If you don't have 10% returns then you aren't tryin!

Sugarman is very successful, but he is focusing on the wrong numbers here. I find it incredible that somebody would think they are getting the most value out of their marketing because they were getting some arbitrary percentage of product returns.

When running a marketing campaign you look at the net revenues produced by that campaign. Both immediate and lifetime from that customer. Through testing you maximize those revenues. The focus is on the revenue not on the percentage of returns. I want to get my products into the hands of as many people as possible with as FEW returns as possible.

Giving customers more than they expect is not a bad business decision. It does not matter if you are one on one chatteling or mass marketing a product, giving more than is expected will increase your bank account more than you expect.

If you have a high return rate, you are over promising and your product is under delivering. I have worked with plenty of salesmen that over promise telling the customer just what they want to hear. It's easier to make the sale that way, but when the product does not perform as promised do you think those customers have much lifetime value for that salesman. Most customers who have gone to the trouble to order your product don't want to return it. Sure, there are always some that will order knowing full well they are going to return it, but they should be a very small percentage.

All of this said, if you are in business to make a profit (if you are not trying to make a profit why are you in business?) you should always be looking at your numbers. You should know which ads are the most profitable and which are the least. Saying your rate of product return is too low is meaningless.

Les




Have you read Gordon's Chattel Report??

You see Joe had all the numbers from many, many different products and the numbers told him that he made more money with a higher rate of return (say 10%) as opposed to say (3%). And why is that? Easy he made a lot more sales with the 10% return rate. You see Joe wasn't 'thinking' this was the result--he knew that was the result based on the huge database of information he had collected over the years. This wasn't guesswork by any stretch of the imagination.

You see the problem we have here is that we equate returns to a 'bad' thing. But Joe is saying that returns can be a very good indicator of how well you are marketing a product plus I can tell from my own personal experience a customer that is treated with respect during a returns situation is often turns out to be a very-good long term customer.

You're thinking the 'sale' is the only thing here but on the contrary it's both the sale and the building of a customer list that's important. I believe Joe found out very quickly that if he had 3 customers out of a total of a 100 that returned a product he was much better off with having 15 return products out of 150 sales. Not only did he have more sales he also built his customer list that much faster.

Don't make the mistake of thinking Joe only focused on the rate of return with no other factors involved. What Joe has done for you and I is boil the soup down and give you the results...what we're not seeing is all the ingredients he put in to make it.

I understand why this is making people uncomfortable. We were always told something was 'blue' and maybe it is 'red' like Joe says and it makes us uneasy. But that is why Joe is good, he isn't some guru just stating the obvious.

Take care,

Mike Winicki

> Sugarman is very successful, but he is
> focusing on the wrong numbers here. I find
> it incredible that somebody would think they
> are getting the most value out of their
> marketing because they were getting some
> arbitrary percentage of product returns.

> When running a marketing campaign you look
> at the net revenues produced by that
> campaign. Both immediate and lifetime from
> that customer. Through testing you maximize
> those revenues. The focus is on the revenue
> not on the percentage of returns. I want to
> get my products into the hands of as many
> people as possible with as FEW returns as
> possible.

> Giving customers more than they expect is
> not a bad business decision. It does not
> matter if you are one on one chatteling or
> mass marketing a product, giving more than
> is expected will increase your bank account
> more than you expect.

> If you have a high return rate, you are over
> promising and your product is under
> delivering. I have worked with plenty of
> salesmen that over promise telling the
> customer just what they want to hear. It's
> easier to make the sale that way, but when
> the product does not perform as promised do
> you think those customers have much lifetime
> value for that salesman. Most customers who
> have gone to the trouble to order your
> product don't want to return it. Sure, there
> are always some that will order knowing full
> well they are going to return it, but they
> should be a very small percentage.

> All of this said, if you are in business to
> make a profit (if you are not trying to make
> a profit why are you in business?) you
> should always be looking at your numbers.
> You should know which ads are the most
> profitable and which are the least. Saying
> your rate of product return is too low is
> meaningless.

> Les