Following on from the Checklists and Frameworks Episode, Pete talks to Dom about one of his original frameworks, the Preneur Hierarchy, that guides the most productive use of your marketing efforts by identifying the different segments of any market.
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Action Step: Have a look at the Preneur Hierarchy diagram on http://www.preneurmedia.tv and draw out your own version. Write out all of your current marketing activities, then put them into the Preneur Hierarchy to see if you are getting the most leverage for your efforts, or if there are opportunities to improve.
Bonus Action Step: Go back and listen to http://preneurmedia.tv/preneurcast/preneurcast035-pete-and-doms-favourite-things/ Episode 35 to find out how you can enter our competition and win some of Pete and Dom’s favourite things from 2011.
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[The Self-Indulgent] Preneur Hierarchy Framework
Pete Williams: How are you, Dom?
Dom Goucher: I am good, sir. I am just going through my podcast preparation checklist in Evernote.
Pete: I like it. Prepared, taking action, implementing what we talk about. At least someone does.
Dom: Hey, if we don’t do it, we don’t talk about it. So, I’m doing it.
Pete: Very, very true. I’ve got some really cool e-mails. I’ve got a fantastic one, literally only about 10 minutes ago, I think it was. Let me check- sorry, 58 minutes ago, I can’t count. It’s from Shannon who’s a long-time community member of the Preneur world, but is only new to the podcast.
Has been listening to a whole bunch of stuff and a few of the back episodes and things like that. So, big shout-out to Shannon who’s obviously taking action at a fantastic rate, getting through all the back catalogue, which is very, very cool.
Dom: Cool. So, what do you have for me this week, sir? Should we get straight into it?
Pete: Well, let’s delve into it. Been a busy week. How’s your week? Let’s talk weeks, as we normally do. How’s the week been? Anything exciting happening in your world?
Dom: It’s early on in the New Year for me. I’m just cycling through my clients, doing my little old 2012 strategy calls. I decided this year to be proactive. I’m going through each one of my clients, contacting them, booking a call-in with each one of them, and seeing first of all what they’ve got coming down the line, and then how I can help, both from a strategy point of view and also obviously from a delivery point of view with the media production. It’s being quite well received, actually.
Pete: Very, very cool. That’s awesome to hear, man. Nice.
Dom: So what did you do this week?
Pete: Well, you know, usual ‘try and take over the world’-type activities. But, no, a few things. Did an awesome community call, which I do a little bit. But this one was for Scott Bywater’s community, who’s a copywriter and marketing/advertising consultant here in Australia. Did a recorded conversation for his community. We spoke about the 7 Levers, which always is received exceptionally well.
Also, given our podcast last week that we recorded on framing and checklists, framing was on my mind, and it was a bit topical at the time; so we discussed using the 7 Levers not only as a tool to grow the profits of your business, but also as a bit of a triage tool or framework. We spoke about triage before here on PreneurCast, and we spoke a little bit about that.
The thing that really got me thinking was something that kind of just came out of the blue while Scott and I were chatting on the call for his clients, a way of using the 7 Levers framework as a way to create context. We spoke about context and framing a couple of times in back-issue episodes of the podcast as well, which is something I’m very passionate about in terms of understanding and applying context.
We spoke about it from the aspect of, if you’re reading a business book, per se- and a lot of people do this; they would grab a book and read it for enjoyment or for learning, which is absolutely fine. But something that came up, which I thought was very cool, was using the 7 Levers as a way to create context for the book you read. So if you’re going to pick up a book, before you actually go and read the book, check out the index, check out the back cover.
Maybe check out the Read It For Me summary if you’re a member of the Read It For Me service, which we spoke about quite a bit. You can get access for that at ReadItFor.Me/PreneurCast if you’re interested. But using that framework, you can sort of say, “This book is all about increasing opt-ins,” or, “This book is going to help me decrease my margins,” or, “This book’s going to help me increase customer loyalty, which will therefore give me more transactions per client per year.”
