Guest Post from Elizabeth Walker and Ken Burgin
We are rabid fans of growing loyalty among Ideal Clients over pretty much any other tactic. It’s the lowest cost sales activity you will ever engage in, since you are already doing business with them, you already know what they want and need and you can easily find out if they are being wooed by someone else. How easy is that?
And yet…we have hundreds of examples of business owners who not only don’t take advantage of this fantastic opportunity, they positively destroy it. See if you recognize yourself in these stories (yes, they are all real).
A client who spends $100 a month in your salon calls to make an appointment only to find her favourite stylist has left. Or even better, who calls for an appointment and lands in voice mail saying the salon is closed for renovation. You lose $1200 a year.
A customer who has been leasing his upscale cars from you for years needs some emergency service. Your service centre is booked up so you tell him you’re too busy. The customer not only takes the car somewhere else for service, he never comes back. You lose a lifetime value of $500,000.
A customer buys over a thousand dollars in clothing and accessories. He is particular but happy to spend to get the quality he wants. He leaves the store and never hears from you again. You lose the $10,000 he would have spent with you over the next five years.
A client who spends $35,000 a month gets a call from her ad agency saying they have to let the client go so they can pitch a potentially bigger prospect in the same industry. The agency didn’t get the other client, the client who was “fired” bad-mouthed them for years, they lost over $400,000 in revenue from her and it cost them close to a million dollars to go after the client they didn’t get.
What would it take not only to keep those customers, but grow them by 25%? Without spending a cent you wouldn’t have spent anyway? Without even investing in a web site, if you don’t already have one?
The first step is a database of every single customer who does business with you. If you can, link it to your point of sales system, so you know how much they spend, on what, when. At the very least, set up a spreadsheet with different columns as follows: first name, last name, street, town, postal code, phone, email, and a column you can put an X in for the kinds of products and services they buy. Since your computer already comes loaded with Excel, that’s free.
The second step is to sign up for an automated email service like www.ConstantContact.com. Sending to up to 500 names, more than you will ever need, will cost you about $20 a month – almost free. And the first 60 days are completely, 100% free.
Stay tuned for real life ideas you can steal to grow your business without spending money.
Elizabeth Walker (thinking and words) and Ken Burgin (creative genius) are the Marketing Masters. They are both Duct Tape Marketing Authorized Coaches. Liz leads seminars in business strategy and communications at the Schulich Executive Education Centre, York University. We are thrilled to be working with small businesses and entrepreneurs everyday, and derive considerable joy helping them build busy businesses.