Why one-shot direct mail is marketing suicide

Here’s how most people do marketing, particularly their direct mail.

They get a list, such as our tax lien lists. They print a flyer, brochure, postcard, coupon, etc. They send it to this list ONCE. Then, no matter what happens, good, bad, or ugly, they never touch this list again.

I received an email last week from a reader saying that direct mail doesn’t work. He went on to explain that last year, he had obtained 2,000 tax liens from us, then sent them all a letter. He got ZERO responses.

For one, getting absolutely zero responses out of 2,000 letters definitely tells me there was something wrong with whatever he sent them (which I happily would have critiqued for him at no cost if he had attached a copy to his email). But secondly, the biggest problem was that he only sent them something ONCE. It simply doesn’t work like that. You can’t send something to a group of people one time and one time only and then say, “Direct mail doesn’t work.” Direct mail DOES work…you’re just doing it wrong (sorry to be blunt, but the truth hurts sometimes).

Woody Allen is quoted as saying that “80% of success is showing up”. This is just as true for marketing as it is for performing artists. Statistically speaking, study after study shows that over 3/4 of all customers buy a product or service after the 5th contact from the salesperson or company they buy from.

Here are some other statistics: About 48% of sales people never make a follow up contact with a prospect. Less than 25% of sales professionals make two follow up contacts, and less than 12% make a third follow up attempt (e.g., a 4th contact).

If less than 12% of people make a 4th contact, and over 3/4 of sales are made after the 5th contact, then guess who’s getting those 3/4 of all sales?

That’s right: The company getting all those clients are the ones making the multiple contacts!

Let me phrase that another way: The secret to success in marketing is repetition.

I’m sure that you are fully aware of what battery company uses a cute little … Continue reading

It’s time for you to fire some clients

Today is client cleanup day for me. What do I mean by this?

We all have clients that are unproductive, in one way or another. Perhaps they haven’t paid their bill to you in 6 months. Perhaps, like in my case, they are tax resolution clients and they’ve refused to become compliant with filing and FTD requirements for three quarters in a row. Or, perhaps they are an active client, but use up three times more staff resources than the revenue they pay you.

Basically, these are clients that need to go elsewhere.

I’ve written extensively about the Pareto Principle before, the 80/20 rule. This states that 80% of your profits come from roughly 20% of your clients. The converse is also true: 80%, or even more, of your headaches comes from 20% (often even less) of your clients.

So, even though it’s summer, I think this is a good time to be doing “spring cleaning” of your client lists, especially since we’re just coming out of tax season still. Here are some questions to consider for deciding who to cut.

1. Do you have old clients that you mail and call every year, but haven’t seen them in 10 years for their tax preparation?

2. Do you have active clients that are straight up unprofitable? (You should constantly be tracking this, by the way). No client is worth LOSING money on.

3. Do you have a small handful of clients that are simply a major pain in the ass, and you’re just sick and tired of dealing with them?

4. Do you have absolute deadbeat tax resolution clients that are going nowhere because of they consistently miss RO deadlines, refuse to make FTDs, can’t get you financials, etc? (Historically, I will cut off my tax resolution clients after 3 consecutive quarters of additional accrual — 9 months is enough time to make a human being, so it’s more than long enough for a small business to get their act together, particularly with professional guidance at their disposal).

5. Do you have clients that are consistently on your accounts receivable list?

If you have unprofitable clients, lazy clients, clients that aggravate you and you hate dealing with, clients that are constantly paying you late…These are the people that need to go.

Once you fire your worst clients, life will be much happier. Your bottom line will most likely instantly improve, you’ll sleep better, your staff … Continue reading

Closing the sale and getting paid

Closing: The very word strikes fear into the mightiest of professional tax slayers.

The problem is that it doesn’t have to. If done properly, as part of your overall needs-based selling strategy, closing isn’t so much a distinct step of a sales process as it is a natural conclusion to the entire meeting.

I have met far too many tax resolution closers (unlicensed sales staff) that simply believe that the key to closing a sale is to pound the prospect into submission. While this technique does sell a couple hundred million dollars worth of client services each within the tax resolution industry, it is also the type of practice that garners unwanted attention from people such as the Federal Trade Commission and your state attorney general. Just ask Roni Deutch and Patrick Cox (of TaxMasters) if it was worth it.

The reality is that any client gained by coercion will forever resent you for it. Sales tactics like this are where BBB complaints, FTC investigations, lawsuits, and increased legislative regulation of our entire industry all stem from.

So what do you do instead?

Like I said, if you’ve done proper need analysis, layed out a solution with strong benefits to the prospect, the sale basically closes itself. Instead of needing to use a “tactic” or a “line” to close the sale, it simply becomes a very easy question: “Does everything we’ve discussed about the benefits of doing XYZ make sense? Well, great, let’s go ahead and get started on putting this IRS problem behind you.”

That’s it. That’s my entire “closing technique” (although I hate that phrase). It’s called “assuming the sale”. If your prospect doesn’t fully understand your solution, then they will ask questions. If they do fully understand your solution, then you can assume that they’ll do business with you.

I should state something that may seem obvious, but that many people actually miss: You should always be asking for the order. Always ask for your prospect’s business. If you don’t ask for their business, guess what? You’re going to starve. If you don’t ask, you won’t get the sale, and even worse, your prospect’s problem won’t get solved. And wouldn’t that be a travesty? Knowing somebody has a problem that you can help solve, but you don’t offer to?

The consultative, question-based process for closing the sale works like this. Ask your prospect:

“Do you see how bringing us on board would … Continue reading