It was a really cool concept that came up in that conversation about using the framework in a lot of different areas as opposed to just doubling your profits, to actually say, “I’m going to read this book,” but give it some context. That will help you actually understand the content a little better, understand how you can apply it in your business better as you read the book.
You can get that feel for how it can actually be physically applied to your business. I know a lot of people read books and find it interesting and educational, but don’t really have action points or a clear bridge between their business and the content they just read. So I thought that was a really cool point that kind of came up about using those frameworks in an effective context creation-type aspect.
Dom: Yeah, and that’s really cool. I see. We talked briefly before about using the 7 Levers for triage because some personal contacts of mine had been using it for exactly that, a way of reviewing your business and seeing what needs your attention next. But I like that- that using it for context, because that’s quite an important technique for study, which I’m obviously very interested in.
We talked about that when we talked about the Pragmatic Thinking and Learning book. In there, they talk about always have a goal when you’re reading a book. Have a goal, know what you want to get out of it, and maybe the original way to do it is to review the book, as you said, to look at the index, and look at the table of contents, and so on.
Actually, Rich Schefren talks about that as well, when he talks about speed-reading. You get an overview to the book, but have a goal. Have a reason to be reading the book. That’s really good, actually. That’s a good outcome from that- what would otherwise be you giving out your knowledge, you got something back from that call. That was good.
Pete: Yeah, it’s very cool. So, I thought tying that the last kind of things we’d spoken about; frameworks, checklists, and things like that; I thought we could talk about other framework called the Preneur Hierarchy. Now, if I had my time over again, I would rename this and not make it so self-indulgent.
Dom: I never said a word. The thought did cross my mind that it was a little bit, well, yes, self-indulgent. Let’s leave it to that.
Pete: Basically, when I first published, for want of a better term, this particular framework that we can chat about today, was in my first book that was published four years ago through Wiley publishing. I was young, and naïve, and decided to name it after the business because it was my framework. I think it still applies and is sort of out there already, but it’s a little bit self-indulgent.
If anyone’s got some better names, we can try and kind of change the perception of this particular hierarchy and framework in the marketplace. But for now, it’s the Preneur Hierarchy. So let’s just roll with that, shall we?
Dom: I’m good with that. You know you’re still within your bounds to use the young and impressionable excuse. Relative to me, you’ve got a few years to go.
Pete: I guess before we delve into this particular framework and system, to a certain extent, it’s probably worth covering off a couple of key things. It’s about marketing and choosing places to market and advertise your business, so it’s a little bit different to those 7 Levers, which is all about the key drivers for the profitability of your business and how you can use this framework to grow that.
This is primarily focused on generating sales through marketing. It’s a slightly different application of a framework. When you think about it, before we kind of explain it, let’s discuss from a higher perspective what is the ideal checklist, if you will, that you want to actually tick off when you try to generate new business.
Obviously, one of the key things is a low acquisition cost. When you’re trying to get new sales and new customers or past customers coming back to you and spending money, you want to make sure that the cost of that acquisition, that particular sale, is quite low. Fair enough?
Dom: Absolutely. I do note though, that’s not something- I’m liking this already because you’re making me think about what a lot of people don’t actually think about, before we even get started with this hierarchy. So, yeah, cost of acquisition is one of those things, like cost of sales. It’s one of those things some people don’t think about much. So, definitely important.
Pete: Certainly one of the key things. Another one that I definitely put high on my checklist is high response. That obviously is very closely allocated and aligned to low acquisition cost, but you want that the message that you send out actually gets a quite high and immediate response. It’s one of those whole direct response-type ethos coming into play there. You don’t want that sort of scattergun approach, you want a very targeted-type message that gets a high response.
Pete: Measurable, I would say, would be number three. And this is no particular order, but number three on my checklist that every single marketing should try and get to as close as possible should be measurable. We’ve spoken about that before.
Dom: Definitely. You can’t manage what you don’t measure.
Pete: Very, very true. Very, very true. Another element would be the type of client that you actually get would be quite important to me. We speak about getting, well, I refer to anyway, and a lot of people refer to, as A-grade clients. How would you describe an A-grade client?
