Advertising and Marketing Ideas to Create Phenomenal Profits In YOUR Small Business

What’s The Best Way To Increase Profits And Protect Your Small Business? PDF Print E-mail
What’s The Best Way To Increase Profits And Protect Your Small Business?




Can you get WEALTHIER in your retail sore or small business, especially in these lean economic times?

I define Wealth as being totally independent. Living off your investments..Not “Donald Trump” wealthy, but comfortable. Comfortable enough to have freedom of choice. Not having to check your budget before every decision. Having at least a Million dollars in liquid assets. Possible? Yes. Here's the answer;

It starts in how you see your store. If you think of your business as a job, something to think of as work, you’ll pretty much have the same business in 10 years as you do today. Why? Because you think like an employee. Maybe a loyal employee, but an employee. Counting days until your next golf game or vacation.

The other way to see your business is as an asset that you grow. A machine that grows in value and produces wealth. Whichever way you see your business is a choice.

If you see your retail business as an asset to grow, There is one asset in your business that pays for everything else. It grows in value when tended to, and provides the bulk of the value of any business.
Which leads me to “how I met my Mentor Julius Toth” (Claude-Master of the segue)

I sold vacuum cleaners in-home. I visited his retail store because I had head so much about him... mostly from his competitors. We found we had a lot in common; Same sense of humor, same passion for reading, we read the same books, and listened to the same tapes. We soon started meeting every Monday morning for breakfast, and we became good friends.

One day I asked Julius what the difference was between selling out of a retail store and selling in the home. He thought about it for a minute and said...
“Claude, let’s pretend this is the Old West. You’re a cattle rustler. You go out on the range and find stray cattle. You then sell them for a large profit. You start every day the same way. looking for cattle to sell.  I own a ranch. I have to pay ranch hands to tend my cattle. I feed the cattle.  I provide shelter to keep them warm and dry. I own the herd. And every year the herd grows in number, and grows in value.” It took over 20 years to fully grasp what he was saying to me.

Entertainers call these people their raving fan base.  Have you ever watched a comedian do a half hour show on HBO? The audience went to see him. They are going to laugh at every joke. They are raving fans.  Preachers call it their flock. Julius Toth  calls these people his herd.  A group of people who like you, trust you, and are used to regularly giving you money. Your Herd.

The secret to wealth is selling to your "Herd". Your Herd is your customer base that bought a vacuum cleaner or other expensive product. Wealth is generated by repeatedly giving High Profit Offers to your established customer base. At least once a month. Usually by direct mail.

It’s all about the herd. We used to advertise just to get the sale. We counted on the profit made from that first sale to create income. Now we advertise to get the customer. The sale is just one event. A customer that becomes part of your herd, will  buy repeatedly, because you treat them well and remind them to buy repeatedly. You give them reasons to buy repeatedly.

This is the secret all Direct Mail Companies know. The profit isn't in the first sale. The profit is in "Mining the Gold" from your customer list over & over again. Do you see the infomercials on late night TV?  How many have bought from an infomercial? Other than “Girls Gone Wild” Larry.  See? Big business.  

We’ve all seen the late night offers."Send $39 for this course. Get rich in Real Estate". It may cost that company $200 or more to sell you that $39 course.(Which is really a very long  sales letter for their other products) Why are they willing to spend that kind of money to get a customer? Because the average customer that gives them $39 will continue to buy from them, perhaps another $2,000 over the next few years. They are buying customers to add to their herd. This is not theory. It is the method used by all major retailers to sustain growth and maximize profits. What this “Marketing to your herd” principle has meant to me is this; In 2002 we did $128,000 in total sales. I’m not saying that’s a lot or a little, that’s just the figure.  Because of some discoveries I made in advertising, we grew to $218,000 the next year (2003) In 2007 we topped $900,000. (From all sources)  I felt pretty good about that until I talked to someone doing a million. When I do a million, I’ll feel pretty good, until I talk to the Brady’s or Howard Anderson  who are both doing $5-7 million. In the last year, our advertising costs have gone down. Our overhead is the same. The only thing going up is our profit.  It’’s all about the Herd.
Now marketing to your Herd only works if you give real value. If you show a product that doesn’t apply to your customer, they won’t buy. They won’t buy again if they don’t trust your advice. The only reason they buy the second time is you gave them reason to trust you the first time.

