Forget 1 Million, Focus on 1,000 for Success

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During my time at college, I had a friend who was obsessed with the idea of making $1 million. How hard could it be, he wondered, to take $1 from each of 1 million people? “Look at the guy who invented the pet rock. He became a millionaire selling. . . rocks!” my friend observed.

Creating the next big fad was his plan, but he quickly found it’s not easy to duplicate the success of the pet rock. Creating a product that could command the attention of 1 million people is a challenging dream to chase.

I recalled my friend’s ambitious plan to gain 1 million customers while recently reading author Kevin Kelly’s essay entitled “1,000 True Fans.” The main point of the essay is that most of us do not need 1 million customers; 1,000 will do nicely.

Defining a “True Fan“

Kelly’s “1,000 true fans” are people who would do almost anything to help their favorite businesses prosper. He gives the examples of a singer whose devotees will drive 200 miles to hear her perform and a writer whose fans buy hardback, paperback and audio versions of his latest book.

We would all like to have diehard fans like those, but they are difficult to attract. That’s especially true if your business provides a product or service that is not unique – like state-mandated auto emissions tests, for instance. Nobody is going to travel 200 miles to get their emissions test from you, except possibly your mother.

On the other hand, I have clients like dentists and property managers who are very highly regarded as regional experts. Their top clients, or fans if you will, are loyal to the point of sending them gifts and personalized Christmas cards. I have to imagine their fans would follow them through a change of office locations or the occasional fee increase.

Why 1,000?

Two premises of Kelly’s “1,000 True Fans” are that the entrepreneur can earn, on average, $100 profit from each true fan per year and that an entrepreneur can make a living by earning, on average, $100 per year from each of 1,000 customers. That’s $100,000 per year, but the $100,000 must be free and clear of all operating costs. In other words, it is net profit.

Why is 1,000 the magic number? That is the question I asked myself while reading “1,000 True Fans.” I know dry cleaning businesses whose owners make their livings from customer bases smaller than 1,000. I can imagine Kelly’s premises being valid for a writer or a singer without a band. But for most of my clients’ businesses, some adjustments would have to be made.

As Kelly explains: “The number 1,000 is not absolute. Its significance is in its rough order of magnitude — three orders less than a million.” So, 1,000 is not posited as the be all and end all. It’s an approximation far closer to the mark than 1 million customers.

For an entrepreneurial professional with employees, the business probably needs to clear $100,000 per professional (maybe more depending on the region). And, the 1,000 customers likely needs to be expanded to accommodate a practice of several professionals.

The key point is that attaining 1,000 customers is an achievable goal. You can grow your business to that size by adding just a few accounts each week. And, if 1,000 is achievable, so is 2,000. It just takes more time. . . and an unwavering commitment to keeping customers happy.

Here’s to your 1,000!

Mike, The Numbers Coach

Want To Improve Your Sales? Do This One Thing

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I recently ran across an article discussing how some companies are asking one simple question to get an understanding on whether a customer would recommend your product or service.  Referred to as the “net promoter score “, the question asked is the following.

On a scale of 0 to 10 how likely is it that you would recommend us to your friends or colleagues?

High responses in the 9 to 10 range are promoters.  Low responses from 0 to 6 are detractors and responses between 7 to 8 are somewhat satisfied.  This concept was embraced by GE Healthcare who at the time was doing traditional customer satisfaction surveys that only gave vague results.

GE went so far as to not only compile a score but also tie it to a bonus.  However, there are critics of this approach too.  While it is a simple measure some say its simplicity may point people in the wrong direction. My thought is we all need to start somewhere and having an actual metric gets you started thinking about how to make customers your best source of referrals.  Understanding why detractors answered the way that they did can only give you helpful information to become better at what you do.  The discussion with your customers on this question can be of great value that can accelerate your company’s growth.

Want to Increase Sales?

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There is a whole lot of information on the web and in print on what to do to get great sales results.  Part of the solution is to know what are the statistics behind some sales activities that could help influence how you approach your activities.

  • Most emails get opened at the end of a day.  According to a study done by MailChimp they found the hours between 2pm and 5pm to have the most opens.
  • Tuesday is tending to be the day of the week with the best open rate.
  • A subject line is one of the keys to whether a person opens an email.  A study shows about 35% of people will make their decision to open an email based on a quick read of the email’s subject line.
  • Key words in your subject line are important for the open rate.  Words such as “learn”, “new”, “alert” tend to grab their attention.
  • According to a recent study about 57% of recipients will mark an email as spam, and this is even when the person knows the sender too.  If the subject line and material don’t resonate, they will throw it to spam because they don’t have the time to linger over matters that don’t help them move forward.
  • For outbound cold calling only about 2% result in an appointment.  This resonates with me because of my experience with clients using this technique.  It can be very effective but requires a large volume of calls to drive results.
  • On average a study showed that sales people will spend about 25 hours each month leaving voice mails.  Does leaving a voice mail work?  It may in some cases, but from my experience it does not result in calls to action to return the call.
  • Most voice mails will not be returned.  A study done by RingLead indicates that 80% of call go to voice mail and 90% of the first-time voice mails will go unanswered.  Some say to make it effective, only leave a voice mail that is between 5 to 15 seconds long.
  • The best time to call is generally between 6:30am – 8am and 4:30pm and 6:30pm.  People are usually checking messages and catching up at these times of day.
  • A recent study found that 77% of B-to-B buyers never talk to a sales person without independent research done before making contact.  It’s important to maintain the right social media presence and website content that will provide the information needed to the buyer.
  • Another study on B-to-B business found that 84% of buyers in this market started their buying decision with a referral.  One of the most powerful sales techniques is “word of mouth” referrals from a trusted friend or advisor.  How can your company position itself with influencers in your space as the “go to” source for your product or service?
  • Social media usage for business has found sales people are 79% more likely to hit their goals.  The key is using it for business communication with a strong message for recipient.

