Episode 45: The secret to attracting and retaining customers


All Xero Gravity episodes

Hosted by Elizabeth Ü

Meet Megan Roth, Marketing Manager at Insightly and women’s mentor, who discovered her love of marketing while doing character role research as a film major. Then
meet Ron Cates, a former coach to world-class distance runners, who’s now the director of digital marketing education at Constant Contact. Ron’s also a serious tennis player who,
in his own words, “is seriously not very good.”

These two marketing experts join Elizabeth Ü to chat about the secrets of attaining and
retaining customers through digital. Tune in to hear how the magic of email starts in the
‘from line’ and subject line, how great CRM can help your customers feel more connected
and why subscription-based cloud solutions are a beautiful, non-intimidating, no-brainer for your small business. Plus the cool, new show segment, Five Quick Questions. Xero Gravity #45. For digital sake, tune in!

Small Business Resources:

Alignable Local small business owner networking app

How great leaders inspire action  Simon Sinek TEDTalk  

Episode transcript

Host:     Elizabeth Ü [EÜ]

Guests: Ron Cates [RC] and Megan Roth [MR]


EÜ: Hi everyone. I'm Elizabeth Ü, and this is Xero Gravity.


Guest soundbites

RC: “Most business owners are in digital diapers. This is really intimidating to them. It's really scary. They didn't open their business because they were interested in becoming an online marketer or digital marketer. They got into it because they love pool and they wanted to open a place that sells pool tables.”

MR: “I think that a lot of times when you mess up you're really hard on yourself. And you really shouldn't be, because it's in the past and you should just think of what you could do to kind of do a favor for your future self a lot of times.”


EÜ: Meet Megan Roth and Ron Cates. Megan and Ron are joining us today to talk about some great ways to not only attain but retain customers for small businesses.


Guest soundbites

MR: “Don't get too bogged down in e-newsletter-open matrix. You can make your emails actionable without your customers needing to open them.”

RC: “Today the subject line and the from line carry more weight than ever. People are taking action just on that, without opening the email. So never clean out your do not opens, or think that the ones that aren't open don't have action to them; they do.”


EÜ: So we have all that and more coming up on Xero Gravity, right after this.


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EÜ: Megan Roth and Ron Cates — thanks for joining us on Xero Gravity.

MR: Thanks for having me.

RC: Yeah, thanks for having us.

EÜ: So, Megan, we know a little bit about your professional background, but tell us a bit more about what you do when you're not serving as marking manager at Insightly.

MR: So when I'm not doing marketing at Insightly I do a lot of things in San Francisco. I'm pretty involved with the city; what it has to offer. Pretty involved right now with election going on. I really like to do a lot of things about bringing the community together and creating love for small businesses and local businesses in San Francisco.

EÜ: Oh, I love that. We have such a great community of local businesses here as well. And I understand you've had a pretty diverse and colorful career. So how relevant was your undergraduate degree to what you're doing now?

MR: It was funny that you asked that. Something that I think about a lot is that I actually didn't graduate with a marketing degree. When I went into college they ask you, in America, to choose a major the second you get there. And so I was 18, going to college and I'm thinking to myself, "Wow, I really like TV so I guess I'll go in to be a TV major, or, like, oh, I want to be filming." There was this one show called Wild on E that people just go to different countries and film these exotic vacations, and it looked just like so much fun. And I was, like, “Wow, that's what I want to do.” And so that's what I studied in college.

I thought I wanted to be a casting director. I think I kind of fell into marketing around thinking about when you're casting someone. You have to do research into a role and what are the motivations for people and what they're saying, and kind of where they're at in, you know, maybe a movie or a play. And it really resonated to me in marketing; the research you do behind people and what their motives are into buying a product. Or maybe what problems you're solving for them when introducing this new product or service. And I felt like it really resonated with me both those types of, you know, attributes when it comes to just connecting with people and that why I kind of transitioned from TV and casting to marketing.

EÜ: That's a fun story. And Ron, what about you? What are you up to when you're not ConstantContacts Director of Digital Marketing Education?

RC: I'm a very serious tennis player. I'm not very good. But I am very serious.

EÜ: [Laughing]

RC: I play as often as I can. I mean, I do travel a lot. I'm somewhere different in the country every week. So I don't get to play as much as I would like. But it's a great outlet me. So that's where I spend a lot of my free time, is the tennis court.

