Tell me about your vision.
Well, my vision is simple.
I want to help business owners take full advantage of marketing
to drive growth.
And when I talk about this, I talk
about really powerful and effective marketing
is a two-sided coin.
It creates value for customers as well as for the business.
And that distinction is really important.
That distinction really informs an awful lot
of how we look at marketing and how
we look at the relationship that you
need to build with customers and with your audience
in order to create a sustainable entity that brings value
to you as a business owner but also brings
value to your audience.
And when I audit websites, when I audit digital marketing
programs, the most common problem I see
is an absence of strategy.
And that absence of strategy, the end result
is you've got a successful business,
you've stopped DIYing this, you've
hired a digital marketing agency,
you've told them to go do stuff, and nobody
comes to work with the intention of doing a bad job.
They're going to go out and do the best they can,
and they're going to probably do a better job executing
the tactics than you are.
However, pretty tactics without strategy
is still digital noise.
And digital noise does not build your business.
What does?
Building your business is involved by,
and it's an old, old idea, it's a direct marketing axiom,
get the right message to the right person
at the right time.
For the right price.
Price becomes less of an issue if you're
building on that commitment.
Building on that kind of issue.
Because what you're looking for is
you want the sale to be the next logical step in their journey.
So they don't feel like they're being tricked into something.
They feel like they're giving value and getting value.
Wow.
I'm getting more and more excited.
James, where would you say this vision, amazing vision,
that I agree with come from?
Many years ago, I was working when
I was an executive vice president at a large ad
agency in Chicago.
We were working with a telecommunications company,
and they were having huge problems with churn.
People signing up and then leaving.
So they hired us to help them develop a loyalty program.
And part of that effort was we commissioned a research study.
We hired a guy who specialized in loyalty research.
I don't remember any of the details
from the output from the research study,
but I remember one sentence that he said in his preamble.
Now context, this is incredible.
Now context, this is a guy whose profession,
whose years and years of experience
doing research on customer loyalty
for many different brands in many different categories.
And he said, 90% of loyalty problems
can be traced to a flawed sales process.
So that one sentence got me really thinking
about the sales process and what's involved
and what parts of it are flawed and how can you
change your mindset around these things
so that you're generating sales for the right reasons,
getting the right message to the right person at the right time.
And building a, and then another thing
as I did more research into this,
a guy named Reichelt wrote a book called The Loyalty Effect.
It's really old, but I imagine the ideas are still valid.
And he points out that when you analyze customer bases,
a loyal customer brings revenue to a business
in five different ways.
It basically builds on the concept
that the most important sale is not the first sale,
it's the second sale.
Because if you can sell them the second time,
the chances you'll sell them a third, fourth, fifth time
are exponentially improved.
Yes.
And when I did work with companies like, well,
Bank of America and Visa, I've had both of them
as clients at various times.
And we've had the opportunity to do analysis
in their customer data.
A 1% to 2% improvement in loyalty
would generate anywhere from a 60% to an 80% improvement
in the net present value of the customer base.
And that leverage is because of this idea
that loyal customers contribute revenue to the business
in five different ways.
So having strategy, underpinning,
understanding who your customers are,
you may have heard described as the customer persona
or the customer avatar.
They're kind of synonyms for the same concept.
Who is your customer?
Demographically, what are their characteristics?
What is the pain they're trying to solve?
And what is the gain that they get from working with you?
The customer avatar.
And then the other side of that coin,
everything in life is two-sided.
The other side of that coin is mapping the customer journey,
understanding what events happen in their life that
cause them to start, I think I need to consider this,
whatever it might be.
And then they go into consideration mode,
where they start doing research around what are their options?
What are their choices?
I haven't done this for a while.
What's out there?
And then that moves into the prospecting phase,
where they're making a choice around, OK, I've
got two or three different options here.
Which one's the best for me?
And then there's the bottom of the funnel, which
is the decision-making process.
Everybody understands and recognizes the marketing funnel,
which I've just described.
But what they don't do is actually sit back and document
what are the questions and obstacles
at each stage of this process from the customer's
perspective.
Because when you can do that, circling back
to the hub and spoke idea that I talked about before,
now you can create a content and messaging strategy
that's in alignment with what the customers are looking
for at the stage that they're in in their journey.
This builds trust.
It builds relationship.
And it means that at the end of the process,
the purchase decision is the next logical step
in their journey versus being tricked into buying something
that they're not sure about.
The value that you shared today, James, is amazing.
