Maximize Profits By
Optimizing Your Customers Turning One-Shot Sales Into A Continuous
Stream of Income
3 Critical Elements To Growing Your
Business
For many business
owners and marketers, marketing only means getting new customers.
True, getting new customers is important for every business but it
is only one part of the OPTIMIZATION equation.
In order for a
business to achieve exponential growth, it must do the following
three things:
1. Increase its customer base.
2. Increase each customer's frequency
of purchase.
3. Increase each customer's average
amount of purchase.
Marketing must address all three of these
areas to optimize a business. For some reason though, 95% of
marketing dollars are spent on gaining new customers. But by failing
to increase your current customers' frequency and amount of
purchase, there's a good chance that you're wasting valuable
resources.
3 Steps To Avoid Perpetual
One-Shot Selling
Restaurants are a good example of
perpetual one-shot selling. It's not that people don't come back
necessarily, just that the restaurant makes no pro-active effort to
get them back. That's why I'm going to use a restaurant to
illustrate a simple 3-step formula that will keep customers coming
back over and over again. This formula can and should be applied to
every business.
Step
One: Capture the names and addresses of all of your
customers.
Step Two: Systematically
contact all of your customers and ask them for more
business.
Step Three: Offer a reward
when you ask for more business.
Sounds simple enough and it is. But I can
assure you that any business that is struggling isn't doing it and
90% of businesses that aren't struggling could double their
profitability-if they would execute this formula.
By execute,
I mean contacting the customers either individually or by a letter
that is computer addressed and laser printed and sent to them. I
don't mean sending a coupon in the mail on the back of a lost child
postcard (although those are good for finding customers in some
cases).
The Myth Of Passing Out
Coupons
What about a method that most small-time
restaurants use: coupons. I'll submit to you that most people using
your half-off coupon are looking for a deal more than they're
looking for a good restaurant to frequent.
Think about the
message the coupon sends to customers: Our place is so bad that
we've got to give it to you at half price to make it worth your
while. Plus you don't make any profit on the transaction.
You
must pro-actively seek to work the back-end. Most businesses let
their customers dictate what their buying habits will be, how often
they'll come back, how much they'll spend when they do buy, etc.
Most businesses are reactive when it comes to re-selling their
customers. If you already have sunk the cost of generating and
nurturing a customer once, why not solidify the relationship and
profit from him forever?
Start immediately to do everything
in your power to gain repeat sales from your current customers. It
may be something as simple as writing them a letter or giving them a
telephone call. But one thing is certain if you don't ask for the
business, your competitors will.
Joint
Ventures: How to Gain $3.4 Million of Good Will in 30
Days
One of the best ways I know to leverage your
time and marketing dollars is to enter into joint ventures with
other businesses. The first place you need to consider when looking
to maximize profits is reselling to your own customers.
If
you agree that your customers are your business' most valuable
asset, then you should see the potential profits available if
another business will make its customers available to you.
Available, that is, in the form of consignment of goods, an
endorsement or a more integrated joint venture.
Joint ventures can work in one of two basic
ways. First, you let other companies play off your customer base and
then take a percentage of each resulting sale. Or second, work a
deal with other companies to make their customers available to you
and then pay them a portion of each sale.
The underlying
principle of why this works is simple. A business will spend some
finite amount of time, money, resources, and sweat developing a
relationship with its customers. The customers will have some level
of confidence in that company which translates into their
willingness to respond to offers made by the company.
For
instance, a company might spend $50,000 a year in advertising,
$80,000 a year on commissioned salespeople, and $5,000 a month for
prime retail space. These three expenditures alone not to mention
dozens of others account for almost $200,000 spent a year to develop
customer relationships. Now, if you work a joint venture with the
owner of that store, you can access all of that money spent for the
cost of a letter.
Joint Venture
Marketing Offers Your Business The Ultimate Financial
Leverage
There are thousands of ways to construct
joint venture deals. You have to be willing to actively pursue and
put together deals. When you present another business owner with a
proposition, your approach is all-important.
Just like all
good marketing efforts, you want to preach benefits to him
immediately. Don't just go up to him and say, "Will you endorse my
product to your customers?" You have to paint the picture first. You
have to help him understand how it works. Not everyone understands
the dynamics and leverage like you do.
The marketing function
of a business can offer tremendous leverage. These concepts can be
applied to almost any kind of business successfully as long as you
keep an open mind and continue to think outside the
box.