Give these statistics some thought on how you can utilize it with the sales techniques most appropriate for your company.

Here’s to increasing our sales!

Mike

Company Growth: Know Your Speed Limit

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Have you heard the saying “you’re either growing or dying?” 

For me, growth is in the eye of the beholder.  What I mean by that is growth means different things to different people and larger is not necessarily better.  The seduction of “bigger is better” exists because you can scale, get better pricing from vendors, and have a wider impact on your market.

However, as Basecamp founder Jason Fried explains in his article “The Zen Approach to Growth,” size may be important but it should be a by-product of meeting the mission of your company.  Getting bigger means more personnel to manage, larger customer base to manage, and so on.  Employees become a number vs. a name and family.

A business owner should think about why they want to grow and how it will impact the culture.  Being intentional about your growth is important.  Careful, methodical growth where the rate of growth is at least within the company’s affordable growth rate, which I often referred to as your “speed limit.”  Every company has a speed limit, and going excessively fast has its consequences.  Know your limit and why growth is important to you.

Here’s to knowing your speed limit and staying within it.

Mike

Marketing, Advertising, Branding… What’s the Difference?

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For business owners, it can be confusing to understand the differences between marketing, advertising, and branding.  The differences can seem subtle and for those not trained in these areas, it can be difficult to figure how best to implement especially with the myriad of channels to put our companies out there, such as Instagram, YouTube, podcasting, LinkedIn, Facebook, and more.

I recently read an article in Inc. magazine that helped spell it out for me.  Here is how they defined these terms:

  1. Marketing
    Marketing is how you see yourself as you try to present to others in reaching your target audience.  It’s how you “dress” your company for the image that you want it to portray.  The article mentioned thinking of your marketing strategy like your personal appearance.  It’s the difference between a business professional, a rock ‘n roller or a nerdy techie.  It should convey the vision and values of your business in a way that the public can identify.
  2. Advertising
    Advertising best shows your actions.  While marketing portrays the image you want, advertising is the actions you are taking to carry it out.
  3. Branding
    Branding is how you want others to see your company.  The marketing strategy needs to mesh well with how you want your brand to be “seen” by the public.  A strong brand helps you drive your marketing and advertising strategies.

All three are important pillars in your company’s ability to educate and attract your target audience to buy your products and services.  Making sure they all work together cohesively will ensure better success with driving sales.  Knowing the difference among these three can be the difference between success or failure for your company’s bottom line. 

Cheers to attracting the right customers at the right time through your marketing, advertising, and branding activities!

Mike

Selling via email? Absolutely – but use these tips for success

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Communicating with sales targets via email was probably not an option for your parents’ generation of workers. Yet email is a crucial tool for today’s salesperson. But these days, as we know too well, it’s impossible to read all incoming emails. So only “smart” emails will make it through your prospects’ filter.

Here are a few tips on how to craft and send emails that actually get read:

Best time to send:  According to Mailchimp, most emails are opened at the end of the workday, between 2:00 and 5:00 p.m. So, send emails in the afternoon to be first in line. A study by Experian shows that the most emails are read on Tuesdays. Why? Maybe because the Monday rush has passed. Maybe people are moving toward a four-day work week, whether their companies approve or not. Whatever is happening, send your most important sales emails on Tuesdays if possible.

Choose subject lines carefully:  Studies also show that the subject line makes or breaks an email: 35 percent of people decide whether to open an email based on the subject line. So a “cold call” email has got to have a short, interest-catching subject line.  Email open rates drop by 60% when the subject line is more than three words, so keep it short and concise.

    • There are also certain words in a subject line that increase the likelihood of it being opened. It may seem unoriginal, but words such as “alert,” “new,” and “free delivery” in the subject line (not only those words, of course) seem to pique recipients’ interest. Of course, the subject line should match the email content. Interestingly, words like “report” and “learn” in the subject line are likely to get your email escorted to the trash bin – perhaps because they allude to committing time that people just don’t have!

Content that inspires action:  Now we come to the content inside the email. The message should be friendly, concise, and action-triggering. It should have helpful information: why your product or service is better, what you want the recipient to know, what you want them to do next. People are busy; if it isn’t relevant to the receiver at the time, it’s clutter, no matter how fabulous you are. Give them a reason to reply!

So, send sales emails – but send smart sales emails. And think before you send each one. The last thing you want to do is flood someone’s inbox until your name equals “Junk Mail” in their mind.