You need to keep contacting your customers and not only that, the customers actually expect you to do this.
A trap that many businesses get into is getting frustrated about business slowing down and constantly try to find new customers. The question I always ask is have you served your existing customers to the maximum? The answer is almost always “no, I have some other service or product that some of my customers have not bought from me yet”. If you already have existing loyal customers make it your priority on Monday morning to select five customers at random and give them a call to follow up and see how they’re doing.
Existing customers are also a great source of information if you’re developing a new product or service. Why not ask the opinion of your existing clients about the new service you’re rolling out and what they think about it and the price you are offering it at? Since they know you well and there is trust built up between you, you should hopefully get a good honest answer and be able to tweak your offering to maximise the chances of success.
It is always easier to get more business from existing customers, than getting new business from new customers. So take a look at your last year’s order book, and see who you can call or meet up for a coffee. Plan your follow up, get your diary out and actually write in the diary who you are going to call and when.
We hope you found this article useful, but remember it’s not the acquisition of knowledge that will generate you money, but the application of it. So if you found this article useful, then put it to Full Use, by grabbing your address book and diary, and get scheduling those follow up calls. I use a really simple to use piece of follow up software to ensure I keep on top of my follow up list. It’s so good in fact that we have partnered up with the company that provides the technology, and I am due to run a webinar with them where I will be demonstrating some simple follow up techniques, and how to use their technology to help keep up. Check them out: Contactually . It takes literally minutes to set up, and systemises all of your follow up integrating all of your email accounts, twitter, facebook and linkedin in one place – it’s truly unique I promise you.
Dedicated to your success!
P.S. Have you applied for your $5,000 educational grant for use towards coaching services? We have five grants available to be applied for every month. There are no fees to apply, autorenews and it never has to be repaid. Get yours here
P.P.S. Are you registered to attend our weekly Ask The Expert call, where you get to speak with me or one of my coaches, asking any questions you like on lead generation, converting customers, marketing strategies and any other challenges your business is facing?
Shop assistant: Hello, can I help you?
Vivian: I was in here yesterday, you wouldn’t wait on me.
Shop assistant: Oh.
Vivian: You people work on commission, right?
Shop assistant: Yeah.
Vivian: Big mistake. Big. Huge. I have to go shopping now.
If there is one thing I have learned in the world of selling over the past 18 years that I have been involved in it, it is to never, EVER, judge your prospects and customers. The above quote is a great example, and you may recognise it from the famous scene from the movie Pretty Woman, when Vivian, a call girl, walked into a high-class ladies wear store, with lots of bags of designer shopping, having been refused service the previous day because she wasn’t dressed appropriately.
When I used to work in a large investment bank, I was surprised every day by the behaviour of my various customers. Surprised in that my expectations of what they would do versus what they actually did, regularly differed. Supposedly small clients gave more regular trade than supposedly large customers.
People in the banking world or financial advisors, have to go through a process of KYC – Know Your Customer. But this applies to all businesses, whatever you do.
How much time do you actually spend getting to know your customer?
One of the very best salesmen I have ever come across, was a guy called Charles B. He used to wait on me at one of the UK’s leading menswear retailers. When I first met him, I had gone into the shop because I needed to buy a pair of trousers. That first time I went in, I left having spent over £1,000
Charles’ approach to selling was to take a completely holistic view of his customer. He did not ask the typical shop assistant question “How can I help you?” – No – he would ask me what event I was getting ready for; what part of my wardrobe am I having trouble with right now (i.e.. casual, smart casual, formal, or super-formal). He would draw me into a conversation that would go something like this:
Charles: Hello Sir, I’m Charles. How are you doing today, are you planning something special or just looking to add some versatility to your wardrobe? Are you having trouble choosing what to wear in the morning?
Me: Well, actually yes, I just don’t have any trousers that I really like. I have jeans, and I have suits, but I want some casual slacks for when Jeans are just to casual.
Charles: No problem Sir, why don’t you step right into the changing room, and I’ll bring you 5-6 pieces for you to try on. What kind of knitwear, and shirts do you tend to wear, just so I can get an idea of the styles you are comfortable with? You’re a size 32 waist, and small for shirts/tops right? What is your name Sir?
Jason: It’s Jason. Yes that’s my size. I tend to wear fitted shirts, block colours like white or blue – I try not to be too loud or ostentatious.
Charles: Okay, stay there Jason, and I’ll sort you out with an outfit. You don’t have to buy everything, I just want you to see how you would look with what you already have in your wardrobe at home.
I would then spend the next 2 hours in the changing room. I’d never step out of it. Not once. Charles would even bring me water to keep my hydrated (you know what it’s like in changing rooms – HOT!)
Charles would bring me trousers, along with shirts, shoes and jackets (that I hadn’t come into buy) just so that I could ‘try them on’. He would emphasise how I feel and then bring more clothes so I could feel even more. He made me look good, and that made me feel good. He said that I didn’t have to buy ALL the clothes.
But I DID have to buy them, because he found the best pieces in the shop that suited my taste. He even sold me my first ever PINK sweater! That first visit I left with trousers, shirts, sweaters and shoes. Oh, and a belt. I bought it all, because what he also did was ask me to wear all the items in different combinations. White shirt with the navy trousers. Then the black trousers with a green sweater. Then the green sweater with the white shirt, and navy trouser etc… showing me that I wasn’t just buying one outfit, I was buying multiple outfits. He showed me that in fact my money was going to stretch to six-times the amount it would have if I had just bought without his help. I would buy 8 pieces, but have 64 different possible combinations to wear them.
He judged me better than I judged myself when I walked into the shop. I say “trousers”, he says “Get in the changing room”. He sorted out my entire season of clothing in one visit. I didn’t need to go to another shop for 6 months…..and when I did, you can bet I went back to see Charles.
Try to remove the “How can I help you?” vocabulary, and think of alternatives, and properly engage with your customers. Get to Know Your Customer the Charles B. way. My sales guru Zig Ziglar, (R.I.P), would be proud of him.
Oh, by the way, Charles B. now runs a very successful jewellery company called Bead Brothers.
I’m always amazed at how course providers of professional qualifications spend no time educating their students on making a living. Architects, Doctors, Dentists, Chiropractors, Lawyers, Accountants can train for between 6-7 years (roughly between 1500-1750 days of studying for degree and professional qualification training) before getting that nice certificate on the wall.
And out of those 1500+ days of blood sweat and tears, how many days are dedicated to business development training? Zero, Nada, zilch. Not a one.
So it’s hardly surprising so many professionals struggle to make ends meet. I was speaking at an event this week. It was to a group of about 35 driving instructors. I asked them all, “How many of you have had, during the course of you getting your driver trainer training, any sales or marketing advice. How many of you have had an hour/day/half day covering ‘building your own business’?.
Only one person put their hand up, and even then, he said that it was a very brief talk. These guys had invested hours and days and a lot of their own money, to become trainers – but had no idea how to get the wheels turning (that’s pretty ironic for driving instructors, don’t you think?)
If you have taken a course towards a professional qualification, your next step is to invest some time (and perhaps some dollars) into getting your business turning.
There are some fantastic books you can buy like:
Zig Ziglar’s – Secrets of Closing the Sale
Michael Port’s – Book yourself solid
C.J. Hayden’s – Get Clients NOW! ™
And you can also visit the homepage of , Eco Business Academy, for a free tutorial every week. (half way down on the right – look for This Week’s Training Video)
If you are on a course already, and think that you and your fellow students could benefit from this ESSENTIAL business marketing training, ask your course leader to contact their favourite business coach (or myself) to come and give a talk, or host some webinars on the topic.