http://dennyhatch.blogspot.com/2022/07/162-don-jackson.html

#162 Blog Post - Wednesday, 27 July 2022

Posted by Denny Hatch

Don Jackson's Fascinating
Direct Marketing Stories

 

DonJackson's Immutable
First Commandment

Ask yourself what business you are in.

You are emphatically not in the direct marketing"business" or "industry." Direct marketing is a process — away of doing business. Everybody from catalogers and publishers to banks andinsurance purveyors use the direct marketing concept.

DonJackson's Immutable
Second Commandment

You are in the business of acquiringcustomers (or donors) and then continually delighting them.

The next time some wonk gets up at aconference and starts using the current industry buzz words, “retentionmarketing,”  “back-end marketing,” and“customer satisfaction,” let fly with a noisy raspberry cheer.  This is old hat.  Anybody with half a brain and half a computercan satisfy a customer.  But only whenyou continually delight your customers will they keep coming back and back formore.

TwoPersonal Stories

A friend of mine bought a Lexus—a $45,000piece of machinery.  He could afford aMercedes, a Jaguar, a Cadillac, but he went with the Lexus.  His lifetime value to that automobilemanufacturer could be in the high six figures.

My friend took delivery of his elegant newLexus from the dealer and started to drive it home, luxuriating in the smell ofthe leather interior and the glorious handling qualities. On a whim, he turnedon the radio. His favorite classical music station came on loud and clear insplendid quadraphonic sound. 

He pushed the second button; it was hisfavorite news-weather-traffic station. The third button was the talk radio station he listened to keep awake onlong trips.  In fact, every button wasset to his specific tastes.

Was the Lexus psychic?  No. The mechanic at the Lexus dealershipnoted the radio settings on the old trade-in and duplicated them on the newLexus.  My friend was, in a word, delighted.

Was setting the radio the mechanic’s idea? Orwas it the policy of the dealership?  Ordid it come from Lexus-on-high. Apparently it was the technician’s idea.  Delight a customer and you have a customerfor life (which, for an automobile mechanic —and all of us workingstiffs—translates into corporate growth and a steady income.)

Remember, what this technician did for myfriend cost Lexus nothing. Zip. Nada  Notone cent.  Yet, it solidified therelationship. Over the coming years, Lexus will have to screw up big time tonegate that divine moment.

= = == = = = =

ForChristmas of 1995, Betts and I ordered $1,500 worth of goodies for the kitchenfrom Williams Sonoma. Because of lousy weather and a Federal Express slowdown,not all of the merchandise arrived in time to be under the tree on Christmas morning.For us, it was less than a merry Christmas.

On the Monday after Christmas, I calledWilliams Sonoma and complained. The Telephone Sales Representative was not onlysympathetic, but he also took immediate action. 

First off, he forgave all the shippingcharges—thus knocking off about $150 from our bill.

Secondly, he overnighted to us all themerchandise we had not received—with no charge for shipping—so we would be sureto have it for the remainder of the holidays.

Third, he included merchandise return labels,so when the first shipments arrived, we could simply slap these labels on thecartons and ship them back—at Williams Sonoma’s expense. 

Fourth, he sent a Free Gift—a marvelous,top-of-the-line glass turkey baster which retails for $25.

Betts and I were delighted.

P.S. The merchandise did indeed arrive the next day.

Takeawaysto Consider

•"Nothing is more powerful thangood will... except ill will. Ifyou have a dissatisfied customer... make good... fast.. and then give a bonus."
—Anver Suleiman

• "The purposeof being in business is not to make money; the purpose of being in business isto be of unique, important and meaningful help and value to the customer. Thenit will follow, 'as night the day,' that you cannot help but make money."
— Wendell Forbes

• "Times ofadversity and customer screw-ups may be the only times when you can really showyour customers how much you love them. When the relationship is smooth as silk, thecustomer may tend to feel unloved. For example, if everything fromWilliams-Sonoma had arrived in time to be put under the Christmas tree, we maywell have taken the company for granted. Would we not, then, entertain offersfrom The Chef’s Catalog and Colonial Garden Kitchens? Only when Williams Sonoma blew it did they come to realize howmuch they were loved." 
—MalcolmDecker