Dom: Whoa. Politely or impolitely?
Pete: You deal more face-to-face with clients than I do. We obviously sell a truckload of products through e-commerce sites, in Simply Headsets and Infiniti Telecommunications and stuff like that, but I don’t have a lot of direct day-to-day interaction with those guys. Whereas, you’re sort of a little bit more towards the cold front, so to speak.
Dom: Yeah. No, that’s a fair point. For me, my A-grade clients, as I mentioned in the Thanksgiving episode, I’ve been grateful for the last year that I’ve had, in the main I would say, A-grade clients. What’s important to me first of all is that the client values the service that I provide. I’m not seen as a commodity, I’m not seen as something that if, “Oh, well, if I don’t use you, I’ll use somebody else.”
That’s important to me, and also that they understand and appreciate the way that I work. I’ve had in the past clients that have come in and not really got with the program, that I’ve done this a lot, and I know what I’m doing. And if I suggest that we do it this way and use this workflow, that they go with that as well. But just in general, just having a bit of respect-
Pete: They play by your rules, more or less?
Dom: Yeah, they play by my rules. I wouldn’t personally put it that way, it’s a little bit egotistical for my liking; but it’s something to talk about, definitely. It’s just a possible misunderstanding from my point of view. But those things are important, that they ‘play by my rules’, let’s use your terminology, and that they value the service that I provide, or value me as a consultant.
Pete: Yeah. I think we should probably have a bit of a Freudian couch session coming up soon, man, because I don’t think that’s egotistical at all. It’s your business; you should operate how you want to operate. So if a client doesn’t play by your rules, that’s fine. There’s plenty of other service providers that do what you do. And the same to listeners, there’s plenty of other service providers that do what you do. As long as you feel confident you’re offering a good product and getting the right result by following your systems and processes, if the client doesn’t want to get on board with that, it’s too hard, you know?
We’ve spoken about Built to Sell, John Warrillow’s book, on the podcast before. And we’ve spoken about you should work out what model or what business or product you want to sell, and just sell that and sell nothing else. Don’t customize it, because that’s where you get into trouble. I think that is just a different way of saying play by your rules.
Dom: Good point, good point. You’re right, I still need a little bit of therapy before I can go, “Hey, these are my rules. Play by them or get out.” But, you know, we’ll go with it, I’m working on it.
Pete: Good, good. Let’s get back into the framework. Let’s get back to the case in point, so to speak. The main points are going to be, you want a system that’s structured. You want a system that’s systemized. You don’t want to be just doing, as I said before, sort of just scattergun approach and doing this bit of marketing here, this bit of marketing there, whatever tickles your fancy or whatever the sales rep knocked on your door this week that you agreed to. There’s got to be a system and a framework you can follow, and it’s got to be scalable.
Everything in business should be scalable, unless you’re wanting to own a job. That’s very much an [The] E-Myth thing that I know you’re a big fan of. It’s also got to be ‘segmentable,’ and this is something that took me a while to come to grips with, after my marketing degree with the whole Michael Porter’s 4Ps, segmentation, that sort of stuff. I went very anti that segmentation-type conversation. I went very much direct marketing and direct response-type avenue in the actual growing of the business.
But as you grew the businesses, the products and stuff like that, you really learn some things. Segmentation actually does apply quite a bit. I think segmentation is a key factor when it comes to creating a marketing framework that you can follow. They’re kind of the rules or the checklist that I want to try and achieve as much of as possible when marketing a particular business. Anything else I’ve missed or does that pretty much cover most of it, do you think?
Dom: No, that’s a good way of evaluating any system. I like that; it’s a good checklist to have out there. Add that one to your checklist.
Pete: Coming off the back of the checklist is what has over time evolved, and continues to grow, that we’ve termed the Preneur Hierarchy. I’m going to laugh every time I say that now. But, basically I thought we could chat through that. Something to precursor this; if people have read How to Turn Your Million-Dollar Idea Into a Reality, it’s covered as a whole chapter in that particular book. For those who haven’t read it, there’s obviously a free audio download available.