I’m not talking about a list of names. You can buy names and addresses for a dime each. I’m not even talking about a list of customer names.  The names themselves have little value. The value is in the relationship you have with the customer. A person who buys a belt and leaves is not in your herd. A person who buys a high end vacuum cleaner is not in your herd. A person who buys a high end vacuum cleaner (or other high end product) that you repeatedly contact and nurture a relationship with- that person is in your herd.


When you advertise to the general public, maybe you will get one out of a THOUSAND to buy a vacuum from you (from that single ad). They have to like you, trust you, know where you are, be willing to buy from you, be willing to pay a lot for a quality vacuum. One out of a Thousand. But 100% of your Herd already fits that criteria, 100%. So instead of getting a .1% response from your mailed offer, you may get a 20% response or more. EVERY mailing will be profitable. It's like buying Hundred Dollar Bills for Ten Dollars.

Almost all marketing expense goes to finding the customer, to making that first sale.  There is almost no expense in marketing to your herd.

I used to feel great pride when I was selling in-home. I would create a sale out of nothing. I did the same thing the first several years in retail. I would boast about the belt sale I turned into a vacuum cleaner sale. They came in for a belt, & an hour later, after the dust settled, I created a sale. I still do that. But then you have to start over again, from the beginning, with the next customer. That’s work.


Claude’s Law ....It’s far easier to sell something different to the same person, than to sell the same thing to a different person. In other words, it’s far easier to find one product to sell to your list of a thousand customers, than to find another list of a thousand customers to sell to.. I have had 6 interviews with Millionaire vacuum cleaner store owners. They are a mixed bag. Some have one location, some many. Some sell high end, some lower end. But they have two things in common. They study marketing, and they market to their herd. All of them.

Who here has a list of customers? Over 1,000? Over 5,000? We figured out that a high end vacuum customer, properly nurtured and repeatedly made offers to, is worth about $200 a year in business to us - on average.  A herd of 5,000 - which many of you already have, is worth about a million dollars a year if cultivated..

Here are the advantages of growing and taking care of your herd;

Your herd buys faster. All the rapport building has already been done. They already like you, trust you, and see you as an expert. The whole decision making process has been shortened.

Your herd doesn’t shop your prices. Do you have a family dentist? Do you shop his prices? No. Why?, because you have a relationship with the dentist. All the value of the herd is in the relationship you build and maintain with them. They don’t go to E-Bay to


check prices after they buy from you.

Your herd responds to your direct mail offers.  Why? Because they have responded before. These people have proven to you that they will buy from you, at the price you ask.  A direct mail offer to your herd will give you a response up to 200 times greater than a cold mailing. Like Advo-Valpak.

With a herd, you can create income on demand.  John Lennon once said “I think I’ll write me a swimming pool” What he meant was that he could write a song, knowing it would generate a large sum of money. Income on demand. We don’t write songs, but we can write a sales letter, an ad, send it to our herd, and create a large payday. Income at will.

With a herd, you have choices. Want to buy something big? Go on vacation? Make a large investment? Send the bill to the herd. This bill will look a lot like a sales letter or advertising offer.  When you have a herd, you’re not paying for it, they are.  

Best of all, you get to select your herd. I don’’t choose who buys a high end vacuum from me. But I choose who I contact in the future. You get to sell to people you like. I’’m happy when I see them, because I picked them.