EÜ: And I understand that you quit the corporate world some 25 years ago. So tell us how you came to that decision.

RC: I did. I was a corporate guy; suit and tie guy. And I wanted to have kids. So we had kids and I decided to stay home. I wanted to be the full-time parent. My wife didn't want to — I did. So I moved to Miami. I've got these three little kids and what I haven't said yet is; I had this hobby all these years. I used to coach runners; distance runners. And even though it was just a hobby I was pretty successful. I had some world-class athletes; some world-record holders, some Olympic medalists.

Now, I never thought about it being a business. But when I moved back to Miami I got approached by this guy who said, "Oh, my gosh, you're Ron Cates. You're in Runner’s World and Track and Field News. I'm just a middle of the pack runner. Would you ever consider coaching somebody like me?" I said, "Sure." The next week he had a friend. The week after that the friend had a friend. In three months there were 120 of them. They said, "Ron, we should pay you." I said, "Okay."

EÜ: Oh wow!

RC: 10 years later, we did over $6 million.

EÜ: What were some of the challenges that you faced juggling that business while also being a stay-at-home parent?

RC: Well, I always promised myself that I would run the business from home. And the business, fortunately, and unfortunately, got really really big. So I had to cheat a bit. I ended up building a house around a pretty big business. So actually, when I sold the business I had some rooms in the house that were big enough that my teenage son, at that time, can invite his friends over to do skateboarding inside the house.

EÜ: Oh boy! [laughing] That sounds like it could be a bit of a challenge.

RC: I was by far the most popular home in the neighborhood.

EÜ: So speaking of coaching: Megan, I understand that mentoring is an important part of your career so far. Can you tell us about your mentors and your thoughts on mentorship?

MR: Yeah, totally. I think mentorship is a really big part of what I do today. I even try to be a mentor for a lot of people. I'm involved in a couple of different areas and groups, one being Women Catalyst, where we do a lot for women to be surrounded by positive leadership roles, and to talk about different things that they're doing and how to get more involved.

And I'm also a part of other groups like Dreamers and Doers, San Francisco. There's programs where we're all there to support each other in a way that we all want to be successful. At the same time we're all women and we want to join together and support each other when we can. Also I've had great mentorship, mentors, in my life, and I was really grateful for that. My first mentor was a man who got me into my first tech job because I had only retail on my resume.

He really saw a great drive in me and he decided to take me under his wing, and really teach me the ways of marketing and sales. I also got another mentor who I'm lucky to have, who is my current boss.

She took a lot of interest in growing my career in that she wanted to make sure that I felt comfortable, and that I understood the different tracks I could take, which I was super grateful for. I'm really lucky to have had really good mentors in my life. And I think it's really important to talk to people who are just starting out, who are looking to grow their careers or even grow their lives, and trying to find really good mentors in order to know that it's okay, and that you have to try some things and to really not get wrapped up in where you are right now. Because as long as you align yourself with people and the goals that you want to accomplish, opportunities are going to open up for you.

EÜ: And Ron, how did you journey from coaching athletes to coaching small businesses in your current role?

RC: It was a pretty natural segue, really. I mean, think about it. A lot of the same principles apply, (1) you have to really know what you're talking about so that they're going to go out and implement what you tell them to do, and (2) you have to be very honest, very candid, you know, with an athlete. You can't say you're having a great day if they're not having a great day. Or when they’re having a great day and you say so, it won't hold as much weight to it. With a small business I visit, and especially nonprofits, everything's a 10 on a scale of one to 10, because it's the best they've ever seen it done. And, a lot of times it's, "Hey, I'm sorry this isn't a 10. This is maybe a three. Here's how we can get to a four. I'm not even sure, you know, what a 10 would be yet."

Making them accountable, that's another big component, you know, with coaching. Athletes have a coach to be accountable to. That certainly works with small businesses, you know, I give them something fairly prescriptive things they need to do. We'll do a follow up on a seminar a year later and I'll sit in the back of a little discussion group, and they'll say, "Yeah, I did that thing, or Ron was talking about this dog and I did it and it worked." So I'm thinking, "Wow, you know, that's awesome." They implemented it. They were successfully with it. They followed through on it. And from a business standpoint the fact that they credited it back to us is a huge bonus. So education really, really works.

EÜ: So let's dig a little deeper into this episode's theme, which of course is: attaining and retaining customers. So first up, Megan what does it mean to attract and retain customers in the digital age?