If you head over to PreneurMarketing.com and join the e-mail community there, you actually get instant download access to the audiobook, which you can check out. And then halfway through there, we start delving into the Preneur Hierarchy. I think it’s worth talking about it again today, and also how it’s grown and adapted over those last three or four years, too.
I thought we could chat through that framework, how it applies to marketing and generating new customers or repeat customers to your business, and getting close to hitting those checklist criteria as much as possible.
Dom: Cool. Although there is one important thing before you get started, and that is the last thing you said there, which is that it has changed and evolved over time. I think this is an important thing, going back to the high level, just looking kind of top-down for a minute at the whole kind of thing that we’re trying to do here with checklists and frameworks. Don’t stick to them. Don’t cast them in stone, in concrete or whatever the correct terminology would be, metaphor, whichever.
They’re there to help you, if over time you work out that something actually is better, different works better for you; especially if it’s something that we’ve suggested and it doesn’t quite fit in with whatever you do, then change it. Make it your own, update it, keep looking at it, keep evaluating. Don’t just take it for granted that it’s going to work. It’s important to keep moving, and changing, and reviewing, yeah?
Pete: Absolutely. Absolutely, and that’s what it’s all about- just continually adapting and testing, refining stuff. But a lot of people, they mistake that for not having a system at all, or a framework to work on, and that’s what I really began, particularly going to 2012, is talking more about frameworks and systems and having that thing in place that you can religiously go back to and work on as opposed to taking that scattergun approach.
So many people, they buy the next silver bullet that comes out on the market or they have all these ideas and don’t really ever have a structure to actually tie those ideas to and have a framework, or a road map so to speak. That’s what the 7 Levers is all about, what the Content Leverage System is all about, what the Preneur Hierarchy is all about- having different systems for different elements of your business that you can then build on and have a good solid foundation you can always go back to.
We’ll put a visual of the Preneur Hierarchy over on the site for the podcast at PreneurMedia.tv so you can check that out while you’re listening along. We’ll make sure it’s up and available before we publish the episode. But fundamentally, the hierarchy is exactly that. It’s a hierarchy or triangle-type structure. So, if you have a pen and paper handy, let’s walk through it as the call develops. Let’s draw a triangle, a decent-sized triangle, in the middle of a piece of paper.
That represents the target market of your particular service or solution offering. As we’ve spoken about before, what you do is simply solving people’s problems. You need to identify what that problem is, and that triangle represents all the people who have that problem who want to spend money on a solution. That’s what we start with. And then, the bottom, like everything, the good stuff falls to the bottom.
The heavy stuff starts at the bottom, so that’s where we want to start. We’re going to work marketing our business from the bottom up, like you just build a pyramid if you were back in Egypt. Unfortunately, there’s no aliens to come and market our business for us and get us clients. We have to physically do the manual labor and build the pyramid ourselves.
Fitting that criteria we spoke about earlier, I would say out of all that the easiest people to market to, the people who are going to be A-grade clients, the people who are going to be most responsive to our offerings, are going to be our past clients. If you want to make a new sale tomorrow, the people, out of that entire target market, that align themselves closest to that criteria is going to be your past customers. Is that fair enough?
Dom: Absolutely. It’s very common advice. Obviously, the cost per acquisition of an existing client is zero. But also, if they’ve already bought from you, they’re more inclined to buy from you again.
Pete: Yeah, you’ve proven that they’re willing to spend money to pay for the solution; they know the rules in which you want to play by, and all the other little good stuff. What we want to do is put systems in place that allow us to hit these past customers as much as possible. This is where we want to start building our marketing funnel and our marketing systems, and past customers are part of that marketing funnel.
So many people think of them on the other side of the transactions, after you actually sell; and all they focus on when it comes to making a new sale is new clientele to bring them that new sale. Whereas, if you put some systems in place early, you can have that foundation of past customers coming back and buying from you straightaway. I really encourage a lot of people that I work with, a lot of businesses that I consult to, to get that foundation in place first. It’s the cheapest, the easiest, the most responsive people you can sell to.
