It’s not often that I find myself speechless, but that’s exactly what happened at a recent speaking gig. In the middle of explaining tracking what leads come from what source, a voice piped up from the middle of the room.

“I don’t even look at that anymore,” said the calm voice on the back row. “All I know is our revenues are up, our bonus payments are up, and our customers are happy. Oh, and my hours are actually down.”

Well, that got everyone’s attention. The question posed on the seminar floor was, “How do you track all your ad revenues, per media, per ad?” and the answers involved software, tracking questions, and solid follow up. That was when Mr. Calm spoke up. His answer caused most of the heads in the room to swivel.

He shared that “I used to try and keep up with all the pennies I was spending. But then I noticed all the dollars I was missing,” he laughed. My mind drifted to wonder how many of the $3.5 million he’s doing now in a medium-sized Eastern town he’d actually missed. Then there was the inevitable break of the silence.

The intelligent note-taking lady in row one turned and asked, “So what do you keep up with? Don’t you want to know how all your leads are coming in?”

“Sure, that sounds reasonable” he answered, “but if I had to count my friends only by how many called to wish me a happy birthday, I’d feel pretty lonely.” Another round of laughter. I half considered asking him to finish the seminar. “I’ve got another way,” he suggested. And with that, I took notes.

SAVE TWICE WHAT YOU SPEND

“We follow that method up there on the screen,” he said referring to a pie chart of media allocation. (Editor’s Note: Hudson Ink has agreed to give this chart to all NEWS readers. See end.) “But every year for the past five, I’ve dropped my Yellow Pages by 5 percent and put 2.5 percent into retention.”

He continued, “I’m now down to what Hudson calls a conservative but I’m getting as many or more leads than ever, way more referrals, and we don’t jack around with as many time-wasters.” Another bit of laughter. I’m undoing my microphone at this point.

“What I came to figure out is that I can’t count every bloomin’ lead traced back to every possible penny invested in each media … so I don’t. I just know that my customers tell me they aren’t going anywhere, and they nearly force their friends and neighbors to call me. My ad expenses are down from 5 years ago as a percentage of sales, but my sales and profits are up. The Yellow Page guy doesn’t seem to share my excitement though!” I’m clipping the microphone to his lapel.

In five years, his Yellow Page expenses are down 25 percent (from 31 percent to 24 percent of his total budget), and his retention investment is up to 10 percent of his total, almost exactly where we peg a conservative marketing platform. Uncanny. He’s spending less, getting more, and quite plainly doesn’t feel the need to analyze it within an inch of its fruitful life.

“Carry on young man,” he said with a hand gesture. “I think you’re doing a fine job … except that I can’t hear you anymore.”

In my speaking career, I’ve been interrupted many times - generally to the delight of the audience - but never taken such a delightful side step in learning. The second he finished speaking I knew this would be an editorial.

I spoke to this gentleman following the seminar and thanked him for his enlightened input. A point not made in his commentary is that part of the retention investment was in maintenance agreement marketing, with the other part in thank you cards, gifts (to bigger purchasers and referrals) plus newsletters. I looked back at our records, and as he indicated, his newsletter investment here has gone up seasonally, like clockwork.

STEPS TO TAKE

Here are some specific steps he’s taken that you can copy.

Look who’s buying: Your customer list shouldn’t be viewed as one large category, but as multiple levels of buyer. Avoid making offers to the wrong group, wasting dollars on the uninterested, or mistaking big for valuable.

Divide for recency (those who have spent money in the last 24 months), frequency (those who have used you with the greatest frequency in the last 24 months), and transaction amount (those who have spent the most with you in the past 24 months.)

Rank the best candidates and determine list size you can effectively contact. The most recent get a happy call, which can also generate follow up and referral work. Right after that, a thank you card to reinforce it.

Assemble a broader list for a post card offering $20 off any service call, plus a $20 gift certificate for referrals who get service work done within the next month (or whatever time period you determine).

Oh, I can hear the cries already; “I’ve got to pay $20 for each new customer?” Actually, you’re already paying about 12 times more than that, so this is mighty cheap by comparison, and you only pay when they pay you.

The gift certificate can be for a lunch/dinner, which if you do it right, you do not pay the face value. (Any wise restaurant owner will sell you blocks of 10 or so certificates for as little as half the face value to put more diners in chairs.)

Make the call: Follow up post cards with a call saying, “Did you get our money-saving postcard in the mail?” If the answer is “no,” check your records. If “yes,” then “Great, our technician will be in the area on Thursday and Friday. Which would be better for you?” This is an alternate-of-choice close and not pushy if said by a pleasant, smiling voice. Modify for your tastes, but you get the idea.

If your caller runs into a person who doesn’t need any work, can’t think of a referral, but says nice things, jot it down and request to use it as a testimonial.

Details that make a difference: Verbally ask each service call for referrals. We’ve written two books on this – it works. Put door hangers or bag on adjacent homes where you do service work. Use a yard sign on each service call. Send proximity mail to adjacent homes that reference the job done in the neighborhood. These last four items are the cheapest way to maximize market penetration and maintain top-of-mind awareness. Plus, most contractors read this and don’t do it, so you’ll stand out.

Include all your service customers in a “3R program”: That is retention, referrals, and recurring income. Your retention is a newsletter program that goes automatically to them at least twice per year. The referrals are both overt and implied in the newsletter, plus the follow up letters and phone calls. Do not assume you’ll get referrals, make sure. The recurring income is a gradual push toward your maintenance agreement program. What else? Put them in your e-mail loop (with retention messages not pure sales messages!). It’s fast, inexpensive, and can serve as a great way to accomplish and reinforce the 3R program.

Do the suggestions in this article, and you load the boat. If you limit the time for them to respond or find your competition, you’ll load it faster. When you plan your customer contacts as part of a program, you load it regularly. And if you follow up on every lead and sale, you won’t need to worry about loading again anytime soon. This is how most of our record-setting clients have done it, including the very wise and very profitable Mr. Calm.

Free Sales and Marketing Tools of the Month: Want to learn where to put your marketing dollars so you can see the results you want? Get a free Budget Calculator from Hudson Ink. Just send your polite request on your letterhead faxed to 334-262-1115 or a similar e-mail to freenewsstuff@hudsonink.com.

Publication date: 10/26/2009