Tapping Into Your Most Valuable Small Business Asset...Your Current Customers Not long ago I was speaking with a client in the spa and pool industry who expressed concern that his sales had grown stagnant. He mentioned that he was still actively advertising and working his lead generation process but his new customers had slowed to a trickle.
I asked him, “As a percentage of your marketing efforts, how much is devoted to new customer acquisition and how much is devoted to current customer sales?” He glanced at me with a look of confusion and said, “What do you mean current customer sales?”
He continued, “Once we sell a spa to a customer, that’s it. They’re not going to come back and buy another spa a week later. A lot of our customers come in to buy chemicals and some accessories, but that’s it. All of our efforts are focused on finding people who want to buy a new spa or pool.” There’s Gold in Your Customer Base Waiting to be Mined Unfortunately, my client didn’t understand the value of his customer base.
There is gold in your customer base waiting to be mined. You see, many retailers focus on the first sale or the “front end” sale and spend a disproportionate amount of time looking for new customers when the real goldmine lies in the “back end” sales or continuing steam of sales. You’ve probably spent a lot of money acquiring your customers.
Not only do you miss out on lost revenue when you ignore them, but you also flush your return on investment from acquiring your customers right down the tube. If you have convinced a person to do business with you, it means that they have already given you a vote of confidence. If you’ve provided good service and met (or exceeded) their expectations, it’s very likely that they would be willing to give you a second vote of confidence or third or fourth. If you’re good you may even get their lifetime vote of confidence.
To Get to the Pot of Gold, You Have to Know Where to Mine You must be able to contact your customers in order to market to them. That’s why one of the first pieces of advice I give to my clients is to capture your customer’s contact information at the point of sale.
This process is done automatically in some businesses, but in others, you must ask for your customer’s contact information. If you have ever purchased an item at Radio Shack you know that the clerk always asks for your name, address, and phone number. They don’t even give you a reason, they just ask for it. They just assume you will give it to them, and you know what? 98% of Radio Shack customers do give it, without any question. The process is so automatic that you feel that giving your contact information is just part of the purchasing process.
Every small business in America should be doing the same thing as Radio Shack. But to go one step further, you should be capturing your customer’s email address as well (assuming they have one). Capturing your customer’s email address is the “holy grail” of marketing because you can market to your customer again and again at no cost. If your customer is reluctant to give you their email address, give them a bribe, such as a coupon for their next visit or something else of value. The effort to obtain your customer’s email address will be repaid many times over. Focus On Your Best Customers Most businesses lose between 15 and 20 percent of their customers each year. Retailers lose even higher percentages. Depending on your business, a large majority of your customers lie dormant, having only transacted business with you once or twice. Your remaining customers are those that are loyal to you and from whom your profits can be significant.
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