This is a common question I get asked quite regularly when starting out with a business. But before you decide what to do to get more customers into your business, there's a simple calculation to do first. It's called the "Lifetime Profit Value of Your Customer".
Once you have calculated this, you will then have an idea of what a customer is worth to you in PROFIT - over their lifetime with your business. A general rule of thumb is to spend no more than 10% but there is no right or wrong answer here. So here's how you do it.... Grab a pen and paper and calculate the following for your business:
Average sale value $
Less cost of sale $
Equals profit per average sale $
Multiply by no. of sales per year $
Gives you profit per year $
Multiply by no. of years as a customer
Equals Lifetime Profit Value of your Customer $
So now you know this figure, you can see what the average customer is worth to you in profit. Now what would you be prepared to spend to entice a new customer into your business?
Depending what type of business you are in, people love free stuff so what could you give a potential customer to get them to phone you or visit? If you're a cafe, how about a free cake or voucher. Restaurant - a free meal. Hair dresser - a free haircut. If you sell high value items, provide a free report on the benefits of a widget or 10 points a customer should know about your widget before they buy.
Of course you must provide excellent customer service so the new customer enjoys their experience with your business and returns as well as referring others to you. Common sense stuff really but I hope you find this information useful and I wish you good luck with your next marketing strategy.
Check out my website for the Customer Lifetime Profit Value template. You'll need to register first and log in but then you'll have access to some free stuff you can use in your business. (Don't be afraid to register, your details will be kept confidential. I hate spam so I'll never sell your details). Over and out for now. Arlene
Sunday, November 15, 2009
Monday, November 2, 2009
How to Get More Customers Using Low or No Cost Marketing Solutions
How to get more customers into your business?
This is a common problem I get asked regularly by many business owners especially in a recession. So I’ve compiled a series of marketing solutions that can be implemented into your business that are low or of no cost.
There is one point I would like to mention though before I start my series of strategies to help you bring in more customers. All the marketing in the world won’t work if:
1. there’s no market for your product or service
2. you don’t have a quality product or
3. you don’t focus on your customer service
For example, take a restaurant, the food is not good and/or the customer service is poor, you may get customers in, but they won’t return and they’ll tell lots of people in the process. If your customers have a good experience they will recommend you to their friends. If they don’t like it, they tell 10 people and they tell others so it becomes like a virus, spreading quickly around the community.
So make steps to ensure that your business has these areas nailed first and you’ll be on your way to creating more customers before you know it with the cheapest form of marketing there is. Word of mouth or referrals.
Restaurants, cafes, take away shops, hair dressers, mechanics, beauty therapists, and many more businesses can see results quickly if they start implementing some of these simple strategies into their business.
Database. Do you have one? They are quick and easy to build. It’s 5 times easier and cheaper to sell to your existing customers than it is to get new ones. So how do you get customers to hand over their details? Conducting a survey is a simple way to do this. Have a monthly competition so every survey goes into the draw to win xxx. Some questions you could ask are: What did you like about us? What could we improve on? Then you can ask for their details so you can contact them. Don’t forget to ask for their email and mobile number, day and month of birth and include your privacy statement at the bottom.
Conducting surveys with your customers are a great way to find out improve your business as not only are you building a database but they are also telling you what they want. By finding this out, you are then able to provide those products or services to get them to buy again from you.
So you now have your database building, each month, you must pick a winner. Obviously they receive special treatment on winning the prize but also all the losers could also receive a consolation prize. Send them out a “bad news” and “good news” letter with a small voucher attached to spend in your business. This is to entice them back in again.
If you’ve collected their birth date, send them out a birthday letter with a surprise voucher to get them to visit you again.
Have reactivation strategy for your database of customers who haven’t returned. Try a direct mail campaign out to them. A sequence of 3 letters sent out, and you’ll need to test the timing between each letter and day of which they will receive it and see if any certain day works better to increase the response rate. You’ll need a good headline to catch their attention plus have an additional attention grabber like a wrapped chocolate etc. attached to the top of the letter is a good way to help get your letter opened and read.
You could also send out your business newsletter to keep your customers up to date with new products/services, special offers, pre-public releases and free information that may benefit them. If you’re going to use email, you’ll need to give them an unsubscribe option so they can remove themselves from your list and remember you must have their permission to email them in the first place.
With people’s inboxes becoming overcrowded with many newsletters and junk emails, it can work in your favour by mailing them out to get a better readership. Try testing out emails v good old fashioned post. Put in an offer and see what response you receive.