So, to give it an action step or an actionable idea off this- autoresponders. E-mail autoresponders are the perfect way to start implementing a past customer acquisition or reacquisition, or sale system in place. A lot of people who market online use autoresponders. But a lot of people who have retail businesses or consulting businesses should be using autoresponders. You can get plenty of autoresponder systems that allow you to upload your clients’ details once you make a transaction with them into a system that they then get automated follow-up marketing pieces from.
Let’s go back to the good old bike store example that we continually refer back to. When someone buys a racing bike, they should get a series of autoresponder messages talking about all different other add-ons, upsells and additional things they should be buying: reminders to get their wheels checked and serviced, getting new tires, all that sort of stuff. If they’re buying a family bike, different series of autoresponder e-mails should be going out to those types of segments to get them to come back and buy more.
You really want to get that in place very early and very quickly in your business. It’s very easy to do, but you’d be surprised at how much additional revenue, new revenue you wouldn’t have otherwise had, comes from having that first level of Preneur Hierarchy in place.
Dom: Absolutely. And just to clarify; if for any reason you don’t know what an autoresponder is, very quickly, it’s a system whereby you can preload- and this is the important tip- you can preload a set of e-mail messages, marketing messages, just like the ones Pete was talking about with the bike store, and have them sent out to a large group of people, an e-mail list, it’s called, over a period of time, at regular intervals or at preset intervals.
The key here, though, the big tip, is that if you sit down one day with a piece of paper and go, “These are the things I want to tell my clients about once they’ve bought something from me,” like a bike or whatever, and then you write those e-mails in one go, or a series of focused effort time like Critical Focus Time sessions we’ve talked about before, and then upload them. That’s it. Your marketing to existing clients once they’ve bought one of your products is done for the entire year, possibly in one afternoon.
Pete: All of that, exactly right. Couldn’t be more spot on there. A lot of this is going to sound obvious; this is the same with frameworks. A lot of this stuff, when you hear it you go, “Oy, that’s kind of obvious.” But unless you’re implementing it in your business and you’ve got that framework as a core element of what you do, it’s completely meaningless to you and your business. So, once you’ve got your past customers all set and the systems around that, you want to move up to the next level.
Obviously, as you move up this hierarchy, this pyramid so to speak, we’re going to be getting further and further away from that golden child-type customer that fits those main key criteria we spoke about earlier 100%. The further we get away, the further we move up, the further away we are. The next level, which is not going to be as responsive and not going to be as cheap [to acquire], is going to be prospects and callers.
Now, these are the people who have already responded to your marketing. Once someone answers the phone in your business, based on a phone call, an inquiry, that person is now a prospect; that person who called is a prospect, they’re on the phone to you. What you want to do at this point is consider that a separate sale; it’s a separate type of marketing. There’s marketing to get the phone to ring, and there’s marketing to actually make the sale- or salesmanship is the obvious term for it.
But you want to have things in place; things like sales scripts for your staff. When we spoke about the 7 Levers, a way to increase your conversions is to have those greet-and-seat rules that The Athlete’s Foot have, to reinforce and train the entire staff the same structure of getting that sale. Getting those scripts in place. Maybe working on a proposal, if you’re a service provider at any level and you have to quote the work you do or provide proposals.
Take a look at the proposals you’re given, whether it’s a quote on a scrappy piece of paper with $500 for the roof tiling you’re going to do, or whether if it’s for a phone system sale. You want to make sure you have a very effective proposal that helps convert those people. Because to me, they’re a bucket you need to continually make sure there’s a system in place to convert and sell to. That’s the next level up, getting that proposal, that script, to hit and convert those prospects, the next level up. Does that make sense? Is that fair?
Dom: Yeah. What you’re doing here is showing that each level of this, it’s going towards the pointy end. And in this case, the pointy end isn’t the pinnacle, the great bit; it’s the sharp dangerous nasty bit as it gets less easy to do, and the people become less responsive. So that slope is a diminishing thing. And also, each layer that you’re coming across is a different marketing approach. You’re doing different kinds of marketing to the different people. That’s a segmentation thing happening, isn’t it?
