Archive for December, 2008

Moving Your Customers to Recommend You

Saturday, December 13th, 2008

A couple of days ago I posted on getting customer referrals and recommendations. The bottomline is you need to be in their head at the time it becomes appropriate for them to recommend you. Most will agree the best way to achieve this you need a fairly high level customer relationship with them. But it goes beyond that.

Unless your customer can see some immediate or tangible benefit to them for recommending you, they won’t be motivated to mention your name. There are many referral motivators, they’re not all monetarily motivated. Here are a couple that work well.

For instance, there are a huge group of people who pride themselves in being in the know and being connected. Think of the most popular kid in school who was always on the leading edge of anything. No matter what was going on he or she seemed to be in the loop on it, ahead of everyone else.

Who are those people in your community? Malcom Gladwell (The Tipping Point) calls them mavens or connectors. They receive their validation from the ego boost of knowing they’re ahead of the curve. The more you can do to make them feel that way, the more they’ll value you. You’re providing them one of the key drivers in their life.

If you keep these people fully informed of what you’re doing and how it’ll benefit the recipient, they’ll jump at recommending you. One of the best ways of doing this is through where interesed people “follow you.” You can post short updates telling people who you’re talking to, what you’re doing, where you’re going, etc. It definitely makes people feel more connected. Twitter is growing like crazy right now and lots of businesses are taking advantage of how this works. It’s not mainstream yet, but it will be soon.

The second way to get people to mention you is if there’s an organized reward involved. I call this the ethical bribe. You can give out referral business cards with the name of the referring person on the back and your company on the front. When one of these referral cards comes back to you, call the person who referred and give them some kind of reward. It can be as big or small as you feel is appropriate.

There is a patent pending business card system for doing exactly this. It’s called the Rip-Card and you can check it out at It’s an ingenious system that’s completely trackable for all parties. My friend Alf, who invented it, has come up with a winner.

Another way of dealing with this is to leverage your existing client base to create new traffic and business for them through your normal business relationship. It isn’t that hard to do and the results can be very well appreciated.

As an example, I’ll often trade restaurants the set-up fees for new work for buy-one-get-one-free lunch or dinner coupons. This drives business to the restaurant, introduces new customers to the restaurant, and generally stimulates business for the eatery.

On the flip side, your recommending customer gets a free lunch on us when they recommend us. It works for everyone. It also provides a great opportunity for you to take that client to lunch. His lunch is free and you pay for yours. You see the restaurant client and you have quality time with your recommending individual. The possibilities are endless.

Bottom line here is referral systems need to be organized and systematized. If you can track the referral rate, you can really grow your business in a very efficient manner with very little advertising and promotion budget.


What Are Your Customers Saying About You?

Thursday, December 11th, 2008

Most small businesses rely on positive word of mouth as the primary way to grow their buisness. I think the reason is that it’s free and the person doing the referring is excited about what you did for them and they want to share their experience.

This can occur organically or we can have a systematic referral approach where the results are much more tangible and measurable. The organic way happens naturally and we really don’t have a good way of making this happen. The more contact you have with your customers, the more inclined they are to talk about you. Since most of us are too busy doing our own thing, this customer contact element of our business is reduced to the point of need. In other words your customer or you have a need to talk to each other about something of interest to the other party.

This can happen on a regular basis if you see the other party regularly. More likely, it happens gradually over time. If this is the case, there’s really no incentive for your current customer to talk about you unless the subject of t shirts comes up in a conversation. Even then you may or may not benefit depending on whether your customer remembers to mention you. Most likely, they won’t. It’s not because they don’t like you or have a problem with you. Rather, you simply aren’t in their mind at that time. You need to know how to get a positive referral. You have to have top of mind position.

As any marketing or advertising pro will tell you, your brand depends on repetition, repetition, repetition. Regular reinforcement of what you’re doing, what’s interesting/new, anything of value is helpful. The more benefit you can deliver to your customer, the better the chance they will remember to mention you. You need to give them a reason why when it comes to recommending you. I can’t tell you how many times I’ve been told I didn’t get the order because someone else “knew a guy who knows a guy who’s doing t shirts.”

To defeat this kind of situation you need to be positively positioned in the brain of your customer so they can recommend you. There are several ways to do that. Tomorrow I’lll outline one of my favorites.

Using Pricing in a Related Way

Monday, December 8th, 2008

We all acknowledge we’re living in a highly price sensitive and competitive market. My contention has been for a long time the reason for this is primarily because we don’t clearly define our value in the eyes of the market AND we don’t understand how pricing works.

