Business Growth Masterclass 16 – How to Calculate and Lower the cost of your Customers

How to Calculate and Lower the Cost of Your Customers

 

Hello there and welcome to the 16th instalment of my Business Growth Masterclass. The step by step guide to building the business you always wished you could have.

 

Today, we’re going to look at how to calculate the cost of your customer and a few techniques you can use to lower that cost and increase the profitability of each of your customers, both old and new.

 

As ever though, before we get our teeth into today’s material, lets just check on actions from the last Business Growth Masterclass:

 

Did you do your homework?

  • You have a system in place for measuring your conversion rate on a daily, weekly, monthly and by-campaign basis.
  • You have chosen two new strategies to implement for an increase in conversions, and are measuring the results.

Great. Homework done. Now let’s get started with today’s Business Growth Masterclass.

When you buy a product, you want to receive the most for your money. The same is true for customer acquisition.

customers

Generating leads and converting those leads into paying customers is a process that costs you money. You can attribute a piece of your marketing and sales costs to each of the customers that you successfully attract and convert.

Essentially, you buy customers for your business.

Let me repeat that: essentially, you buy customers for your business.

Please read this again and understand it on a very basic level. If I sent you to the store with £40 to buy a white t-shirt, you would be successful. Well you can do the same thing with GOOD clients (ones that pay, stay and refer). Do not be scared to go into the business of buying good clients. This one distinction can completely change the way you do business and your level of success.

So when you think of your customer as your most valuable asset, you’re absolutely right. They’re an investment in your business that you expect to see a return from.

As with any investment, you not only want to see a return, but you want to see the greatest return possible. In this case, you could try to reduce your marketing budget, or boost your profit margins, but the easiest way to minimise the cost of a customer and maximise your return is to increase the number of times each customer buys from you.

In the five-step process, this is called increasing the number of transactions in your business. Instead of constantly chasing down leads and buying new customers, your work is to keep the customers you have bought coming back to spend more money.

In this Business Growth Masterclass we will cover:

  • The financial impact of repeat business
  • How to figure out the average number of transactions of your business
  • How to calculate your average customer acquisition cost
  • The lifetime value of your customers
  • The 80/20 rule and letting some customers go
  • How you can lower the cost of your customers to boost profits

Increasing your repeat business is one of the easiest and most cost-effective ways to boost your bottom line.

Turning a single transaction customer into a repeat or lifetime customer is one of the simplest ways to boost your bottom line. It costs very little and is largely based on the experience you can create for the people who buy from you.

With a little bit of time and thought, you can turn single-transaction customers into loyal patrons, or even big fans of your business. This not only translates into returning customers, but also earns customers that refer you to their friends.

Financially, the more times a customer buys from you, the lower their acquisition cost becomes. You only have to buy customers once, so when that figure is spread over several transactions it goes down.

Here’s a chart of how a 10% increase and 30% increase in average number of transactions can impact your bottom line.

Starting Point 10% Increase 30% Increase
Leads 4,500 4,500 4,500
Conversion Rate 30% 30% 30%
Customers 1350 1350 1350
Transactions 1.3 1.43 (10% increase) 1.69 (30% increase)
Average Sales Value £140 £140 £140
Revenue £245,700 270,270 319,410
Margins 24% 24% 24%
Profit £58,968 £64,864.80 £76,658.40

What is the average number of transactions for your business?

If you have a system for managing customer accounts and tracking purchases, this next step will be really straightforward. If you have a computer-based point of sale system, your reporting functions may even be able to calculate this figure for you.

To figure out the average number of times each customer buys from you, you need to choose a time period (the last 12 months is a good starting point) and a sample of customer accounts with the number of times each has purchased from you. Take 50 at random, or all the customers starting with the letter “T” as an example to illustrate the point.

Then, add up the total number of transactions for each of the customers in your sample, and divide the total by the number of customers in your sample. This is your average number of transactions. For example, if I have a sample of 10 customers, my calculation might look something like this:

4 + 5 + 2 + 8 + 5 + 1 + 2 + 2 + 2 + 6 = 32 32 / 10 = 3.2 average number of transactions

If you don’t have an existing data source for this information, survey your customers or start your own tracking system to use over the course of a week or month. Note on your customers’ accounts when they purchased and what they purchased, or keep a tally at the cash register. If you can’t survey your customers or create a viable database, then just estimate the figure based on your observations over a week or over the history of your business.

Remember that the average number of transactions is going to be different for every business. Grocery stores will have far different figures than furniture stores, computer stores will have dramatically different numbers than coffee shops based on the frequency that people need those products or services.

What is the average customer acquisition cost for your business?

Do you know how much do you spend – on average – on each customer you acquire? To calculate this, simply divide the amount of money you spend per month (or per campaign) on lead generation by the total number of sales in that month (or campaign duration).

For example, if you spend an average of £5,000 each month on advertising, and you generate about 250 unique sales per month, your average customer acquisition cost is £20. Or, if you spent £10,000 on an ad campaign over three months, and generated 400 campaign-specific sales, your customer acquisition cost would be £25.

To evaluate this figure, look at it as a percentage of your average sale. Of the 250 unique sales in first example from the paragraph above, and say the average purchase was £75, £40 of which was margin. Subtract the customer acquisition cost from your margin, and you’ll have the average profit of each sale, in this case it’s £20.

What is the lifetime value of your customers?

Now, assuming your average customer acquisition cost is £20, let’s take a look at what would happen if you turned that customer into a lifetime customer. What value does that customer have to your business?

First let’s look at the value of a single transaction customer:

Customer Acquisition Cost £20
Number of transactions 1
Average value of each transaction £75
Average profit margin £40
Margin minus acquisition cost £20
Total value of customer £20

Then, assume that an average customer ‘lifetime’ with your business is about five years. Calculate as you did above, spreading the customer acquisition cost over the total number of transactions.

Customer Acquisition Cost £20
Number of transactions 15 (assuming 3 per year)
Average value of each transaction £75
Average profit margin £40
Margin minus acquisition cost £38.67 (£40 – [£20/15])
Total value of customer £580

Here’s a more in-depth look at cost of a single transaction customer, in comparison to a tripe transaction customer or a lifetime customer:

One Time Year Lifetime
Customer Acquisition Cost £20 £20 £20
Number of Transactions 1 3 15
Average Value of Each Transaction £75 £75 £75
Average Profit Margin on Each Transaction (excluding acquisition cost) £40 £40 £40
Actual profit per Transaction (profit margin – [customer acquisition cost / # of transactions]) £20 (£40 – £20) £33.33 (£40 – (£20/3)) £38.67 (£40 – (£20/15))
Lifetime Value of Customer (in profit)(actual profit per transaction x # of transactions) £20 £100 £580

Based on the chart above, you can see that the lifetime customer who purchased from you 15 times over five years brought your business £580 in profit, in comparison to the single transaction customer who brought your business £20 in profit.

Both customers cost you the same amount – £20 – but there is a £560 difference in return on investment! Repeat business – the average number of transactions per customer – makes a huge difference on your bottom line.

Give yourself permission to fire some of your customers.

Everyone has a group of customers they enjoy doing business with and are pleased to continually serve (our A-list). Likewise, we all also have a group of customers (our C-list) who are a pain to deal with. They may consistently complain, only take advantage of special offers or never spend much money after a bunch of hassle.

Like a good business owner, I bet you treat every customer with respect, and give them the attention they need – even the C-list. Here is where the 80/20 rule applies: 80% of your revenue comes from 20% of your customers. That 20% of your customers is what we call your A-list.

The important point here is that while you’re busy trying to make your C-list customer happy, you’re missing the opportunity to give your A-list customer the level of service they deserve. Since the majority of your revenue comes from your A-list customers, that’s where you should be focusing your efforts.

So, give yourself permission to fire your C-list, and stop bending over backwards to address their concerns. Don’t let them rule your time. Spend your efforts making your A-list happy, and their purchases will more than make up the difference.

Let’s look at some strategies that will help you boost your repeat business, and your bottom line.

Customer Service

Everyone- even businesses with high customer service standards – can improve the service they provide to their customers. This phrase is used a lot, but it’s true: Under promise and over deliver.

If you’re looking for new ways to impress your customers with service, conduct a survey of your existing customers and ask them how you can enhance or streamline their experience dealing with your company.

When you establish standards of customer service, make sure they are:

Consistently implemented by everyone in your business. Every customer who walks through the door experiences the same level of service, and receive that same service every time they walk through the door.

Convenient for your customer. Make the purchase process seamless for your customer. Think of all the steps your customers has to take from driving or walking to the store until they leave with their purchase, and try to eliminate any inconvenient elements.

