Brad Sugars, CEO of ActionCoach, came to Glasgow as part of his UK tour. In a packed conference room on October 20, Brad shared his wisdom following years of experience running companies and advising businesses.
The topic for the seminar was ‘Buying Customers’, meaning that you invest money to acquire them.
Brad’s aims for attendees were:
- Have fun! If you enjoy your business and your customers do too, they will keep returning.
- Learn a lot – I took 12 pages of notes.
- To coach ourselves.
Without marketing, you can’t develop your business – you’ll only have family and friends as customers. Most people don’t know how to get a return on investment on their marketing.
Marketing today is a lot more fragmented than it used to be – but if you put the work in, it’s easier to target the right people.
Most small businesses are just that – small. Many just want to pay the bills and have no notion of expanding. They don’t have a global mindset.
Always Seek Opportunities
To grow a business, you need to keep an eye out and be ready for new opportunities. You should feel a mix of fear and excitement when a new opening presents itself. Brad described a situation where he had the chance to sell ‘No Fear’ bumper stickers, which were big in the USA, in Australia. Due to fear, he ended up talking himself out of the deal. The man who got it went on to earn $57m in 2 years.
Brad’s definition of a real business is:
A commercial, profitable enterprise that works without you.
The owner’s work – building the business – is different from doing the job of the business.
Remember what it was that made you go into business initially. Losing track of this can leave you loathing rather than loving your business. I’ve been reading The E-Myth Revisited, and this book emphasises this point through telling Sarah’s story. Sarah is a pie shop owner who has become jaded and frustrated with her day to day work. Through conversations with the book author, Michael Gerber, she realises what she loves about her job and vows to bring the sense of pride and care she feels from crafting her pies into every aspect of running the business.
Learning before Earning
Learning about business is crucial, but most business owners have only practised the job of the business before starting out. When they see how many different hats a business owner needs to wear, they often feel like simplifying their lives by getting a job! Making mistakes is all part of the process and helps you become a better business person.
Lots of people don’t want to be seen as pushy sales people – but there’s nothing wrong with selling a quality product or service you believe in.
Brad’s definition of leverage is doing more with less, or:
Do the (owner’s) work once and get paid long term or forever.
Brad spoke about his dog food business as an example of this. It has repeat business built in, as dogs need fed daily.
How do we create leverage? By creating business processes. Authoring a book is a good example – you write it once, and get paid for a lifetime (plus decades after your eventual demise).
Discounting – don’t do it!
Offering discounts is a quick way to kill off your business. If you have a 20% profit margin on a product and sell it for 10% less, you need to double your sales to make the same profit. That way lies insanity!
The way forward is to not to cut prices, but to add value to your business offerings.
Know Your Market and Target Audience
Market research is key to knowing who your customers really are. Making assumptions is not good enough – find out! Use Google to find out about your customers’ demographics, psychographics and location.
Your goals for your business will depend on what you learn – you may need to adjust your goals upwards or downwards.
Narrow down your audience into small groups to market to them profitably. Find out what they want and where to find them in numbers.
Knowing what is the right number of customers for you per day, week or month is also very important. If you get too few, you’ll struggle to make enough money. If you have too many, you will get swamped and your customer service will suffer. Adjust your marketing efforts to hit the sweet spot.
No one likes planning, but having a written marketing plan will improve your business results. Too many businesses (including my own!) don’t have one at all, or only a very short one.
Your Marketing Budget
Marketing should be viewed as an investment, not an expense. If you spend £10 and get £20 of business, it’s worthwhile.
Measuring and Testing
You cannot know if your marketing efforts are successful without measuring and testing before and after a campaign. Know your baseline numbers first. One obvious question to ask your customers is “How did you find out about my business?”
One electrician Brad worked with spent $80k a month on adverts. After analyzing his results, Brad discovered that $50k of his spend went on TV adverts which brought him less than 5% of his business. The rest of his budget went on radio and newspaper ads, which accounted for 95% of sales. No-one had bothered to check on his ROI.
80% of marketing campaigns fail, so test the water with a low-budget campaign to begin with.
Measuring Your Success
Many people don’t understand success. Americans are the exception – they celebrate it.
There are 7 key numbers you need to know: Leads, Conversions, Customers, Transactions, Average Sale, Revenues, Margins & Profits.
The formulae you need are:
Leads x Conversion Rate = Customers
Customers x Number of Transactions x Average Sale = Revenues
Revenues x Margins = Profits
The most important of these numbers are the measurable ones: Leads, Conversions, Transactions, Average Sale and Margins. These are the five numbers that his coaches work on to improve business performance.
Growing a business has to be done at the right rate. If too fast, cash will run out. If sales are constant, there will be no growth.
That concludes the first part of this blog post. Stay tuned for Part 2 of my summary the Brad Sugars Buying Customers seminar, to follow next week. There will be advice on referrals, repeat business and seven marketing strategies you can implement right now.