The consumer retail market, especially supermarkets, have developed very sophisticated approaches to pricing. They use all kinds of economic supply/demand elasticity equations etc. That clearly is not going to work for us. What will work it to under stand the related events that work together to create new business for us.

As a starting point let’s look at the concept of discounting. I’ve laughed many times at the old joke of the two business owners talking. One says, “I’m loosing twenty-five cents a unit on every one of these I sell, but I’ll make it up on volume.”

There is a certain amount of truth to this, but upon close examination there is some strong logic as well. I don’t want to get into a big cost accounting discussion. I’m more concerned about how this fits into the overall business philosophy and strategy. Three are only three ways to grow our business.

    Increase the Number of Customers.
    Increase the Amount of the Sale.
    Increase the frequency of the purchases.

Each of these ways of growing our business is independent and acts separately on the other areas. So this means the true combined value of this approach is:

New Customers x Higher Order Value x More Orders per Year

What may not be so obvious is having more customers is the basis for growth as we can then have the second and third factors to work on in the future. Since all three of these factors work on each other, we can use this relationship to create more customers for us. How’s this possible?

Suppose for illustration (and this may not be the actual case)you’ll get more customers at the same rate as you drop your prices. So, dropping your price by 25% will increase your customers by 25%. If you have 100 customers, and you make a limited time offer to them of a 25% reduction in price if they refer a new account, you stand to gain 25 new customers. In this case you may actually be losing money on the sale of the shirts to your original customer, BUT you’ll be gaining 25 new customers who you’ll be able to market to for a long time. The retail industry has used this for years as a “loss leader” to build traffic.

It’s possible to adjust the relationship between discounting price and gaining new customers. The customer lifetime value is a critical component of future profit and growth. A customer acquired at breakeven or slight profit today will be worth much more to us at full value over time as we market to them and educate them to our ideas and philosophies.

Our ability to apply upsells, cross sells, and down sells give us ultimate flexibility in the design of our promotions to both maximize our profits AND maximize the customer’s perceived value of doing business with us. When you use the related relationships as outlined here, the consumer does get a better deal than your normal or standard offer AND you engineer more sales and more profit for yourself as well. Win-Win, my kind of transaction.

To read more on this subject, you can find several articles in the Strategy Department of TShirtSuccess.Share/Save/Bookmark

Crowdsourcing: Letting the Market Guide Your Direction

Saturday, December 6th, 2008

Many of you are familiar with the concept of t-shirt competitions. Such sites at Threadless, DesignByHumans, Teetonic, Shirt.Woot and so on host competitions where you can submit designs and the community as a whole votes on them. The ones with the most votes go into limited production and are sold out before you know it.

This is part of  a much bigger trend in society today of actually listening to the market and letting the market make their choice. The term is crowdsourcing and it is part of the Web 2.0 approach of doing business. It’s connecting you to your audience and allowing them to participate and become part of the overall experience.

So how does this apply to us? Past posts have talked a little bit about price sensitivity and how the market is driven by commodity behavior. Anytime we can elevate the end user to actually participate in an activity, we move toward experiential marketing. This is exactly what Walt Disney did with Disneyland in the ’50’s and Cirque du Solei in the 90’s with the circus.

These companies changed the perception of their product or service. They went well beyond the accepted norm for their respective industries and redefined the offering. You can do exactly the same thing by involving your customers and the end users of your decorated apparel. This is already a common practice with schools (especially elementary) where they have a class contest and then vote on the best design. But there is one major difference.

The difference is the designs are being done by amateur designers. They are coming up with primitive images that capture some, but not all of the emotional elements of the group, organization, or class. Your opportunity is to go beyond this by incorporating trained graphic designers into the equation.

Going beyond the classroom, a perfect example of this would be to team local designers or design students with the group and have the designers compete for the approval of the group. If you’re wise, you’ll find some way of compensating the winning designer from the price you charge the group for the shirt. This will make it appear the group is getting the design for free AND they’ll get a much better image than they would without trained involvement.

The possibilities are endless. The more you can access the end users in the design and selection of the graphic, the more connected they’ll be to you and the more they’ll talk about you to others. This is one of the most powerful leverage strategies you can use to get and hold the attention of your target market. For more on how to actually implement this approach, visit the TShirtSuccess website and look at the TShirt 2.0 section for more ideas and strategies.