Driven by the needs and wants of the customer. Understand how your target market wants to be treated when they’re purchasing from you. What do they value most from the experience? High end linens, or fast service? One-on-one assistance, or ample space and time to browse?

Newsletters

Use newsletters to establish and maintain regular contact with your customers. This is an easy, time-effective and cost-effective customer retention strategy

You’ll spend an upcoming Business Growth Masterclass learning how to create and send effective newsletters, but the most important point to remember is that the newsletter (just like all other marketing materials) needs to be focused on the needs and interests of your target audience.

The most popular and environmentally friendly form of distribution is through email. This is highly cost effective, as some web-based programs start at just £10 per month, and can be customised to your business’ graphic standards.

Here is a list of the types of content you can include in your newsletter:

  • Expert advice or opinion
  • New product or service features
  • New offers or promotions
  • Company news
  • Customer surveys
  • “Missed you!” emails
  • Event or closed-door sale invitations

Added Value

Find ways to increase your customers’ perception of value so they feel that their money goes further at your business compared to the competition. Value added products or services not only add to your average Transaction value but create repeat customers by:

Making a great first impression. Providing a customer with more than they expected – something goes beyond meeting their needs – establishes a solid first impression of your business. They learn to associate the experience of shopping at your business with pleasant surprises, which is a huge draw for returning customers.

Giving them a reason to come back. The perception that your products or services have a higher value than the competition will convince your customers to purchase from you, and refer their friends. The addition of new value-added products or services will keep them coming back.

Here are some examples of added value:

  • Free shipping/delivery with minimum purchase
  • Premium product or service line
  • Bonus gift with minimum purchase
  • Complementary product packages
  • Guarantees or risk-free purchases

happy customer

Incentives and Customer Loyalty Programs

A common form of customer retention is to provide incentives to customers to entice them to come back and buy from you.

A systemised form of incentives is called a Customer Loyalty Programme – and I bet you’re part of several. Loyalty programs work because they provide a consistent visual reminder of your business through a card, key fob, rewards vouchers, or other such items, and give the customer a financial incentive to purchase from you instead of your competition.

These programs vary from simple cards to complex rewards structures, but they don’t have to be complicated or costly. Plus, once they’re in place, they’re super easy to maintain. Loyalty programs are also great market research tools because you can collect a wealth of information on the signup form, maintain a detailed database and monitor their purchase habits.

You’ll spend an entire Business Growth Masterclass learning how to set up a loyalty programme from start to finish, but here are the basic structures to give you an idea:

Loyalty Cards Provide a wallet size card and use a stamp or punch to track their purchases until they reach 10. When they reach the magic number, the next product or service is free.

Rewards Dollars Return a certain percentage of each purchase to the customer using coupons that can only be spent with you.

Rewards Points Award a certain percentage of each pound they spend to a points account. These points can be used to spend in-store, or on special items brought in for points-holders only.

Membership Amenities Produce membership cards, and give your members access to services, discounts or amenities that other customers do not have access to.

Remember, each of your customers is a valuable asset that you have purchased to grow your business.

Treat your customers like you would treat good friends, and offer them the perks and rewards they deserve for their loyalty. I find that this approach is also a lot more rewarding because I get to know my customers, and some of them actually become friends.

Of course, there will always be a few clients you’ll never please, so keep the 80/20 rule fresh in your mind. Don’t be afraid of firing the customers who drain your time and your resources. Your A-list will more than make up the difference in revenue.

In the next Business Masterclass, I’ll show you a ton of ways you can add value to your product or service, and boost the pound value of each and every sale.

As always, let me know if you have any questions.

You can  use the contact form below to discuss and get help with the topics covered in this, or any of the previous Business Growth Masterclasses.

Until next time, good luck!

Business Growth Masterclass 15 – How to improve your conversion rate

Hello there and welcome to the 15th instalment of my Business Growth Masterclass. The step by step guide to building the business you always wished you could have.

Today, we’re going to look at a few tips and tricks to increase your conversion rates from lead to paying customer or client.

As ever though, before we get our teeth into today’s material, lets just check on actions from the last Business Growth Masterclass:

Did you do your homework?

  • You have implemented two persuasive writing techniques in your marketing materials.
  • You have elaborated on your list of emotional trigger words and phrases that will inspire your target market to take action.

Now that your target prospects are answering your call to action, how can you get them to actually become your customers?

conversions funnel

A big part of your focus to date has been on identifying who your ideal customers are, deciding how to reach them, and how to communicate with them so that they take action and contact you. Converting leads into customers is your next point of focus, and step two of the five-step process. You’ve spent so much time and money enticing the right people to raise their hands and identify themselves that now all you and your staff need to do is convince them to become your customers. Generally, how your potential customers perceive your business and your staff, as well as how much trust you can build and how fast you can build that trust are the two key factors that impact conversion rates. Secondly, the strength of your sales process and scripts as well as the level of risk involved in purchasing your product or service also have a powerful impact on conversion rates. But before we get into ways you can improve your conversion rates, let’s take a look at where conversions stand in your business right now. I’ll also show you how to evaluate whether you have a strong conversion rate or not – it’s not as black and white as you think.

In this Masterclass we will cover:

  • How your conversion rate impacts the bottom line
  • How to measure your conversion rate
  • How to evaluate your conversion rate
  • How trust and qualified lead generation impacts conversion rates
  • Strategies for improving your conversion rate

Your conversion rate is the second factor in the customer equation.

A conversion rate is simply the number of transactions divided by the number of leads during a specific time period. It’s a ratio between the number of people you attracted with your lead generation strategies, and the number of people who purchased from you and became your customers. So if 150 people come through your store in a day, and 50 of them make a purchase, your conversion rate is 33% for that day.

Converting leads – which is essentially the sales process – is likely the core of your daily business efforts. You’ve spent time and money setting up lead generation systems and strategies, so it stands to reason that you should put equal time and energy into converting those leads into loyal customers. I’m going to show you in a few minutes how you can improve your conversion rate with a few simple strategies, but first I want to show you how increasing your conversion rate alone will have a dramatic impact on your bottom line. Using the five-step formula, here is an example of how a 10% and 30% increase in conversions can impact your total profit.

Starting Point 10% Increase 30% Increase
Leads 4,500 4,500 4,500
Conversion Rate 30% 33% (10% increase) 39% (30% increase)
Customers 1350 1485 1755
Transactions 1.3 1.3 1.3
Average Sales Value £140 £140 £140
Revenue £245,700 £270,270 £319,410
Margins 24% 24% 24%
Profit £58,968 £64,864.80 £76,658.40

What is the average conversion rate for your business?

To figure out your conversion rate, choose a specific time period (day, week, month, campaign) and then divide the total number of sales transactions by the number of people who inquired about your product or service (leads) and multiply by 100. This is a percentage value of your conversion rate. For example, 50 transactions / 150 leads x 100 = 33% conversion rate. Now, if I wanted to look at conversions over a specific time period, the rate would vary:

Leads Sales Conversion Rate
Day 150 50 33%
Week 910 286 31%
Month 4050 1196 29%

If you’ve been tracking your leads over the past few weeks, you’ll be in good shape. All you may have to do is look at your lead tracking sheet, and divide into it your total number of sales over specific time periods. You’ll be able to analyse what your conversion rate looks like over the course of ad or direct mail campaigns, as well as over various weeks in the month. If you haven’t started tracking your leads, you’re going to have to start in order to understand what your true conversion rate is. In my experience, many business owners overestimate what this percentage actually is, so I feel this is an important step in the process.

Keep track of the following items in your conversion rate measurement sheet:

  • Start date and end date of the measurement period (by ad campaign, week, or month)
  • Total number of leads (divided by source – telephone, in store, online, etc.)
  • Total number of sales transactions
  • How trust and qualified lead generation impacts conversion rates

If you’re starting to track leads and sales today, by the end of a week you’ll have a reasonable understanding of where your business stands.

How do you evaluate if your conversion rate is “good” or not?

