The Newsletter Pro - February 2017

#343 in the 2016 INC. 500 | #120 in the 2015 INC. 500 | 2014 Marketer of the Year | 24K Club Winner

02.17 208.297.5700 www.thenewsletterpro.com

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INSIDE THIS ISSUE:

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Behind the Scenes of a Killer Customer Reactivation Campaign Resource of the Month: Prezi Meet Brandon How to Virtually Guarantee You’ll Hit Your 2017 Growth Goals How a Business Setback Can Become a Success Finally! A Guide to Modern Customer Service Good News

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Marketing Mistakes That HURT Cash Flow and Business Growth

flow is sometimes a problem, and 41 percent of businesses surveyed said cash flow was a consistent problem. To be fair, this study didn’t publish any additional info about the business owners — for example, did all of these businesses have less than a million dollars in annual revenue? If so, I would assume those businesses would have greater cash flow issues than a group of businesses with over a million dollars in revenue. For the sake of this story, let’s assume this is accurate (based on my experience of working with small businesses, it is pretty close). How do you fix a cash flow issue for any business? The interesting thing is that, in the vast majority of cases, your marketing is linked to cash flow issues. The mistakes many entrepreneurs are making with marketing, sales, and business growth in general are the very same mistakes that are causing the cash flow issue. On a side note, it is also possible that

I am often confused by the decisions that entrepreneurs who are normally very smart make when it comes to marketing, sales, and growing their companies. It’s as if logic flies out the window and emotions rule the day when we start talking about sales and marketing. Of course, I’m not suggesting entrepreneurs need to be perfect and never make a mistake — in fact, I personally made one of these mistakes last year in my business. My issue is with the entrepreneur who doesn’t realize when they are screwing up and who continues to let their mistakes hurt their business’s long-term ability to grow. I recently read a study that looked at businesses’ cash flow. This study found that only 12 percent of businesses never have a cash flow issue. That means 12 percent of businesses can consistently pay their bills, pay themselves, and have profits left over. On the flip side, 47 percent of businesses say that cash

someone just has a crap business model that isn’t scalable, but that’s an article for another day. The First Mistake: Not Investing In (or Ignoring) Your Current Customers I’m going to start us off with the marketing strategy that is most near and dear to my heart: customer retention. You don’t have to use a newsletter to grow and maintain retention (although that is a good idea ), but you do have to do something , and that something needs its own budget. Retention is not a portion of the marketing budget. Without customers, your business is worth just about zero. The reason so many businesses struggle to grow is that they

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invest nothing in retention. These normally smart entrepreneurs have deluded themselves into thinking that their product and services are so amazing and life-changing that people will continue to buy over and over again without prompting. So what lie do these same entrepreneurs tell themselves when they have 3.5 percent year-over- year revenue growth? Tens of thousands — maybe even hundreds of thousands — of dollars spent on marketing, and only 3.5 percent year-over-year revenue growth. If you’re a large retail chain, that isn’t bad, but for dentists, lawyers, financial advisors, or anyone in a service-based business, that is far from good. You MUST — starting today — have a customer retention budget. Use the budget to increase retention, and from there, upsell the existing customers. The longer a customer is with you, the greater the chance for a referral. Their customer lifetime value goes up, too. Done correctly, your retention piece can be used to upsell existing customers and close more prospects. Regardless of how you use it, you must have a retention budget. Getting Bored With Things That Make You Money As entrepreneurs, we are prone to getting bored, and that even happens with our marketing. Regardless of how it is working, we get bored with it and want to try something new. This is such a bad practice on so many levels. I understand wanting to try something new, but you NEVER cancel marketing that is working (even if it isn’t crushing it) to try an unproven new tactic. When people do this, they are basically saying “I hate money.” How many times have you tried a marketing program, only to have it not work out as promised or as quickly as promised? So stop canceling good marketing to chase unicorns. If you have traditionally slow sales months, you MUST do more, spend more, and market more, not less.

