I had a client recently tell me that one of his mature, declining businesses needed to be resurrected. In reality, the market dynamics were all running against this decision. The product line had run its useful course as substitutes were becoming more important to the end user. Competitors were dropping pricing to maintain share and customers were feeding the frenzy by insisting on the lowest priced alternative. This is just one example of many I can site. I’m sure you have your own stories you can tell. It isn’t a good position to be in.
Now you are going to find out the best way to locate a target market of expected customers so you aren’t wasting valuable resources on blitz advertising.
Thus, both questions you must ask yourself are:
- What do folks actually need to purchase from me?
- What merchandises that are associated are they purchasing?
When you figure this out you’ll understand who’s predisposed to buy your products/services. Following that, you find other companies with exactly the same customer base.
The fundamental theory is this:
You need to seek out present companies that have the customer profile that you’re seeking to promote your products/services to.
Because of this, you’ve got an audience to market to and they create an additional value out of their present base.
Then strike up a relationship with those business owners to work out an incentive for customers to purchase from both businesses.
As a result, you have an audience to market to and they generate an added value from their current base.
How do you figure out this? There’s an excellent formula.
LV = (P x F) x N – MC
Here’s what it all means:
- LV is the life time value of a customer
- P is the typical profit margin from every sale
- F is the amount of times each year, a customer purchases
- N is the amount of years customers remain with you
- MC is the marketing cost per customer (total costs/number of customers)
You’ll understand just how much of an incentive you’ll be able to provide to a small business to help bring new customers, knowing how much you really should spend to bring a fresh customer.
Here’s your step by step procedure:
- Locate businesses who already possess the customer base you are seeking.
- Negotiate an incentive to allow them to share that customer base alongside you.
- Concentrate your advertising resources to this group of customers that are predisposed.
In the event you want assistance working by means of this procedure, take a look at our FREE test drive for the in-depth system of resource and promotion instruments here:
Remember that quote from Field of Dreams – “If you build it, he will come”?
Well, if you build it, they may come…but will they stay? You’ve been successful at turning prospects into customers, but are you maintaining those relationships?
In any business, retention is important. The more you nurture your relationships with your current customers, the more chance you have for getting their next referral. And the next one. And the one after that. And one after…well, you get the idea.
So thanks to Kevin Costner for today’s quote!
Now, how do you initiate proactive contact?
Glad you asked…
Educate them about what, you may be thinking. Well, consider this, many businesses focus solely on attracting new customers. Actually from what I can see with a lot of my clients, the aiming push seems to be to get more interest and more nibbles, and more people at least looking, calling or navigating to a company’s website, but you NEED to spend a good chunk of your time retaining current and former customers. These are people you already know to be good sales potential…they’ve already bought from you!
Take more of your time to market and sell new products to your old customers and less time trying to sell old products to new customers and you will see a drastic change in your sales, customer quality and branding position.
Here are a couple of key elements to use to retain your current customers:
- Stay in contact: This means by phone, email, e-newsletter, in person-by pigeon if you have too!
- Post-Purchase Assurance: This means you need to follow up with customers. Your customers need to feel like they are being supported for their purchase and with the item they purchased. How many times have you purchased a product, and then felt completely abandoned? Something as simple as a Thank You note with your contact or customer service information can go along way in retaining a great customer.
- Deals & Guarantees: Always offer your current customers the best deals and guarantees you have. Show them you appreciate their business or even come up with a club specifically to reward loyal customers. You can also do this with a preferred pricing option.
- Integrity: Using good business practices and simply upholding integrity, dignity and honesty go along way with customers. Let’s face it, there’s a lot of swindling and crap out there and the safer and more confident you make your customers feel, the more they will trust you and that makes for an amazingly supportive and loyal customer.
Great ideas pop up at the most interesting times…in the shower, driving in the car, during a morning run. They always pop up when we are relaxed and don’t have your daily pressures on your mind…this is a good thing. This is how new and interesting ideas develop. The question however is…when do you know if your good idea makes good business?
Too many companies guess at where they are today so when they implement new ideas and those new ideas fail, it’s because they didn’t understand the inner workings of their organization or company today. You can only make positive changes if you know what you are changing, not what you think you are changing. Unfortunately, this happens way too frequently. So, benchmarking your current state of affairs will ensure the good idea was well thought out. This is good business!
There are three cornerstone ideas to a successful business:
- Quality product/service
- Offering useful products/services that solve a problem for or enhance the life of a customer
- Offer subjects your customers find interesting
Use this approach of educating your customers and offering them real information and insight and you will be rewarded with loyalty and success.
Stop wasting all your time on new prospects while your current customers fall by the wayside!
Also keep in mind: These existing customers are not just a group of fruitful customers when it comes to your existing and potentially newly developed offerings, because you already have a relationship with them. They are also a great potential source for referrals. Think about it – they bought from you. They liked your product or service. They liked you. Hopefully both. They had a good experience with what you gave them. With a little nurturing and nudging they probably have a bunch of people in mind that could also benefit from what they bought from you.
We all know how much effort it takes to get a customer. That’s often a huge battle. Winning the war means turning these existing customers into repeat customers and sources of referrals based on the relationship you have developed with them
As Jay Abraham says, “Your best prospects are your existing customers. If you’ve been putting all your marketing efforts into acquiring new customers, stop and diverts some of your resources into reselling, upselling, cross selling to those same customers. In every ways possible – through package inserts, regular mailings, special offers – stay in touch with those customers and get them used to buying from you.”
So, there it is! Remember, our FREE test drive can help you put together the resources and tools to do exactly that.
We can help you educate your customers and you can watch the benefits pay offer many-fold.