I have clients ask me this all the time, ‘Once you know what your conversion rate is, how can you tell if it’s “good” or “profitable”?’ Unfortunately, the answer isn’t a black and white one. The truth is that conversion rates vary and depend on the product, service and customer base. Different businesses can have dramatically different rates, yet both rates can mean the respective companies are highly successful. For example, a thriving pound store may have a conversion rate of almost 80%, while a profitable furniture store may have a conversion rate of 30%. Other businesses might have rates of anywhere from 4% to 99%. You can put it into perspective if you think about how differently these businesses operate. Pound stores generally have a high volume of foot traffic and offer a wide variety of products. The price point is low, and most people who walk into a pound store buy something. Furniture stores, on the other hand, offer products of a higher value that usually require more thought prior to purchase. The store generally advertises to attract leads that are looking for specific items and features. Lastly, the product requires a much more substantial investment. So, instead of focusing on how close your conversion rate is to 100%, you need to think of conversions as relative to your break-even point – either for a campaign or for regular business operations. To do this, you need more information than the rate itself. You need to know how many leads you need to convert into customers to see a return on investment. You need to know how much money each lead costs you, on average how much they spend, and how much of their spend is actual profit. For example, if you have £4,000 to spend on advertising and you want to see £20,000 in sales, will a 20% conversion rate be enough to do the job? To answer this, you need more information on other measures in your business. You need to know your average pound sale and average customer acquisition cost. In this example, let’s say your average pound sale is £42 and your average customer acquisition cost is £2.50. (You’ll look at customer acquisition costs in the next Masterclass). If you take your £4,000 advertising budget and divide by your £2.50 customer acquisition cost, you’ll expect to generate about 1,600 leads. So 1,600 leads with a 20% conversion rate would equal 320 sales – not bad. Now, take the 320 projected sales times the average pound sale of £75, and you’ll get £24,000 in revenue. That’s a reasonable ROI for a £4,000 investment! But is the 20% conversion rate a ‘good’ one? To answer this, you’ll have to factor in your profit margin to determine the answer. You wanted to achieve £20,000 from your £4,000 advertising investment. Let’s say your average profit margin is 45.3%. So, on each £75 sale, you made £34 profit. So, let’s look at your actual profit after costs:

320 sales x £34 profit per transaction= £10,880 in take home profit.

So, when the rest of your business measures are factored in, you actually only achieved a 272% return on investment, which is about half of what you were targeting. Therefore, in this case, a 20% target conversion rate isn’t necessarily a strong one for your business.

Now, before you dive into any conversion rate boosting strategies, focus on building trust and generating qualified leads – the cornerstones of a profitable conversion rate.

You probably already know that trust is a huge factor in any exchange with a potential customer. When you first learned about sales and the selling process, you learned about building trust and rapport with the people who are giving you their money. So, trust is therefore a big factor in having a healthy (and profitable) conversion rate. Your prospect needs to trust in the value of your offering, as well as the credibility of the business and the knowledge of the people who work there. The issue here, of course, is the length of time it takes to truly establish trust, or credibility. With all your new leads – practically strangers – walking through the door and picking up the phone, you need to establish instant trust and credibility in order to make the most of the time you spend with each prospect. The other important point I want to make is about the role that qualified leads have in your conversion rate. It’s one thing to have hundreds of leads contact you on a daily basis, but if they’re not qualified leads, they’re less likely to buy, and are therefore potentially wasting your time and squashing your conversion rate.

Here are five ways you can boost your conversion rate with little improvements to your business.

satisfied_customers

1. Build instant trust.

Use testimonials. Ask happy customers to write testimonials about their experience at your business. Use their words (or even their whole letters) in your marketing materials, or post them in your place of business. Testimonials boost confidence in what you’re offering and establish trust in the eyes of prospects.

Showcase your good news. Post awards, accolades, media articles and other ‘proof’ of your credibility around your business and on your website.

2. Create an image of quality.

Consider the appearance of your staff. How do you and your staff members dress? Does your appearance communicate the right message to potential clients about your offering? You don’t need to show up in a suit every day, but make sure everyone’s appearance is professional and appropriate for your business.

Improve the perception of your business. This includes the physical state of your place of business, as well as the quality of your marketing materials and the quality of the service customers’ receive when they purchase from you.

Give merchandise displays a boost. Can you make your products look more attractive through the way they’re displayed or arranged? Put complementary products together, and create feature product displays to create variety and interest.

3. Train and develop your staff.

Give staff conversion targets and incentives. Remember that you’re not the only one who can contribute to an increase in conversions. Involve and support your staff in tracking and boosting conversion rates. Give them individual targets, and incentives for meeting them.

Review and improve sales process. Everyone can improve their sales skills, and refine the process they use to close sales. Take an opportunity to watch and give feedback to your staff members, or hold a brainstorming session to discuss what techniques, phrases, objections are most effective when selling your product or service.

Develop and continuously update scripts. If you’re not using scripts, it’s time to start (you’ll see why in an upcoming Masterclass). If you are using scripts, make sure you’re revising and improving them on a regular basis based on what you and your staff experience during the sales process.

Focus on customer education instead of sales. Face it, no one likes to be ‘sold’ to. Focus your sales process on building a relationship with and educating your customer on the benefits and solutions of your offering. The more they learn, the more they’ll believe what you have to say, trusting the business enough to make a purchase.

4. Improve your offering.

customer-service

Increase quality, exclusivity or range. Can you improve the quality of products or services that you offer? Carry a more exclusive product, or extend your range of products? Take a look at your merchandising mix and service menu and identify areas where you can expand or specialise.

Make great offers. Strong offers can also serve as an incentive for a potential customer to complete the sale. Offer great perceived value, or exclusive and time-sensitive products or services, and you’ll see a spike in your conversion rate.

5. Take away purchase risk.

Provide free trials and demonstrations. Allow your customers to test out your product or service for free, with no obligation to purchase. Or, offer free demonstrations so your customer can see the benefit or solution your product or service provides.

Guarantee product or service performance. Take away the purchase risk from your potential customer, and you’ll have a powerful strategy for closing sales and increasing conversions. This is also an immediate trust and credibility booster – you are so confident in your product or service’s results that you’re guaranteeing them.

Work with your staff on a daily or weekly basis to consistently measure and increase conversion rates.

Post a calendar in the staff room or common area, and track your targeted and actual conversion rates on a daily and weekly basis. This will give you and your staff a visual reminder of the company’s goals, as well as an indication of how the team is performing. You don’t work in your business alone, so involve and motivate your team to support you in growing your business. Give them incentives and help them develop their sales skills, and I promise you’ll see an impact on your conversions. The next step is about customer loyalty – how to keep your clients coming back to make new purchases, instead of continuously trying to buy new clients. As always, let me know if you have any questions.

You can  use the contact form below to discuss and get help with the topics covered in this,or Any of the previous Business Growth Masterclasses.

Until next time, good luck!

Business Growth Masterclass 14: How to Be a (Better) Copywriter

Hello there and a belated Happy New Year to all who follow my blog. Let’s hope for a busy and very prosperous 2014 for us all.

Welcome to the 14th instalment of my Business Growth Masterclass. The step by step guide to building the business you always wished you could have.

Today, we’re going to look at what it takes to write brilliant attention-grabbing copy in all those marketing peices that are so important to the growth and prosperity of your business.

As ever though, before we get our teeth into today’s material, lets just check on actions from the last Business Growth Masterclass:

Did you do your homework?

  • You have created at least two advertisements to use in an upcoming campaign.
  • You have a plan in place to test and measure the success of each advertisement, and make changes based on your results.

Great! You’re all set to go with this month’s Masterclass. Read on.

When writing sales copy, you’re racing to hold your readers’ time.

Unlike novels or news stories, sales copy doesn’t have the luxury of a reader’s patience. No one is going to leisurely sit down with your brochure and pour over every word, or analyse your ad to really understand what it’s trying to communicate.

Writing for sales means racing to catch and hold your readers’ attention long enough to convince them to take action. Every word and every sentence needs to mean something to the reader and support your message.

There are dozens of helpful tips and suggestions in this Masterclass that will strengthen your ability to write effective copy. Someone once told me that copywriting can never be too long – just too boring. And it’s true. Copy needs to be captivating and easy to read or it simply won’t be read.

As you work through this Masterclass, I encourage you to take a few of your recent marketing pieces – like a brochure, sales letter, an ad or any other copy-heavy document – and identify the mistakes you may be making. There are always opportunities to strengthen your work, so be open to them.

In this Masterclass we will cover:

  • Copywriting myths
  • Tips for triggering emotions and hitting hot buttons
  • Strategies for improving copywriting
  • Persuasion techniques for marketing materials
  • Examples of effective copy

The first step to better copy is to stop buying into these myths about copywriting and copywriters.

I find that there are a lot of misunderstandings out there when it comes to copywriting and copywriters. This is often closely linked to advertising myths, like you have to have a big budget to be successful, or the prettier the ad, the more effective it is. It’s all just hype.

I urge you to let go of these common misperceptions:

1. Good copy needs to be clever and fancy.
Good copy needs to get the message to the right audience. Fluffy words, long sentences and poor attempts at clever humor get in the way of the message. You’re not competing for a copywriting award; you’re competing for customers. Worry less about the high budget ads in Vanity Fair, and more about your audience’s emotional triggers.