because if it doesn’t work, you are screwed. If you can’t afford the new marketing without killing the old marketing that is working, then you shouldn’t be starting the new campaign until you figure out how to pay for it. Not Investing Enough Money Into Marketing Is a Recipe for Disaster I was chatting with a dentist from the greater New York area a while ago, and he claimed to be getting patients with this one type of marketing for about $175 each, which is good in his area, because of all the competition. However, just because you hit a home run doesn’t mean you can expect to hit a home run every time you’re up to bat. In that area, it costs $250–$450 to get a new patient in the door. You will never grow if you’re not willing to invest a realistic amount per new customer. I’ve chatted with entrepreneurs who want to get 50 new customers per month, which should require a budget of at least $12,500, but currently, they only have a budget of $3,000 per month. I hate to break it to you, but you’re never going to hit your goal. If anything, the $12,500 per month you have devoted to marketing may not be enough, because as you scrape the low-hanging fruit, you often find you need to increase the amount you’re willing to pay to get a new customer. Feast or Famine Marketing This is the mistake I made last year. We had so much going on in the first half of the year (the feast) that I didn’t plan well enough for July, which is typically a slower month for us (the famine). In July, I need to do more marketing and even spend more money on marketing to make up for all the business I lose when people go on vacation and forget about their campaigns. But I was planning a vacation myself in July, and in turn, I ended up cutting marketing because I didn’t want to do the

work that was needed. Bad planning and a cut in the already planned marketing for July tanked the month. It was our worst month for new sales in nearly two years. You can’t allow a busy period to let you take your eye off the ball. If you have traditionally slow sales months, you MUST do more, spend more, and market more, not less. Cash Flow Issues Means More Marketing, Not Less This is the last of the bad ideas for today, but when you are having cash flow issues, canceling the pipeline that is bringing in more cash is just dumb. Of course the argument I always get when I say this to someone is that the marketing wasn’t working anyway. Well, if that was true, why didn’t you cancel it earlier? Typically, the entrepreneur doesn’t know if their marketing is working or not. All they know is they need money, so they cancel marketing to free up cash. That may help the problem this month, but it creates a new problem next month when no new customers show up. When times are hard, you need to reinvest more in marketing, not less. You must figure out how to close more sales, not get fewer leads. Real success and business growth doesn’t come from finding the latest marketing gimmick of the month, but rather from sticking with a bunch of small and rather boring things that work well, over and over again. It comes from creating marketing assets and business systems and

processes. I know it’s not as exciting as or fun as we all thought it was going to be, but it is what works.

– Shaun

If you want to try something new, create a budget and try it. Don’t kill a pipeline of incoming cash to drill for a hopefully more profitable pipeline,

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KILLER DIRECT MAIL STRATEGIES

KILLER CUSTOMER REACTIVATION CAMPAIGN BEHIND THE SCENES OF A

After the FedEx packages are delivered, we will then start calling. We’ll have three different people making phone calls on this campaign. If that seems excessive, that’s because it is. The reason we’ll have three people making calls is that we have some team members who have existing relationships with these past customers, and we feel that those team members should be the ones to reach out and try to reconnect. If we had hundreds of people to call, I’d likely not worry too much about the team member connection, except for in cases where the account was very large. Normally, reactivation campaigns are able to recover between 2–12 percent of lost customers. For our campaign, we’ve set a goal of four reactivated customers. Personally, I’d be happy with two, and thrilled by five or more. I know those seem like small numbers, and they are, but we are starting with a small list. I’m a firm believer that the game of business is won 10 yards at a time, not by trying to throw a Hail Mary to the end zone on each drive. The goal of the phone calls is to either set an appointment, or hot transfer the call to a sales rep.

When we started building our lost customer campaign, our first step was to pull our list of lost customers from the last 24 months. That list was sent to me and two others for review. The point was for us to see if there were people we wanted to remove from the list. After the three of us reviewed the list and crossed out a few names, we had 43 clients left. I then wrote a story-based sales letter that was themed to the start of the year, and I made sure to include an amazing offer. Since we only had 43 names, we decided to send the letters via FedEx. Inside the FedEx package was a copy of my 6-page sales letter, a copy of my book co- authored with Dan Kennedy, "The No B.S. Guide to Maximum Customer Referrals and Retention," and a testimonial booklet we use in some of our marketing. To add a little extra “wow factor,” I personalized and autographed the books, and we added a bookmark, which, of course, is branded. In all, each package is going to cost somewhere near $18, including FedEx Ground Shipping. Not including time spent on this campaign, we will be in it for $774. We have two follow-up letters that will go out over the next few weeks, but both of those will be sent by first-class mail, and we estimate it will cost about $150 for those to be printed and delivered.

