The Most Powerful Small Business Marketing Strategies that No Internet Marketing Expert Teaches or Talks About…

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None of the other internet marketing experts have the balls to tell you this stuff but Rich Schefren does and this is why he gets the big bucks…

-> The Two Most Important Metrics To Growing Your Business:

Cost Per Acquisition + Lifetime Customer Value … You need Multiple Products and Premium Offers … Generate Leads -> Improve Conversion -> Increase Customer Value -> Generate Leads -> Improve Conversion -> etc.

… Spend time on  Improving Conversion and Increasing Customer Value … The Profit Zone = Overlap Between 3 circles (new product and promotions / increasing conversion rate / growing customer value)  -> A good business model answers the questions:

  • Who is the customer?
  • What does the customer value?
  • How do we make money in this business?
  • What is the underlying economic logic that explains how we can deliver value to customers at an appropriate cost? But a business model is not the same as strategy. Business models describe a system, but they do not factor in competition. Dealing with competition is a strategy’s job. And ultimately, both a good business model and effective strategy are required for success.-> Continue To Provide More Benefits For Your Customers. Continue To Make It Easier And Easier To Start Doing Business With You. Continue To Develop New Distribution Channels.

    -> Funnel: Suspects -> Prospects -> 1st time buyers -> 2nd purchase -> Loyal customers -> Hyper responsive …

    Marketing Funnel: Articles, Speaking, Online Forums, White Papers, Buying Guides, Free Consultations, Teleseminars, Audio clips and Interviews, Newsletters, E-courses, ROI Calculators, Screen Saves (all free ways to get acquainted)

    -> Book (low cost low risk way to build trust) -> Audio cassettes, special reports, assessments, tele-classes -> (increased commitment) coaching, consulting (higher cost trust building purchases) Marketing plans, Copywriting, Custom Services -> Goal: High-cost products or services, Repeat customers, Word of mouth referrals … 80/20 customer pyramid…

    “If you want financial security in a business, you will make it a priority to cultivate ‘hyper-responsives’ within your customer base. What is a hyper-responsive? Where do they come from? How to cultivate them? The ‘Hyper-Responsive’ is that customer who totally believes in you, your company, your products and will buy virtually every new product or service you offer or recommend. They come out of your regular customer base, typically 5% to 10% range, as a results of delivering on your promises, exceeding their expectations, and frequent and consistent, nurturing communication.” …

    -> What The Most Powerful Strategies Have In Common:

    Fully developed backend, Leveraging Of Other’s Email Lists, Conversion was a focus

    -> What is a customer? Someone who: Has purchased from you already and Is expected to buy from you again. A customer is someone you expect to do further business with – if they aren’t they are former customers)…

    If currently your business is not getting a disproportionate amount of its profits from a tight segment of your customers it means you’re leaving lots of money on the table…  “The Money Is In The Backend”: The problem is, many business owners in their quest to acquiring more customers, often neglect or just don’t recognize the importance and power of this marketing simple concept.

    (Example: Front End Offer -> 1300 sold @ $400 [Affiliates $200] [Net: $210k / Partner Share: $70k] … Back End Offer #1 -> 400+ sold @ $5k-$6k [Affiliates $0] [Net: $1.8M / Partner Share: $600k] … Back End Offer #2 -> 40 sold @ $12k + 50% of new revenue [Affiliates $0] [Net: $480k + 50% profits from 40 / Partner Share: $160k + 50% allocation] … Back End Offer #3 (Free And Clear Spin Off) -> 25 sold @ $697 [Affiliates $0] [Net: $225k / No Partner] -> TOTAL: w/o backend $70k / WITH backend over $1M …

    Why The “Back-End” Is Vital:

    Because when your customer value is higher you can spend a lot more money to acquire customers which means channels that were once inaccessible become easy to maneuver in. (it also means you’ll have little to no competition in these areas).

    You can easily get affiliates and joint venture partners on your front end promotions because you don’t care whether or not you make any profit in it.

    Because without a back-end you put you and your business in jeopardy because you are over-reliant on current promotions being profitable  -> Your customer list is your most important and valuable asset.