2. Copy is the crux of the marketing campaign.
Of course your copy is important to your marketing efforts, but it can’t make the ship float. You need to have your target market identified and your message clearly defined before you can reach out with success. You need to have a strong product or service offer before you can tempt your audience with it. Strong copy is essential, but only after a strong foundation has been built.

3. Only professional copywriters can write effective copy.
As a small business owner, you have a considerable advantage over professional copywriters and big budget ad agencies. You know your product inside and out, and are actually passionate about it. Once you understand the elements of strong copy, you’ll have no problem creating it yourself.

Here are the key points you need to remember when writing sales copy:

  1. Copywriting is persuasive writing.
  2. Use a strong headline to get your readers’ attention and read the sub headline.
  3. Use a captivating sub headline to get your readers to read the first sentence.
  4. Design your first sentence to persuade the reader to read your second sentence.
  5. Repeat until you convince the reader to take action.

Strong copy grabs and holds your readers’ hot buttons, and keeps them reading.

Just like you did when you practiced writing headlines and creating powerful offers, use your knowledge of your target audience to provoke emotional reactions in your sales copy.

1. Use the word ‘you’ twice as often as ‘us’ ‘we’ or ‘our’.
To avoid writing sales copy that focuses too much on the merits of your business, try writing from the perspective of your reader. Focus on answering the question “what’s in it for me?” over and over again.

People love talking about themselves, so let them. Use the word ‘your’ as often as possible, and twice as often as the words ‘us’ ‘we’ or ‘our.’ Pretend you’re having a conversation with one person in your target market, and talk about them as much as you can in that conversation.

For example, if I simply wrote, “Buy our product and receive…” it would not have the same impact as “When you buy our product, you will receive…” Similarly, “Our members benefit from hundreds of pounds in savings” doesn’t hold the reader like “When you become a member, you will save hundreds of pounds…” does.

2. Use emotional trigger words.
Keep your list of emotional trigger words and power words handy when you’re writing. Word choice is a powerful component of successful copywriting, and not because particular words or phrases are unique. A few dozen words and phrases in marketing have been proven to have a stronger impact on target audiences than others. (For examples of some of these “powerful” words, take a look at the list in Business Growth Masterclass 12)

Use the tools that are available to you to continuously update and add to your lists of powerful words and phrases for copywriting. Research ‘power words’ online, or invest in a software programme that will measure the impact of your copy based on a database of statistically measured words.

3. Describe your audience’s problem in detail.
Don’t assume that your reader knows you understand their problem, or the experience they’re going through. Sympathise with them and show that you understand their problem, just like you would with a good friend. This technique builds their trust and confidence in you, so the more specific you can be in your description, the better.

A meal delivery service might consider copy like this: Are you tired of coming home from work, exhausted after a long day, faced with coming up with yet another dinner idea for your family? The copy can then go on to describe how the audience would benefit from the service.

4. Concentrate on benefits.
People buy benefits and results, not features or attributes. No one buys water filters; they buy clean, fresh-tasting water. They don’t buy lawn mowers and fertilizer; they buy a green, well-manicured lawn.

Hit your target’s hot buttons by painting a picture of how the benefit will solve their problem. Describe how cough syrup will ease symptoms, not cure the ailment. Focus on what is bothering or irritating the reader, that’s what they care about. Show how your product will bring about relief.

Use these simple guidelines and techniques to improve your overall copywriting skills.

Tone

  • Studies have shown that conversational writing is remembered more often than formal writing. Write to your audience in the same way that you would speak to friends or family. If you struggle with this, consider taping yourself having a fake conversation with a potential client, and then transcribe what you said.
  • Read every piece aloud as part of your editing process to ensure that it flows smoothly and is easy to understand.
  • Write in a tone that your readers are comfortable with, and used to hearing. Read the publications that they read to gain an understanding of what that tone sounds like.

Sentence Structure

  • Keep sentences to about 16 words or less.
  • Maintain a rhythm in your writing by varying sentence length.
  • Split long sentences into two, and connect them with words like ‘so’, ‘and’, or ‘because’.
  • Limit paragraphs to two or three sentences, or a single thought.

Vocabulary

  • Use clear, simple language, just like you would in conversation.
  • Avoid complicated, overly descriptive words
  • When you read your copy as part of the editing process, take out any and all unnecessary words. Use the least amount of copy to communicate the most information.
  • Avoid any and all industry-specific jargon and corporate clichés
  • Keep language positive and future focused, using words like ‘can’ and ‘will’

Formatting

  • Use headlines and sub headlines to break up your copy into sections
  • Remember that most people only skim information in the newspaper or on websites, so format your writing to be conducive to that habit.
  • List benefits and other important points in bullets or numbers so the reader can quickly identify which parts are of interest to them.

The Post Script

  • Use the Post Script (P.S.) at the end of your sales letters or direct mail letters to reinforce your message.
  • Studies show that reader look first at the headline, then the signature and P.S. before deciding to read the letter.
  • The P.S. can act as a secondary headline, or last opportunity to sell your message. Use it to restate a guarantee, powerful offer, primary benefit or free trial.

Use the following persuasion techniques for a surefire boost in response rate for your marketing materials.

Now that you’ve grasped a few of the basics of copywriting, use persuasion techniques to drive your message home and convince your audience to take action. Compelling or persuasive writing gradually builds an argument and leads the reader slowly down the path to the call to action.

Sales copy is persuasive because, when done right, it:

  • Grabs the attention of the reader from the beginning
  • Supports a main focus or argument
  • Backs up claims with specific proof like stats and expert opinion
  • Makes the reader believe what the copy is saying
  • Convinces the reader to act because there is something in it for them

Use storytelling to hold your readers’ attention 
We’ve all been conditioned to pay attention and respond to storytelling, so use this technique to hold your audience’s attention. Stories are also easier to remember than facts or lists. For example, tap into their empathy and tell them the story of someone who had a similar problem to the one they do, and describe how your product or service provided the solution. Use the story to gradually build proof behind your message.

Use metaphors to communicate imagery 
You won’t always be able to include images in your marketing pieces, so train yourself to write copy that communicates imagery in words. The easiest way to do this is to compare your points to strong images and objects that your audience will relate to and feel emotional about. You can do this with metaphors like sleep like a baby, and brewing like a perfect storm.

Use repetition to reinforce key messages
It often takes several attempts before someone will truly hear and understand what you have to say, so don’t be afraid of repeating yourself in your copywriting. Repeat your key messages several different times, several different ways. You can summarise your points in bullet form at the end of letters or important paragraphs, or use testimonials to reinforce your message through someone else’s voice.

Back up your claims with ‘reasons why…”
Use the word ‘because’ or the phrase ‘here’s why’ to build trust in your statements and claims. Place short lists of proof beneath bold statements; you are more likely to be believed because you went to the effort of backing up what you had to say.

Answer silent objections
Just like in the sales process, attempt to overcome objections before they can even be raised. Based on your experience selling to live customers, address one or two of the common objections in your copy. This shows that you understand the reader’s perspective and relate to their thought process because you’ve answered questions before they’ve asked them.

All successful copywriting taps into a reader’s emotional triggers, and convinces them to take action.

I know I keep coming back to this, but it’s really important. The more you can cultivate your ability to use words and persuasion to motivate your prospects, the stronger your marketing materials will be. All you have to do is practice, and test out a few of the techniques you learned today.

If you like, I can share with you a few tried and trusted templates for getting your marketing message across. All you have to do to benefit from this is fill in the form below and we can get started straight away. These make the job super easy and will save you heaps of time working it all out for yourself.

You can also use the contact form to discuss and get help with the topics covered in any of the previous Business Growth Masterclasses. (Listen, I know some of you don’t like filling in forms like this, but I promise you it will be worth your while. Go ahead!)

Since you’re probably seeing a big increase in qualified leads by now, we’re going to shift gears in the next Masterclass and move on to step two: increasing conversion rates. Are you ready?

Until then, good luck!

A Little Coaching Exercise for the New Year

Hi everybody,

 

Each year as we approach the close of one year and the beginning of another I go through an exercise with my coach which I find extremely beneficial and rewarding. I have asked if I can share it with my clients past and present, and other close contacts.

 

This is way beyond creating New Year resolutions and is much more about moving on to the future with renewed optimism and focus. I hope you have the chance to do it rather than just read it. It is important that you write down the answers rather than just think them through especially as it is a really enjoyable exercise to complete.

 

Step One

 

Look over the past year and:

A)   Make a list of all the wins, successes and breakthroughs in the past year. Look at all areas of your life. What do you want to celebrate and acknowledge?

B)   Make a list of all the losses, disappointments and breakdowns in the past year. What do you want to forgive yourself for and release?

