Predictable Cashflow

There are three keys to creating consistent and predictable cashflow:

1. Strong and Sustainable Unique Selling Proposition: A strong USP is one that cuts through the clutter of our everyday lives. A USP is like a beacon that calls you like an irresistible force. It is the lighthouse that brightens the night sky after you were lost at sea and thought that all hope was lost. Do you get the picture?
   
   In his book, Purple Cow, Seth Godin explains that the USP must be as remarkable as seeing a Purple Cow. So, if you do not have a USP or you believe your USP is weak, try this exercise by Jay Conrad Levinson, author of Guerilla Marketing. First, write down everything you possibly could think of that you do that would possibly be unique and put it into seven paragraphs.
   
   Next, take the most unique ideas and reduce it down to seven sentences. Finally, take the seven sentences and use only seven words that describe your uniqueness. Going through this exercise, will give you a good starting point for a powerful USP.
   
   
2. Overwhelming a particular niche: Many entrepreneurs that start out with their first company make the mistake of focusing too narrowly on a specific target market.
   
   Haven’t we all heard that we should be really specific about our target market? The answer is yes and no. When starting a new marketing campaign the target market should be small and very focused. However, having this narrow focus for a marketing campaign does not mean that the company should have a very narrow focus.
   
   A new company may not have yet realized exactly what target market has the strongest demand for a new product or service. Once a target market or a niche is identified, then we can further develop the niche until we master it.
   
   Seth Godin refers to this process as “overwhelming the hive”. As when bees protect and swarm their hive, the same is true about how similar people tend to congregate as a target market. People within the hive naturally spread the word about you until everyone is talking about you and your product and services.
   
   In planning your marketing, what are the top three target markets or hives that your company is determined to overwhelm?
   
   
3. Multiple strategies producing balanced lead generation: Once you have a strong USP and you know who and where your target markets exists, then determine what specific lead generation strategies you can put to work.
   
   How often have you heard someone say that they get all their leads based on referrals? Well, if you think of the example of a diving board and its one leg, how much spring would the diving board have compared to having multiple legs prop it up? This example is true in business too.
   
   If you have one strategy or leg supporting your marketing diving board, how much bounce in your cashflow are you going to experience?
   
   For businesses, which rely solely on one referral strategy, cashflow is going to be up and down. Predictable cashflow is driven by well thought out strategies that equally produce a balanced set of leads.
   
   In the event that one strategy does not work in a particular month, there are several other strategies that could. We at Action like to plan for a 10 x 10 lead generation plan which means that a business should have 10 lead generation strategies that each produces 10 percent of the company’s leads.

Features Vs. Benefits

Features versus Benefits

If you’re not careful in creating your marketing copy, you may inadvertently end up with features-laden descriptions of your products or services. This can be unfortunate, in that most clients and customers will base buying decisions on the benefits they perceive the product or service to provide, not its features. Most of us have been well-trained in telling people what they’ll get when they buy a product/service…how ‘it’ works…not what it means to them to buy it…what ‘it’ will give them if they own ‘it.’

Think of the feature as the description and the benefit as the result. Then re-write your feature statements into benefit statements. You’ll save prospective buyers the trouble of trying to do it themselves…which they generally won’t.

Consider the following example pairings of feature and benefit statements:

Feature: We’re open until 10 every night.
Benefit: Because we’re open late every night, you can shop at your convenience and don’t have to take time off work

Feature: Our day care center provides age-appropriate stimulation
Benefit: Because your child will be stimulated using age-rated activities and certified daycare workers, their mental development will be accelerated. We care about your child’s progress.

Feature: We use only high quality woods and adhesives in building our furniture.
Benefit: Because we use only the best in making our custom furniture…your purchase will be a one-time, long-term investment that’ll outlast you.

Feature: Our bookstore features comfortable chairs throughout the store
Benefit: Because we provide comfortable chairs throughout our bookstore, you can relax and read snippets before you buy the book. Know what you’re buying and you’ll enjoy your investment that much more.

Feature: I have over 20 years experience selling houses in the neighborhood
Benefit: Because I have over 20 years experience selling homes in your neighborhood, your house will be sold quickly, for the highest amount possible, letting you focus on other important things. Let me take the stress out of selling your home.

If you don’t believe in the power of ‘benefit-selling,” re-read the five feature statements above; then compare them to the five benefit statements. Which one in each case stirred or compelled you more?

Increasing Lifetime Value

There are two aspects to increase the value of your marketing which in turn creates profits in your business.  What are these two sides of marketing?  In short, they are Acquisition Cost and Lifetime Value.  The goal of Marketing in the business should be to reduce the Acquisition Cost and increase the Lifetime Value.  So, we will reserve Acquisition Cost for a later discussion and focus on how you develop the Lifetime value of your customers.  Based on the knowledge that it is six times more expensive to acquire a new customer than to sell more products and services into your current customer base, Action has created a system to build customer loyalty.  The concept Brad Sugars discusses in his book, Instant Repeat Business, is to increase lifetime value by using the Ladder of Loyalty.

The concept is to categorize each and every name in your prospect and customer database into levels according to their loyalty to your business.  You start with SUSPECTS which are businesses that fit into what you have defined as your target market.  Any name that you obtain through marketing efforts that fits your criteria enters the Ladder of Loyalty at the SUSPECT level.  Once the SUSPECT becomes interested in your product or service and makes an inquiry, you would move the business up to the PROSPECT level. 

Next, a SHOPPER would be a business that buys once from you but has not yet determined that you are a vendor he or she wants to do business with again. 

If the business buys more than once, then the SHOPPER becomes a CUSTOMER. 

Once the CUSTOMER becomes a consistent buyer of your products and services, you may begin offering incentives and privileges to them so that they become MEMBERS and no longer look elsewhere for competitive products or services.  MEMBERS do business with you because of the relationship and trust that you have developed. 

An ADVOCATE is where your MEMBERS begin selling for you through testimonials and referrals. 

An ADVOCATE becomes a RAVING FAN when they cannot stop selling for you.  Anytime a RAVING FAN is out in the community they are promoting you to everyone about how wonderful you are.

Now, here is the question.  How many RAVING FANS do you have in your customer base?  What would happen to your business if you moved everyone in your database up one level?  Massive profits do not occur by bringing more SUSPECTS or PROSPECTS into your database but rather moving MEMBERS to ADVOCATES and then to RAVING FANS. 

Massive profits occur at the RAVING FAN level.  As an assignment, go into your prospect and customer database and determine how many businesses you have at each level.  You will create a world of opportunity once you begin to implement strategies for each level on the Ladder of Loyalty.

Have a wonderful month and if you need more information on how to create a Ladder of Loyalty in your business, please contact us.