Razvan Rogoz

Category: Business Models

  • How Many Customers Do You Keep?

    From the desk of Razvan Rogoz,

    I’m currently waiting for customer support. I’m trying to get into contact with a leading financial provider, because they’ve shipped my debit card to a wrong address. I’ve been waiting for 30 minutes and I have 20 minutes remaining. The level of frustration I’m experiencing now made me want to share a very important lesson from my experience as a copywriter.

    I’ve been in the position to work with amazing customers, businesses and people. In the first month, it was okay. In the second month, it was okay. Then, ironically, the better the relationship was, the less I was invested in it. If in the past I used to reply to emails within hours, I started replying in days or not replying at all. If deadlines were sacred for me, I’ve started missing them, not by days but by weeks.

    This happened years ago, when in all matters and purposes, I was just a young adult. It happened at the beginning of my career as a copywriter. Yet, it is a lesson that I’ve learned very fast. People have expectations from you and if you want to keep those people paying you, you must satisfy them. In a way, it is similar to dating. In the beginning, he’s bringing her flowers. He’s taking her to dinner. He’s doing everything in her power to impress her. Maybe he even starts going to the gym.

    After they get married, he stops doing all those things and watches TV all day. The same happens with most solopreneurs or self-employed. The more a client is invested, the more a client pays, the lower the quality of service that person gets.

    And honestly, this is the worst thing you can possibly do. I was talking about this key concept a few days ago with a copywriting student of mine. I was explaining to him that the natural impulse is that when you finish a work, a project, is to go and find another person to work with. The rational and logical thing is that if someone paid you, that person is happy with your work, to find something else to do for the same person and to not spend 4 – 5 hours in lead generation and qualification when you can simply continue an existing relationships.

    It is counter-intuitive but when it comes to customers, focus your efforts on keeping the ones you have and less on getting new customers. It is the most common sense thing in marketing yet so few people understand it. Your priority comes in the form of those that already pay you and are engaged in a relationship with you. They are putting the food on the table and your revenue comes as a consequence of having them. So serve them, keep them happy, find more ways to help them (while getting paid) and keep them on board as much as possible.

    As a coach or trainer, it is not a big accomplishment to get 20 new customers in a month. If we were in the same place, I would show you how one day of cold calling can bring you 20 new customers. This is not an accomplishment because it is a game of numbers. The big accomplishment is developing a relationship of trust and mutual benefit with each of the people you work.

    Why? Because a person that just entered the door may buy your $19.97 eBook but a person that has been with you for three years will invest in your $1997 workshop. How much someone is willing to pay with you is based on trust, not good marketing. Sales funnels are designed to sell products that start cheap and end expensive, not to promote the high ticket option at the beginning. Someone like Tony Robbins may sell a $3000 retreat directly to a cold lead because he is Tony Robbins and everyone knows him but most people have to gradually build a relationship based on increasingly higher products that build trust and value.

    It is hard to sell the high option to someone from the start and each time you focus on bringing new customers, you are reseting that counter. It is like someone who got 40 kilometers into a 42 kilometer race and then goes back to the beginning.

    Every business consultant knows that you don’t judge a business’s health by revenue because you can have $1.000.000 revenue on $1.200.000 costs. You don’t even judge it on profit because it is too general. You judge it on two things – ROI, what you’re getting out for what you’re putting in and how long your customers stayed with you. While your CPA is not going to put this in your financial statement, it is the best way to determine where a business is heading and how healthy it is. A high turn-over of clients in a consulting based business means that clients are not satisfied, are not treated right or that there are not enough products and services to satisfy their needs long term.

    My focus as a marketer is to maximize customer lifetime value a lot more than getting new customers. There are some fields where new customers is everything, like in software or in online platforms. In my field, I would rather get five people now and work with them for 24 months than get two people per month, for the next two years.

    There is yet another reason why this makes sense. There is a cost with every new customer. This cost is first in the form of marketing, getting him to become a lead. Second is the sales process. Third is getting to know this person, as you can’t quite help someone before becoming very familiar with their problems. In some businesses, this cost is higher than the front-end value of the transaction, leading to what is called “a loss leader”.

