Cash Cow Gone Wild!

LOL! I am just saying... there are people out there that would intentionally feed that antacid to their pet bird, then suit you for millions for sending it to them.

Baal,

Because I am new to this model, I am still testing and playing around.
I have been doing different things, like SEO, actual offline marketing strategies, and of course website creation.

This will be the first time I actually send out a letter based upon the auto responder service. Usually when I talk or meet with them, I find out that they may just need something else. It is all about their goals.

If I want to increase their business by 25%, there is basically only 3 ways to go about it.

1. Increase the number of customers (Rarely needed unless a startup, or going out of business)
2. Increase the size of the average transaction
3. Increase the frequency of purchase

In a nutshell, I meet with the owner(s), and find out what they want, and what they are not getting. I find out what their average customer is worth to them in bottom line profit.

Example: Coffee shop

Average # of customers per year: 1000
Average $ gross profit per transaction: $2.50
Average customer frequency: 3 times per week
Average length of loyalty: 1 year

Which means that the "average" customer or client is worth $390
$2.50 x 3 (times per week) x 52 weeks = $390

The lifetime value of the average customer in gross profit is $390
x 1000 = $390,000

This is how much his business is making on a general and average degree not counting fixed expenses, and any expense that is going to be paid no matter the volume of business, eg: rent.

If you want to improve his business by 25%, in reality you can do many things. You can:

1. Improve # of customers by 9%, size of purchase by 8%, and frequency of purchase by 8%

2. Improve size of purchase by 10%, and frequency by 15%

The combinations are endless..

1000 customers per year to improve by 8% means 80 new customers per year. /12 = 6.6 new customers per month. Not hard to do.

Size of transaction by 9%, means .22cents per bill. There are many ways to do this. Up the price by 25cents, add on a bagel for cheap...etc...

Increase frequency of purchase by 8% by offering incentives such as daily specials, and rewards for coming back more often. Building personal relationships.

When you break down their business in this way, it is easy to improve it.

A simple referral system can explode the # of customers, and now that you know the numbers, you can track it all. A simple up sell, cross sell or add on at the point of purchase can boost size of transaction by big numbers. A simple auto responder can boost frequency of purchase by simply offering sales, and remaining in the mind of your customers. Add a referral system "sign up a friend who has never been here before for a free coffee".

The opportunities are endless, and you can see how the auto responder truly is (as Andrew said) just an "in" to be able to really get into their business and transform the entire system from the inside out.

All of these are intertwined with each other, and the whole will be bigger than the sum of it's parts. You can not improve one without the others improving as well.

The auto responder allows the business owner to capture all of his past, current, and soon to be customers in a conversation, and they are now in his world.

Constantly having to bring in new customers is like filling a bucket with a hole in it. The auto responder is that plug. The best customer is the one that already bought. The auto responder curbs attrition (the rate at which they drop off), and improves retention.

You also reduce your ad budget, as once you funnel all of your past, present, and soon to be customers into your email world, you do not have to put an ad in the paper when you anticipate a slow week, you just press a button. You don't have to constantly spend cash getting new customers, because the real value is in the repeat business of the special relationships you have already cultivated.

Most business owners have it all backward.

P.S - Yes still in Thailand. taking it easy, will be here I think until Christmas. Am moving over to Koh Phangan though, to live and full moon party on the island everyday.

P.P.S - I have been charging $5000 for the auto responder service, and $200/mo.
Easy to do when you can state all the benefits, and they trust you.

I love the idea of using a "pretty college girl" and we've got plenty of them here in Athens, GA. And I know that this works very well. I'm a woodworker - my former business and passion when I need to relax. A couple of weeks ago I went to this year's Woodworking Show. After being there about two hours, I pointed something out to my wife. The booths that were the busiest were the ones that had young girls with low cut tops on that were bending over to fill out sales slips, demonstrate tools, etc. The girls didn't even have to be pretty - but most of them were. The older men of the bunch just saddled on up to the tables - purchasing things that were neither new nor innovative - just to get a quick shot down these girls tops. I know because I watch people as another pastime and I watched these people closely. Even my wife noticed it.

Years ago, I was on the trade show circuit. One of the things we would do to get people to come to our booth was hire a pretty young lady in a short skirt and low cut top to shine shoes. We would pay them $100 a day to do it for us and she would make $200, sometimes $300, and once I even saw one take home an extra $500 in tips.

I tell my 18 YO daughter - "men are pigs". She doesn't believe me yet, but I can demonstrate it with things like we're talking about here. Sorry to say that we men are so simple, but we are. Sorry ladies - we're built that way.

I agree that tricking people is not the way to go but I think that if you give it some thought, the check idea could be great.

My idea is to make it a part of a bird dog campaign. Send it out like you normally would but maybe have the customer give the check to the person they refer, to be proof of the referral. Of course the original client's name with the referral amount would be on the check. At your meeting with the referral you could present them with a check to pass along. IDK jus thinking out loud.

How about those small travel size bathroom supplies?
Deodorant: Does your website traffic STINK?
Mouthwash: " " " " "
Soap: " " " " "
Toothpaste: Does your internet marketing campaign need some polishing?
Sewing Thread: Is you website holding on by a thread?
Small magnifying glass: I can't seem to find your (type of business here) on the internet......Is it in small font?