And to me, this information is not new.
But to our audience, probably most of it is.
And I can see if they grasp what you just said,
they have like, their mind will be blown into, like, oh, my gosh,
I had no idea what to do.
And I can see that they're not going to be able to understand
like, oh, my gosh, I had no idea what this could be.
What? Oh, my gosh, I do not think this way.
And that's the key thing.
You do not think this way.
Nothing I said was revolutionary.
Everything I said was stuff that everybody will go,
yeah, I've heard that before.
But the way it's put together, that's
what makes this different.
That's what makes this because you're not a business
owner standing on your rooftop shouting at the world at large
about how awesome you are.
You are building a commercial relationship with ideal customers
in a way that the ideal customer appreciates.
Because it's bringing value to the customer.
Like I said, good marketing brings value to the customer
and to the business.
And if people listening, if you don't get anything
from what we just said, please get this.
This way of thinking is what gets you farther ahead
than anything else.
Thinking from the customer's perspective,
what the customer is experiencing.
If you just optimize that in your business processes,
you would have created a machine on one side of the equation
that would be a force to be reckoned.
But people would love talking about the experience they
had with your business.
And they'd be like, my gosh, that was amazing.
Right.
And they'll start to be more open.
When you're communicating with them after the fact,
the sales messages stop being sales messages
and start being valuable information.
Yes.
That telecommunications example I used to talked about,
we've followed through with them.
They accepted our recommendations.
It took us about a year to put the plan together.
But for four straight years on a $2 billion base of business,
we were generating 20% revenue growth.
That's amazing.
But for $2 billion, 20% revenue growth is $200 million.
Year over year for four straight years.
That's amazing.
The four straight years, that's $800 million
in extra generated revenue.
I'm a little confused, Matt.
Right.
And we ended up, I mean, it was an interesting conversation
sitting down with the chief marketing officer
and explaining that they needed to spend less money.
Wow.
Because they were kind of marketing to everyone.
And we're like, you don't want to market to everyone.
80% of your revenue is being generated
by 20% of your customers.
Yeah.
We need to market to that 20%.
The other 80%, all the marketing in the world
is not going to change somebody's needs state.
They don't need what you're offering.
I mean, you're just swimming upstream.
That 20% who are heavy users, who are heavy category users,
they really care about what you're doing.
They really care about what you're offering.
And they really care about the solutions you're providing.
They're much more likely to continue
to spend that money with you.
It's another old direct marketing concept called RFM.
Yeah.
Recency Frequency Monetary.
The customer who buys from you most frequently,
who bought from you most recently,
and who spent the most money with you,
is the customer most likely to buy from you again.
Yep.
A lot of times, actually, that's probably most of the market.
We see, and I don't know if you've read the book,
E-Myth or not, in that book, there's
a pretty staggering statistics where 96% of businesses
are failing within the first 10 years.
That's a pretty bad, bad number.
And coordinating that number with what people are doing,
I've asked this question multiple times on a podcast,
before and after the podcast.
People can describe to me their ideal customer.
They have spent way too much time, money, and effort
into targeting the unideal customer,
that they forget about the ideal customer,
and their focus is dispersed into not effective marketing
strategies, which is crazy.
And that's what they've been taught.
It sucks.
It sucks, but it is the truth.
It is completely true, and I see it all the time.
And it's hard.
David Old will be old ad agency guy.
One of his famous quotes is, the essence of strategy
is sacrifice.
You have to stop trying to be everything for everyone,
because when you are everything for everyone,
you are nothing for no one.
No one.
That's awesome.
You didn't correct me when I told you $200 million,
$2 billion, the math was $400 million for 20%.
And that four years is $1.6 billion.
That's right.
It was a big program.
It was a very successful program.
That's amazing.
Imagine having 3% retention on that, on increase of that,
for the rest of your life.
Right, and I've taken these ideas.
I've tested them with automotive manufacturers,
with credit card folks, with banking.
And it works across lots of different sectors.
And we did an analysis of Bank of America's customer base
and showed them that 120% of their profit
was being generated by 10% of their customers.
Yeah.
It's like free checking is not a good idea.
Thank you for being here today.
I'm really happy that you tuned in to Vision Pros Live.
I'm looking forward to seeing your reactions
as these episodes continue to move forward.
This is going to get more and more fun.
We'll have more and more engagement as well.
We'll invite people to participate in the show.
And thank you for giving us your time and attention.
Have an excellent time building out your vision
and becoming a Vision Pro yourself.