What is the number one most profitable group of people that you can market to that will consistently deliver the best return on your advertising dollar and that most businesses neglect…we’ll tell you here.
What is the number one most profitable group of people that you can market to that will consistently deliver the best return on your advertising dollar and that most businesses neglect?
YOUR EXISTING CUSTOMERS!
The people who have most recently given you money are the ones most likely to return and give you more.
Your previous customers know how to get to you, they know what they like about you and your staff, they know your service and products, and they appreciate the value they are getting when they spend their money with you. It doesn’t take much effort to convince someone like that to return again.
A new customer, on the other hand, doesn’t know who or where you are, has one of your competitors closer to them, or a friend recommended them to somewhere, or they have another business in mind and they have little motivation to try to find an alternative. It takes a lot more energy and money to convince them to come to you. According to Lee Resource Inc., attracting new customers will cost you 5-8 times more than retaining an existing customer.
The single, easiest way to get more business is to get your existing customers to come back more often. But you can’t trust that they will return automatically. That’s what we call the “hope” marketing method. You “hope” that they come back again. (Hint: it doesn’t work)
A majority of customers come once then get on with their busy lives and don’t return. Not because of anything you did, but what you didn’t do. Stats says that you lose 68% of your customers because they feel that you are indifferent to them. It’s the kiss of death. Eventually, you’ll run out of people.
It’s a leaky bucket. You keep putting new customers in the top and they keep disappearing out the holes in the bottom. Some die, some move away, some are lured by competitors, some are recommended elsewhere by friends and some just simply forget about you.
How do you plug those holes? How do you let your customers know how valuable you are to them, how do you get them to return again and how do you make them feel important enough that you become their first option when they need what you provide?
To do that, you need to know who they are and have a means of communicating with them. This means you need a customer list; a database of the names, addresses and emails of people who frequent your business. You should also get your customers’ birthdays, which has several other benefits. (We’ll tell you more about that in a future post.)
Once you have a list created, you are able to communicate with them directly and encourage them to return more often by sharing the last updates, special offers and changes in your business.
During the Covid-19 pandemic, the value of a customer list became even more evident. Customers were no longer coming into businesses, which meant that without a list you weren’t able to communicate with them. You may have started a contactless way of doing business, or added additional safety protocols, you may have held special events – but without a list to share the news, many customers would never hear about these changes.
But it doesn’t need to be a pandemic. We have had clients over the years have fires that temporarily closed their business, road closures that prevented access to their parking lots, natural disasters, broken gas lines, ferocious weather and all sorts of other obstacles that negatively affected them. With their customer list at their fingertips, they were able to keep they customers informed and influence them to return when the time was right.
When it comes time to sell your business, having a customer list is a critical asset that increases the selling price. The ongoing revenue from your existing customers is a large factor that influences the buyer decision because it means they’ll continue to have a steady stream of customers.
You may feel uncomfortable with building a list and asking for customers for their information, but once you develop some systems you will find it quite easy and profitable to maintain. Almost every business has tried a version of the old “fishbowl”. Put a bowl out with a sign attached prompting your customers to enter a draw, get everyone to submit his or her name, address and email to be eligible to win. But often that list languishes and never gets turned into the lucrative money maker that it could be.
Another option is providing comment cards at the end of each transaction and offer a monthly draw from those who complete the form.
Use several methods if you can. Your goal should be to capture all the names and addresses of all your current customers.
The challenge with collecting them with these methods is that then you need to enter them into a spreadsheet- and over the years we’ve seen this be a barrier for a lot of Business Owners. Even if you delegate the task to a staff member or admin person, it’s a big task that need regular attention.
With technology now, a great solution is to offer them a “reward” for providing that information in the form of a loyalty program, where they earn points and rewards for repeat visits. This is an effective way to start creating a list, especially if the customer can sign themselves up in a rewards app. Customers are so familiar with loyalty programs now that as long as you are offering a strong incentive to join, capturing their information will be easy.
But your marketing plan to your existing customers needs to rely on more than just points and rewards. A customer list’s value is in the ENGAGEMENT it can build between you and your customer, the connection you can forge. This is the superpower you have over the National Chains and Big Box stores. They are too big to be able to do this.
Building a connection creates an iron cage around your customers, making them so loyal to you that you are most often their first choice. Communicating effectively via multiple channels – direct mail, mail, app notifications, social media posts, and texting – is the key to building that strong connection and mining all the money that is held in you customer list.