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Shaun Buck – Customer Retention and Maximising Referrals

Shaun Buck is the founder of Newsletter Pro, based in Boise, Idaho. A 5% needle move in customer retention is equal to an 80% increase in profits. Everyone is so focused on growth via new clients. But they rarely focus on the costs of acquisition. It is one of the most expensive things we do as business owners.

Shaun said to himself that if he could get customers and keep them he’d make a whole lot more money. Customer retention became his focus

Shaun talks of “tax free day” the day in the calendar that you work to before you’ve paid your taxes. In the US, it’s around the 24 April. In the UK, per the Adam Smith Institute, it is a whole month later at the end of May!

Shaun Applying this to customer retention for businesses. The “Day” for most businesses where new customers helps the bottom line is more like October, November or even December! This is because they get a new customer, then they lose a customer. It takes so long to grow that way. It is a drag on profits. So, a little time spent focusing on retention, not only helps you grow faster, but you’ll see bigger profits.

With existing customers, they already know, like and trust you. People don’t typically give their money to people they DON’T know like and trust.

Perry Belcher – an associate of Shaun’s – “today we live in the single most difficult time to get a new customer, that’s the bad news, but the good news is that it is the single best time to get a second sale.”

Why do most customers leave?

Rockefeller Institute study showed 67% of people leave because they feel the business doesn’t care about them. They feel the business is indifferent to them. If the business doesn’t care about you, and there is no relationship, then what is the determining factor for doing business with the company? Price. Without relationship, it is only price.

Relationship and making your customers feel appreciated and valued and like they are being heard, that you are there to help them and you are on the same team, that’s what keeps customers from leaving.

Shaun doesn’t expect to lose his customers. Last month, Shaun lost 1 from 400+ customers. He expects his customers to be with him for ever. He is realistic. People sell businesses, go out of business, come up on hard times, or they just decide they want to change approach. He sees his job is to minimise these things from happening – by relationship, by providing amazing service.

Shaun figured all this out a long time ago. That apathy breeds attrition.

In 2002/2003 he had a dry-cleaning company. One of the ways he got customers was going door to door every evening, signing them up, for his pick up and deliver dry-cleaning service. He said, that was brutal hard work. Shaun quickly realised he just didn’t want to lose any of them. He needed to do everything he could to keep them.

That was Shaun’s start point in customer retention.

What got Shaun into newsletters?

The co-author of Shaun’s book, Dan Kennedy, was an inspiration to Shaun. Shaun started reading Dan’s books when 16/17 years old – around the late ‘90s. More recently Shaun has written about customer retention with Dan.

No BS Guide to Maximum Referrals & Customer Retention – Dan S. Kennedy & Shaun Buck (Check it out on Amazon in UK and in USA )

Dan talked about newsletters. So, Shaun started using a newsletter to his dry-cleaning clients. But it was a pain in the butt to get out every month. Every time he sent out his newsletter, he got more referrals. Customers would give him good comments, leave him notes about it and enjoyed it!

When Shaun was looking for a new business to setup, he figured that if newsletters were hard for him, it’s got to be hard for everyone else too.

Shaun’s business – Newsletter Pro – was 120th last year in Inc. Magazine’s Fastest Growth Privately Held US Companies 500. This year he is 343rd! His growth rate was a shade under 3,000% over 3 years from $100k to over $3m – 2011-2014.

What are the things we should know about customer retention marketing?

Let’s start by determining how do you put a newsletter together?

  • You only need a 4-page newsletter.
    • Send it as a self-mailer.
    • Address panel on the back.
    • Leaves 3 ½ pages to fill.
  • Don’t talk ALL about your business – this is one of the 2 biggest mistakes you can make.
    • If you are a Dentist, NO-ONE wants to know about dentistry, other than other dentists! And maybe not even them!
    • Dentists again. They want to put in pictures Before and After pictures. Latest procedures etc etc – NO. You want to build a relationship. People do business with people they know and like. Speaking of which, Dr. Robert J. Herman Orthodontics is one such dentist who has always managed to treat people even without any marketing gimmick.
    • You want that celebrity factor, that relationship factor. Open-up! Tell them about who you are, about your family. Tell them about your holidays, your vacations. Or the fun charitable thing you just did. Put this kind of stuff in there.
    • Also, put in other information that is going to benefit the lives of your reader.
      • If the mother is your target market, help her have a better life. Add a recipe, how to keep your kids safe on Facebook.
    • And then, of course, maybe talk about your referral offer a little bit. Your call to action. But do that is less than 25% of the space. No more than one full page out of the 3 ½ available, and your business bit should be in 2 parts if it is a full page’s worth.
  • Mail every month. No good relationship has quarterly communication. You don’t call your spouse once a quarter! If people keep you top of mind it makes it easier for them to recall you when the opportunity comes along to refer you.