C)   Bring this list to our session. We will discuss what it means to be “complete” with each item. Incompleteness holds us back from taking on the next exciting opportunity.

Step Two

 

Looking over the past year, what are the 5-7 lessons you have learned?

Choose the lessons that you want to carry over into the New Year.

What learning is there to deepen?

Some examples of learning:

q  I learned to windsurf, play bridge or speak Spanish

q  I learned that my mistakes do not mean I am a failure

q  I learned that more is possible for me than I ever imagined

 

As you review your goals and commitments for 2014, which areas do you want to maintain, bring into the New Year, revise, be complete with?

 

Step Three

 

Consider these questions as you prepare your vision for 1 year from now:

  • As you stand on one of the peaks looking forward, what future is calling?
  • What is the essence of what is next for you?
  • What do you want to achieve or accomplish?
  • What risks and challenges will you take on?
  • What more of you wants to be expressed — for example, self-love, self-compassion, self-value?
  • What self-lies (e.g., “I am not powerful.”) are you ready and willing to end?
  • What new level of abundance and success are you willing to embrace?

 

Imagine one year ahead, and write a list of all the wins, successes and breakthroughs for the coming year. What would you like to learn or accomplish by the end of the next year? Write this list as though it has already happened. Make it as long as you choose, and be sure to look at each area of your life.

Prioritise the list. Look at how each item fits with your values, make plans and set accountability for the next year.

 

Step Four

 

Much like the Chinese tradition that gives names to each year, choose a name for this coming year. Use images, symbols or ideas to name the coming year. What image allows you to step more fully into what you want to be, and are already becoming? Find a name that stretches your imagination and moves you into greater possibility.

Examples: Year of Balance, Year of the Soaring Eagle, Year of the Wild Woman Set Free, Year of the Creative Genius, etc.

Step Five

 

Finally, consider where we are in our relationship:

  • What do you want more of, less of, the same of?
  • In what ways might this relationship and our work better serve you?

 

Please try PRINTING IT OFF and DOING IT… it may not be as artistic or colourful as a Greetings card but I guarantee the positive attitude, actions and focus will last for a whole year.

Have some great time off and a prosperous new year.

Cheers for now,

 

David T Preston

Business and Executive Coach

Business Growth Masterclass 13: Marketing Materials – Ads

Hello there, and welcome to the 13th instalment of my Business Growth Masterclass. The step by step guide to building the business you always wished you could have.

Today, we’re going to look at the importance of high quality advertisements in your overall marketing mix.

As ever though, before we get our teeth into today’s material, lets just check on actions from the last Business Growth Masterclass:

Checkpoint:

  • You have created a list of words to use in your marketing materials that will target your potential customer’s emotional motivators.
  • You have practiced writing headlines, and are working to strengthen the headlines you have been using.

For many small business owners, advertising is a confusing, expensive marketing strategy that delivers mediocre results.

We’re surrounded by advertising everywhere we look. From TV commercials and Google Adwords to local newspaper and radio spots, everyone is vying for your attention and the money in your wallet.

So, as a small business owner, how do you weed through the big corporate marketing campaigns and your competitors’ ads, flashy design and high budgets, and figure out what you should do for your own business?

In this Masterclass I want to show you how to create clear, cost-effective ads and placement campaigns that get results for your company.

I use a few hand picked templatesfor my coaching clients and I’m going to share some of this material with you today. They’re not going to win any advertising awards, but they don’t need to because they’ve generated hundreds of thousands of pounds for small business owners just like yourself! At the end of the day, do you want an advertising trophy, or thousands of pounds in the bank?

In this Business Growth Masterclass we will cover:

  • Types of advertising
  • Print advertising for lead generation
  • Steps to creating effective (and inexpensive!) print and classified ads
  • Testing and measuring your ads
  • Examples of effective ads

Successful advertisements are those that have been designed with a clear purpose, and for a specific target audience.

Successful ads are successful because they pay for themselves with the sales traffic they generate. They bring in leads, promote products and services, and maintain awareness of your business.

So, like all of the lead generation strategies you’ve been working on, effective advertising is rooted in a strong understanding of your target market and how to motivate them to do what you want them to do.

Successful advertising, no matter what its specific purpose is, always:

  • provides a benefit, meets a need, or solves a problem
  • targets an audience that wants or needs the benefit or solution
  • offers a product that is closely tied to the benefit or solution
  • clearly communicates the message (the benefit or solution) and is easy to understand
  • pays for itself by generating a high volume of sales traffic

Every business should have an overall strategy or purpose for their advertising over time. This will not only allow you to save money by making bulk ad purchases, but will keep you from advertising on an infrequent basis, or in an ad hoc fashion.

Align your advertising with your business growth or positioning goals, and map out a six month or year-long strategy. Do you want to position your business as the expert in the industry? Double your lead generation? Sell a specific product or service? Announce new products or services? Maintain awareness of your company?

Here are some forms of advertising that each have a separate purpose:

Information Advertising is a common form of advertising that features the company in question in a positive light. Be careful not to misuse this form, as no reader is going to be interested in an ad that is too “me”, “me”, “me” focused. Always provide something of interest or benefit to your reader.

Image Advertising is a type of advertising that reinforces your brand name and image. It’s a less aggressive strategy that aims to keep your business at the top of customers’ minds, even if you have no specific message to communicate. It might include running frequent small ads with just your business logo and phone number or email address.

Ads That Sell convince a prospect to make a purchase before they’ve even identified themselves as prospects. These are more rare forms of advertisements, and harder to create. Lead generation ads are a more effective way to generate traffic.

In this Masterclass, we’re going to focus on advertising for lead generation.

Ads that have been created for lead generation have a strong “call to action” and are focused on motivating readers to respond.

You may want prospects to pick up the phone, bring in a coupon, enter their contact information in a contest, call for free information, visit your website or visit your place of business. At that point, they enter the formal sales process and you can work to convert them into loyal repeat customers.

Use the emotional motivators you’ve been focusing on the previous Business Growth Masterclasses to speak to your target audience, and focus on getting your readers to do something that identifies themselves as potential buyers.

1. Design your advertising strategy. Advertise to your target market in the places they go to most often for information.

Using the information you gathered in your market research, determine the publications that your target market accesses most often.

  • Do they read the local newspaper? If so, which section?
  • Is there a community newsletter or neighbourhood publication that would also serve as an effective vehicle for your message?
  • Is there a local listing publication that would serve as an inexpensive way to test and measure your offer?
  • Can you create a YellowPages ad that generates leads?

Once you have determined the publication (or publications) that you wish to target, make contact with the sales representative at each. This person is a great resource for you to use to your advantage – ask questions about size, specs, deadlines, proofs, changes and other expectations. Newspapers often use their own systems for layout, and have their own requirements for file preparation.

This person will also have demographic information on the publication’s readership, so gain access to that data and use it to inform your campaign.

When you are establishing a relationship with the publication, make sure to spread your advertising budget out to maximise your investment. Publications will often give you discounted rates when you buy in bulk, or commit to a certain budget over the year. Keep in mind that you will need to test and measure which ads are effective, and which aren’t, so try to structure your contract in a way that allows for flexibility.

While you are looking for a good advertising rate, remember that advertising is an investment that you make into the growth of your business. That money is used to ‘buy’ customers, whose purchases become your return on investment.

Ad placement is also an important consideration, but you will have varying degrees of influence over the final placement. Always request placement that is well forward and in the top right-hand corner, preferably in the section of the paper that best relates to your industry.

Advertise frequently – or at least regularly – to see the highest return on investment. There are a number of reasons for this:

  1. People need to be reminded constantly of your business (even big household names like CocaCola advertise regularly)
  2. There are always new customers to market to
  3. The people who are actually looking to purchase your offering are a percentage of your target market that rotates regularly
  4. People need to see your advertisement regularly to build trust and belief in credibility

Make a plan for regular advertising that suits your budget. You may want to alternate between large and small ads, or between display and classified ads.

2. Write copy for your ad that speaks to the emotional motivators of your target audience.

Use the writing and persuasion skills you’ve been learning in the past two Masterclasses, and apply the same principles to writing your ad copy. The next Masterclass will take an in-depth look at copywriting; so more help is on the way!

Like you learned in the headlines Masterclass, the most important part of your copy is your headline. You need to start with a headline that catches their attention with emotional triggers, and then gives them a reason to keep reading and care about what you have to say.

In advertisements it’s especially useful to follow your headline with a subheadline that is equally interesting and engaging. The remainder of your copy should focus on communicating the benefits or solutions that your product will provide, and deliver on any promises you made in your headline. Tell your prospects why they should take action, and what they’ll get when they do. Use the emotional trigger words to hit their ‘hot buttons’ and keep them reading.