Pete: Absolutely. Exactly right, yeah. Everyone, as they go through your marketing funnel or whatever term you want to talk about, or go through the buying cycle, they hit different elements of this hierarchy. So you’ve obviously got to target and communicate with them differently. Because the next level up is going to be the next easiest people to convert or market to and get into your world, is going to be the searchers.
What I mean by this is that these are people who are proactively out there searching for a solution to the problem they have that you solve. They’re out there searching for a solution to the problem they have that you solve. What I mean ‘proactively,’ they’ve got their wallets and purses half open, just trying to work out where they can spend their money. They’re in that buying cycle, in that very end of the buying cycle so to speak.
AdWords is the obvious way to market to these people. They’re obviously proactively searching in searches for a solution. If we were recording this podcast as a radio or CD of the month program four or five years ago before podcasts really became the vogue-type thing, is Yellow Pages. That was what people used when they had a problem they needed a solution to. They’d go to the Yellow Pages because it was the easiest way for them to see solution providers. And now it’s AdWords.
All AdWords is, is a solution-providing type platform. There’s other sort of stuff- SEO is obviously another play for you to get in front of people who are proactively looking for the solution you need. That’s the next level up, those searchers. From there, if you have the next level up, I’ve got them pegged in that segment of the Preneur Hierarchy as procrastinators. These people have a problem, but they’re not currently proactively looking for the solution.
Let’s say for example the problem that you solve might be how to make your tomatoes grow riper and bigger, that’s the solution. Obviously, if you’re targeting those sorts of keywords for SEO, AdWords and stuff like that, you’re going to get that traffic. But what about the people who read gardening magazines and watch Home Beautiful? Those people quite possibly could have that problem; they’re going to be most aligned to your specific target market, but they’re not proactively looking for the solution.
This is where banner ads on websites and blog posts, doing guest blog posts, doing magazine advertising come into play. You’re going to get in front of the people who are most aligned and most likely going to be procrastinators because they’re the market you’re reaching them on, or the media and the medium you’re using is very closely aligned with the type of person and the demographics of your prospects and searches are. Is that concise enough? Does that make sense?
Dom: Yeah, it does. Do you know what pops into my head when you were talking about that? And this is, I think a very important build, it’s a tip I got from Jen Sheahan of FBadsLAB who’s big, big, big, huge in Facebook advertising. She talks in general about advertising and marketing, and about market to message-match, which is basically what you just said; that dependent on who’s looking where for what, you need to talk to them in the right way.
Dom: But the other thing that she talks about, which builds on what you’re saying now, is that whatever the advert is, whatever you do, however you are in front of that person, it’s not just the initial advert as it were. It’s not the e-mail message or the AdWords ad you do or the magazine ad you place; but the whole funnel behind it, in a way, needs to be lined up. So, if that person’s an existing client, you can shorthand the process. If they’ve called you up, you can make some assumptions. If they’re searching, they’re still action-takers.
You can do something a little bit more fluid to streamline that process. When you get to the point of procrastinators, then, just to reiterate, you’ve got a bit more of a struggle on your hand. It’s a lot harder to make the acquisition at that point, and you’ve got to do a lot more convincing. You’ve got to make it easier for them to get involved, and so on and so on, make it obvious what you want them to do and things like that. That’s just a tip I’ve picked up from Jen that is relevant.
Pete: Yeah, absolutely. The content of your marketing at this level is completely different because you have to build the demand. You have to create the demand and really scratch that problem into existence almost. Whereas, with searchers, all you’re doing is selling the solution. The language you’re using in your AdWords, your SEO and that sort of stuff is solution-based language. “We can fix your problem,” not, “Hey, did you know you had a problem?” That’s where the procrastinators come in. You have to really bring the problem to light, almost.
Dom: Yeah, that’s almost like a kind of a big water margin-type line across the middle of this Preneur Hierarchy triangle. When you get above searchers, it really just significantly changed, doesn’t it?
