http://archive.aweber.com/kenvargaFree Marketing Tip of The Week SubscriptionWed, 15 Feb 2012 18:07:58 -0500http://archive.aweber.com/kenvarga/GGI5g/h/I_wanted_you_to_know_this_.htm Hi , I have been vacationing at my second home in Aruba for ths last couple of months and in my spare time have been writing. Since I have been away, I haven't communicated too much and I wanted to let you know I have posted several new blogs here. Please check them out and post your thoughts. I have found over the years that I learn an awful lot when people post responses. It gives another perspective to me and to others that read them. To your success, Ken Varga Ph: 732-859-6461 Fax: 732-449-4145 Email: kenpbg@aol.com Website: www.kenvarga.com www.sellinsurancelikecrazy.com ...helping businesses increase customer acquisition by up to 32.7% in as little as 3 to 6 months, and increase customer retention by up to 90%. FREE Ebook: 10 Marketing Mistakes That Steal Your Cash at www.kenvarga.comWed, 15 Feb 2012 18:07:58 -0500http://archive.aweber.com/kenvarga/J9OLg/h/I_wanted_you_to_know_this_.htm Hi , I have been vacationing at my second home in Aruba for ths last couple of months and in my spare time have been writing. Since I have been away, I haven't communicated too much and I wanted to let you know I have posted several new blogs here. Please check them out and post your thoughts. I have found over the years that I learn an awful lot when people post responses. It gives another perspective to me and to others that read them. To your success, Ken Varga Ph: 732-859-6461 Fax: 732-449-4145 Email: kenpbg@aol.com Website: www.kenvarga.com www.sellinsurancelikecrazy.com ...helping businesses increase customer acquisition by up to 32.7% in as little as 3 to 6 months, and increase customer retention by up to 90%. FREE Ebook: 10 Marketing Mistakes That Steal Your Cash at www.kenvarga.comWed, 15 Feb 2012 17:57:08 -0500http://archive.aweber.com/kenvarga/9iYjM/h/Important_news_.htm Dear , I've decided to take a sabbatical for a year. There are so many companies that need help, that I've decided to only work with companies individually to help them through this challenging economic time. If you are one of those that would like individual help, email me at ken@kenvarga.com. As a result, I am suspending publication of my blog and of my Marketing Tip of The Week newsletter for now. You can revisit past blog articles by going to www.kenvarga.com/news, and can revisit past issues of the newsletter by going to http://archive.aweber.com/kenvarga. I wish you the best in your endeavors. To your success, Ken Varga Creating Customers, LLC www.kenvarga.com 1-888-682-2596 Mon, 21 Nov 2011 11:01:35 -0500http://archive.aweber.com/kenvarga/L_0k6/h/Oops_Incorrect_Link_How_To_Be.htm Dear , I apologize! In the message I sent you this morning, we mistakenly gave you a link that took you directly to a video I wanted you to look at, instead of first to my blog post that explained the reason for the video. Please click on the link below to read my blog post. That will put the video in context. Here is the link we should have given you. After reading the blog post and viewing the video, let me know what you think: How To Be Creative With Customer Service (New to leaving comments on blogs? Just scroll down to the bottom of the blog article and you'll see the Comment box where you can leave your comment.) To your success, Ken Varga Creating Customers, LLC www.kenvarga.com 1-888-682-2596 Tue, 25 Oct 2011 21:23:37 -0400http://archive.aweber.com/kenvarga/GyD56/h/How_To_Be_Creative_With_Customer.htm Dear , An inspiring way to please customers and keep them coming back.... Check it out here at Creative Customer Service and let me know what you think. (New to leaving comments on blogs? Just scroll down to the bottom of the blog article and you'll see the Comment box where you can leave your comment.) To your success, Ken Varga Creating Customers, LLC www.kenvarga.com 1-888-682-2596 Tue, 25 Oct 2011 08:02:52 -0400http://archive.aweber.com/kenvarga/7yMac/h/Persuasion_The_Key_To_Getting.htm Dear , A 4-step persuasion strategy for getting what you want.... Check it out here at Persuasion Strategy and let me know what you think. (New to leaving comments on blogs? Just scroll down to the bottom of the blog article and you'll see the Comment box where you can leave your comment.) To your success, Ken Varga Creating Customers, LLC www.kenvarga.com 1-888-682-2596 Fri, 30 Sep 2011 01:30:38 -0400http://archive.aweber.com/kenvarga/DFd9U/h/A_secret_to_getting_known_on.htm Dear , A secret to getting known on Linkedin.... Check it out here at Secret to Linkedin and let me know what you think. (New to leaving comments on blogs? Just scroll down to the bottom of the blog article and you'll see the Comment box where