A final tip in writing ads for lead generation is about weeding out unqualified leads. Make sure you include enough information in your ad to deter unlikely customers from making contact with you. For example, be up front about price and you’ll avoid dozens of phone calls from people who can’t afford to purchase your offering.

3. Ask your customers to take action.

Since the purpose of your ad is to generate qualified leads, your call to action has to be prominently featured so your readers know what to do and how to do it.

  1. Ensure the way you want them to contact you is a larger font size than the rest of your contact details, or the only contact method.
  2. Tell them how to receive what you’ve promised – free information, a special offer, preferred status. For example – Call 0845 6669997 right now and ask for Ted; Visit www.newco.com and sign-up to start receiving your bonus guide; or come to the store and ask for your membership card.
  3. Link your call to action to copy that mentions customer benefits and rewards. Phrases like, Call now and start receiving: lists of benefits are particularly strong motivators.

4. Layout your ad using these guidelines.

Remember that it is the strength of your message and the clarity of the layout that will determine how effective your ad will be. Resist the urge to get really creative and stick to a clean and simple design.

Layout should be kept simple and allow the message to come through clearly, not the formatting. Keep all type horizontal, and avoid the urge to get too creative.

Headlines are absolutely essential to successful ads. Create a powerful headline that draws in readers, and make it stand out from the rest of the ad.

White Space gives your reader’s eyes a place to rest and will keep their attention on your ad longer. If you cram too much copy or too many images into a small space, your readers will move on.

Type needs to be easy to read, but also stand out from neighbouring newspaper copy. Stick to a maximum of two types of font, and avoid font sizes below 9pt. ALL CAPS and reversed type (white on black) should also be avoided.

Images need to be professionally taken in order to be reproduced in newspapers. Take care that black and white images are not too dark, or too light, and choose photos the will clearly communicate your message.

Color can boost the response rate to your ad by almost 40% over a black and white one, so use it if you can fit it into your budget.

5. Make sure to be aware of and set yourself apart from the competition

Pay attention to what your competitors are doing so you are aware of what they are doing well, doing poorly, or not doing at all. With this awareness, you can make choices to set yourself apart, or improve on your own strategies.

Without copying their strategies (you don’t want to be a “me too” business), look at their messages, layout, placement choices and offers. What can you do to give your offer or your ad an edge? Is there something they haven’t thought of?

You may want to get into the habit of clipping their ads out of the newspaper, and making observations about the messaging or design. Use this information to improve your ads and distinguish your business, but stay focused on your own purpose and messages.

6. Test and measure each and every ad, every time you run it.

Like I said above, successful advertising is advertising that pays for itself.

It is helpful to think of advertising as an investment, rather than an expense. You are investing money in your business and using it to ‘buy’ customers. Ideally, those customers will offer you a favorable return on your investment by purchasing from you on a repeat basis (we’ll look in detail at customer acquisition costs and lifetime value in an upcoming Masterclass).

The only way you will know if an ad is paying for itself is if you track and measure the results it generates. You need to know where your customers are coming from, how they found out about your business, and why they decided to take action.

You can use your lead tracking system to do this, and then assess the results at the end of a fixed time period. You can also put codes or “keys” on your ads to indicate where your customers came from. This includes actual codes on coupons that tell you which publication the ad was placed in and in which week, as well as different offers and bonuses: Buy 2 get 1 free vs. Free gift with purchase, or Guide to Home Energy Savings vs. 25 Ways to Save Money on Energy Costs.

Remember, effective print and classified advertising rarely needs to be flashy or clever.

Get into the habit of always asking yourself, “what am I trying to accomplish with this ad?” You can even write your purpose on a sticky note and put it on your computer screen to keep you focused. Then, make sure that your headline, message and unique offer all cater to that purpose.

Effective advertising doesn’t have to be complicated, expensive, or even cleverly designed. Like all aspects of lead generation, it really comes down to a strong understanding of your target audience, and knowing how to communicate with them.

So, in the next Business Growth Masterclass I’m going to help you become a better copywriter. You’ll build on the skills you cultivated creating strong offers and writing effective headlines, and learn how to craft persuasive text.

Oh, by the way, if you would like some help with the ideas discussed in this, or any of the previous Business Growth Masterclasses, or to get expert help with any other aspect of growing your business, use the following form to get in touch: (Listen, I know some of you don’t like filling in forms like this, but I promise you it will be worth your while. Go ahead!)

Thanks for tuning in!

Business Growth Masterclass 12 – How to Write Headlines That Stop Them in Their Tracks

Hello there, and welcome to the 12th instalment of my Business Growth Masterclass blog. The step by step guide to building the business you always wished you could have.

Today, we’re going to look at how to write headlines for your marketing material which will stop your target customers and clients in their tracks.

As ever though, before we get our teeth into today’s material, lets just check on actions from the last Business Growth Masterclass:

  • You have created at least two offers that you can use as lead generation tools .
  • You have begun to test and measure the strength of your two strong offers to evaluate which is more effective.

Everybody done that? OK. Let’s get on with finding out how to write attention grabbing headlines.

This may sound obvious and may also sound simple, but all your headline needs to do is convince your reader to keep reading. But simple is not always that easy…..

Just like your lead generating offer, your headline has one job. It doesn’t need to close sales, or win copywriting awards, it just needs to grab and hold your reader’s attention long enough to keep them reading.

Studies have shown that around 80% of people read headlines when they’re looking through the newspaper, but only about 20% actually read the ad or article.

Your headline is the only tool you have to get the rest of your copy read, so you’ll need to focus the majority of your copywriting efforts on catching and holding your readers’ attention. The rest of your copy only matters if you can get them to read it!

In this Business Growth Masterclass we will cover:

  • The role of strong headlines in all of your marketing materials
  • Headlines as emotional motivators
  • How to create strong headlines for your audience
  • Examples of strong headlines
  • Headline templates
  • Testing and measuring headlines

Headlines shouldn’t be limited to advertising alone – they’re essential elements of sales letters, direct mail cards, websites, newsletters and brochures.

Headlines are used to grab and hold reader’s attention in ALL marketing materials – not just advertisements in newspapers. Most readers take only a few seconds to decide if they want to spend any time reading what you have to say, in an email, website, sales letter or direct mail postcard. Just like you, your audience is bombarded by information every minute of the day, so if you haven’t convinced them to care in a few seconds or less, they’ve already moved on.

Your subheadline is almost as important, because it’s your second chance to tell the reader why they should care and keep their attention. It also creates a transition between your headline and the body of your letter or advertisement, and acts as a teaser.

Every headline should:

  • Grab the reader’s attention
  • Be something the reader cares about
  • Offer your reader something
  • Trigger emotional reactions
  • Incite curiosity

Headlines need to trigger an emotional response and motivate your reader to keep reading.

When you’re writing, you have to put yourself in the mindset of your audience. People are pressed for time, so your headline has to offer something to them that is going to solve their problem, make their life easier, or give them information that they know they need. Otherwise, they’ve already turned the page.

For example, if I were to write a headline like this – Give me three hours of your time and I’ll show you how to double your annual income by creating a passive income stream – I’m probably targeting overworked, overwhelmed, underpaid professionals who are struggling to provide for their families. I’ve tapped into their emotional motivators and caught their attention.

There are a few categories of basic human needs that most purchase motivations come from. When you are aware of these, you will be able to incorporate them into your writing and appeal to your target market’s emotions.

By identifying your target market’s needs, wants, and desires, you’ll be able to identify the words and phrases that will effectively trigger emotional reactions, which will motivate them to take action.

Using the list of basic human needs below, identify which apply to your target market and create a list of words that will trigger the emotions related to these needs, wants and desires.

  • Personal, financial and emotional security for self and family
  • Convenience and time management
  • Freedom from worry, including peace of mind, comfort
  • Self-improvement, including spiritual, intellectual, physical
  • Acceptance and recognition from others, including self esteem, achievement, attention, respect, companionship
  • Basic needs, including food, shelter, clothing, love, personal maintenance

When you begin writing your headlines, you will discover that certain word combinations are also very powerful. You can combine your list of emotional trigger words with these power words in all of your copywriting.

According to a Yale University study, the top two rows of words are the most powerful words in the English language.

Love Money Health Discovery Proven Save
Safety You Easy Results New Guaranteed
Breakthrough Profits Discover Incredible Shocking Shocked
Ultimate Free Master Uncovered Hidden Secret
Revealed Scientific Your Powerful Suddenly Miracle
Now Magic Announcing Offer Introducing Quick
Improvement Amazing Wanted Sensational Challenge Remarkable
Compare Startling Bargain Hurry

Here’s how you can write effective headlines for your business in a few easy steps.

