Dangers of the Blind Pursuit
of Higher Response Rates
- How over-hyped sales copy built a $5 million business in 2 years, and killed it in five …
- Why the promotion you THINK is your biggest winner could be the cause of your falling profits …
- This famous marketer’s simple strategy is the key to building long-term, profitable customer relationships …
- And much, much more!
Dear Business Builder,
In the land of the blind, the one-eyed man is king.
And in direct marketing, your numbers are your eyes.
Without understanding them you could be blind to the fact that the biggest winner you’ve ever had is actually killing your business.
And after months or years of throwing good money after bad you’ll be forced to close up shop, scratching your head and wondering what the heck happened.
Don’t assume you’re immune – it even happens to sophisticated marketers.
Direct mail guru Denny Hatch once revealed how a postcard “control” for a magazine subscription was really a loser from the perspective of a year down the road.
How? Because customers who signed up using the “FREE subscription” post card offer didn’t renew their subscriptions. And what’s the “second-sale” in the subscription business? Right, the renewal.
So getting the first subscription isn’t the money-maker – getting the renewal is. Turns out, postcard subscribers who just had to drop a pre-printed card into the mail weren’t committed readers like the folks who came in through a sales letter.
But marketers, blind to the long-term behavior of the customer, thought that because the post card mailing produced a higher response, it must be better than the sales letter.
Who knows how much money they poured down the drain to get those useless subscribers? And who knows how long they would have kept throwing good money after bad chasing bad customers while ignoring good customers if no one had bothered to check their long term behavior?
Tracking customers can be a huge task. For starters, though, check out David Dittman’s article on How to track an ad campaign.
How over-hyped sales copy can kill your business
Michael Masterson of Early To Rise once wrote about how over-the-top, unrestrained sales copy built a $5 million business in two years, and killed it in five.
Why? Because it wasn’t bringing in quality buyers (they were spending about one-fifth of what they should have been). In this case, Michael explained the problem:
“The reason is simple. Your customers may initially be responsive to bells and whistles, but in the long run what they want from you is honesty, sincerity, integrity, and value.
“Yes, you can make quick bucks in the direct-marketing business by bowling your customers over with inflated claims and exaggerated promises and hyperbolic language – but those bucks won’t keep coming once they figure out who you really are and what you’re really up to.”
Your sales copy, every last bit of it from your customer acquisition to your house file promotions, contributes to the experience your customer has with you and your business.
Direct marketing as a sales channel is a relationship business. You make your money on the second, third and fourth sales. That means the longer customers stay with you, the more profitable your business is.
You’ve only got one chance to make a first impression
The promises you make to get a customer color that customer’s experience with your business. Promise the moon and deliver hot air, and you’ve ruined your chances of developing a long-term, profitable customer.
The industry’s great soft-offer marketers, like Boardroom and Rodale, know this lesson well.
The success of a soft-offer promotion is rated on two numbers:
- Up-front response
- And actual pay-up
Because when a customer doesn’t have to pay anything to try your product out, they get to decide BEFORE they write the check whether you’ve delivered on your promises.
Can’t you just picture it: An excited customer eagerly waiting for the delivery of the product he’s sure is going to solve his problems. When it arrives, he tears into it like a kid on Christmas morning, only to find it’s nothing more than a box of socks.
Crestfallen, and a little ashamed of being suckered by your promises, he doesn’t pay.
When selling a hard offer (people pay before getting the product), you might see a high refund rate. Problem is, not every under-whelmed customer asks for a refund.
Most follow the “fool me once shame on you, fool me twice shame on me” philosophy of simply refusing to buy from you again.
In essence, by over-promising you’ve created an objection to buying again that is almost impossible to overcome.
If you catch someone in even a seemingly harmless white-lie, how long do you think it takes before you’ll stop thinking of that person as a liar? I read a study once that said it takes two years of almost daily contact – without any more lies – before the average person truly gets over being lied to.
And that’s two years of personal contact. What are your chances with a customer in today’s cluttered world where the click of a button banishes your ability to communicate with a customer in a tenth of a second?
I don’t know about you, but there are several businesses I will never buy another product from because the product didn’t live up to the promise. Nothing those businesses ever say to me again will convince me to buy their products because I simply don’t trust them.
Your customers are the greatest asset you have.
Mishandle them by over-promising in your copy and under-delivering in your product and your marketing becomes a Sisyphean task of constantly struggling to get new customers – while they constantly turn around and refuse to buy a second time.
Jay Abraham’s Strategy of Preeminence
This is a simple strategy: Put your client’s needs ahead of your own and success will naturally follow.
In Jay’s book, “Getting Everything You Can Out of All You’ve Got,” he draws a distinction between customers and clients. Customers are people who buy from you. Clients are people under your protection.
By looking out for what’s best for your customers, you are treating them with honesty, integrity and sincerity while bringing value to their lives. And that’s just good marketing, because you’re bonding with your customers and becoming more than just someone who sold them something.
You’re becoming an advocate for them and a trusted advisor to help them achieve their goals. And that’s how you build long-term, profitable relationships.
As you’re building your business, or your client’s business, these two things – tracking customer behavior and understanding the customer’s experience with your business – are critical to your long-term success.
No promotion exists in a vacuum. They are momentary, though critical, contacts with your prospects and customers. Value your customers and what you can do for them, and you’ll avoid over-promising and under-delivering.
Likewise, be careful judging your success on the results of a single promotion or a single campaign, because your business has goals beyond the initial sale. Your long-term success is determined by your ability to achieve those goals.
To your faster success,
John Newtson
Editor, Life in the Fast Lane
THE TOTAL PACKAGE
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Comment by Steven James — September 29, 2007 @ 10:11 am
Wow! Your article was very helpful. I am new to marketing and found your info the best to date.
Thanks! :zzz
Comment by Don Oat — September 30, 2007 @ 4:12 pm
I see this failure everyday and wonder how long it will take for the company to go out of business.
The saying,\\\\\\\\\\\\\\\”there is no such thing as a free lunch\\\\\\\\\\\\\\\” cuts both ways. Giving it away will cost you dearly in the long run.
As for liars, they deserve what they get.
Thanks for a great article. I plan to add some of your thoughts to my mantra on how to build a customer base.
Comment by Greg Thompson — October 1, 2007 @ 8:29 pm
Jay Abraham’s Strategy of Preeminence
\”Put your client’s needs ahead of your own and success will naturally follow.\”
LOL - Geez, gotta admire Jay Abraham for always taking something ultra simple and common sense, giving it its own complex-sounding term, then charging people $10,000 to hear all about it. Now THATS good marketing! You should write an article about how to make $100k+ per year doing just this in your spare time.