    BUT YOUR CUSTOMER LIST IS PERISHABLE: RECENCY. Recency is when a customer last purchased. An aggregate of all your active customers is the primary measurement of your business’s vitality and it’s one of the most important indicators of the value of your business.

    -> Your Ideal Customer:

    Selection of the right audience is the single most important element in every direct response marketing program (offline and online).

    If you already have customers you can use surveys to extract great information. By Analyzing the characteristics of your best customers you: identify your best prospects, anticipate problems in your current customer base, focus attention on the “real” prospect list…

    Dan Kennedy: “I do not believe in “generic” persuasion. In fact, my contention is that truly understanding the targeted prospect / customer is more important than any other element in a marketing success.”

    Yes, a true pro like me can often create offers, pitches, copy, etc. that will get satisfactory results even with a market I have little understanding of – but it’s not a very good situation.

    When I take on a project, I do my best to get in sync with the market. But quite truthfully, there are a handful of markets where I get much better results than with all others, because I truly understand those consumers like I know me.

    I am dismayed when a client, when challenged, cannot describe their ‘ideal customer’ in copious detail. Here’s a quick seminar exercise: first take a sheet of paper and write out the most detailed description you can of a TV character (from one of your favorite shows – current or past). Where does he live, how does he dress, what interests him, likes/dislikes, what does he think about money, sex, etc.? Fill both sides of the page.

    When that’s done, try and write out just as detailed a description of your customer. If you find it easier to profile the TV character than your customer, that tells you a lot.

    I absolutely guarantee you: the more you know about your customer, the more you will sell…

    You must make people feel miserable before you can liberate them. Whether selling a kitchen appliance or an annuity, selling to mom at home or the CEO in the tower, you must create despair to ready the person for your solution…

    This is the most reliable approach to selling…  Do You Know Where Your Customers Really Hurt? Make a list of all potential problems that someone might have that would want your product or service – then brainstorm how to use the different methods to build your pipeline / funnel…

    Get The Scoop On Your Customers:

    Do they have common interests? How do they find you (which strategies are working) What’s their average age? What other stuff do they buy? Who has an existing relationship with them already? Do they have a preferred buying style?

    -> Customer retention is more advisable than customer conquest…GETTING, SATISFYING, RETAINING, ENHANCING…building and maintaining long-term profitable relationships with customers by creating superior customer value and satisfaction

    A philosophy of doing business that focuses on keeping current customers and improving relationships with them. the focus is less on attraction, and more on retention and enhancement of customer relationships…

    Critical Non-Essentials:

    When you begin to understand what customers remember about your business, you will realize that it’s rarely associated with the core part of what you do.

    These are the little things in business that are so important in determining how clients judge your product – even thought they have very little to do with the product itself. (Product Packaging, Small Gifts, Thank You Cards, Voice Broadcasts, etc…)…

    They buy because of what you promise, they stick around because they like you…

    Continuum of Differentiation:

    Commodities -> Goods -> Services -> Experiences  … PRODUCT EXPANSION MINDSET…9 box matrix…Product Based Brainstorming / Problem Based Brainstorming / Customer Based Brainstorming

    -> Customer Value Management (RFM / Delta Lifecycle Grids) … Customer Behavior Predicts Future Behavior Better Than Demographics…

    Your Goal Defines The Information You Need: Demographics (To get more customers) / Customer Behavior (To increase lifetime value) … spot changes…The Right Message, To The Right Customer, At The Right Time…look at the patterns of behavior for your customer lists and determine what is the normal way your customer act.

    From there you can then: tweak it to improve the profitability of your different customer segments, Determine the most profitable path towards building customer loyalty, Use exception reporting to nudge customer that are heading on the wrong path to move the right path (the profitable one)…

    Understanding Your Customer Life Cycle Will Also Open Your Eyes To Where The Opportunities Lie In Your Business…

    Extend your Customer Life-Cycle by using predictive modeling & exception reporting to reduce your customer attrition rate.

    Increase the number of purchases within the existing Customer Life-Cycle so when the customer becomes inactive they have spent more with you, even if you can’t hold on to them longer…

    Latency is the average time between customer actions. You then use this metric along with exception reporting to guide you to either prevent customer attrition or to accelerate the buying process because the buyer is in a hyper responsive mode.

