Increase customer engagement

I have recently been educated on the concept of increasing customer engagement - the modern age replacement for building brand.

Sounds a bit creepy to me

I have always thought it a better idea to keep business relationships professional and separate from personal relationships. Of course, over time, I have come to be good friends with many of my long-time business partners and colleagues. But the personal thing is still a bit difficult for me personally.

On the other hand, if I have a computer system that can provide me better leads for less money it will benefit all parties. Specifically:

Better marketing allows more time to be spent getting to actually know each other, and that ultimately means better decisions on all sides.

So how do I (or you) do it?

Now there's the rub. I have spent quite a bit of time trying to get this sort of marketing to work well, but so far, it's marginal at best. Interestingly, when I put up my metrics, others who have their own metrics tell me my numbers look really good. I typically get something like 33% of recipients of emails opening them, and something like 4% (of the total) click on something and get more information. Here's the thing. To me, that's not very good. I might convert 1 out of 100 into a sale, but it might take me 4 hours of effort per sale. That means I need to charge 4 hours more of my time per sale than the actual work done, which means they pay for my sales effort. The more expensive my sales effort, the more effectively I can sell, but then the costs of sales goes up and I have to sell more expensive things.

Ultimately, if I want a scalable business, I need to be able to turn the crank on sales and marketing so that to get more business, I simply repeat the well defined process again and again. That means I need to be able to teach it to people who are less expensive than I am per hour in order to keep the price down (and the margins up). In the end, this translates into more automation to get closer to sales with automation. But the automation also costs. Today, I can get a reasonably good expert to generate reasonably qualified leads for about $100/lead. Assuming a 1 in 10 conversion rate, that means it costs me $1K/sale plus my time to do the close (1 in 10 means I spend another 10 hours give or take closing the deal). It adds to the price.

If you are looking to sell shoes, you can probably get qualified leads a lot more quickly and close sales with automation. But in the high end businesses I tend to run, automation can only get you so far.

If these numbers sound good to you, I will revert to good old mail order marketing. I did mail order marketing in the 1980s after reading Joe Karbo's book "The Lazy Man's Way to Riches". At the Radon Project we had the resources to go for mail order sales to well defined segments of the population in geographical locations. We converted about 1/2% of sales (1 in 200 mailings) at the cost of $1/ea for the mailing. That's $200 in sales cost. Knowing that, we chose our markets for volume sales (the test kits sold for under $10 and the cost was on the order of 50% of sale price, so we needed to sell $400 worth to the 1 in 200 buyers to break even).

More engagement costs more

Time and money are limiting factors in most businesses. The next step up from mail and wait is mail and call. Mail and mail again is likely to get you spam filtered if you do it too often. Then there is the banner and similar advertising approach. Google (by example) can put your ad in front of people with various characteristics who have entered various search terms and this will bring you something like the same returns for the same costs as classic mail order. If they click, you can send them to more information and so forth. This is similar to emails identified above with an extra step in reaching out to more leads for the entry to your sieve.

The mail and call strategy is a good one for higher valued sales, but can be quite expensive (time wise). You can have someone from overseas do the follow-on calls, etc. But this can both hurt and help you. It may get you more leads with more engagement, but it may also damage your reputation, depending on the sales process you use and the quality of the people doing the engagement.

As an example of a professional engagement campaign, one company I discussed this with indicated a well-defined algorithm for gaining qualified leads from LinkedIn. In this process:

In my case, this goes into a CRM system I operate (called Gigs) intended to assure that the appropriate person follows up with the lead on a regular basis. It is a system of record and thus retains the entire history of interactions. It includes different states of closing sales and executing for clients, and allows for other follow-on processes. As an example, for angel to exit's Goto Angel services, it is always a human being sending individual follow-ups:

All folks entering the sieve also get put on email lists via constant contact for periodic updates on new things, etc. They can control their subscriptions based on their interest. From there, they contact us further for other engagement processes.

The key is in the calculation

Now that you have the very minimal basics, it's time to get to the reality of things. When you spend money this way, you need to measure results and determine if it is worth what you pay. That means calculations in advance, closely measuring what you do and the net results, and determining whether it's actually profitable at the desired return on investment. It also means the ability to determine in advance how much you are willing to risk for what level of reward.

"Now every gambler knows
The secret to survivin'
Is knowin' what to throw away
And knowin' what to keep"
- (from the Kenny Rodgers song "The Gambler")

The way you can tell this about advertising, is by watching the numbers. Keep what works and throw away what doesn't. Of course some folks are just better at creating ad copy than others.

But it's not obvious which ones are actually "better". So here's an example - the use of graphics and text in advertisements and customer facing information. ... but this is for another article.

Exploitation

One other note on this. Some might view this approach as exploitive or cynical. That is, we are building rapport and relationships to make money, not to make friends.

I view it exactly the opposite way. This is about being efficient in meeting people with potential mutual interest. The efficiency benefits all of us. Otherwise, we would not meet and I would not know the pleasure of your acquaintance, nor you mine. And who knows. Some of the meetings end up in long-term friendships, some in fruitful business relationships, and some in both.

There is a social contract here. You get "free" content (which is not free to me) when I share my expertise with you as part of my engagement process. You (or someone else) will pay for it by sometimes buying some things from me. If you aren't interested you can always opt out (e.g., I'm really not interested ...). assuming I am ethical about my approach I won't keep pushing you when you say to stop.

In summary

Customer engagement is an important concept, and one worth learning about. But it's not as simple as it might seem. It requires an analytical process and careful cost controls to be effective. These articles are a way I engage customers - existing and future. Hopefully, you are engaged and read them, watch for my monthly updates to get the next installment, and ultimately decide you can use what I have to offer. Of course I will be measuring it to see...

Copyright(c) Fred Cohen, 2018 - All Rights Reserved