No B.S. Guide to Maximum Referrals and Customer Retention. Dan S. Kennedy

popularized the idea of systems in business in his groundbreaking, bestselling book The E-Myth. Preceding Gerber, credit is deservedly given to Peter Drucker. But most business owners apply the direction given by such men only to management, to business operations, not to marketing or sales, and almost never to retention and referrals. If you do so, prompted by this book, you will gain significant competitive advantage, you may gain price and profit elasticity, and you can build a stronger and more valuable company!

      One last point: this book contains chapters from a small, select group of Special Guests. All have their own way of maximizing customer interest, retention, and value or of multiplying customers through referrals. Each does an outstanding job at this, in very different businesses. Do NOT make the common, dumb mistake of quickly deciding their examples can’t help you because your business is different. First of all, no business is fundamentally different. All businesses have to get, make active, keep as long as possible, grow as valuable as possible, and clone or multiply customers. At least, that’s what every business should be doing. Don’t be myopic. Second, most breakthroughs in one type of business come about by borrowing ideas from other, seemingly unrelated businesses. Don’t be Amish. Be curious and imaginative.

       CHAPTER 1

       NOT Running with the Pack

      by Shaun Buck

      Are you a “pack animal”?

      If you live in, follow, and hunt with the pack, you may feel safe and safer than you really are, but you will also be controlled, regulated, sometimes bullied, and often go hungry. Packs starve together. Packs sometimes are mass-hunted and killed as a group. Packs go extinct as one. If you carefully examine business history as well as contemporary business, you’ll find that nearly all the really big winners have defied and distanced themselves from their peer packs.

      I was 16 years old when I got the phone call that would set my life on a trajectory I never could have imagined. It was my ex-girlfriend calling to tell me she was pregnant. For a few seconds, I was confused. Why was she calling me? That’s when she said it: “The baby is yours.”

      My response was what you would expect from a 16-year-old guy. “Are you sure it’s mine?” I asked. She was sure. Suddenly, I was one of two parents to this unborn baby, and we had a number of decisions to make. As a teenage dad, I had to make a couple for myself as well: Would I stick around? Would I (or even should I) try to be a part of this baby’s life?

      At 16 years old, I suddenly had to decide the kind of man I wanted to be. I had a few friends, most of them older, who also had to make the decision of what to do with an unexpected baby. Unfortunately, without exception, they all bailed on their responsibilities in one way or another. I decided to head in a different direction; I decided to be a dad. That single decision was my first real experience in breaking away from the pack and heading down my own path.

      It has since been my experience that, in life, and in business as well, breaking away from the pack is most often exactly the right thing to do. So, the fact that the overwhelming majority of business owners invest comparatively little or nothing in customer retention and invest almost every dollar they can into customer acquisition speaks loudly about the right thing to do.

They Can Take Their Jobs and Shove ’Em!

      At 21 years old, I made another big decision. At the time, I was working for AT&T and was making a six-figure yearly income. Not bad pay for a young guy. After reading a number of business books and taking a few business courses over the years in college, I developed an idea: A job, even a good job, was never going to give me the size and scope of opportunity that I wanted. I decided to quit my job and become an entrepreneur. My first business? A pair of hotdog stands located in front of Lowe’s Home Improvement.

      My first year of income was $36,000. Not horrible for a young guy, but a far cry from the six figures I was making with AT&T. Many of my peers and family members thought I was crazy (my mom still thinks I’m crazy for not getting a safe and secure job), but sticking with the safe and secure job at AT&T was not what I wanted for my future. My pack circled me and did all it could to discourage my leaving! Although entrepreneurship is more in vogue today than it was in 2001, it is still considered risky and odd. The focus of polite society is still on jobs and careers, not taking on the outsized responsibility and risk of starting a business. While the media does make heroes out of Silicon Valley business creators, the lesson seems lost. And people starting hot dog stands are rarely glamorized. The news media coverage of the recent years’ reputed drought of proper jobs for college graduates, the debt burden with which they exit campus, the big number of them living in their parents’ basements, and the news coverage of high unemployment and stagnant wages stays stubbornly, narrowly focused on jobs—as if that was the only answer that exists. This is not so. In fact, if you learn; really, really learn “marketing” and how to apply it, your choice of opportunities in your choice of fields, professions, or industries opens up and you don’t need to wait for anybody else to confer your hoped-for wages on you. That puts you in opposition to the thinking and behavior of the pack.

      These days, I spend a lot of my time as a facilitator and supporter of people traveling their own chosen paths, building businesses of their own choosing.

      One of my more recent departures from the movement of the pack was when I founded my current company, The Newsletter Pro. While most of my friends were starting internet-based marketing companies or SEO (search engine optimization) companies, I was going into the “old-fashioned” print newsletter business. Yes, printing. On paper from trees. With ink. Producing newsletters for businesses, sent to their customers. By mail. With stamps. Not email. Not ezines. Not social media. Print newsletters.

      Naturally, there were naysayers who told me my business model would never work, but again I disregarded the pack. I ignored the numerous articles predicting the demise of the post office (a constitutionally guaranteed service). I ignored the articles on predicting Facebook world domination and went on creating my business, which in four short years went from an idea to mailing millions of print newsletters annually, and it is still growing month in and month out today. At The Newsletter Pro, we have clients in professional practices and various businesses, some mailing thousands, some mailing tens of thousands of the newsletters we prepare for them every month. Combined, we are a little “underground resistance movement” against digital depersonalization. Most importantly, we get stellar results.

      While I have found success in the print newsletter business, I understand that others still find it to be an odd choice of niches. I agree—it is a bit odd—but there is a method to my madness.

      Since 2002, I have always been hyperfocused on customer retention. So much so that when I bought my second business, a dry cleaning pickup and delivery franchise, I chose it because of its apparent exceptional opportunity for customer retention. I had figured out that if I could simply keep every customer I signed up—forever—my business would grow faster, be more secure, and be more profitable. Keeping customers is success. Losing customers is failure. Seems simple, but for many business owners, it’s a revelation!

      One of the reasons I purchased this franchise was because the franchisor said it had great customer retention rates and the logic made sense. The franchise owners would drive by their customers’ houses on a weekly basis and check for a bright green bag on the front porch. If the bag was there, on average, that person had $25 worth of dry cleaning in it, which equaled out to $50 per month because the average person put out their bag twice. There was no extra charge for the pickup or delivery of the clothes. No wonder they had such great retention! Who would drive their clothes to a dry cleaner when they could have them picked up and delivered for free? Surprise. As logical as that seemed to me, every customer failed to agree with me!

      I assumed as long as we didn’t lose or