    It is not virtue how many people you serve. It is how well you serve them. The focus on size is like an obsession in the business world, most define success by how big they are. In practice, size and success have little to do in common, you can have a 10.000 people company that is going under. ROI is what determines value and a ROI of 50% on a company of five people is far better than a ROI of 10% on a company of 100 people. A true achievement is to have 10 people that you’ve helped for five years in a row, selling higher and higher priced services and them coming back to you because no matter how much you charge, they know that what you’re doing works very well.

    Saying that I’m working with 50 customers in a year is not praise. It means that I either don’t know how to sell to them, I can’t identify needs that I can help them with or I do something that makes them leave. Saying that I’m working with only five people means exactly the opposite. And yes, after I’ve ended my “young and dumb” period, I’ve realized that this is the solution and in all honesty, while I don’t know your specific business model and product line, I tend to think this is the solution for you too – maximizing customer value and serving a particular customer for as long as humanly possible, instead of replacing him with a new customer at the beginning of the trust scale.

    When you’re using economy of scale (distributing fixed overhead over a large number of products), then size matters and customer acquisition may be more important. When your product doesn’t have a follow-up (like a writer selling a single book), then getting market share is more important. But as a coach, as a trainer, as someone who sells his or her time in exchange for money, the best thing you can do for yourself and for your market is serving a few people for a long time as opposed to many people for a short time.

    This is a mistake I’ve done and I regret dearly and only by doing it, I know how important is to nurture commercial relationships instead of constantly seeking new ones.

    Let’s see how you can do this in your own business? I’m giving you a complimentary 30 minute session in which we’ll discuss ways to maximize customer value and other means in which you can succeed, from a marketing and copywriting point of view, in your coaching or training business.

    Please use the link below to get started.

    Click Here For Your Complimentary 30 Minute Call!

    Best regards,
    Razvan Rogoz
    The Self-Improvement Copywriter

    Click Here For Your Complimentary 30 Minute Call!

  • Fix Your Marketing Bottlenecks

    From the desk of Razvan Rogoz,

    I have realized that the 80 – 20 distribution and the TOC (Theory of Constraints) are largely related. This means that in any I/O system, the 20% that generates 80% of the results comes in the form of eliminating the most important system-wide bottleneck.

    Life is made out of I/O systems. It is what you put in (input), you get out (output). Everything in human existence can be abstracted to some form of I/O. It is true if you go to the gym – how much you exercise and how much benefit you get from that given exercise. It is true when watching TV, when reading a book, when dating, when running, when eating. Everything in human existence can be summarized to a simple formula “you put effort in and you expect some benefit out of it”.

    The 20 – 80 distribution simply states that 20% of what you do creates 80% of the outcome. This is not always true and it can be 30 – 70 or 10 – 90 or even 5 – 95. The key principle is that there is an uneven distribution between cause and effect and a small part of what will do will be highly efficient in obtaining your desired outcome while a large part will be system waste.

    The TOC is something not known by most people in the self-improvement field as it is an industrial management concept. It states that a system is always limited by a major bottleneck and that the output with which a system functions is always limited to that given bottleneck. TOC states that bottlenecks needs to be either removed or the systems reconstructed around them in order to achieve a high efficiency without waste.

    So how does this combine together? Any system, be it a business, dating, self-improvement, spiritual growth, improving your body is bottlenecked by something. This means that at some point, the effort you put in is reduced to the amount of that bottleneck. Imagine that you have a freeway with cars on all three lanes. At some point, it all converges into a single lane. That’s a bottleneck. The number of cars that can go on that one lane is equal to 1 / 3 of the number of cars that could go before. The entire system is reduced to the bottleneck, therefore reducing efficiency by a factor of 2X or 66.7%.

    At that moment, most people take the most lackluster approach, put more input. This means putting more cars. But putting more cars won’t reduce the bottleneck, because a bottleneck is never about input but rather, about how input is dramatically lost to output. Eliminating cars is not a good idea either because yes, if you eliminate 66.7% of the cars, the bottleneck is gone as input equals output but the efficiency is exactly the same as before. This is one of the facets of the TOC, rebuilding the entire system to fit the bottleneck in the case that the bottleneck can not be fixed, as eliminating input costs is just as good as increasing output profits.

    The only solution towards improving results is eliminating the bottleneck. This means making that bottleneck a three lane road so I/O once again.

    How does this apply to real life? Let’s take the example of a salesman. He calls 100 people a day but he makes only $500 in sales. His conversion rate is only 10% which means 10 out of 100 people buy what he’s selling. Now, an unsuccessful and not so smart sales manager would say “work harder, you don’t want it hard enough, hoooraaaaaahh” as most inspirational and rhetorical blah blah goes. A smart one would simply say “you’re putting enough effort but you’re bottlenecked by your ability to sell. Take a few days off, improving your pitch dramatically, come back and you will get better results”.

    This is why I despise most self-improvement posts on Instagram nowadays. They lack any common sense. In a system, your output is not represented by what you put in, but simply by anything under your biggest bottleneck. You’re limited not by your effort, but by your global efficiency and putting 20 hours instead of 10 hours into an inefficient system will give you the same ROI as putting 10 hours. Yes, it will give you more results, because I’m using ROI (return on investment) as a metric and not revenue but the focus for a smart person must always be ROI, what you get in for what you put out.

    Bottlenecks are the reason why you’re failing in your life right now. You’re failing because your entire system is limited, is struggling in one key point. Now, you have two solutions. If you can rebuild the system without that key point, then your bottleneck is gone. In some cases, you don’t need to fix the bottleneck, you simply need to eliminate it as a critical step from cause and effect. This means rebuilding the “production line” so the bottleneck is not a required part anymore.

    In most cases though, the bottleneck is important and the 20% that will generate 80% of your return is always looking at and fixing that bottleneck. It is not doing more of what you’ve done by taking a hard, critical look at what is keeping you in place and then actually solving it.

    So when it comes to setting life priorities, on a day to day level, ask yourself this simple question:

    “What is my major bottleneck right now in me achieving goal X?”

    “What can I do to either increase this bottleneck (increase I/O ratio through the bottleneck) or eliminate it altogether from the system while obtaining the same results?”

    Keep asking yourself these questions day in and day out and you’ll achieve system wide optimization where 1 unit of energy = 1 unit ot desired output in no time.

    Are you interested in discovering in finding your bottlenecks when it comes to marketing and conversion? Then let’s have a talk together. I’m offering you a complimentary 30 minute session in which I’ll ask you some key questions about you and your business. After this session is done, I can tell you with a high degree of certainty how I can help you and what you’ll get out of it. Please use the link below to get started.

    Click Here For Your Complimentary 30 Minute Call!

    Best regards,
    Razvan Rogoz
    The Self-Improvement Copywriter
    www.razvanrogoz.com

    Click Here For Your Complimentary 30 Minute Call!

     

  • How To Maximize Your ROI By Eliminating Wasteful Marketing

    From the desk of Razvan Rogoz
    Dear friend,

    I’m sharing with you a secret now that if you understand, it is going to earn you millions. It will cut your working time in half, it will make your self-improvement business effortless and it will bring you a sense of satisfaction that you’ve never experienced before.

    This is the most important and most obvious secret in marketing. It is no rocket science and yet, nine out of ten entrepreneurs fail this simply rule.

    The rule is … Go to where your market actually is!

    Let me put it this way. Most entrepreneurs try to pitch to everyone except the people that want to buy. They try to convince their friends, their relatives, their network to buy when they’re not interested in buying … while ignoring a huge army of people that have the money, have the interest and actually are aware of the problem you’re trying to solve.

    (more…)

  • Why Recurring Income Is The Only Approach That’s Viable

    From the desk of Razvan Rogoz
    Dear friend,

    Here’s the question I’m asking you to ponder today – are you having a job or are you having a business? I’ve met quite a lot of solopreneurs, people who work by themselves. Some are very successful. They live the life of their dreams. They are enjoying all the perks of showing the middle finger to their boss. Others are more stressed and pressured than when they were working for someone else.

    And now I’m asking you this – as a coach, trainer or self-improvement entrepreneur, are you owning a job or are you owning a business? To make this clear, I’m going to ask you where are you spending most of your time, earning money now or earning money in the future? This is a trick question though so don’t rush with an answer.

    Let’s say I’m starting a new business. Selling on customers, giving coaching sessions, trading my time for money is all a way to earn money now. It is cash-flow. It is a J.O.B. no matter if I want to name it like this or not. It may be a high paying job but I’m eating what I’m hunting. If I’m making the sales, I put food in my belly, if I’m not, then I guess it is time for fasting. Most coaches and trainers are in this category. They are getting paid by customers for services delivered, paid at point of delivery. This means that I’m coming to you, I’m getting one hour of coaching and I’m paying you $100 at the end. Simple.

    (more…)

  • The Future Of Advertising – Biofeedback.

    From the desk of Razvan Rogoz
    Dear friend,

    Being the proud of owner of a FitBit Flex, an amazing piece of technology that tracks your movement and sleep patterns (it’s more than a glorified accelerometer since I’ve tried to trick it to track data artificially and I’ve failed), I’ve started to think more and more of passive wearable technology.

    Technology evolved in an interesting way and I’m almost certain that this decade is all about technology we wear on our body (or it is integrated directly) and allows us to automate our life. It’s the next step of evolution. We’ve first had computers then laptops than PDAs. We’ve had fixed line phones, mobile phones, smart phones and now wearable computers running IOS or Android.

    And now we are starting to use technology that requires less and less input from us. Instead of adding a task, we can use Google Now or Siri to simply mention it. Instead of opening the garage door, we have RFID chips that automatically open the door when we come close to it. Instead of entering a password, we use our fingerprint.

    None of these technologies are new. RFID exists for a while now so do fingerprint scanners. But the way it is applied in our day to day life is relatively new.

    In a few years, I envision a future where our voice, gesture and passive devices will direct everything around us. Instead of using a key to open our door, we’ll use an RFID chip in our phone (or better said, NFC) or we’ll enter a keycode. Instead of tracking how much we walk daily, we’ll use smart devices like the FitBit (also Jawbone, Nike Fuel, etc) which will track every movement we take and provide us with huge bases of analytics.

    Because in the end, the FitBit is nothing more than an information gathering device. Yes, it motivates you to exercise or walk more but beyond that, it is a device that tracks your movement and that’s something I find fascinating. Just as Peter Drucker said „you can’t improve what you can’t track”, these devices allows us to optimize our lives, find patterns into what we are doing and take more informed decisions.

    I envision that in five years or less we’ll wear a bracelet that will track everything from our movement to our heart rate, blood sugar, stress levels and maybe even provide us a real time bio-feedback of our health. That’s the future. The 2010 – 2020 decade is not about communication but about analytics – about collecting the seen and the unseen and exporting it into a format that we can all understand.

    In a few years we won’t have to go to the doctor for our yearly check-up because our smart devices will do these for us. They will either collect blood or use some non-invasive method to provide us with a real time bio feedback. We could have a device that based on the nutrients in our blood to suggest what we can eat next, a device that will tell you to relax and take a brake when you are too stressed or a device that could give you some kind of emotional metric regarding other people – giving you a better assessment on whom you should have around and who not.

    Of course, this at an analogical level exists. It’s called journaling. But instead of journaling (and never reading our entries, I’ve journeled almost daily but I’ve never read any of the entries) we’ll get quantitative data. Instead of saying that „that person makes me happy” we’ll have a log that based on proximity and other factors will give a score between 1 and 10 of emotional arousement around another individual.

    Instead of tracking how much water we are drinking (as many of us are, using Android or IOS apps) the app will log this automatically since it will have a direct connection with your organism. Input was first done by typing, on keyboards especially. Then it moved to touching, using touchscreens. Recently, it became popular and rather effective using gestures (like the Galaxy S4) or using voice (Siri on the IOS).

    The next step of evolution is either mentally (we’re not there yet) or a direct connection with your organism through your skin, pulse, blood or any other valid indicator that can show us what we are experiencing directly.

    And this has some interesting applications too from an advertising point of view. I’m almost sure that someone at Google already thought about this. If we are emotionally aroused in a sexual way, our feedback devices (as phone / glass / computer displays) could show us PPC based ads about condoms and hotels. If we are stressed our, about meditation and yoga. If we suffer from a particular problem, let’s say diabetes, it could show us treatments and doctors.

    What better than is there to deliver contextual ads if not the one based on what we are actually feeling, not saying or expressing interest for. An ad for a coffee shop when our organisms show us that we are sleepy or for a cinema when we feel bored.
    The applications are almost limitless. Now we are receiving ads based on behavioral patterns shown by our actual actions. These are accurate but not always spot on. For example, I already use a top notch to-do management program which I’m paying about $40/year for. I was curious about a competitor so I’ve visited their site. Now their banners follow me almost on every site even if I have no interest whatsoever in buying that subscription. Plus, computers are generally shared and it’s not like I’m signing out from my Google account every time someone borrows my phone or computer.

    So even if the algorithm is good, it’s rather hit and miss but it’s the best that can be done at this time. But if Google for example would have an ecosystem of bio-collecting devices (devices, not apps, since a computer program can’t interact directly with our body, only an actual physical system can, an app can only manage and transform the feedback into something useful) it could deliver real time, contextual ads based on our deep, true needs.
    It will be like showing up in a helicopter with a bottle of water for someone who is wondering in the desert lost or having that pizza delivered right in the moment you decide you would like to eat pizza tonight.

    Therefore, a new dawn in marketing and advertising is upon us. Advertising was first about understanding human nature and leveraging this. Now it’s in a crude form about data collection and analysis so predictable trends can be found and leveraged. In the future it will be only about data collection and analysis, at a deep level, from our behavior to our bio-feedback so it will appeal not to our rational mind but to the deepest needs of our psyche and body.

  • The Three Entrepreneurial Personalities

    From the desk of Razvan Rogoz
    Dear friend,

    I am not only Razvan Rogoz. I have actually three personalities. Now, don’t be scared. I’m not crazy.

    I’ll explain in a second.

    Every entrepreneur or business owner has three personalities. If you don’t believe me, ask Michael Gerber in “The E-Myth Revisited”, one of the best books on system thinking ever wrote.

    • I’m Razvan the technician – writing the copy, writing this article, putting in the work.
    • I’m Razvan the manager – creating plans, updating Basecamp, managing my time, writing goals, allocating resources, finding help and so on.
    • I’m Razvan the entrepreneur – dreaming, finding opportunities, creating systems, looking for ways to grow and evolve.

    Three personalities in one. And what I’ve discovered, what I’ve understood recently is that the more these three personalities are balanced in a manner of 33.3%, 33.3%, 33.3%, the more competent that person will be.

    Some people are technicians by nature. They like to get the work done, whatever that work is and don’t really concern themselves with management or entrepreneurship. Others are managers or entrepreneurs, focusing on order and opportunities. The idea is to balance these three.

    The idea is that if you have three hours available …

    • Use one to plan and keep everything in order.
    • Use one to do your work.
    • Use one to find opportunities for your work to value more in the future.

    In other words – execution, management, vision. 

    Is it easy to keep such a balance in place? No, it’s not. But life is about balance. You can’t go 90% A and zero B if you need both. If you want to be productive you need both work and rest. If you want to grow a successful business you need to be the technician, manager and entrepreneur, all in one package.

    For your profits,
    Razvan Rogoz