One Coach

One of the most basic concepts of economics is want vs. need.

They may sound similar, but they’re as different as day and night. As a small-business owner, it’s important to distinguish between the two in order to attract more clients and grow your business. By learning the specific wants and needs of your clients, you can learn how to better market your product or service in a way that speaks to your ideal client and leads them to buy from you.

A want is something you would like to have. It is not absolutely necessary, but it would be a good thing to have. A good example is music. Now, some people might argue that music is a need but you don’t need music to survive.

A need is something you have to have, something you can’t do without. A good example is food. If you don’t eat, you won’t survive for long. You might not need a whole lot of food, but you do need to eat.

It may sound completely counterintuitive, but the fact is, wants are much more powerful than needs. Even though their needs must be fulfilled for survival, most people make their purchasing decisions based on their wants, rather than their needs.

For example, people need to lose weight for health reasons. A weight-loss clinic might assume that clients would respond to a weight-loss program that is positioned to help them feel better and improve their health. But oddly enough, what most people want from a weight-loss program is not health, but to look better, attract more romance into their lives, to receive compliments from people and gain confidence. Those are all emotional wants versus objective needs.

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What is optimum performance?

The question raises different responses from different people. Have you ever thought about how much better you could be doing with your small business or in your career? What about your relationship with someone you love or the state of your health right now?

I have to admit that at any point in my life, one or more of these areas needs more attention than I give it.

There seems to be so much to do, so much to accomplish if ‘more’ is the focus.

Let me suggest that the quest for more is a trap. It never stops.

Optimum performance is about playing life at the highest possible level. If we are so full of potential, then why are most of us not living up to that potential in every area of our life?

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You may have read a post here early last month that talked about when it makes sense to give your product away. In that post we were explaining the value of getting your message or product out to the masses of prospects who might value your core product or service.

And, in my previous post  I wrote about a couple of ways to boost the lifetime value (LTV) of your customers.  To refresh your memory, the LTV of a customer is defined as the total gross profit that you accumulate from a customer over their lifetime (based on the definition of lifetime you pick as noted above), less the original customer-acquisition cost and the subsequent marketing expenses over their lifetime. 

Both of those posts are central to my message today.  You may have heard us mention the value of acquiring a new customer at a loss.  This seems counter-intuitive, but it plays right into the psychology of marketing, and it leverages the LTV of your future customer. 

It is a basic fact in marketing that your current customers will be more likely to make an additional purchase from you than the likelihood of a purchase from a prospect.  I’ll give you an example from world of catalog marketing where, one of the measures of marketing campaigns is revenue per thousand catalogs mailed (Rev/M).  Using a generalized example, when a cataloger mails their “Christmas Wish Books” to prospects and to existing customers the difference is dramatic: 

Rev/M of catalogs mailed to current customers is $5,000/M catalogs mailed while Rev/M coming from catalogs mailed to prospects is $1,250/M.

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“In times of change the learners will inherit the earth, while the learned find themselves beautifully equipped to live in a world that no longer exists.”

Your business, your clients, and your world are in a constant state of movement and change. The above quote from Eric Hoffer does a great job of explaining the importance of embracing change. If you stand still or stop growing, then your competition may pass you by, or the needs and wants of your clients may change.

It’s been said that people don’t like change and yet the facts show that in the process of change is usually when you are the happiest and most productive. People actually like change, they just don’t like being forced to change, especially by others.

Whether you need to change to keep pace in your business, or you are asking your clients to make changes when they invest in your product or service, you’ll often run into resistance. Let’s take a look at why people tend to resist change:

• You might feel awkward or uncomfortable
• You might feel alone or isolated
• A feeling you can only handle so much at one time
• A tendency to look at the negative first
• A belief that you lack the resources
• People are at different levels of readiness
• Conditioned to revert back to old habits

It is important to recognize these feeling so you can identify them when they show up for you, and so that you are prepared to deal with these issues when they show up for your clients.

Here are seven things to remember when you’re running into resistance to change:

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Growth is the lifeblood of entrepreneurship and business success. It is also the lifeblood of our economy. It is why we at OneCoach are dedicated to teaching and empowering growth. But growth requires work, change and transformation. Perhaps most importantly, growth requires personal transformation in the leadership of the organization.

Most small-business owners have enough knowledge, experience and resources to get themselves into business. However, few have the depth and breadth of knowledge, experience and skills to remain capable as a leader as the business grows– unless they grow too. Growth brings increasing demands, of:

• complexity
• management
• human systems
• financial management
• competitive response
• planning
• training
• development
• technology and information management
• and leadership itself.

Hence, the leader must transform to adapt to all of these changes. The leadership skills, experience and methods that were appropriate for a three-person startup operating out of a garage will not serve a 100-person firm or a multicultural international enterprise. Business growth constantly puts a leader in new positions that require learning, new perspectives, new skills and new stamina. If the leader relies upon what has served in the past, it may not serve in the future. Unfortunately this realization may come too late, unless the leader is ready and prepared for change, expecting, waiting and preparing for it rather than being forced into it or surprised by it.

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Imagine, if you will, that you and I are engaged in an ongoing conversation.

Every conversation has a give-and-take, but in ours I repeatedly interrupt to draw attention to myself and how wonderful I am. Then I ask you for something – a commitment that you may or may not be ready to make. I do this over and over. I can be charming, but generally, this is the extent of our ongoing conversation.

