The 6 Star Principles for Maximizing Referrals and Customer Retention

When I first started The Newsletter Pro in 2011, the company was actually called Solution Marketers.

We sold three products: The first product was a direct mail campaign to restaurants; the second was a direct mail campaign for dentists; and the third product was newsletters. About 18 months into Solution Marketers, I realized I needed to focus on one product, and after careful evaluation, I chose newsletters (though we are now actively selling our direct mail campaigns for dentists).

One primary reason I chose to focus my efforts on newsletters was because, at the time, we had never had a client cancel our newsletter service, and people often referred new clients to us. I also really enjoy the topic of retention and referrals, which are two benefits of sending a newsletter.

star-principles-for-building-relationships

Over the years, I have found that the secret to maximizing referrals and increasing retention comes down to 6 key principles:

1. Frequency of communication:

I want you to think about the personal relationships you have — maybe some of those close friends from high school or college. Of all of these “close” friends, how many of these are you still close with? How many do you talk with daily or weekly or even monthly? How many do you only see on Facebook or other social media?

What about your family? Do you speak with your spouse or other loved ones daily? How are the relationships you have with people different when you speak with them on a regular basis as opposed to quarterly or annually?

Outside of business, those people whom you speak to often are the people you have the closest relationships with, and those friends from the past are just people you are familiar with or share a history with now.

In May of this year, I was at an event, and I ran into Christopher Judge. He is an actor, best known for his role in a TV series called “Stargate.” We got to chatting and ended up hanging out in the bar that evening. Somehow we ended up on the conversation of divorce in Hollywood, and he said, “You know, most people think the reason the divorce rate in Hollywood is so high is because we are all self-absorbed, but in reality, it is because we spend so much time away from our families to film these TV shows or movies that eventually we just grow apart.

The same can be said for any relationship, including the relationship you have with your clients or customers. The longer you go between communications, the weaker your relationship is with your customers, and the more open they are to using another service or simply forgetting about you altogether. Another wrinkle in this is the type of communication you deliver. If every interaction you have with someone is you asking them for money (i.e., pay your bill, buy my stuff), you’re killing the relationship.

We’ve all had that friend or family member in our life. Every time they call, they are asking for a favor or to borrow some cash. Most people eventually avoid these moochers like the plague, but that is exactly how most businesses operate.

We have a saying at The Newsletter Pro: Don’t be that guy. Basically, that means we never want to be the person who doesn’t add any value and only pitches. Of course, you can go too far on this spectrum and never pitch, which isn’t good either.

2. Consistency of communication:

As I write this, it’s July, and as a company, we know that this is a month when we have many customers skipping because they are too busy with vacations or with family activities.

As a dad of 5 boys, I get it, but being inconsistent in the eyes of customers and prospects is bad for business.

Another time of the year that we see this is in December. I am always baffled by people who are surprised that they have more family obligations during these two months — it’s not like July and December don’t roll around at the exact same time each year. When you book a vacation in March for December, you kind of know you need to work ahead, and the good news is, you have nine months to plan for it, but few do.

Stop making excuses, just get it done.

When you take on the task of a regularly scheduled publication and you do not send it out on time, at a minimum, you are telling your customers you are disorganized. Is that the message you want to put out to customers and prospects? My guess is, it is not. Being inconsistent hurts sales, referrals, and retention.

3. Creativity in your communication:

This step is difficult for so many business owners. The primary reason people seem to fail at this is that they simply get busy.

As a fellow business owner, I know how crazy life and business can be. But even when I’m busy, that doesn’t give me an excuse to be lazy and boring in my communication with customers and prospects.

Insanity: doing the same thing over and over again and expecting different results.

As my grandma once told me, paraphrasing Albert Einstein, “The definition of insanity is doing the same thing over and over again when it doesn’t work.” So if you keep doing what you’re doing now, you’ll be in the same place next year.

I have watched countless business owners start down the right path of being creative and useful to their customers, only to self-sabotage and go back to old habits of being the same as everyone else in their industry, which equals boring.

You need to communicate information that is interesting, personal, relevant, and speaking directly to your ideal reader.

You’ll notice none of the blog posts or newsletter articles I write are for people who are new to business. It is not that I don’t want to help them — I love starting new businesses and working through those challenges — but most of my products aren’t designed for newbies. So I don’t want to write articles that attract people with 36-person lists. That would be a waste of my time and theirs, as I can’t help those people.

People want to do business with people they know, like, and trust … it is your job to let them know you through quality, creative content, so they have the opportunity to like you and so they can connect with you, which helps them trust you.

4. A variety of styles of communication:

This one seems like a no-brainer, but so many people mess this up. You cannot have a single method of communicating. Not only is it very unstable (as you never know when a form of communication may become less effective), it also just isn’t smart. People consume information in multiple ways and value various media differently. It would be much simpler if all communication came via email, but “simple” doesn’t mean correct or smart. Email deliverability and open rates decline each and every year, which is why so many people are sending even more email; to compensate for the lack of results.

Don’t misunderstand me; I am not against email marketing. I am against it being the only form of communication. To build a relationship, you should communicate with multiple different media. A winning annual content strategy would look like this: 12 print newsletters, 104 emails, 26 postcards, 12 letters, online retargeting of existing customers, six CD/DVD interviews, three FedEx packages, three gifts, and two awards/trophies. This would have the customer hearing from you about every two-and-a-half days in a variety of different ways.

5. Personality/celebrity:

Fairly recently, the MGM Grand in Las Vegas ripped out its  highly profitable $2 million a year but run-of-the-mill restaurant and replaced it with a restaurant created by celebrity chef Michael Mina called Nobhill Tavern. They have since literally tripled sales to $6 million annually.

What makes Nobhill Tavern three times better? Is it possible the food being served is 300 percent better than before? I doubt it.

The addition of celebrity allowed the MGM Grand to increase prices at Nobhill, compared to the previous restaurant, as well as allowed them to fill the restaurant each night — something that was not happening previously. Adding celebrity to restaurants has been a game changer. Adding celebrity (even local celebrity) or at least personality to any business will be a game changer, because as a society, we’re programmed to value personality/celebrity.

As I said earlier, people want to do business with people they know, like, and trust, and they’re willing to spend more with someone they see as a personality or a celebrity because of how they feel about that person.

6. Quality:

content marketing concept

The look and feel of your product, service, and marketing matters. You can’t claim to be high-end and send out items that were last updated in 1990, when New Kids on the Block was a big deal and “Beverly Hills 90210” was a popular freshman TV show.

Your content also can’t suck. If it looks like your articles were created in the Philippines or add no value, you’re shooting yourself in the foot. When I read articles written by my team, I am always looking for the one (or more) big idea. Why was this piece of content not a waste of time? How did it help the person consuming it? These are questions you need to ask when you create content.

Relationships matter.

Don’t take your customers for granted, because one day you may look up and find they’re all gone. It happens daily, to businesses bigger and smaller than yours or mine. According to the SBA, from 2008-2009, on average, 1,865 businesses closed their doors each day. Having a relationship with the people who put food on your table is just smart business. Follow these six principles, and you will be way ahead of your competition.

If you want to know more about newsletters and how they can help you build a relationship with your customers, clients, or patients, give us a call at 208-297-5700 or visit our schedule page to make an appointment to speak with a Pro. 

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