When was the last time you spent any time thinking about canceled or lost customers? If you’re like me, the answer is not very often. I’ve never been one to focus too long on the ones that got away. Instead, I prefer to go out and simply find more new business. But once or maybe twice a year, I find it can be very wise to spend a little time looking back at the customers who got away and devise a strategy to win them back, because many times, there is gold in those lists. Customer reactivation campaigns aren’t new, but so few businesses actually use them. That may be the reason I’m attracted to implementing one. I prefer to play in less-crowded spaces. When I see everyone going left, I want to head right and see what’s over there. If you’ve never run a lost customer campaign, they are pretty simple. We are currently in the process of marketing one here at The Newsletter Pro. There isn’t a huge difference between B2C and B2B when creating this campaign. Typically, the main difference between B2B and B2C is volume — B2C is going to have a much higher number of lost customers. The other difference is the amount of money you must spend to get a customer to come back. A B2B customer has a higher annual customer value, which means you can spend more money to win them back.

– Shaun

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RESOURCE OF THE MONTH

PRESENTING PREZI!

Let’sbehonest: PowerPoint presentations can be boring. Really boring. You don’t have to stretch your imagination too far to remember how it feels when someone is droning on and on in front of a PowerPoint slideshow or whiteboard. Your head dips forward, your eyes flutter shut, and it takes all your willpower to keep from snoring right there in the conference room. At The Newsletter Pro, we don’t want that, so whenever Shaun gives presentations at a tradeshow or conference, he uses an engaging

presentation software solution called Prezi as his visual aid. If you haven’t seen Prezi, you’ll want to check it out. Basically, a Prezi presentation is created on one giant slide — a canvas — where you can pan and zoom across all of the elements. The result is a slick experience that’s a lot more engaging for the audience. With Prezi, you can include text, images, and videos, and it’s easy to arrange them in a specific order on the canvas through the timeline. Once it’s time to give the presentation, you can just go through the timeline with an arrow key or break away from the timeline altogether and zoom into different

Team Player, Sports Fan, Newlywed In the opening pages of “Newsletter Marketing,” our CEO, Shaun Buck, attributes much of his MEET BRANDON:

These days, he’s all about football. Brandon is often seen

entrepreneurial success to his son, Brandon. Now, 20-year-old Brandon carries on the entrepreneurial tradition and supports the family business as a production specialist. Although Brandon and his dad work in close proximity, Brandon has made a name for himself as more than just the boss’ son. Brandon is known around our Boise headquarters as a huge sports fan. Over the years, Brandon has played just about everything, from football and basketball to soccer and even swimming.

sporting Boise State University and Denver Broncos gear or discussing games with anyone who’s willing. However, hockey is a close second to football, since Brandon’s wife of 10 months, Kylyn, introduced him to the Minnesota Wild. Brandon and Kylyn met in their senior year of high school. “She was the TA in my photography class, and one day, the only available seat was right next to her,” Brandon explains. “I was so shy, I sat on the far edge of my seat — I didn’t want to get too close! She noticed and said, ‘Hey, I don’t bite.’”