MR: So I actually think it really means finding different customers, what's in it for them; that you want to create relationships with them, you want to be able to find out what they're trying to improve, and give them a solution. So I think that it's definitely important to not just have a one-way conversation, but have a two-way conversation with your customers or people who could potentially be prospects, who are interested in what you have to do and provide a solution. And retaining customers is kind of the same thing. You want to make sure that you follow up, that you make sure that your customers are satisfied, and that you take them to the next stage. And if they are happy with their service, definitely ask for some feedback or referrals, and that will really help your business grow.

EÜ: And so for you, Ron, what does it mean to attract and retain customers in the digital age?

RC: At Constant Contact we have 650,000 customers. We talk to them regularly. We do a survey and we ask them where their business comes from. They tell us that 90 percent of it comes from existing customers. So obviously retention is critically important. When we dive into it deeper that 10 percent that is "new", they tell us that 90 percent of that comes from referrals. So really, the retention, engagement, marketing, getting in front of it on a regular basis, that's where 99 percent of their business comes from. So that's critically important. It's very important to stay top of mind.

We get more than 6,000 marketing impressions per person per day in North American. So, you know, how are you going to get through that clutter? That's what we talk about is, how to stay top of mind, how to make sure that they don't forget you. Because sometimes we can love you but totally forget you. I think we all have restaurants we love but we forget to go there. If we've got some sort of marketing impression from them on a regular basis we'd probably salivate for that chicken sandwich and drive over and buy it that day.

EÜ: [Laughing] Or maybe that's a bacon, bacon burger. Megan, what are the ways in which we can attract and retain customers?

MR: I think what Ron said, definitely, is asking for reviews in order to retain more customers and to attract more customers because word of mouth is definitely very cheap. It could be free. And it gets a lot of customers because people like to see other people or businesses that align with them, that are on the same as them, using the products and seeing success from it.

So definitely asking your customers to review you, surveying your customers, seeing how you can improve what you're currently doing. Another great way to attract customers is when you're thinking about your goals for the business: who are the people you're trying to attract? What problems are you trying to solve? There are also other people out there that are kind of doing the same thing. You could partner with those people or really just kind of put yourself in your customer's shoes and see where they would look for the solutions and really optimize those areas.

EÜ: Ron, what are some of the mistakes that you see small businesses making?

RC: Well, the bar's been raised by consumers when it comes to marketing, in two very important ways. The first is they expect marketing to look professional. So as an example with email marketing; it used to be you could send out a plain text email and that would get good action to it. Today your recipient, the customer, the prospect, they expect it to be this nice looking, you know, HTML, colorful email. And if it's not then they assume that the product or service is second rate or amateurish. Now, when I first started doing email marketing 25 years or so ago, you couldn't even do these nice looking HTML emails.

The other mistake; the other way that consumers have changed is they expect marketing to be targeted. So you don't want to take every email address you collect, dump them all into one bucket and send the same message out to everyone. It needs to be targeted. And I have a great example of that.

I bought these two cars a couple of years ago, and I know that this car company has a $900,000 million marketing budget in North America. So the small businesses that are listening to this — you might not have a budget that size. It doesn't matter. I bought these two cars. I got put on their email list and three weeks later I get my first email from them. In the email message is, "Ron, you should come in and buy this new car."

Now, I don't buy a new car every three weeks. Sometimes I wait, you know, four months or so before I buy a new car. And it wasn't the car that I bought. So now I'm second guessing my decision. They should have a lot of buckets, a lot of lists, you know, people who bought a sports car, people who bought a luxury car, people who bought two cars, people who came in and didn’t buy anything, and then just target the message. They target what they send out.

EÜ: Well, Megan, I know that you know a lot about this targeting. I also think that you would have some great insights around some of the myths surrounding marketing.

Let's say I'm a small business and I have an e-newsletter and I'm expecting it to go to my customers' inbox. Obviously we have a lot of spam filters and other ways that things go to Google's promotions tab, for instance, or Gmail's promotions tab. What are some myths that you can debunk for people around how to do effective e-marketing?

MR: I guess a lot of people say that there's better deliverability when there's better text-to-image ratio. Maybe not using these buzzwords, like free, is sometimes is a trigger for spam. That's what we're hearing. I think that if you have a good relationship with your customer they'll want to open up your emails and they'll look forward to it as long as you provide information that they find valuable.