    Friction is what gets in the way of your latency periods. Friction is an indicator of current or future dissatisfaction and ultimately leads to attrition. Customer’s express their level of friction (or lack thereof) by how their behavior relates to the average Latency period between actions.

    As friction increases the customer’s potential value decreases. As friction decreases the customer’s potential value increases. You’ll know there is customer friction when the latency period has lapsed between expected actions.

    Then you’ll need to take action to overcome the current friction to get the customer back on track.

    Customer Value Management By Exception: When a customer’s behavior falls within the latency norms – you take no action and let the customer go through your funnel.

    We define the latency periods to decrease our customer attrition by identifying those customers through their actions that are currently experiencing friction and developing systems (through testing) that flag the customer as an exception and take the most profitable corrective action.

    We define the latency periods to increase the chances of converting a customer, who we flag through exception reporting as moving through the latency periods faster than normal, into a hyper-responsive because their actions tell us that they want more.


    Don’t incentivize action unless you need to (based on the customer’s actions)

    When you take corrective action – do it at the time that delivers the maximum return on investment (through additional spending, discounts, or incentives) When a customer is in heat – don’t deprive them or they may go somewhere else, in other words by not accelerating the life-cycle you run the risk of losing customers that are currently hyper responsive.

    Customers who are either increasing their relationship with you or decreasing their relationship with you are your highest leverage opportunities.

    Prevent customers from becoming inactive in the first place and encourage hyper responsives…

    Life-Cycle Promotions To Get The Customer Life Cycle Back On Track:

    1. Determine how soon after the customer passes the latency period you want to act.

    2. Create a mafia offer

    3. Do a split test – every other customer who has gone the x days with no action to get the offer.

    4. Deliver the offer and track both groups

    5. Monitor until the difference between the 2 groups either becomes stable or begins to fall

    6. Calculate ROI

    7. Repeat trying to beat the previous winner.

    (Calculating the ROI -> You have to allow enough time after the corrective promotion to determine how many of the customers you simply incentivized to take 1 more action and how many you actually got back on track to becoming hyper-responsives)

    An object in motion tends to stay in motion. Therefore a significant portion of the customers that you get back to normal Latency will once again be back on track for the next action.

    This Means That The ROI From The Corrective Action Can Be Enormous – Because Of The Future Purchases That Have Now Become More Likely. …


    One customer is much more likely to buy from you than another…

    RECENCY: Keeping active customers active is your constant objective – the alternative is that they become inactive and disappear.

    Customers are either active or inactive – active means buying, inactive means they are not.

    Recency is also a good indicator of the customer’s top of the mind awareness of you… which leads to branding. Recency is to your business what your pulse is to your life.

    When you rent lists the best performing names are the most recent – they are referred to as hotline buyers and you pay extra for them.

    Ideal Recency Is Specific To Your Market And Your Products:

    When a customer buys from you for the first time, something has changed or occurred in their life that caused him/her to trade their hard earned money for it.

    Looking into the future there is a much greater likelihood that this change is permanent until his/her behavior tells you otherwise. Therefore the more recently your customer bought a product from you – the higher the probability is that he/she will buy again.

    The More Recent A Customer…

    1. The more likely they are to respond to your other promotions

    2. The higher their potential value is to your business. If a customer is more likely to buy they are also more likely to respond when contacted about buying.

    A Customer who is more likely to buy and to respond has the potential to contribute greater profits to your company than other customers and should be given the opportunity to buy more often…

    After 50 Years Of Testing And Research – The One Variable That Is The Most Powerful Predictor Of Whether A Customer Will Complete An Action (purchase, optin, visit your website, etc…) Is Recency…You Market To Those Who Buy From You Regularly And, If you Are Smart, You Market To Them Often, up To The Point Where Profits Are Optimal And No Further…

    If you aren’t bringing in more customers than the rate of attrition, you are going out of business everyday. That’s why it’s so important to manage your attrition rate and continually test to improve your retention rate. (Bathtub Analogy via Lifecycle Grids).