Business owners are and should be in the 'marketing business', it is their role to drive leads and customers to their business. This cannot and should not be left to anyone else as the business owner knows their business best of all and in addition what his customers want. If a business owner cannot identify their target customers clearly then they need to find another business or do some homework to find out.
How do you define a worthwhile customer:
· Someone who has a reason for interest in your product or service
· Someone who has the money and the authority to say yes
· Someone who has already said yes (someone who has already bought this product/service or a similar product in the past)
Three methods for gaining more sales;
1. a) Get your current customers to buy more often b) Get your current customers to buy larger quantities with each purchase
2. Increase the number of prospects
3. Increase the closing rate for the prospects
If we grow our business from 1a or 1b then it is relatively inexpensive as we should have their contact details ( if you don't have all your customers details then you need to design a mechanism for collecting them) As such the initial focus should be in this area before we look at number two and three which is by far the most expensive method of growing the business.
Critical:
Each business has to find the lifetime value of each customer otherwise it is impossible to calculate how much money to spend on retaining existing customers or attracting new customers. The formula is simple and outlined below, it should be checked periodically in case the figures change.
Example:
Average spend x number of repurchases per year x the number of years they remain as a client, so lets say you own a restaurant and the average spend of the customer is £25 (£10 profit), they come into the restaurant 10 times a year and stay a customer for 3 years, this means your average customer is worth £300 to your business, so you could spend up to £299 per new customer and still profit but obviously the key would be to spend as little as possible of the £300 but still provide value to the customer. If you don't know this figure then you cannot design any advertising campaign and/or budget.
Another example of this CRUCIAL Concept:
The lifetime value of your customer is £1000 (profit) You have a product which sells for £200...but your cost is £100, there are a number of choices you could make.
You could give an initial discount on the product they buy..........anything up to £100 and still break-even on that transaction (remember you are investing £100 to return £1000 in the lifetime value of the customer)
You could give your salespeople all the commission from the first sale. This gives them a bigger incentive although it must be linked to their customer base staying with the company for a certain time period, otherwise you will get lot's of new disloyal customers.
You could use the profit from the first sale to buy products from other complimentary businesses as a 'introductory service' for your new customer
You can offer longer service and/or warranty with this profit.
Advertising Campaign
If you knew that the lifetime value of your customer was £300, this means you can track every advertisement response rate so that you know what to repeat and what to cancel. Say the advertisement's are costing you £1500 a month if you don't get more than 4 customers who buy your products you need to cancel that advert/advertising and look at other copy or mediums. Critical: It costs 500% more to attract a new customer than to re-sell to an existing customer (don't ever spend money on advertising for new customers at the expense of not looking after your existing customers)
PROVE IT: It will make any sales process easier if you have overwhelming proof that what you are selling is of great value. The proof must be influential to have the best effect. Testimonial letters and comments are very powerful, 'third party' endorsement's are much more believable. Another element could be photographic proof of 'satisfied customers' (if you have any celebrities as customers even better). Another way to prove your product is by using the statistics like the type listed below:
82% reported increased sales
99% reported satisfaction with our service
75% made additional purchases once they saw the product
Some more ways to prove your fantastic service could be:
Your qualifications
Length of time in business
Client lists (more powerful if some celebrities)
Number of cities served/countries served
Number of customers served
Audio tapes with endorsements
Infomercials
'Eavesdrop lines' for potential customers to listen to your existing customers
The more overwhelming evidence of your quality, service, product etc. the easier it will be to sell your companies products.
Look Everywhere for Inspiration:
Dan Kennedy the marketing guru has become a multi millionaire by introducing creative and innovative marketing to the business world, part of his success is based on looking for what is successful in one industry and transferring it to another, always be on he look-out for new marketing ideas from other industries. Change the way an industry markets to their customer's, don't do what everyone else is doing in your industry. There are many methods which have been successful already in other industries so find how you can modify or copy their methods so that they work in your business. Do not increase the marketing spend just allocate your budget in a different way.
Key Note:
Fall in love with your client and not your company/product, become externally focused and not internally focused. It is your job to maximize how your customer can benefit from dealing with your product/service. (You become the default expert in your area) Add value so they will never leave you, all your focus must be on how you can help them.
Most Crucial Point in the Article!!!!
The first interaction with the customer must be considered an opportunity to start a long-term relationship not just thought of as a normal transaction. You need to get their details and work on how you can increase their lifetime buying with you, don't consider the first purchase the end of their business with you. What offers can you provide them? What information can you send them? How can you benefit them on a regular basis? How can you get them to buy again and become a regular customer. remember it is 500% more expensive to get a new customer than to look after an existing customer!
The article Why Are Your Customers So Valuable was Submitted by Allen Robertson through Articles.GetACoder.com network. Here's the additional information: Allen Robertson BA, MBA is a 
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