Your best source of low cost sales
It is 6-7 times less expensive to get sales from existing and former customers
Does your business have a strategic approach to up selling, cross selling and retaining customers?
“Customers don’t owe you their loyalty. You have to earn it – continually. Having an effective customer retention program in place gives you the ability to identify, track, and custom-promote to those customers who are most likely to become loyal, long-term sources of revenue.” – Alex Lawrence, Forbes.com
For a business, it costs five times more money on average to get a new customer than it does to maintain a current customer.
This alone should push you to want to boost your efforts to resell, and maintain a positive relationship with your current customer base.
So, what exactly are you doing to resell, to upsell, or to cross sell customers on extra products and services your business offers?
11 months ago we had problems with some lights and wiring in our house. I looked up Google and found a local electrician. Perhaps I clicked on an AdWords ad. Perhaps I clicked on a local directory listing.
It does not matter. The electrician invested some money in getting a local presence online, and it worked.
A day later, job done. We were happy with the service and told him so. Probable cost per sale $150 in marketing costs. Job profits $200. That's a profitable first sale.
- No request for a review
- Nothing left behind (except the receipt that is long gone)
- No request for a referral
- No follow-up communication about the service
- No newsletters, emails or letters about other services they could offer.
Now I've completely forgotten who the electrician was and when I next need one, I'll be going back to Google.
This must go down as a wasted opportunity by the electrical business. They had a great opportunity to make more from the customer relationship and get more sales from an existing customer at much less than $100 per sale.
A Strategic Approach to Reselling
The right strategy is not only going to ensure more sales, but also a healthy relationship that will thrive into the future with happy customers.
You’ve put in the time and effort, as well as financial resources to get new customers. Now that the hard work is done you have to maximise your efforts to build a long standing relationship with current customers.
It makes more financial sense to capitalise on your current customer base, as opposed to constantly having to get new customers.
When you generate more value from one customer, this means less spending on marketing campaigns and ads. It means better returns, and optimises your efforts as a business owner to build a business that is going to thrive.
In practice your business should focus on:
- Increasing the frequency at which current customers purchase, or
- Trying to upsell, to increase the amount they spend each time they do business with you.
- Trying to keep customers coming back for regular purchases so you keep them for longer.
One classic example of a financial powerhouse is McDonalds. “Do you want to supersize or do you want fries with that,” are a couple classic lines the restaurant mogul is known for.
Let’s look at another example with SMS texting. You can send out 1000 texts for as low as $30 monthly, and the average return on these messages tends to sit at about 20%. This means you are spending as little as $.0.30 (or less) for every customer who walks in the door.
Many business owners are leaving money on the table, because they are not maximising sales from their current consumer base.
So next time you think of spending money on a new marketing campaign, ask yourself :
“Do we effectively and ethically prepare customers to become repeat customers each time we get a new customer?”
The answer will help you decide if you are maximising your returns. And if you are making a positive effort towards building a long standing profitable customer relationships.
To really grow out of your skin, you need to manage the all the elements of the Five R Marketing System.
We can set you up profitable marketing systems to resell to existing customers. Yet we prefer to look at your whole online marketing strategy so you can get the best strategy and plan for your business.