By: Silvia Wright-Davies (c) 2006
www.wrightchoice.biz

Just last week I was visiting a shop that sold a large ticket item in the household leisure industry. The owners were bemoaning the fact that business was slow. Yet during the hour I was there 7 people walked in and purchased various 'add on' products. Because of the low value of the purchases, these clients were considered a 'nuisance' factor and treated accordingly. Treat them properly, create trust, provide outstanding service, and they could well be back to purchase a major product!

Why a business would spend hundred and thousands of dollars to get a client in the door, and then let them walk away, without getting their name, address and other vital information is beyond me.

Of all the terrible marketing mistakes made, this one has caused businesses to lose the MOST money. The real gold in any business is the database. Did you know that it is between 7 and 15 times easier to get an existing customer to return, than it is to get a new client in your business? Plus, returning clients will typically spend twice as much as new clients would.

What would happen to your business if you had to constantly rely on selling to new prospects instead of existing ones? With a good database, one could just market to existing customers and prospects and continue to grow the business every year, without any concerns for the current economic climate.

Ideally you need to capture the name, street and email address, phone numbers, plus any other details that could be of value. This is easy to do. You could ask people to complete a form so they can receive:

• a free informative newsletter
• or information on regular 'specials"
• or have their name go into a draw for an attractive prize
• or invitations to 'customer only' sales

Got the idea? Great! So if you're not doing so already, now is a perfect time to build or add to your database.


This database should consist of clients, plus a mix of prospects who have expressed interest in your product or service. The next step is to invest in your database. And it goes without saying that these days thanks to modern technology, emails afford a very professional, cost effective means of communication. (another effective option being telephone contact). Here are some ideas:

SURVEYS

Do you want to be customer focused? Feedback gleaned from surveys is a valuable aid in the formulation of an effective customer focused marketing plan. The results of a survey can give you a clear understanding of how your customer thinks, what problems they have, what their preferences are, what they want - what benefits they seek. This is important because clients buy benefits - not features, and they buy solutions to problems. So it is valuable to gain an awareness of your clients needs - and then meet these needs. Find out what their problems are then tailor your marketing accordingly.

Surveys seeking feedback about your company service can also be highly beneficial - assuming you then act upon the results.

CULTIVATE A RELATIONSHIP

The human touch goes a long way toward turning your clients into lifelong advocates of your business. So make your customers feel special, do customer friendly things such as:

• Send them unexpected gifts, articles of interest, reports, maybe cd's.
• A friendly personalised letter, thanking them for their custom/ or referrals.
• An informative newsletter - this is an excellent way to keep your company at the forefront of their mind, so that then they need your product or service they'll think of you.
• And how about thanking them for paying their bills on time? A simple touch that most customers would appreciate, and chances are, if they ever need to stagger their payments, your business will be top of their list.

So there you are, a few ideas on how to cultivate a relationship with those on your database. Communicate with them in this manner at least 6 times per year. Make them feel special and appreciated. The good will this creates will repay your efforts tenfold. It's all part of marketing - and marketing is a cost of doing business, just like fixed overheads and payroll.

I want to briefly touch on 'turnover' and list the various ways for increasing turnover. Do you know that there are numerous ways to do this? Today I will mention only three:

1. Increase the number of customers
2. Increase the number of transactions
3. Increase the average sale value

These are called the 'turnover drivers' and if you increase each of these by just 10%, that would represent a 33% increase in turnover. Maybe you'd like to do the maths yourself.

You should easily be able to "increase the number of transactions and increase the average sale value" by marketing effectively to your database. The database (customer list) is everything in a business. It allows you to have an ongoing personal relationship with the customer through direct mail.

For example, you could:

• Send them special offers for birthdays. Here's one that’s used a lot by restaurants: offer a free meal for the
birthday person. You've probably received one of these special offers sometime yourself. Taco Bills Clifton Hill used to do this and I would always pop in to enjoy my free main meal. And of course I'd order a dessert and have at least one companion with me, sometimes several, and they'd be paying full price and ordering drinks too. The restaurant would always make a good profit.

• Write a letter to clients thanking them for their custom and attaching a 'fake' cheque that they can spend at your business - ensure you include a 'use by' date.

• Have a 'customer only' sale. Post a flyer to your customer base inviting them to a 'customer only' sale. This would take place prior to a normal sale for the general public; maybe even opening after hours for a customer only event.

• Introduce an in-house loyalty program. Hand out a loyalty coupon to customers. Each time they purchase something the coupon gets stamped and when it is full they are entitled to a 'special'. Years ago I would always go out of my way to use the same car wash. The reason? After each wash and polish I'd get my coupon stamped. They were offering a bakers dozen: 12 stamps and the next wash and polish was for free.

• Upsell. For example, you could direct mail your customers saying "Because you purchased this xyz item (or spend $x amount), you are entitled to this second item/service at half price".

• Endorsements and joint ventures. Ideal for insurance and mortgage brokers, accountants and financial advisers.

Scientific marketing studies prove that it costs 7 to 15 times as much to find a new customer as it takes to sell something to an existing one. So use direct mail and your phone to constantly keep in touch with the customers you already have. One company I know makes an extra $250,000 per year per 1000 customers just by mailing them with special offers.

And remember, the more you treat your customers as friends, the more they'll talk about you and want to do business with you.

Silvia Wright-Davies
Wright Choice Pty Ltd
Phone (03) 9440 7788
www.wrightchoice.biz