1. Identify who you are trying to target.

You need a clear understanding of who you’re writing for and what their motivators are before you can attempt to reach them. This is the target market you identified for yourself in Business Growth Masterclass Instalment 7, published in  April 2013.

If you are trying to target a more specific group within your target market, you can chose to segment your market into sub-markets by demographic or behavioural characteristics. For example, you might choose to focus on only men, or only women with children under five years of age.

The more specific you can be with your market, the easier time you will have identifying and reaching their emotional ‘hot buttons.’

2. Identify what you are trying to communicate.

Once you know who you’re speaking to, clearly define what message you want to communicate to them. Be specific, and even write it down in plain language before you start drafting your headlines.

To clearly articulate your message, ask yourself questions like:

  • Do you have a solution to their problem?
  • Do you offer a new product or service that they need?
  • Can you provide the information they’re looking for?
  • Do you have a better option for them?

3. Identify the motivators or “hot buttons” that will elicit an emotional response from your audience.

Take the list you drafted above, and highlight or write down the words that will pique your target market’s interest, or trigger their ‘hot buttons’.

If you’re selling vacuum cleaners to young mothers, you’re going to want to identify words that would appeal to her desire to keep her home germ free for toddlers, and make her cleaning efforts easier and less time consuming.

When you’re writing for sales and marketing, always try to paint a picture for your audience. Carefully select descriptive words they will relate to and resonate with, and strong power words like the ones listed above. For example, phrases like “challenging outdoor experiences” would appeal to physically fit readers, but not those who don’t like to exercise.

4. Choose a type of headline that will work best based on the emotional motivators you have identified.

Direct Headlines clearly and simply state the offer or message, without any attempt at humor or cleverness. Pure Silk Scarves – 40% This Weekend Only | Brand New Security System Just £99 Per Month

Indirect Headlines are subtle, and often use curiosity to pique a reader’s interest before providing an explanation in the body copy. Clever puns, figures of speech and double meanings are often used. The key to weight loss success lies in your backyard.

News Headlines mimic a headline you would read in the newspaper and are a great option for a new product announcement or industry scoop. These work best when you actually have news, and can stay focused on benefits, not features. Newco launches the ultimate timesaver for new moms

Question Headlines ask the reader something they can closely relate to or would need to continue reading to discover the answer. Questions are easy to read, and can immediately tap into your reader’s emotions.Are you tired of worrying about your children’s education fund? | Do you know what’s in your fruits and vegetables?

‘How to’ Headlines indicate that the rest of the copy or the offer itself will describe a step-by-step process of interest or use to the reader. These two words create headlines that work wonders. How to find a job in a recession | How to start a profitable internet business from scratch.

Command Headlines are similar to direct headlines, but always start with a strong verb or command for action. It usually focuses on the most important benefit you offer your reader. Triple your energy in just three days | Stop wasting money when you travel.

‘Reasons Why’ or ‘Ways to’ Headlines precede lists of tips, suggestions, product benefits or even mistakes of interest to your target audience. Keep the list to a reasonable length or you’ll run the risk of losing your reader. Eight ways to save money around the house | 25 mistakes you could be making at the grocery store.

Testimonial Headlines use other people’s opinions and expertise to persuade a reader to keep reading and begin to build trust. Quotation marks are used to indicate that the words are a testimonial, not the words of your business, and they can increase readership by almost 30%. “ToneYou Bootcamp completely changed the way I look at my body” – Miley Cirrus | “I never thought I’d get out of debt before I discovered Money Saver Inc!” – Grace LePage

5. Draft at least ten different headlines using the templates below, and pick your best three to test and measure.

I often get asked how long a headline should be. This is something that is debated in the marketing community quite a bit, but I always tell my clients not to worry too much about it. Use the number of words you need to get your point across, without writing a paragraph. Remember that your headline needs to do one thing: get the reader to keep reading.

Don’t be afraid to draft pages of headlines or sift through the pages of a thesaurus before you get yours just right. Sometimes you’re only a word or two away from transforming a boring headline into a really effective one. If you’re having trouble, you can rely on the headline templates I’ve included in this Business Growth Masterclass.

Headline Templates

  • How to become the smartest _____ in _____
  • How to end ______
  • How I improved my _____
  • How to develop _____
  • Seven ways to add to your _____ without cleaning out your bank account
  • How to begin _____
  • 12 innovations in _____ design
  • How to enjoy _____
  • Introducing the four key rules for _____
  • How I _____
  • Six things to check when buying a new _____
  • How to conquer _____
  • Complete these three simple steps for a _____
  • How to start_____
  • Five hints to make your _____ rise above the rest
  • How to have______
  • How to become _____
  • Announcing eight powerful answers to your “what _____ to buy” dilemma
  • Which _____ do the experts use?
  • Powerful ways to update your _____ for free
  • How to keep _____
  • The four components that make up a successful _____
  • How to improve your _____
  • Six essential questions to ask before you buy a _____
  • How to get ______
  • Three clever ways to impress _____ without breaking the bank
  • The six warning signs you don’t want to miss in _____
  • How to get the most out of ______
  • Nine tips from the _____ experts
  • How to avoid _____
  • How to stay ahead of business _____ trends in _____
  • How to get rid of _____
  • Five proven advantages that _____ enjoys over the competition
  • How you can _____
  • Finally! The latest _____ secrets revealed!
  • Learn how xxx has improved since you bought your last _____

6. Always test and measure the effectiveness of your headlines. Try two at a time and compare which generates the best results.

As always, you will need to test and measure the strength of your headlines. Try to test at least two “hot buttons” in different media to determine where your target audience’s reaction is the strongest.

You can leverage off of the information gathered from testing and measuring your powerful offer as well. For example, if the offer geared to safety and security concerns was a roaring success, headlines that tap into those motivators will also be successful.

You can apply these headline writing techniques to all your marketing materials, as well as your copywriting.

In our fast-paced society, nearly everyone has become a skimmer instead of a reader. Strong, well-written headlines are the only way you can lure a browser into reading your message – so use them on every piece of marketing material you have.

In future Business Growth Masterclasses, you’ll work on creating brochures, newsletters, direct mail pieces, sales letters and sales scripts – all of which need strong headlines to get noticed.

In the next Business Growth Masterclass we’re going to work on a really popular lead generation tool that also relies on effective headlines for success – ads. You’ll focus on how to use print advertising to bring in qualified leads, as well as how you might benefit from trying some inexpensive forms like classifieds ads and Yellow Pages.

See you in the next one!

Dave

Oh, by the way, if you would like some help with the ideas discussed in this, or any of the previous Business Growth Masterclasses, or to get expert help with any other aspect of growing your business, use the following form to get in touch: (Listen, I know some of you don’t like filling in forms like this, but I promise you it will be worth your while. Go ahead!)

Business Growth Masterclass No. 11: How to Craft Powerful Offers

Hello there, once again, and welcome to the latest instalment of my blog series, The Business Growth Masterclass. This is the 11th in the series and I have called it “How to Craft Powerful Offers

As ever, before we get our teeth into this vital subject, I just need to check you have taken on some action fromthe last Business Growth Masterclass:

Checkpoint:

  • You have identified which marketing materials you need, and which you can live without.
  • You have completed an audit of your existing marketing materials, and identified opportunities for improvement based on the criteria in The Business Growth Masterclass no. 10.

Focus on using powerful offers to generate leads, not to close sales.

Powerful offers that drive your audience to take action can be used in your business to do a myriad of things. They’re great for moving old or overstocked product, overcoming buyer objections, eliminating purchase risk, or even just building your customer database.

Well-crafted offers are also fantastic lead generators – which is what we’re going to focus on in this Master Class. In this case, the offer is designed to get potential customers to identify themselves, not to close sales. Once those potential customers have identified themselves – they’ve taken action to redeem the offer – they enter the formal sales process and you can convert them into a loyal customer.

Offers designed to be lead generators drive more qualified prospects to your business. They weed out the buyers who would take advantage of your offer, but who are not otherwise a part of your target market.

I’m going to show you how to speak to your target market’s “hot buttons” and emotional motivators, instead of simply crafting an offer based on financial savings or bonuses. Let’s get started!

In this Business Growth Master Class we will cover:

  • The elements that make an offer ‘powerful’
  • A step-by-step process for creating a powerful offer
  • Types of powerful offers
  • Examples of powerful offers
  • Testing and measuring your powerful offers

A powerful offer is irresistible to your potential customers’ emotional motivators.