There are two possible outcomes in this scenario:

A) You become enthralled with everything I say, and you do everything I ask.

B) You become annoyed or bored, and you end the conversation and move on.

Now suppose I was a better conversationalist. Imagine that I contact you only when I have something to say that is relevant to you. I know what really matters to you, because our conversation has been going on for months, and I listen to you. I give you information that you can use. I address you personally. You actually begin to anticipate hearing from me. I also give you opportunities to raise your hand to signal that you want to deepen our engagement, and I reward you when you do so.

Who are you more likely to respond to, Tim the Interrupter, or Tim Who Provides Value?

It’s easier than ever to contact people. But what kind of conversation are you having when you contact them?

What if there was the equivalent of a “buy button” in your prospects’ heads? And what if, with the right language and messaging, you could push that button?

Obviously you’d create a lot more sales, and you’d make a lot more money.

Guess what? As scientists continue to uncover more about how people really act upon their needs and wants, we now have a much better understanding of the processess that compel people to buy. At OneCoach we study these sorts of findings, and then apply them in the context of what works for small businesses.

In working with thousands of real businesses all over the world for the past 30 years, we’ve learned exactly how to position products and services to hit those hot buttons that are important to your ideal prospects and clients.

If you want to know how to use these hot buttons to get your ideal clients to buy your products or services, be on this week’s OneCoach Momentum Call with OneCoach Regional Director Adrian Ulsh.

The fact is, people get more careful with their money when there’s a constant drumbeat of negative news about the recession. So now more than ever, it’s to your advantage to understand exactly how and why people decide to buy – recession or no recession.

Register now to be on the call. You’ll learn a step-by-step process for uncovering the hot buttons that compel your prospects to buy, so that you can perfectly position your product to meet your ideal prospects’ wants and needs.

Don’t miss this segment of our continuing OneCoach Momentum Call series. We’ve been sharing a taste of the OneCoach business-growth system, and knowing how to hit the buy button is definitely a critical piece of the puzzle. So register now!

When it comes to finding your ideal client, there is a basic principle that you must remember:

Your prospects buy what you sell because they have specific needs or wants.

Your job as a business owner is to know, understand and deliver the solutions for those needs and wants, which will differ depending on each specific business. Therefore, it’s critical that you know exactly what your prospect’s needs and wants are. This is the essence of marketing: to create a match between your buyer and your product or service.

There are two primary categories of information that will help you with this determination.

The first category is demographics. These are the characteristics that identify the ability, need and interest of a client to purchase your product or service. Demographics define those clients who need what you sell.

The second category is psychographics. These are the factors that identify the motivation or reasons why someone wants to buy your product or service. Psychographics define those clients who want what you sell.

As you identify your prospects’ wants and needs, based upon their demographic and psychographic characteristics, then compare this data with your own wants and needs, you will gain greater insight into your ideal client. And once you accurately target your ideal clients, you’ll spend less time and money to acquire them.

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All the written plans in the world, all the inscribed goals, dreams and desires won’t even make good wallpaper if you don’t take the first action.

Instead of putting off doing what you know you must, dedicate each day to working your plan to get better and to move closer to your goals. Some time ago, I started calling this kind of focus “oxygen-thinking only,” which means that you do only what’s absolutely required to get the result.

Remeber the Apollo 13 movie, when the astronauts were running out of oxygen and there was no time to waste? All you have is one second to do something to move yourself closer to home. There are times in business when that is exactly the right way to operate: oxygen-thinking only. Whatever must be done next gets done, and anything else is just a distraction that gets put off to another day. When you operate in this way, you can actually make procrastination work for instead of against you.

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If you are a regular reader of this blog, you will see us repeat over and over that there are only three ways to grow your business: 

• Attract more clients.  
• Create more profits from existing sales 
• Generate more sales from existing clients.

So simple, you hardly have to give it any thought, right? That would be a mistake.

Two of these three basic components of growth have a common thread, and it’s key to growing a business; so I’d like to take some time in my next couple of posts to raise the discussion of lifetime value (LTV).

One often stumbles upon the concept of LTV, especially at Web sites about marketing, but I think there’s not enough emphasis on what LTV really is, or how to enhance the average LTV across your customer base.

Simply put, LTV is the net contribution to the bottom line that each customer adds to your business.  There is often a debate over what the true definition of “lifetime” really is, and while important for consideration in fancy predictive models, we can simplify the definition of “lifetime” to mean one of two things:

• the average length of time your customers remain actively with you; 
• or a fixed period of time such as a year, or five years. 

Regardless of how you define ‘lifetime,’ you’ll need to create a definition that makes sense for your business.

LTV is calculated as the total gross profit that you accumulate from a customer over their lifetime (based on the definition of lifetime you pick as noted above), less the original customer-acquisition cost and the subsequent marketing expenses over their lifetime.  I won’t go into the details of this calculation here, but you can refer to these in the OneCoach Attract More Clients program.

(We’ll also be examining this topic this week in our OneCoach Momentum Call. Register for the call here to learn more about how to attract more clients.)

What I want to address here is a couple of ideas as to how LTV can be enhanced.  In a future posting, I will discuss the impact of enhancing LTV on your overall customer-acquisition efforts.

LTV is central to the second of the three principals of business growth noted above.  Yet we often don’t concentrate on how to get more sales from existing customers.

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