With each promotion, create a follow up phone script as well. This helps to increase the conversion rate. Especially if it’s customer focused.
If you are posting out your letters/newsletters, try hand-writing on the name and address in blue pen. This has been tested to work better than a printed out address label. Interesting huh? Try it and let me know your results.
Now with all your strategies that you use to bring in more customers, you’ll need to monitor each one. Build a folder with a copy of each letter/email etc and record the following:
how many you sent out
and to what section of your database
day and date of the week (this can make a difference to your response rate)
how much it cost to run it.
how many responded and the %
the profit you made from that strategy
Next time you want to run a promotion, you’ll be able to look back through and see what worked last time.
So database building should be a priority for you. Especially if you plan on selling the business in the future. This database is your “good will”. You will have built the marketing system and have the results to prove it so you can ask your price.
Keep following to read more marketing solutions for your business.
This is a common problem I get asked regularly by many business owners especially in a recession. So I’ve compiled a series of marketing solutions that can be implemented into your business that are low or of no cost.
There is one point I would like to mention though before I start my series of strategies to help you bring in more customers. All the marketing in the world won’t work if:
1. there’s no market for your product or service
2. you don’t have a quality product or
3. you don’t focus on your customer service
For example, take a restaurant, the food is not good and/or the customer service is poor, you may get customers in, but they won’t return and they’ll tell lots of people in the process. If your customers have a good experience they will recommend you to their friends. If they don’t like it, they tell 10 people and they tell others so it becomes like a virus, spreading quickly around the community.
So make steps to ensure that your business has these areas nailed first and you’ll be on your way to creating more customers before you know it with the cheapest form of marketing there is. Word of mouth or referrals.
Restaurants, cafes, take away shops, hair dressers, mechanics, beauty therapists, and many more businesses can see results quickly if they start implementing some of these simple strategies into their business.
Database. Do you have one? They are quick and easy to build. It’s 5 times easier and cheaper to sell to your existing customers than it is to get new ones. So how do you get customers to hand over their details? Conducting a survey is a simple way to do this. Have a monthly competition so every survey goes into the draw to win xxx. Some questions you could ask are: What did you like about us? What could we improve on? Then you can ask for their details so you can contact them. Don’t forget to ask for their email and mobile number, day and month of birth and include your privacy statement at the bottom.
Conducting surveys with your customers are a great way to find out improve your business as not only are you building a database but they are also telling you what they want. By finding this out, you are then able to provide those products or services to get them to buy again from you.
So you now have your database building, each month, you must pick a winner. Obviously they receive special treatment on winning the prize but also all the losers could also receive a consolation prize. Send them out a “bad news” and “good news” letter with a small voucher attached to spend in your business. This is to entice them back in again.
If you’ve collected their birth date, send them out a birthday letter with a surprise voucher to get them to visit you again.
Have reactivation strategy for your database of customers who haven’t returned. Try a direct mail campaign out to them. A sequence of 3 letters sent out, and you’ll need to test the timing between each letter and day of which they will receive it and see if any certain day works better to increase the response rate. You’ll need a good headline to catch their attention plus have an additional attention grabber like a wrapped chocolate etc. attached to the top of the letter is a good way to help get your letter opened and read.
You could also send out your business newsletter to keep your customers up to date with new products/services, special offers, pre-public releases and free information that may benefit them. If you’re going to use email, you’ll need to give them an unsubscribe option so they can remove themselves from your list and remember you must have their permission to email them in the first place.
With people’s inboxes becoming overcrowded with many newsletters and junk emails, it can work in your favour by mailing them out to get a better readership. Try testing out emails v good old fashioned post. Put in an offer and see what response you receive.
With each promotion, create a follow up phone script as well. This helps to increase the conversion rate. Especially if it’s customer focused.
If you are posting out your letters/newsletters, try hand-writing on the name and address in blue pen. This has been tested to work better than a printed out address label. Interesting huh? Try it and let me know your results.
Now with all your strategies that you use to bring in more customers, you’ll need to monitor each one. Build a folder with a copy of each letter/email etc and record the following:
how many you sent out
and to what section of your database
day and date of the week (this can make a difference to your response rate)
how much it cost to run it.
how many responded and the %
the profit you made from that strategy
Next time you want to run a promotion, you’ll be able to look back through and see what worked last time.
So database building should be a priority for you. Especially if you plan on selling the business in the future. This database is your “good will”. You will have built the marketing system and have the results to prove it so you can ask your price.
Keep following to read more marketing solutions for your business.
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