Pete: Absolutely, absolutely, the cost of response and all that sort of stuff. So, the next level up from that goes to ignorants. These are people who basically have no idea that the problem even exists, let alone is even remotely needing a solution or actively looking for a solution. The type of marketing that people do that they do a lot of, unfortunately, is newspaper advertising or billboard advertising, and stuff like that. I know an owner of a business I was talking to recently.
We were just chatting, and he was saying they ran a newspaper advert to announce the opening of a new retail store. Now, the retail store they had was in a very niche sort of market, so the local newspaper was a complete waste of money. I mean a very, very, very small slice of a very small section of a very small corner of that pie was even relevant to them. The rest of it were completely ignorant to his business and will always be ignorant to his business.
So, that sort of marketing was a complete waste of money. He was better off taking that cash and throwing it at AdWords based around key targeted search terms in a geographical location you can do with AdWords. It would have been much better off, much better ROI by moving that investment from ignorant marketing to searcher marketing. This is what it’s all about. This is what the hierarchy is all about. Because the top of the hierarchy isn’t even worth discussing, and that’s just pointless marketing.
You’re just wasting money; you are completely just putting it down the drain. And, this is what it’s all about, just working out where your money is currently being spent and where it should be spent, and doing as much as you can to move all your marketing money down the hierarchy as low as you can get. Because for a lot of businesses, past customers and prospects and callers is all you need to market to, to grow a business. If you do that right and deliver a damn good product, which is something you have to do.
It’s obviously outside the scope of what we talk about here because we’re about marketing and sales and entrepreneurship, but having a solid, good product is just granted. There’s no ifs, buts or maybes about that; you have to have a solid product and deliver on your promises. But once you have that, if you do that really well, you’ll get referral business that just makes the phone ring. And then all you have to worry about is converting those referrals, those prospects and callers.
You don’t have to worry about going to that level of searchers. But what you really need to do as a business owner and a marketer is to sit down, and once you get those first two levels organized, the past customers and the prospects, really, really, really, really, really, drill out every possible place people will be searching for your solutions. Spend your money there and only there if you can. It’s going to give you the best ROI because it’s going to give you lower resistance, higher response rates, lower cost of acquisition.
They’ve already had their wallets half open. Now, the obvious ones we’ve spoke about: Yellow Pages, AdWords, SEO; but there’s plenty of other ones, other directories online directories, direct mail, joint ventures. That sort of stuff can fit into those searchers to a certain degree. Some of it does bleed over a little bit to procrastinators, but that’s what we want to try and get you guys to do. That’s the action point for this week’s episode.
My suggestion to you all is to sit down, draw out this hierarchy in quite large space. Put in all the different categories and prospects of the past customers, the procrastinators, the searchers, in the right level and order of this segmentation. And then, write down all the marketing you’re doing on another list, every single bit of marketing you do, whether it’s a proposal, AdWords, magazine advertising, A-frames, billboards, whatever it might be that you’re doing in your business right now.
Every dollar you spent in the last six months to market your business, to get new sales, what did they actually do? And then match those to the segments of the hierarchy and see where the majority of money is being spent. For a lot of people, when I do this for them and sit down and go through their business, they find out a lot of the money is floating to the top of the hierarchy where it should be obviously floating to the bottom where the good gold leads are.
That’s the action point for this week. I’d love to hear you guys do that; any sort of feedback you have, any aha moments or anything like that. Taking that little bit of action off the back of this episode could make a drastic difference to the way you operate and the way you’re spending your money.
Dom: Cool. And, just to kind of try and compress quite a big thing into a small space, my personal perspective on this hierarchy is all about that return on investment, whether it’s money or effort, and the measurability. At the bottom of this, the widest part which represents the biggest opportunity for you, the biggest return on investment, we have those past or existing clients, and you’ve got everything you need.