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TESTIMONIAL “It was no more than a week after the very first issue went out before I started getting feedback. "I received requests from the co-workers of family members, asking to be put on the mailing list. An acquaintance working at a hotel mentioned showing it to the assistant manager, who is actually a past client! "I even heard from a local event planner who I have yet to work with, telling me, 'I rarely open any mail and never read it. But I really enjoyed the articles in your newsletter. I can’t wait to get the next issue!'

elements on the fly. The program gives you a great deal of flexibility to customize, or you can go with one of their templates. All of this sounds great, right? Well, there’s a caveat! As with any other tool, Prezi isn’t a cure- all. If you want to give an effective presentation, you still need to write and deliver a good speech. And for the Prezi itself to work well, you should unleash your inner graphic designer to make it visually appealing — be judicious with words and include plenty of pictures! If you’re an individual user, you can go with a base Prezi account for $9 per month, which features 4GB of storage. Prezi Pro is $15 per month and includes features like the ability to download the presentation offline, plus image editing and unlimited cloud storage space. Pro Plus is $25 per month and adds advanced Prezi training. The business version of Prezi goes many steps further, with one-on-one mobile device presentations, remote viewing of your Prezi, and more. Whatever you decide, Prezi is a solid presentation choice for your business. Check them out at Prezi.com.

"Perhaps one of the most satisfying responses came from a caterer who also happens to be a friend of mine. She once commented saying that she couldn’t see the value in our prices. Shortly after the first newsletter mailed, she sent me a picture with her holding the newsletter captioned, 'This is so hot!' She’s certainly seeing the value now.

"Everybody loved the content, so hats off to you guys!"

– LaTanya White Owner, 71 Proof

Are you a Vegas referral partner? This is your LAST chance to refer! Referrals must sign on before February 28 for you to qualify for the all-expenses-paid trip to Vegas this March.

Have You Heard The Good News?

Luke 6:35 But love your enemies, do good to them, and lend to them without expecting to get anything back. Then your reward will be great, and you will be children of the Most High, because he is kind to the ungrateful and wicked. Ephesians 4:2 Be completely humble and gentle; be patient, bearing with one another in love. 1 Peter 4:8 Above all, love each other deeply, because love covers over a multitude of sins. Proverbs 10:12 Hatred stirs up conflict, but love covers over all wrongs.

The pair tied the knot this past summer, and with the exception of a couple hiccups (no utensils to cut the cake, and music that cut out mid father- daughter dance), the day was a huge success. After the ceremony, the couple honeymooned at Disney World. “She’d never been before, so I was her tour guide, showing her all the sights and taking her to cool restaurants. I liked seeing how happy she was on our trip.” Today, Brandon has settled nicely into married life. “I always have a friend,” he says. Together, Brandon and Kylyn still enjoy photography, and they recently adopted a dwarf rabbit named Westley.

Thanks, Brandon, for everything you do for your family and The Newsletter Pro!

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MARKETING TOOLBOX

HOW TO VIRTUALLY GUARANTEE YOU'LL HIT YOUR 2017 GROWTH GOALS

do, and many times, the estimates are inaccurate; but that’s the way the cookie crumbles. After I’ve made the plan for how I’m going to get those 429 new customers, I now continue planning with a goal to increase the number of new customers I get by an additional 33–50 percent. The reason for this is that not all of my plans are going to succeed the way I’d like. Some may work out better than planned, and some may bomb, so I need to plan for that. On a side note, if your plan is heavily dependent on internet marketing, this step is even more important, because it is very likely that a rule change could affect your plans and/or the entire media could stop working. We’ve seen this happen many times in Google SEO, Adwords, and Facebook. To think it won’t happen multiple times this year and possibly to one of the media you're using is delusional. Once I have my plan laid out, I create monthly and quarterly milestones so I know how well I’m progressing toward my goal throughout the year. Q1’s milestones will be smaller than Q4’s, but each month and quarter will have a target number based on the amount of marketing I plan on doing during that time. At the end of the year, the totals will add up to my annual goal. Now that you have a plan, you need to look at what type of human capital you’ll need to reach your goals. Do you need to hire additional employees or find companies to outsource this work to? How are you going to realistically fulfill all of this new work? Finally, you need to create a budget. Keep in mind you’ll have to account for any additional employees, plus the extra marketing expenses for media, etc. One other thing: When you’re looking at your budget, be aware that some media is going to cost more per customer than you are paying now. As you grow and thin out all the low-hanging fruit, costs are going to go up. Some of the new customers you want are going to require a bigger investment from you. Good news, though — if everything goes according to plan, you should have additional revenue to draw from to help pay for the additional expense. Here at The Newsletter Pro, we’ve used these exact strategies to grow as much as 2,970 percent over a three-year period. Last year, this was the process we used to grow nearly 100 percent year over year. This system is tried and proven. All you have to do is implement it.

