#162 Don Jackson

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

 

 

 

Don Jackson'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 — a way of doing business. Everybody from catalogers and publishers to banks and insurance purveyors use the direct marketing concept.

 

Don Jackson's Immutable
Second Commandment

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

 

The next time some wonk gets up at a conference and starts using the current industry buzz words, “retention marketing,”  “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 computer can satisfy a customer.  But only when you continually delight your customers will they keep coming back and back for more.

 

Two Personal Stories

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

 

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

 

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

 

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

 

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

 

Remember, what this technician did for my friend cost Lexus nothing. Zip. Nada  Not one cent.  Yet, it solidified the relationship. Over the coming years, Lexus will have to screw up big time to negate that divine moment.

 

= = = = = = = =

 

For Christmas of 1995, Betts and I ordered $1,500 worth of goodies for the kitchen from 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 called Williams Sonoma and complained. The Telephone Sales Representative was not only sympathetic, but he also took immediate action. 

 

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

 

Secondly, he overnighted to us all the merchandise we had not received—with no charge for shipping—so we would be sure to 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 the cartons 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.

 

Takeaways to Consider

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

        

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

 

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

 

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

 

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

 

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

11 Customer Acquisition
vs.
Retention Statistics (2022)

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

 

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

 

• Increasing customer retention by 5% increases profits by 25-95%.

 

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

 

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

 

• Loyal customers spend 67% more than new ones.

 

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

 

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

 

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

 

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

 

• 82% of companies agree that customer retention is cheaper than acquisition
—Marius Kiniulis
      https://www.markinblog.com
   (A brilliant and hugely important blog! —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 the lowest price available, they will buy. If you offer excellent quality, they will buy. If you offer great service — quick delivery, easy returns policy, guarantee of satisfaction, marvelous merchandise, pleasant and helpful sales representatives — they will buy. If your product or service is unique and available from no other source, they will buy from you. — Don Jackson

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

 

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

 

Don Jackson (1937-2014) graduated from Oxford University and Adelphi University and served as a Naval Attaché in the LBJ White House. Don was Chairman and CEO of The JCG Group, Ltd. A prolific writer, he was the author of 151 Secrets Of Insurance Direct Marketing Practices Revealed, 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 widely distributed Insurance Direct Marketing: State of the Industry Annual Report. Don was the founder and former leader of the DMA/Insurance and Financial Services Council’s Advanced Insurance Direct Marketing Symposium, and a noted domestic and international speaker. He was founder and Chairman of the Insurance Direct Marketing Executive Workshops and the Insurance Direct Marketing Forum.

This Blog Post was excerpted from 2,239 Tested Secrets for Direct Marketing Success by Don Jackson and Denny Hatch, 1997, NTC Business Books

 

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