RC: So when it comes to email deliverability we know that about 20 percent of commercial email, bulk email, is blocked. Now, the way small ISPs, the companies that deliver the emails, the smaller ones, they use a spam filter and there's a whole bunch of tests to it. There's the words in the subject line, text, imagery, all of these: there's more than 700 tests. Now, those are just for small ISPs. The big ones that really matter: Google, Yahoo, MacMail, they care a lot more about where it's coming from.

So if you're using a service, you know, most of these services have really good relationships with the big ISPs, and your stuff gets through. It's what we call white listed in the industry. It gets delivered automatically. So using a service does have huge benefit to it.

Now, here's something really, really important. A big study done last year shows us that about a third, 31 percent, of the people who don't open the email usually take action and buy from you often within 14 days. So today the subject line and the from line carry more weight than ever. People are taking action just on that without opening the email.

Now, I'm a skeptic, you know, I read the study. I was thinking, "Well, I can't visualize that." I'm a serious tennis player; I'm not real good but I'm very serious. There's this store that I go to all the time. They sent me this email last month and the subject line is 40 percent off clearance shoes this weekend. I didn't open it. I didn't touch it but I was in line Saturday morning and I spent a couple of hundred dollars. So never clean out your do not opens, or think that the ones that aren't open don't have action to them; they do. And, of course, the from line and the subject line have become way more important than ever in the past.

EÜ: Megan, can you tell us a little bit more about personalization and how this attracts and retains customers?

MR: Definitely. I think that what Ron talked about earlier with his buying a car scenario, is that he had just purchased a car and then they send him an email three weeks later, and he's not going to buy a new car. So the thing is when you give people more personalization, it gives them the ability to take more action. Gives them more of a solution and resolution, and they feel that you're actually listening to what they're doing, and also, I think prompts them more to take action, for sure.

And with CRM you can do personalization based on the actions taken as a customer, maybe just the demographic; where are they located? And you could actually get people to feel more connected to your marketing campaign or to your emails. It was funny, I actually, I don't know if this will be a good example. But the other day I got, I've been playing this Safeway game, that it's this Monopoly game and...

EÜ: Oh my gosh, my boyfriend is addicted! [laughing]

MR: Right. So everyone is playing this game and no one is winning. And we're playing it at work. I'm playing it at home and no one is winning the game. And it's on Facebook. Everyone's like, "No one's winning this game. Everyone just needs this one more piece.” So I got targeted on Facebook by Safeway that said, "A San Francisco winner won $20,000," and I thought, "Oh, my gosh." And I wrote to my roommate, "Someone actually won the Safeway game in San Francisco." So it makes me feel like oh, I have a chance to actually win.

But then I thought about it and I said, "They probably targeted me knowing that I'm in San Francisco, to relate to me, like, I could be a winner too." I could see myself as that person. So then I looked at all the comments, being a marketer and all. I wanted to see who were all these people who were commenting. And every single person was in the Bay area. So I'm thinking that ad was targeted to Bay area people to show that, I don't know if it was a trick but, I mean, being a marketer and knowing about personalization I was, like, "I think this is a trick."

Personalization can definitely attract more people, allow them to see themselves in that role, if you want them to, or just see themselves taking action.

EÜ: And, Ron, how can small businesses use personalization to support their own campaigns?

RC: Yeah. So I'm going to bet that a lot of our listeners to this podcast are on the small end of the small business spectrum, and they might not have a sophisticated CRM system in place to give them insight into their customers. So here's a really simple way that you can start to come up with targeted lists. And you can do it with email. So email is approachable by everyone. You can send out an email, and let's say you've got two or three articles in this email.

Rather than give all the content, give them a portion of it and then say, "Click to continue." When they click to continue they're going to go to your website where they can see the rest of their content. That's great because it drives traffic to your website where they can take action. Even more importantly, when you're using an email service like ConstantContact, we report on who clicked on what. So if a bunch of people clicked on this content and no one clicked on this other content, I now know which content most resonates with my readers.

Even more importantly, with one button you can make a new list out of everybody that clicked on something. Now, think about that. "For more information about this product or this service click here," I now know exactly what they're most interested in. I can make a new list out of those people and do a very targeted follow up at some point just to those people on that specific product or service.

EÜ: Given your experience talking to small businesses, what stage are they at in their digital marketing journey do you think?

