Everyone Gets a Lambo

At the first of every year a theme that’s on almost everyone’s mind is how to change for the better. We want to see improvement in our bodies and health, our lifestyle, our bank accounts, our stress levels, and many other things. And since I’m talking largely to a group of business owners let’s shoot straight. We want to see our businesses get to the next level and start hitting it big, right? We want change, but not just change for the sake of breaking the monotony; we want improvement, and we want it now.

But unfortunately, healthy and sustained change is never easy. It requires time, dedication, and investing resources that many are simply not willing to commit to long term. So, there’s a reason that over 90% of new year’s resolutions never make it out of the month of January, and over half never survive the first week. We want the change to be visible and immediate, and when we don’t see quick results, we lose hope and quickly abandon the goal. I want to propose an alternative strategy where small changes amplified by numbers can lead to big results.

I was reading an article last week about a YouTube star named Mr. Beast. Mr. Beast is a 23-year-old from Kansas named Jimmy Donaldson, and he grew his YouTube channel to be one of the richest social media stars in the world. This article was about Jimmy’s newest promotion idea that struck him when he told his audience he planned to sell his personal Lamborghini. He said that he got more individual offers than dollars the car was worth, and his wheels started turning on how to leverage the sheer numbers of his subscriber base into something special.

In December on Mr. Beast’s channel, he is giving away a Lamborghini to anyone who will send him $35. You are guaranteed a Lamborghini for $35, but here’s the catch. Five lucky winners will each receive a REAL supercar Lamborghini – a Lamborghini Avanzado (which is Mr. Beast’s personal car that he was originally looking to sell) or one of four used Lamborghini Gallardos valued at $100,000 each. Two hundred and fifty people will receive a $300 kids ride-on Power Wheels Lamborghini, 2,500 will receive a $100 remote controlled Lamborghini, and the rest will receive a $6 diecast toy.

And you might say, “Wow, how can he afford to give away quarter-million-dollar cars!?” Don’t quit your trades job when I tell you this because we need tradespeople much more than we need more YouTube personalities, but young Jimmy’s net worth is over $30 million dollars. I promise you he’s smart enough to have done the math, and here’s where the power of numbers comes in.

His investment in the five real cars would be $650,000.

$300 ride-on Lambo x 250 people = $75,000

$100 remote control Lambo x 2,500 people = $250,000

So, after paying for all of the grand prizes it comes out to a $975,000 investment and the VAST majority of the other chumps end up paying $35 for a $6 matchbox car, so it’s $29 profit per pop. And here’s the magic – Mr. Beast currently has close to 90 MILLION video subscribers and has over 18 BILLION total views. If he can convince just .002% of his subscribers to participate, he’s recouped his investment, CLEARED $4.2 million in profit, AND sold his car… which was the original goal from the beginning.

And since his idea has been picked up by Forbes Magazine, TMZ, The NY Post, and many other national media outlets, he probably doubled his money in the first few hours. There’s no telling what he’ll rake in by the time the contest closes at the end of January.

That’s nice to hear, right? I’m happy for (read as jealous of…) the kid whose making money hand over fist from his living room, even though he was only 2 when the 90s ended. That’s incredibly smart, but most of us don’t have a 90-million-person audience to sell to, right? Maybe not, but you do have an audience that can be your greatest asset to substantial growth if you start investing in them. I’m talking about your customer database, and no matter if you have 200 or 20,000 names, there is massive potential for growth there.

When I speak with contractors who want to grow, they seemingly always jump straight to the conclusion growth must mean expanding into new areas, adding new first-time home visits, or even adding on new services. And while that is a way you CAN grow, it’s typically much harder and more expensive. It costs on average 8 times the amount of marketing dollars to add a new household to your list compared to convincing someone to use you a second or third time. Plus, your ticket is generally lower with a first-timer since a promotion is often used to get in the door, maybe even a loss-leader. Meanwhile, your existing base typically pays a higher average ticket, haggles less creating a shorter sales cycle, are more likely to use you for multiple services or an MA, and are much more likely to refer and give reviews. But unfortunately, many contractors think that once they go to a home for the first time, if they hear no complaints, they’ve earned that customer for life with no additional work. And that’s simply not true.

Investing in your base can produce the growth you’re after in 2022.

Let’s play with some numbers and let your mind go wild at the possibilities. Instead of scratching and clawing against your competition for every new house in 2022, what if you decided to grow by attempting to bring your customer loss rate down by just 1%? The average contractor loses 11% of their database every year through normal attrition, with the vast majority of those leaving simply because they didn’t feel like the business valued their patronage enough to stay. If you have an active database of 2,000 homes with an average ticket of $500, that’s 220 customers representing over $100,000 you have to bust your tail to replace every year just to get back to square one. Ever feel like you just can’t get ahead? That’s why.

Now imagine if you invested $3 in each of your customers next year, and it made just 20 homeowners (1% of your database) decide to stay with you instead of drifting to your competition. Those 20 homes, at one $500 transaction per year, represents $10,000 in sales. Now, what if 2% decided to stay? 4%? That’s a business-changing trajectory that is well within grasp. What if the added investment and interaction caused another 1% to use you twice per year instead of just once? What if a $6,000 investment spurs 2% of your base to send you referrals, and suddenly you add 40 new households you didn’t have to cut price for? A $6,000 investment back into your base quickly gets doubled, tripled, or much more in returns. And as the database numbers get larger, the math just makes more and more sense. Many of you are in smaller towns, and you compete with other companies for the same customers that seem to flip back and forth constantly. Make it your goal to lock these households down by investing in your business relationship, and it’ll really turn the screws on your competitors when they don’t come back.

Going into 2022 Hudson,Ink would love to help you implement some easy customer retention strategies that make sense for you moving forward. You don’t have to give away Lamborghinis or have an audience of 90 million to see HUGE payback when you invest in the relationship between you and your customer. A couple of dollars per customer per year and you could automate quality touches that pay huge dividends. Use the power of numbers in your database to get your company to the next level.

If you’d like to arrange a time to speak about customer retention strategies, click here to schedule a time, give me a call at (800) 489-9099, or shoot me an email to [email protected].