You’ll have to decide if all three of these apply to you or not when making your plan. For simplicity’s sake, we’ll just use cancellations. With a 25 percent cancellation rate, we will need an extra 143 new customers, which comes out to $500,000 in additional revenue. Now we know that to grow our business by $1,000,000 in new revenue, we will need to plan for $1,500,000 in total new revenue (once we account for attrition). When we look at this from a new customer standpoint, we know we need 429 new customers. Next I look at the marketing I already have planned and the estimated number of new customers it will bring in. I look at these numbers on a monthly basis. One mistake I see people make is that they want these numbers to even out. For example, in January they want 36 new customers, and in December they want 36 new customers, but that’s not likely to happen. It’s much more likely that in January, you’ll get 24 new customers, and in December, you’ll get 48 new customers. Assuming our existing marketing is good for 183 new customers for the year, we now need to figure out how to get an additional 246 new customers. From here, we can look into two other strategies: increasing the average annual value of each customer, and decreasing attrition. But to get the bulk of those new customers, we’ll need to do additional marketing. When I’m planning additional marketing, I first look at what I’m already doing that I can expand or improve upon. For example, we do a lot of marketing at trade shows. Can we do a better job with lead generation or lead follow-up? Since I already market at trade shows and have working systems and processes for that, what other trade shows can I try? Each year, I take a few fliers to the trade shows I attend. Some years, those fliers bomb (like in 2015, when I lost $40,000 on them). But some years, they work great. In 2016, I took another flier to a trade show that brought in $1.25 million in new annual revenue. I’m always looking for ways to improve and/ or expand on what is already working. Next, I brainstorm new ideas. These may be new media or media we haven’t put enough effort into or resources behind. Here, all you can do is estimate how well your strategy is going to work. It’s hard to

Are you getting tired of all those articles proclaiming they know how you can make 2017 the best year ever?

I know I am.

Good news — that’s not what this article is about. Instead, I want to talk about your marketing plan. Have you spent some time laying out all the strategies you’ll use in 2017 to grow your business? Even if you have, you may want to update them based on what you’re about to read. This is one of the most valuable activities I do each year for my business. It allows me to create a plan, set goals, and make a budget. Although simple in concept, a good marketing plan can be difficult to execute, but it’s worth every single once of energy you put into it. We divide our marketing plan into three sections: 1. New customer acquisition (everything from lead generation to conversion) 2. Upsell/cross sell 3. Retention To make my plan, I start with a high but realistic goal for growth. At this point, this number is not set in stone; it is simply a starting point and a number I want to achieve. For our example, let’s use $1,000,000 in new revenue growth for the year. We’ll also need to make a few other assumptions, so let me tell you a bit more about our fictitious business. Our 2016 revenue was $2,000,000; average annual customer spend is $3,500; and we average a 25 percent customer attrition rate. On the surface, you might think all we need to do is start with $1,000,000 in new revenue and work backward. Unfortunately, it’s not that simple. Our real number is going to be much larger than $1 million. To get the real numbers, we need to add in attrition. For many businesses, attrition comes in three forms: 1. New customers who use once or twice and never come back 2. Customers who cancel 3. Customers who decrease their level of spending with you

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The year was 1976, and Roddick had just found the ideal storefront for her business in Brighton, England. It also happened that this storefront was situated between two funeral parlors. The day the signage for The Body Shop went up, the owners of the two funeral parlors were not impressed. In fact, they expressed distaste and concern over the name of the new business. They worried it would confuse their clients. The name itself — The Body Shop — wasn’t new. Roddick had previously run The Body Shop in Berkeley, California; albeit, not between two funeral parlors. The owners of the mortuaries wanted Roddick to change the name of the business. They found no humor in it, or if they did, they weren’t about to admit it.