RC: Most, to be candid, and I love them; most are in digital diapers. This is really intimidating to them. It's really scary. They didn't open their business because they were interested in becoming an online marketer or digital marketer. They got it because they love pool and they wanted to open a place that sells pool tables. Or they open a restaurant because they're passionate about food. So this is not their wheelhouse.

All the help that we can give any company out there that's in the marketing space, that's willing to give education and share knowhow, I think that's where they're going to gravitate. You know, today it's more about giving away intellectual property. Giving it away because that's how you get attention. I mean, consumers are smart. They know that marketing exists to get their attention to sell them something. Today they will give you their attention; they'll barter for it, if you give them something back of value. So it's not about you. It's about what you know. And if I share that information, show that I know more about it than anyone else; they're more likely to do business with me.

EÜ: Megan, do you find that a lot of small businesses have resistance to migrating to the cloud?

MR: Oh definitely. And I don't know why. I think it's the concept of they think it's too hard or they think that the old way of doing things, you know, you can't really teach an old dog new tricks in a way.

I think cloud solutions are the perfect solution for small businesses, being that they're subscription based. You could try it before you buy it. And you can access it from anywhere. You don't really need to have a big bulky computer or an office in order to use the software.

And what's also really great is it integrates with tons of applications. It's made to be easy use and it integrates with other applications and it makes it so that everything is really seamless, and easy to get up and running on. You don't need to have someone install everything. It's also extremely secure being that both ConstantContact and Insightly are huge companies; have to go through tons of security and auditing, that they're extremely secure. And being that small businesses don't have people who can manage this type of on premise software, it's definitely a great resource for small businesses to take advantage of. Take advantage of cloud software for sure.

EÜ: Thanks so much. We're going to finish up with our quick five questions, for which we need five quick answers. Are you both ready? So these are super, super quick.

RC: I'm ready.

EÜ: Alright. What business book or idea made the biggest impact on your life?

RC: For me, Simon Sinek. “The Power of Why.”

MR: I like “Lean In” by Sheryl Sandberg.

EÜ: Alright. Next: what's the one thing you can't live without?

RC: This is going to sound strange, but right now it's my Xbox because it's a stress reliever.

EÜ: [Laughing]

MR: I love caffeine.

EÜ: [Laughing]

Alrght. What's the most useful app on your phone right now?

RC: For me I'm sitting all day on Alignable. You can also look at it at Alignable.com. It's a startup that connects small businesses so they can co-promote together, and learn from each other. It's the most amazing app; both work incredibly well.

MR: Yeah, we love Alignable here at Insightly. I actually want all my customers to get on Alignable because it's a really great way for you to find local businesses that have the same goals as you. And you could actually do partner marketing and do co-promotions together, and also see what technology they're using, get some tips from people who are just like you and looking to kind of grow their business. I think it's a really great resource. And it's free, like you said.

RC: Yeah, I was going to, and it's free. They've got a great app. They've got a great app for your mobile device. The website's amazing. I really, really am excited about what they're doing there.

MR: I love that they have ideas around giving more knowledge to know the community. I've wanted to do some webinars with them about marketing as well. They have some really great resources in order to make sure that their community is really knowledgeable about, you know, business. It gets the questions answered. We got some good stuff.

MR: My most useful app right now is Yelp.

EÜ: Alright. In one sentence: what's the greatest lesson you've learned throughout your small business journey?

RC: You can't fake enthusiasm.

MR: This is just a life lesson. It's forgive your past self and do a favor for your future self. I think that a lot of times when you mess up you're really hard on yourself, and you really shouldn't be, because it's in the past and you should just think of what you could do to favor your future self.

EÜ: And what skill do you want to enhance in 2016?

RC: I want to learn how to speak Spanish.

MR: I want to learn Photoshop.

EÜ: What a great conversation. Megan and Ron, thanks so much for joining us on the show.

RC: Thanks for having us.

MR: Thanks.


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EÜ: That was Megan Roth, Marketing Manager at Insightly, and Ron Cates, ConstantContacts Director of Digital Marketing Education. Thank you for listening to Xero Gravity.

Make sure you join us next Wednesday because we'll be talking to Joe Malcoun from Nutshell.

Joe will be sharing his stories and insights about how small businesses can really utilize CRM and start improving customer relationship management.

So don't miss that one.We'll catch you then.


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