you can leave your comment.) To your success, Ken Varga Creating Customers, LLC www.kenvarga.com 1-888-682-2596 Mon, 27 Jun 2011 08:00:52 -0400http://archive.aweber.com/kenvarga/GcVRU/h/PART_2_How_to_determine_how_much.htm The Marketing Tip of The Week by Ken Varga Website: http://www.kenvarga.com | Issue No. 2011-6-21 10 How To Determine How Much To Spend To Get A New Customer -PART 2- Hi, and welcome again to another exciting Marketing Tip of The Week. I really appreciate those of you who took the time to email me that last week's tip really helped you to determine the Lifetime Value or your customers. It's always great to hear from you. Now, what else is involved in the Lifetime Value of a Customer? You can also sell products on the back end. Anything that you sell after the initial sale is called "Selling on the back end". You see, customers need to trust you. So the moment you fulfill your customers order (assuming you've done an excellent job of providing good products and good service) may be the most profitable moment in your relationship with that customer. And if you've done a really good job on the initial sale, your back end can be almost anything. This is one of the most overlooked areas in promoting any business and it's an area of huge profit potential. In almost every instance a lot more money can be made from the back end than from the initial sale. Think about it. Don't your customers trust you more after their initial purchase? Sure...if you kept your promises. So your next offering will be much easier to sell. Also, most customers hold back on the first order. They may have wanted five things you have, but have only ordered one or two until they see how you perform. Then they'll order those extra products they originally wanted and maybe a few others that now catch their eye. And when you've exhausted your product line by selling them everything they will ever buy, there's still more gold to be mined. You can create other products that your customers really want. How do you know what that would be? Well, the easiest way is to just ask them. Send out a letter that includes a survey. Or better yet, call on the phone and ask. Just say, "Mr. Jones, what other products are you interested in that you think I should stock?" You'll probably get more good ideas than you can handle. But as always, before you spend your hard-earned money to stock all those new products, test those ideas first. Try putting together a simple catalog and mail it to part of your list. It is a great way to inexpensively test new product ideas. Remember, customers don't always know what they want, nor will they always buy what they say they will buy. Also, a customer survey is a valuable start in learning new ways to profit from customers. And, it's almost always cheaper to get extra products to sell to your customers from someone else than it is to produce them yourself. Having the time to develop new products is something we all wish we had. But almost without exception, it is cheaper and faster to "find" products than create them. The statistics on the costs of new vs. old customers are amazing. It's widely accepted that it's at least five times cheaper to resell an old customer than a new one. Yet most businesses are obsessed with getting new customers, while ignoring their old ones. So while they spend a ton of money to take customers away from their competitors, the competitors are spending comparable sums to take just as many away from them. What a waste! Instead let's maximize the customers you've got, even as you reach out for new customers. Remember, your customer list is most valuable asset. Use it in the following ways: Sell new and existing products to your customers. Promote special "customer only" sales. Target your customers precisely when something new comes along to sell. Contact your customers regularly (at least 8 times a year) to insure that they remain your customers. Find other creative ways you can think of to put the power of your list to work. OK, so now you know and understand the Lifetime Value of a Customer. Can you use this to increase your profits? Go back to the LVC Calculator in Part 1 of this two-part article. Look at the three items that determine the Lifetime Value of a Customer and focus on . . . Increasing the size of your average sale. Package two or three products together. Look at the way McDonalds, Burger King, etc. sell their meals. You can buy a number 1, a number 2 or a number 3 and they all include fries and a coke. And for just $.49 more you can "Super Size" your dinner; this is an extremely profitable back end sale for these companies. Increasing the number of sales. Find out what else your customers want and give it to them. Increasing the profit margin. This may be the easiest way to improve you LVC