As entrepreneurs and business owners, we face setbacks all the time. How we handle these setbacks can determine the fate of our business. Handle a setback poorly, and you may end up the victim of dire consequences. Handle a setback with outside-the- box thinking, and your business may end up stronger for it. This is exactly what happened with Anita Roddick and her once-upon-a-time startup, The Body Shop, a skin care and cosmetics company. Of course, in 2017, it’s hard to picture The Body Shop as the startup it once was in the 1970s, but those early days come with a story we can all learn from. Roddick faced a setback and, with some unconventional thinking, forged a path forward.

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Roddick had a choice. She could take the easy way out — and damage her brand. Or she could do something about it and save her brand.

approach. She was a woman in business, and an underdog at that. Roddick had a story to tell, and as an entrepreneur, she knew stories were what captivated customers. The Evening Argus ran with it. In a matter of days, the community around Brighton was buzzing with interest in The Body Shop. People were curious and wanted to know more about the store and the woman behind it. Roddick had hit the public relations jackpot. But it wasn’t a jackpot hit by chance. It required strategy on top of the opportunity. Roddick put the two together and achieved something remarkable. What had started as a minor setback turned into a massive success. That single store in Brighton went on to become an empire of 2,605 franchised locations around the globe.

On a scale of 1 to 10, how would you rate your customer service? Pretty high, right? You care about your customers, work hard to give them a positive experience, and have trained your team to help customers however they can. You must be sitting comfortably between 8 and 10. Here’s the bad news: Your customers probably don’t agree with you. In 2012, the market research company Forrester released "The Customer Experience Index, 2012,” analyzing relationships between companies and their customers. Most companies described themselves as confident in their customer services skills, with 80 percent claiming to provide “superior” customer service. Unfortunately, only 8 percent of their customers rated them the same way. This is a horrifying reality — one Jay Baer, author of the incredible customer service book “Hug Your Haters,” has spent years researching. According to Baer, the disconnect started when companies failed to notice Roddick wasn’t interested in making any changes. It had already been her business for a few years. She thought the name was clever and worth keeping. On top of that, it was her brand — a brand she believed in. The funeral parlors didn’t go as far as sending Roddick a cease-and-desist letter (something that would likely happen today), but they did pressure Roddick. They were determined to get their way. Roddick had a choice. She could take the easy way out by putting an end to the pestering and bullying, and simply change the name of her business — and damage her brand. Or she could do something about it and save her brand. The choice was clear. Roddick took her story to a local newspaper, The Evening Argus. In what many called a twist of marketing genius, Roddick positioned herself as an entrepreneur — a female entrepreneur — “under siege.” While the positioning was true, the genius came from her

make a concession — or even give up? Or are you willing to strategize — to put up a fight?

It’s easy to assume that the fight and subsequent work isn’t going to be worth it, especially when the setback seems small and hardly worth the time. But when it comes to your business, your brand, your team, and your customers, the smallest fight can end up making the biggest difference.

When you encounter a setback, whether it’s big or small, how do you handle it? Are you willing to

BOOK REVIEW Learn to Embrace Complaints and Keep Customers When You ‘Hug Your Haters’

Jay Baer’s Guide to Modern Customer Service

dry business guide. By pairing real-world examples with research from the Edison Research firm, “Hug Your Haters” is the first book to successfully address customer service in the modern era.

when customer service became a “spectator sport.” Too many companies, then and now, view customer service strictly through traditional channels, like direct phone calls and email. However, customers have long since turned to review sites, discussion boards, and social media to voice complaints, and one-third of these public complaints go unanswered. Whether your haters are “offstage” — using traditional channels and just wanting the problem resolved — or “onstage” — happy to take their complaints public where they’ll have an audience — Baer encourages businesses to answer EVERY complaint. Baer provides an incredible framework for handling each form of complaint and guides businesses to where they should be spending their time on social media. He also predicts what the future of customer service will hold. Companies both large and small will benefit from this groundbreaking look at customer service. Jay Baer breathes the same life into this book as he has all his past works, creating an informative reading experience without demanding you wade through yet another

From the Book: “In today’s world, meaningful differences between businesses are rarely rooted in price or product, but instead in customer experience.”

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