You know something about them, you’ve got their contact details. They’ve already responded positively and bought some of your products. You’ve got an existing relationship with them. It’s as positive as it goes, and plus the methods of contact that you can use usually mean that you’ve got an easier time measuring their individual response. Now, if we take this to the other end of the spectrum, let’s go up to ignorance.
There’s a phrase, and it comes from paintball but that’s another story. There’s a phrase for marketing to people in that space that I use very often, and that is ‘spray and pray,’ ‘cause that’s what you’re doing. You literally are throwing information out there in the hope that somebody sees it and responds. Some people call it awareness marketing; and OK, it has its place as awareness marketing.
But in general, you don’t know anything about these people. You don’t know if they responded, how they responded, when they responded. You can’t contact them, there’s so little value by comparison. I’m not saying there’s no value; but I’m saying that by comparison, you’ve got this huge opportunity with your past and existing clients, or you’ve got spray and pray. I know where I’m going to focus my time.
Pete: Yep, absolutely. That’s what it’s all about.
Pete: There we go, another framework we’re throwing at our listeners. There’s plenty of them out there. The 7 Levers, Marketing Symphony, Content Leverage System, and obviously the Preneur Hierarchy are four very key frameworks people can apply to their businesses based on the context they need to apply it in. That’s the episode for this week.
Now, next week; what are we going to talk about next week, man? I think we should probably take up a couple of e-mails people have sent through and start making some episodes based off the back of that. I’d love to talk about this. I obviously enjoy speaking about it, so let’s start with that one: how I sold the MCG.
A lot of people have asked, heard the tale there, people who aren’t familiar with the story. But more importantly, I think what we should talk about is some of the tools, principles and tactics I used to sell the MCG, which is Australia’s version of Yankee Stadium, and how people can apply those same tactics to selling shoes and bikes and consulting services.
Dom: Definitely. I think that’s going to be one of those things that, you know, that was a fair old time ago in internet time, wasn’t it, when you did that?
Pete: It’s coming on- it’ll be close to 10 years soon. Eight or nine years ago.
Dom: So, it’ll be interesting to review that. It’s a great story anyway, and it’s very entertaining. A lot of important business lessons in it for everybody to take, but also I’d be interested to see if you would do anything differently this time around, with the new technologies and the new techniques and what you know. You’ve been in business; you’ve been doing this type of thing for 10 years now, so I’d be interested in that, as well as the original story. How about that?
Pete: Yeah, well that’s basically what the e-mail from listeners has been about. So, it should be fun. Looking forward to talk about it. I haven’t spoken about the whole MCG stuff for quite a while, used to obviously do a fair bit around that. And last couple of years, obviously, I had new projects and new focuses, so I’m going to enjoy next week’s episode.
Dom: Cool. Everybody, don’t forget, before you sign off; the end-of-year episode, Episode 35, we ran a little competition. Some people have been taking part already, you still have a couple of weeks left to take part and win some of Pete and Dom’s Favorite Things. So, pop back if you haven’t listened to Episode 35. If you don’t know what the rules are, then pop back. It’s a little bit of fun and also a little bit of support for us, if you would. Give it a go, maybe you’ll win a little prize.
Pete: Sounds good. Look forward to speaking to you all next week. In the meantime, @preneur on Twitter, @dgoucher on Twitter for you, big fella. And also, iTunes reviews and PreneurMedia.tv to get all the back catalog, to get the transcripts, to get the show notes, to get the links to all the stuff we’ve talked about. Have a good time: PreneurMedia.tv.
Dom: See you next week.
Pete: See you there.
http://www.scottbywater.com – Scott Bywater’s site
http://JustReadItFor.me – Awesome service that publishes detailed business book reviews
http://www.preneurmarketing.com – Visit Pete’s site and sign up to receive a free audio version of
Pete’s book, How to Turn Your Million-Dollar Idea Into a Reality
http://www.aweber.com – E-mail Autoresponder service
http://www.mailchimp.com – E-mail Autoresponder service
http://preneurmedia.tv/preneurcast/preneurcast035-pete-and-doms-favourite-things/ – Preneurcast Episode 35 – listen to find out how to win Pete and Dom’s favorite things