Utilise Your Existing Customers
May 28, 2011
In order to grow you need to be able to simultaneously grow your customer database with new clients while promoting repeat business through your existing customers. In this article we will concentrate on repeat business, for ways to increase new business read “New Customers or Repeat Business“.
Q: Have you sat down and calculated what percentage of your sales last month were to new customers?
Q: Have you divided your marketing budget by sales to these same new customers to discover your ROI (return on investment)?
The cost of acquiring a new customer is 6 to 7 times more expensive than keeping existing customer (see source).
If you are not already doing this, work out your figures. Design a simple spreadsheet where you can easily input figures on a monthly basis. Examples of statistics required are:
- What % of your existing customers purchase every month.
- What % of your annual (and monthly) income is derived from existing customers versus new.
- What % of your marketing budget is dedicated to increasing repeat business.
- Using the above two % you can then calculate ROI for repeat business – what is each sales dollar earnt costing you?
- How often does your company actively up-sell to existing customers?
It is only by analysis on a regular, comparable basis that you can best determine:
- Which campaigns are succesful
- Which demographics are trending, and how
- Where to focus your attention
We all know these three facts, but how often doing you finish an experience as a purchaser feeling less than satisfied with your experience. Would you recommend these companies to your friends or increase your business with them?
- Make your customers feel valued
- Ask your customers questions, what do they want …listen
- Always follow up on a complaint or criticism
Starting right now, you can increase your repeat business using the following ideas:
1. Survey your customers
Either formally using a survey or questionnaire or informally as part of your natural sales process.
- Are they happy with your products or service
- Do you have their correct details
- What could you do to make their experience better
- Are they getting your newsletters/specials lists
2. Communicate with each customer this month via
- a handwritten, personal note on their statement
- a phone call
- monthly newsletter
- blog (do they subscribe to your feed, do they know how?)
- face to face
- monthly get together (invite a speaker, throw some sausages on the bbq, have a auction to move old stock … the options are endless!)
3. Maximise discounts received
Your existing customers may have received discounts on their purchases, note their monthly savings on their statement. Your invoices may show discount per purchase but always a nice surprise for a customer to see monthly savings.
Consider a loyalty discount (rather than various tiered trade discounts). Simply calling it a loyalty discount promotes a feeling of being valued.
4. Pick your top 5/10 or 20 customers and reward them.
Send them a simple thank you note or gift, don’t wait until Christmas! Gifts can cost little, they are tax deductible, and, if you put your thinking cap on – you can come up with something they will remember next time they are looking for your product or service.
- Rural Contracting Business – take your customer a basket of baby chicks
- Real Estate Company – how about a welcome mat
- Insurance Agent – hand out some smoke alarms (and batteries!)
5. Customer Complaint Log
Those of your with your ISO certification will already have one of these. For those of you who don’t – it’s time! A customer complaint log is not a finger pointing exercise but a tool to improve your business. The log will identify:
- Each complaint is dealt with to the customer’s satisfaction
- Average amount of time complaints are dealt with
- A trend with a particular product or service
- A customer with a history of complaints may need to be culled
Nominate one person responsible for recording and delegating complaints, results should also be discussed in staff meetings.
There are many other opportunities to improve repeat business. Please comment on what has worked for you so others can learn from your experience.