In simple terms, a powerful offer gets people to respond, or take action. It will provide enough motivation for the reader to pick up the phone, visit your website, or walk into your store.

Often, powerful offers are called irresistible offers because they seem too good to pass up. They make your target audience think, “Wow! This is the chance I’ve been waiting for!” or, “I’d be mad not to take advantage of this opportunity!”

Using emotional motivators in your offer (and in your headlines and copywriting, which we’ll review in upcoming Master Classes) will drive qualified prospects to your business, and will make the job of converting customers into repeat business easier and more cost effective.

A powerful offer will feature an element of urgency or scarcity as a key motivator for action.

If I offered “2 for 1 Mother Daughter haircuts” every day of the year, chances are I wouldn’t have a stampede of prospects at my door. I would likely draw a few new clients a week, but the majority of those who saw the offer – even if they were interested – would probably put it off for later.

When you create an offer for lead generation, you want your prospect to take action as soon as possible. Now, let’s face it, we’re all procrastinators at heart, so you have to give your audience a reason to take action without delay.

So, instead of just “2 for 1 Mother Daughter haircuts,” I could offer, “2 for 1 Mother Daughter haircuts, Mother’s Day weekend – 20 spots available, book your appointment today!” This offer has an element of urgency – the offer is only valid for a two-day period – and scarcity – there are a limited number of appointments during those two days.

Here are some other ways I could use scarcity or urgency to ‘sweeten’ the offer:

Strategy Scarcity / Urgency Example
Limited time offer Urgency 2 for 1 Mother Daughter haircuts – Mondays from 1pm to 4pm.
Limited supplies available Scarcity Free! Mother’s Day gift (£50 value) with purchase for the first 20 customers on Mother’s Day.
Seasonal specials Urgency Mother’s Day Special: buy one, get one free on any service in our spa, Mother’s Day weekend only.
Free gift with action Scarcity Bring your mom in for a free haircut on Mother’s Day, and receive a salon bonus pack, worth £45, absolutely free!
Daily deal Urgency Book an appointment with us by the end of the day, and we’ll add on a free haircut for your daughter.

Let’s walk through an easy step-by-step process for creating powerful offers that will generate qualified leads for your business.

1. Establish who you are trying to target, and what you want them to do.

Like all of your lead generation efforts, you need to establish who your target market or audience is before you can attempt to reach them. In most cases, this will be the target market you originally identified. In my hair dresser’s salon example, the target market is middle-class women aged 18 to 65 with an interest in the latest trends in fashion and beauty.

You may also wish to segment that group of people into a more specific category. I could limit my target audience to those women in my target market with daughters.

Secondly, you must be clear about what you want your readers to do, and ask them to do it in your offer. Since you’re creating an offer to generate leads, in this case you want readers to identify themselves in some way, and make contact with you. In my example above, I asked customers to call and reserve their appointment today. You may ask your readers to come to the store for a free trial, or place an online order.

2. Identify the emotional motivators or “hot buttons” that will get your target to take action.

Using the categories below, decide why your target market needs or wants what you have to offer. How do they feel in general about your product or service? What problem does your offer provide the solution to?

  • Safety and financial security for self and family
  • Convenience and time management
  • Freedom from worry
  • Self-improvement
  • Acceptance and recognition from others
  • Basic needs, including food, shelter, love, personal maintenance, etc.

In my example, I’m targeting the emotions associated with the bond between mothers and daughters, especially on Mother’s Day, and their common interest in beauty services. The offer alludes to an opportunity to spend time with each other, an activity for Mother’s Day, and a way to save money while doing so.

3. Once you have identified the emotions you will try to target, determine which type of offer will work best.

Free Offer
Ask your potential customer to act immediately for a free reward. This is a great lead generator if you can offer a solution to a common problem for free. Examples would be “Contact me now to receive your free 10-page guide to financial freedom,” or “Act now and get your first month of home security for free – a £99 value!” Try to include the pound value of what you are providing for free to increase the perceived value.

Guarantee Offer
Guarantee the performance of your product or results of your service, and you’ll take away the fear many customers feel when making a purchase. This is a great way to overcome barriers when a customer is making a large or important purchase, or when safety and security are involved.

  • Money-back guarantee: full refund for unsatisfied customers.
  • Double-your-money-back guarantee: double refund for unsatisfied customers.
  • Long-term guarantee: one year, multi-year or lifetime guarantee.

Free Trial or Demonstration Offer
Another great way to reverse purchase risk is to offer a free trial (7, 14, or 30 days) or to provide a free demonstration. This works with all kinds of products or services, and allows the customer to convince himself that he needs what you have to offer. Those customers who are concerned about making the right purchase decision will be put at ease by this offer.

Package or Value-Added Offer
This offer appeals to customers looking for convenience because their needs are met in one place or one purchase, like start-up kits and special packages. Packaging products also increases the perception of value, often without adding costs. For example, offering a free printer with computer purchase.

Premium Offer
Always offer premiums over discounts, as they will better serve your bottom line. Reward purchases with bonus products or services, and you’ll give new customers an incentive for choosing your business over the competition.

3. Draft several hard-to-refuse offers based on these motivators.

Brainstorm as many different types of offers as you can, using emotional keywords or hot buttons. Depending on the type of business you have, and the products or services you offer, you may wish to focus on a single product or service, or open up the offer to all the items you have in store.

Are there any freebies you can throw in? Any overstock that can be handed out as a free gift, packaged with a complementary product? What about bonus services that you can add on to products for a limited time (with limited costs)? Will a simple guarantee make a big difference?

Remember that when you are describing your offer, be as specific as possible and avoid lengthy description of product details and benefits. Your goal is to sell the offer and motivate readers to take the next step, not to sell your product.

4. Evaluate the financial viability of each of your brainstormed offers.

Even though you’re using these offers as lead generation tools, you need to make sure that each transaction will turn an acceptable profit – or at least allow you to break even. The last thing you want to have happen is a store full of leads redeeming an outrageous offer that will leave you broke.

So, for each of your brainstormed offers, calculate your break-even point. If I were offering 2 for 1 Mother Daughter haircuts, my calculation would look something like this:

A. Costs: Determine the costs involved in your offer (hard costs – product or service, and soft costs – advertising or marketing).

Service costs:
Adult Haircut: £20
Junior Haircut: £10

Marketing costs:
Advertising: £200
Flyer Drop: £100

B. Profit: Assess how much profit you’ll generate per sale (price minus hard costs).

Adult Haircut: £40 (price) – £20 (cost) = £20 profit
Junior Haircut: $0 (offered free) – £10 (cost) = £10 expense

Profit: £20 – £10 = £10 profit per transaction

C. Break Even Point: Calculate how many transactions you’ll need to break even (how much profit will you need to make to cover soft costs).

Advertising (total): £300
Profit: £10
Transactions: £300 / £10 = 30 transactions required to break even.

From here you can assess whether or not you can realistically break even, and if your offer is financially viable. In this example, 30 transactions is a reachable target for my salon over the course of a weekend. I may also consider extending the offer over the course of a week, maintaining an element of urgency, but allowing more time to recover my costs.

Keep in mind that their initial purchase in response to your offer may only allow you to break even, but if you are able to convert them into repeat customers, the profit of their subsequent purchases may make up the difference.

5. Select two of your financially viable offers, then test them to measure which works best.

I like to test two offers at a time when I first start to use this lead generation strategy. This will tell me what emotional motivators really work with my target audience, and then I can continue to build on that knowledge.

Use your lead tracking system to measure which offers generate the highest number of leads. If coupons are a part of your offer, put a tracking code on each of them, or make sure that your staff are asking every inquiry which offer they are responding to.

Remember, testing and measuring is a vital component of your lead generation efforts, and it elicits some really valuable information. Once you know what works with your audience, you can use that information on emotional motivators to influence decisions you make when writing headlines and other copy.

Get creative and put together new and exciting offers for your potential clients on a regular basis.

Remember – you’ll need to keep improving and revising your offers to ensure you continue to draw leads from them. Otherwise, your audience will get used to seeing the same offer, assume it is always available, and it may become stale.

Use opportunities like seasons, events, anniversaries and other celebrations to change and renew offers. When you bring in a new product line, feature a new service, or try to go after a new segment of your target market, check-in to see if you can create an offer around the news and bring in some new leads.

In the next Business Growth Master Class, we’re going to spend some time cultivating your headline writing skills. You’ll see that we use headlines in all types of marketing and sales materials, and they’re a powerful – or even essential – component of your lead generation tools.

See you in the next one!

Dave

Oh, by the way, if you would like some help with the ideas idiscussed in this, or any of the previous Masterclasses, or to discuss any other aspect of your business growth strategy, use the following form to get in touch: