ARC Marketing

August 1, 2005

By: Adams Hudson

You want your marketing not to have to "push through the crowd" but to stand above it. You also want to reach a place of recurring, predictable leads and profits instead of "waiting on the weather."

Consider the ARC method of marketing: Acquisition, Retention, Cultivation. Like an arrow going over the crowd, you can arc your way to your goal.

Customer acquisition is lead generation on the front end, worthy of about 60% of your marketing budget if you're aggressive; just 35% if you're conservative. This is the "heavy" direct response stuff. (Your Yellow Page ad is included in this amount since the only reason to have a YP ad is to generate leads.)

You also acquire through image and TOMA, which together account for 24-28% of your marketing budget. TOMA are small, "high frequency" ads that have minimal messaging but fabulous repetition. Honestly, if I had to choose between frequency and singular impact, I'd choose frequency every time. (TOMA only accounts for about 8% of the budget.)

The remainder goes toward your image. Why? The number one reason homeowners hesitate on new plumbing, hvac or electrical contractors in their home is... you guessed it... lacking credibility. "Unprofessional" and "unethical" are not too far apart in their mind. Higher image equates to higher trust and higher perceived value. Use image ads to raise your ARC.

Once you get the leads, you had better have a retention program running or you can watch them leave... then you get to spend another $275 each to "re-buy" them! Not good.

A customer retention campaign investment will range from a minimum of 6-8% of total marketing budget. You should send newsletters between 2-4 times per year to every customer who has written you a check in the last 48 months. That's a paltry expense when you consider all you've just read. But for you fence-sitters, look at these figures…

  • Loyal customers spend 33% more than non-loyal.

  • Referrals among loyal customers are 107% greater than non-loyal.

  • Rate of referral is highest when closest to the point of contact. Most people wonder why referrals cycle with closed leads. This fact is why.

  • Build a fence around your customers with a solid customer retention campaign. Invest in a good, regular customer newsletter that keeps your name and your services in customers' minds all year long. In time, your customers become "unswitchable." You'll get more referrals, greater loyalty, and more sales.

    No matter whose newsletter you choose, get a Customer Retention Newsletter program going.

    Cultivation means you're "working" your list, extracting referrals, making your Maintenance Agreement offer regularly until they get on the program. Unlike any marketing program you have, active cultivation pays you for years, and accomplishes all the marketing tasks simultaneously - it increases new customer acquisition, image, TOMA, and basically "forces" retention.

    Learning and practicing the ARC method - as simple as it is - can keep your marketing focused all year long.

    Adams Hudson is president of Hudson, Ink “Creative Marketing that Works.” His company creates a full line of marketing tools for contractors including Customer Retention newsletters, Yellow Page ads, “turn-key” Marketing PowerPacks and custom copywriting. You can get a free subscription to his “Sales & Marketing Insider” by faxing your letterhead to 334-262-1115 with the request. Also check out on the web for free marketing tips or call 1-800-489-9099 for more info.

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