since you have the most control over your costs. Become an overhead warrior willing to kill overhead costs wherever you can. Think of each tiny expense your business accumulates as a leak in your boat. Too many leaks and your boat will sink. And finally, as soon as you can, calculate the Lifetime Values of your Customers and use this information to make your business more profitable. Well, that's it for this week. I know that if you use this formula, you will add enormous profits to your business, and you will know how much money to budget in order to add new customers. Till then, keep well and have a profitable week! And remember to forward a copy of this newsletter to a colleague; it may be just what they need to take their business to another level. TAKING ACTION 1. Did you apply last week's idea to your business? If not, why? 2. What help do you need in order to apply it? 3. What areas of your business would you like me to address? Let me know by writing to ken@kenvarga.com OUR BLOG Visit our blog at www.kenvarga.com/news to see the answers to questions some of you have asked. Be sure to leave your comments and ask for clarifications if needed. To post a comment, just scroll down to the bottom of the blog article, click on Comments, and type in your comment in the text box that opens. Best Wishes, Ken Varga ...using experience from my 35 businesses to help you generate millions of dollars from yours P.S. If you haven't done so yet, take a few minutes to whitelist ken@kenvarga.com (add it to your address book as a friend) to make sure you don't miss future issues. You are receiving this email from KenVarga.com (Creating Customers, LLC) because you purchased a product/service or subscribed on our website. To ensure that you continue to receive emails from us, add ken@kenvarga.com to your address book today. If you wish to unsubscribe, see below. Copyright 2000-2011 by Kenneth J. Varga. All rights reserved. Tue, 21 Jun 2011 08:00:46 -0400http://archive.aweber.com/kenvarga/NPBAk/h/Want_prospects_to_open_your.htm Dear , Do these things to get your envelopes opened.... Check it out here at Get Envelopes Opened and let me know what you think. (New to leaving comments on blogs? Just scroll down to the bottom of the blog article and you'll see the Comment box where you can leave your comment.) To your success, Ken Varga Creating Customers, LLC www.kenvarga.com 1-888-682-2596 Mon, 20 Jun 2011 08:00:52 -0400http://archive.aweber.com/kenvarga/Fzv8k/h/How_to_determine_how_much_to_spend.htm The Marketing Tip of The Week by Ken Varga Website: http://www.kenvarga.com | Issue No. 2011-5-31 10 How To Determine How Much To Spend To Get A New Customer -PART 1- Hi, and welcome again to another exciting Marketing Tip of The Week. Over the next two weeks, I'm going to give you a concept that will help you determine what amount of expenditure you should make to create a new customer. Many a business owner will only use their cost of an ad, cost of their product, and sales results to determine their break-even point. This is the wrong way to do this. There were many times in my many businesses that I either broke even, or it cost me more than the original investment, to create a new customer. What I'm going to go over in this and the next issue is how to determine the lifetime value of a customer, and then determine how much you should spend to get them as a customer. A few years ago I gave a computer client of mine an old catalog about guerilla video products. He passed it on to one of his friends who held on to it for a number of YEARS. Anyway, as time passed, the motivation to make money with video technology got stronger and stronger for this friend of a friend. He finally called the office and ordered over $300 worth of the tapes and books we had. All from that $.25 catalog handed out two years before. Incredible! And it didn't stop there. Over the course of the relationship with this customer, he spent over $33,000 dollars with us. You can bet I wish all my customers were this interested in our materials, but that's not the point here. What matters is, understanding the value of your existing client base. Your existing clients are your most valuable assets! The above story is an example of how important it is to provide your clients with good service and good products. Otherwise, we never could have done so much business with one customer. And yes, one customer does not make a business. You need to look at what the average customer spends with you. That is important data. Now, most good business people pride themselves on knowing the value of their products and their equipment. Yet the most valuable commodity of all is rarely assessed - their customers - and that's sad because it's so important and so easy to determine. The lifetime value of a customer