What is the reaction of the recipient?

  • Shaun has stacks and stacks of testimonials.
  • Do people tire of receiving these newsletters? Shaun’s very first client happened to be a Dentist. He’s still a client today, after 6 years of monthly newsletters. He still gets new referrals. They recently did a referrals contest with the Dentist. A few months back he advertised his referral contest in his newsletter and in his office. Over a 3-month period he got 180 new referrals. They don’t seem to tire of it.

The newsletter is physical. It is all sent through the post. The thing about emails and email newsletters is they are starting to not work very well anymore. Everyone has a second email address. Google and Outlook sort your emails. They give you a promotions tab. You are seeing decreased open rates. So, now the prevailing wisdom – perversely – is to send DAILY! If we send more, maybe we can get back to where we were.

Referral Contests

most people are too cheap on their referral prizes. “Hey, send in your referral and get $20!” – Cheap. Some have free product – not a good option, unless it’s valuable free product.

Non-contest referrals. Good. No drawing. A steak dinner. It all depends on budget. You should spend as much to get a referral as you would a new customer.

Referrals tend to spend more money than new clients. So, you could spend MORE than you do on acquiring a customer.

Shaun’s big referral event in Las Vegas March 2017 is costing around $1,200 versus $2,000 to acquire a new customer. The attendees are very likely to become hyper referrers. One person already coming to Las Vegas is a lady who has referred 5 people. Shaun is flying her and her friend out first class to Las Vegas to join in the super-car racing experience he is laying on. He is expecting 20 to 30 new customers from his referral contest.

Shaun’s business is now $8m, so the average customer is an annual $20k, so 30 new customers equates to $600k.

Shaun expects to get around 75-100 customer referrals per annum. He also has referral partners. That is where someone has a list and promotes Shaun’s business. He gets around 15 new customers per month through referral partners.

If you get between 15-20% of your customers to refer you then you are doing good!

Relationships – most businesses are like that weird Uncle who only calls when he wants something. That’s how businesses operate. It’s all me, me, me.

How can I help them? How can you be the local celebrity? If you can think about what’s in THEIR best interests, your promotions will do a lot better.

If you are the only one who STAYS in touch, when it comes to your prospect wanting to act, who are they going to talk to? You are framing the story to benefit your business.

Zig Zigler: “If you help enough people get what they want, you’ll get what you want.”

Newsletter content – MODEL THIS!!

  • Come up with categories for each section of the newsletter.
  • The Front page is always going to be your personal article. That’s your story. If you are in B2B it can be a business/personal story.
  • Top of Page 2 – Category = help whoever is your ideal customer is. So, whomever that is, how will you improve their lives?
  • Bottom of Page 2 – Add your referral contest, something cool happening in your business.
  • Top of Page 3 – could be more content about your business. Or more helpful content to your ideal reader.
  • Bottom of Page 3 – fun, take a break section.
  • Do a little research and write it up? It will take you a little while.
  • Use a 4pp A5 sheet probably 170gsm.

Shaun has 100’s of take a break sections. He also has writers on staff that sounds like the owner write them. Then something local that’s happening, to provide a good local feel to the letter.

What can you do about customer retention in the next 100 days?

Map out the topics for your newsletter. What topics do you want to be personal about? Your family? Open on your vulnerable stuff. Talk about your holidays. Make a list.

People need to be vulnerable. Too perfect and you look fake. No BS. Be real. People connect with the weirdest things.

Get in touch with Shaun:      

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