• Always remember Murphy's Law: "Ifsomething can possibly go wrong, it will." —Malcolm Decker

• It’s much morerewarding (and profitable!) to keep a customer than get a new one. What are your processes to keep customerswith you?  Many firms don’t give that endas much attention as they do the front end, but that is where the money is tobe made. Cross selling, repeat purchases, renewals, word-of-mouth — all reflectcustomer loyalty.  If they’ll switch fora few dollars or an offer on the Internet — beware. You don’t have a customerbase at all. Like a garden, it takes constant care and nurturing — and the bestthinking.|
—Malcolm Decker 

• As direct marketers we're not here primarily to make asale; we're here to get a customer.
Salesare important, of course. (Where would marketers be without them?) But the nameof this game is repeat sales rather than one-shots. And to have that, you needa customer. Some marketers today use a form of advertising that I call"response advertising.”  It consistsof customers who answer their promotions via coupon redemption or electronicmeans like telephones and computers. But generally, these marketers do notrecord customer names and establish a database; therefore, this is sampling —or coupon redemption or sales promotion. It is not direct marketing.
—Joan Throckmorton

11 CustomerAcquisition
vs.
Retention Statistics (2022)

• The probability of selling to an existingcustomer is 60-70%, while the probability of sellingto a new prospect is only 5% to 20%

• It costs up to 7x more toacquire a new customer than to retain an old one.

• Increasing customer retention by 5% increasesprofits by 25-95%.

• 44% of companies have a greaterfocus on acquisition vs. 16% that focus on retention.

• 65% of a company’s businesscomes from existing customers.

• Loyal customers spend 67% morethan new ones.

• Only 40% of companies and 30% ofagencies have an equal focus on acquisition and retention.

• 89% see customer experience asa key factor in driving customer loyalty and retention.

• Existing customers are 50% morelikely to try new products and spend 31% more than newcustomers.

 • For most industries, the average customerretention rate is below 20%.

• 82% ofcompanies agree that customer retention is cheaper than acquisition
—Marius Kiniulis
      https://www.markinblog.com
   (A brilliant and hugely importantblog! —DH)

• People will buy from you for four reasons only: (1)PRICE and/or (2) SERVICE and/or (3) QUALITY and/or (4) EXCLUSIVITY. If you have thelowest price available, they will buy. If you offer excellent quality, theywill buy. If you offer great service — quick delivery, easy returns policy,guarantee of satisfaction, marvelous merchandise, pleasant and helpful salesrepresentatives — they will buy. If your product or service is unique andavailable from no other source, they will buy from you. — Don Jackson

• If you cannot offer at least two of the four elementsabove, you do not have a business.
—Don Jackson

• "I had forgotten what my professor Frank Knightused to say, that what people want is not satisfaction of their wants, butbetter wants."
—Herbert Stein, The Wall Street Journal, 10/25/1994

Don Jackson (1937-2014) graduated from Oxford Universityand Adelphi University and served as a Naval Attaché in the LBJ White House. Don was Chairman and CEO of The JCGGroup, Ltd. A prolific writer, he was the author of 151 Secrets Of Insurance Direct Marketing PracticesRevealed, co-author of Winning!Direct Marketing For Insurance Agents and Brokers, co-author of 2,239 Tested Secrets For Direct Marketing Success and author and publisher of the widelydistributed InsuranceDirect Marketing: State of the Industry Annual Report. Don was thefounder and former leader of the DMA/Insurance and Financial Services Council’sAdvanced Insurance Direct Marketing Symposium, and a noted domestic andinternational speaker. He was founder and Chairman of the Insurance DirectMarketing Executive Workshops and the Insurance Direct Marketing Forum.

This Blog Post wasexcerpted from 2,239 Tested Secrets for Direct Marketing Success by DonJackson and Denny Hatch, 1997, NTC Business Books

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