Transaction size also determines the value of your Herd.  If they buy a pack of vacuum cleaner bags, that doesn’t mean that they are high profit customers. I don’t put people on my direct mail list unless they spent $300 or more. I’m seriously considering raising that to $369.
Why? Because I’m mailing them high end offers- Not offers for more bags, belts, or service. Why not? Because the offers I mail cost the same whether it’s to sell a $600 vacuum cleaner or a candle.  Customer’s develop an itch to buy from you. They want to scratch that itch. They can do that by buying a candle or buying an $800 vacuum. Then they go back in their cave until the next itch. Send offers for high dollar high profit stuff. And they will buy high dollar offers from you,
if they have done so before.

The wealth is not in the first big sale (Mr broken record says) It is made in the many sales to the same person over & over again.

These sales are painless and almost effortless.. These people are used to giving you money. They’ve done it before.
How can you give Great-Profitable-High End offers every month? Remember, they just bought your best vacuum cleaner.

Now, what are you going to offer your list of high end buyers?

Another high end, high profit product that they will love. And another..and another.. And another...

About 25 years ago, when first started to work for Julius Toth, in his vacuum store, he had about one of every kind of vacuum cleaner. If it sucked, he sold it. Years later, I paid him a visit & noticed all the BBS vacuums were gone. He had diversified. He added alpine air purifiers, water purifiers, ceiling fans that heated your room, ceiling fans that cleaned the air. I asked “why the change?”  He says “ After they buy the $600 vacuum cleaner, what are you going to show them next month?”  I though that was a good question.

Sometimes you can buy a herd. When Julius decided to close his store to expand his horizons, he sold his parts & display inventory to a friend of ours & me for about 10 cents on the dollar. And believe me, I still have some of
it. Anyone need a case of Regina bags? Bison parts? Not Dyson, Bison. It made the Kirby look like an Oreck. It didn’t pick up the dirt, it crushed the dirt.

Anyway, Julius had an asset he was willing to sell. He had a list of 5,000 Riccar (brand) customers. Names, addresses, phones, what they bought, and how much they paid. I believe he was asking a buck a name. He was also including his phone number with currently running yellow page ads in the deal. He couldn’t sell it to the 2 or 3 local Riccar dealers. I was out of his area, in a different county, or I would have jumped at the deal.  A proven, accessible, herd of 5,000 for $5,000. Amazing.

You need  Multiple streams of income. Have a mix of high profit products to offer your herd. You have to have something different to offer them next month. Remember, their vacuum cleaner is only a month old.  You need other offers. Like many of you, we sell air purifiers & heaters. We also sell ceiling fans.  Many of you sell sewing machines. The only thing keeping me from adding more high end products is laziness.

But what do you sell them when you run out of offers? A new version of whatever they bought first.
“But Claude, I sold them a super durable vacuum cleaner made out of cast iron that will last them a lifetime. They will never buy a new one.”

Here is a shocking revelation after decades selling vacuum cleaners. The average time it takes for a person to replace (or trade in) their old BBS vacuum cleaner is about how many years?

OK, that wasn’t the shocking revelation. Here it is. The average number of years a person keeps their incredible, indestructible, lifetime, vacuum cleaner is.. About 5 years.

It gets dirty, starts smelling bad, especially after aunt Mildred and her 24 cats borrows it, gets a few creaks & moans. 5 years. Time for an upgrade. Some people will buy a new vacuum every 3 years. How many years before someone buys a new car? A new Lexus? Same thing.

Now the customer needs a Great Reason to buy the same product again, before real wear & tear force a new purchase. You need a great offer, just for them.  This can be a generous trade in, a Free something for their trade-in, or just an event, Like the new completely upgraded models are in!  

Do you keep records of your high end customers? Do you have their address? E-Mail address?

Think about this; If you just had the name and address of your best 5,000 customers...that would be worth a Million Dollars a year in high end...high profit retail sales. All you have to do is send them a letter or postcard...giving them a reason to buy something from you once a month.

That’s 5,000 people just giving you an average of $200 a year each.

If you sell higher end stuff, and can create a real $500 a year business from your top 2,000 customers...that’s also a $1,000,000 a year business.    

Do you know what will save you in this economy? Marketing to your Herd. Now you know.