is simple. It is the amount of profit that you'll realize on your average customer during the lifetime of your relationship with that customer. Knowing this value is important for one major reason--you have to know how valuable a customer is so you'll know how much money you can spend to find them. So here's an exercise for those of you who've decided you want to make a lot of money... To calculate the Lifetime Value of your customer, determine: How much is the average sale? How many times per year does the average customer buy from you? How many years does this hypothetical average customer stay with you? What is your average profit margin? Multiply those four numbers together and you've got it. If you don't have the exact numbers, it's OK to make a good estimate. You see, knowing the LVC is so important that even having a close estimate will give you a guideline to use. (Big corporations employ mathematicians to calculate their LVC. Their calculations include the present value of money, the money from customer referral, the discount rate, other collaborative benefits and more.) And why is it so important to know this value? Because the LVC is the best measure there is for determining your advertising budget. And it's also the best guide for determining advertising results. Let's say a business runs an ad that costs $1,000. If the ad pulls $100 in sales, the owner will moan piteously that it was a loser. Wrong, wrong, wrong. Maybe it was a loser and maybe it was a spectacular winner. Only the LVC will tell you! Let's say the storeowner ran an ad in the local paper and the ad cost $500. Now, let's say he only got two new customers who each spent $50. Was the ad a loser? No way! Our storeowner knows the LVC of these new customers is $2,880 each. So he knows his $500 investment will return $5,760 on average! In the above example, the storeowner knew that his LVC was $2,880 per customer. And that he got two new customers who bought $50 each this time. But we know that on average, those two new customers will probably bring in over $5,760 more in the years ahead? (Remember, the LVC is calculated in profits, not gross sales.) That's a 10-fold return on the initial investment. Not bad, you usually can't do that good investing in the stock market! But what if this computer storeowner didn't understand the Lifetime Value of a Customer? He/she would get discouraged and stop advertising. In fact, this happens to most small businesses. They run an ad and when it doesn't bring back instant response, they quit advertising and eventually go out of business. What a bummer! Remember... The first sale means nothing unless you're planning on going out of business next week. Some of the biggest department stores in the world have been using a technique like this for decades. It's called the loss leader. This loss leader brings customers into the store because the store is willing to sell a product below cost to bring them in. Why do they do this? Well, they know that the customer will usually buy more products once they're in the store. They count on the buyer deciding to pick up a few things while I'm here, so they are willing to sell one product below cost to bring shoppers in. This is an unsophisticated example of the LVC principle.Well, that's it for this week. Next week, I am going to review how to increase the Lifetime Value of a Customer. This is critical for any business. Till then, keep well and have a profitable week! And remember to forward a copy of this newsletter to a colleague; it may be just what they need to take their business to another level. TAKING ACTION 1. Did you apply last week's idea to your business? If not, why? 2. What help do you need in order to apply it? 3. What areas of your business would you like me to address? Let me know by writing to ken@kenvarga.com OUR BLOG Visit our blog at www.kenvarga.com/news to see the answers to questions some of you have asked. Be sure to leave your comments and ask for clarifications if needed. To post a comment, just scroll down to the bottom of the blog article, click on Comments, and type in your comment in the text box that opens. Best Wishes, Ken Varga ...using experience from my 35 businesses to help you generate millions of dollars from yours P.S. If you haven't done so yet, take a few minutes to whitelist ken@kenvarga.com (add it to your address book as a friend) to make sure you don't miss future issues. You are receiving this email from KenVarga.com (Creating Customers, LLC) because you purchased a product/service or subscribed on our website. To ensure that you continue to receive emails from us, add ken@kenvarga.com to your address book today. If you wish to unsubscribe, see below. Copyright 2000-2011 by Kenneth J. Varga. All rights reserved. Tue, 14 Jun 2011 08:02:08 -0400