Did you know that small businesses could actually double their sales by simply following up with leads and contacts? That’s right: 99 percent of small businesses do not consistently follow up with their prospects and customers.
Look at the math: If you close 25% of 100 leads or sell to a quarter of 100 store visitors, you have 25 customers. If you close 10 percent of the remaining 75 leads or visitors, you have 32.5 customers—that’s a 30 percent increase. Close 20 percent and you’re up 15 new customers, or 60 percent more. Follow up with customers to get them to buy one more item this year, and you’ve added another huge increase.
Why don’t we follow up? Because we fall prey to an insidious and dangerous belief about our business that’s so bad it’s like having someone’s hand in your pocket, just reaching in to take our hard-earned money. It’s called product management and it will guarantee you don’t make the money you need and deserve.
See if this sounds familiar. You are a retailer, and you know the margin on every item in your store. More than that, you know exactly what it costs to keep an item in inventory, and how many times you have to turn your stock to maximize your return. You know your sales per square foot, and what every area of your store delivers in sales and profit.
Perhaps you are a manufacturer. You run tight controls on your raw materials, and you insist on just-in-time delivery from your suppliers, and just-in-time manufacturing and shipping to your customers. You control your labour costs and capacity utilization, and you manage your receivables really well. You have a good handle on foreign currency.
What if you provide a service, say accounting, financial planning or law? You know your billable rate, and how many billable hours you must account for and bill during the year. You review the realization rate for the firm regularly. You know where you make money, and where it’s better to put lower-paid juniors on the case.
Now all this activity is laudable, and we are not denying the importance of managing costs. In fact, tight controls are vital to a well-run business. But focusing on costs won’t do the one thing you need more than anything!
Managing costs will persuade ZERO customers to do business with you. In fact, this approach is so insidious it can actually make your business fail.
We fall into it because we manage our relationship with products, not clients. And let’s face it, products don’t write cheques; customers do.
If you are spending more time following up on products, shipments, and inventory than on leads, prospects and clients, you are literally throwing away the opportunity to double your business.
If you are a business owner, we urge you to delegate everything that takes you away from communicating with prospects and customers. We’ll be sharing a way to automate your follow up to ensure you don’t miss out on that potential 100% increase from now on.
Ken Burgin and Elizabeth Walker are the Marketing Masters (www.MarketingMasters.ca), a full-service marketing and advertising partnership that helps build busy businesses. Send your ideas on How to Thrive in Times Like These to firstname.lastname@example.org or email@example.com, or call 1-866-908-5720.