Small Business Owners
Get More Clients, Have Them Stay Longer,
Spend More and Bring Referrals.
It may surprise you to learn that I am actually going to provide useful answers to the four points on the headline above (how to get more clients, have them stay longer, spend more and bring referrals) here on this very page.
Although I clearly cannot give you every detail and answer every question you may have in the space I have available here, the information you have at your fingertips is worth just as much to you as you want it to be. This information has helped many companies to grow in the past, is helping many to grow at the present (despite the economic conditions) and will help many to grow in the future.
There is just one small caveat......
You must use this information. You must TAKE ACTION.
There are many business owners to whom I have given this information personally. When I have then spoken to them a number of weeks or months later what do I find? They still remember what I told them. They even agree it would work for them. Unfortunately they have done nothing with this knowledge and hence it has no value for them.
The information you will find on this page is a little like a book on dieting – it is no use sitting on the book shelf. You actually have to do something.
You might be wondering why I would simply gift extremely valuable information to you.
The answer is very simple.
Now you have found this web site I want you to stay. I would like you to sign up for my Newsletter (and obtain a number of valuable free reports), I would like you to become a regular reader of my blog and at some point in the future perhaps it will be my privilege to supply you with other information products, or you may even become one of the few clients I work with directly.
Yes I have an ulterior motive for making this valuable gift, but that does not make the gift less valuable. So please enjoy, bookmark this page and sign up for my newsletter.
On with the fun.
Get More Clients
If you wish to put yourself in the position of being able to maximise the number of new clients you obtain it is important for you to grasp the concept of lifetime value. I believe that customer lifetime value is the single most important number you will calculate in your business. Knowing, using, monitoring and working to improve this number will inevitably put you ahead of your competition.
Most of your competitors will neither calculate nor use this number. They are all leaving literally thousands of pounds just sitting in the corner waiting for you to pick it up. Please do not make the same mistake. If you already understand the concept of lifetime value please do not dismiss what you are about to read. Spend a little time and examine how (if at all) you use this idea in your business.
Average lifetime value is calculated as follows:
Average gross margin on the initial purchase
Average gross margin each customer purchases in a year * the average number of years a customer remains with you.
As an example
Average gross margin on initial sale = £100
Average gross margin each customer spends each year = £200
Average number of years a customer remains with you = 5 years
Life time value =£100 + (£200 * 5) = £1,100
There are a number of ways to use lifetime value but let’s just consider obtaining new customers.
If you had no idea about lifetime value you might simply look at the gross margin you receive on the first sale – just like your competitors do - and conclude that you are limited in the amount you can afford to spend on obtaining a new customer. In the example above you might decide you cannot afford to spend more than £25 per new customer and this will restrict your marketing activity.
Once you consider lifetime value however you might decide it is worth simply breaking even on the initial sale because most of your profits come from the future sales. So now you are willing to spend £100 to obtain a new customer. Do you think you can attract more customers if you are willing to spend £100 per customer rather than £25 per customer? How much fun are you going to have if your competitors continue to spend only £25 to attract a new customer while you spend £100?
I am of course assuming you make good use of the extra funds you now have available to spend upon marketing.
Have Your Clients Stay Longer
Why do you want your clients to stay longer? Now you understand lifetime value the answer to that question should be obvious. The longer your clients stay with you the more money you will make. Simple really.
But what do most companies do?
A few years ago at the peak of the property boom the “fix” on our mortgage ended so I set about looking for a good deal. Naturally I started by going to my existing lender, after all, why move if you do not have to? What did I find? The deal they would offer me, a long term customer, was worse than the deals they were advertising on the TV or the internet. The best deals were reserved for new customers. I was “forced” to move bank in order to obtain a good deal and every lender seemed to have the same policy.
These were large companies with expensive marketing departments. They showed no evidence of understanding the idea of treating existing customers well so they would remain longer.
We all "know" the most expensive sale is the first sale and that existing customers are easier and cheaper to sell to than new customers. Does it make any sense to spend millions on advertising to attract new customers while your existing customers are leaving in droves because you reserve your best deals for new customers?
How much of your marketing budget is allocated to keeping your existing customers satisfied so they keep coming back to you? If you are like most companies the bulk of your marketing budget is given over to chasing new customers while you ignore the goldmine you have already dug.
To ensure your clients stay longer pay them some attention, not just when you try to sell them something. Show your customers you care about them. Provide a first class service. Engage them in a conversation and discover how you can improve your service from their point of view.
Most customers leave because of a little thing called perceived indifference. Basically they do not feel that you care about them, which in many cases is probably true.
If you only ever communicate with your customers when you attempt to sell them something or you chase for money why would they remain loyal, long term purchasers of your products or services?
This activity may seem like hard work but it will put money in the bank.
Have clients spend more
What I am about to say is going to seem simple – and indeed it is. Do not be tempted to dismiss this idea just because it is simple.
Look again at the formula for lifetime value.
Where is all the money made?
Most businesses concentrate on the “front end,” the first sale. Once you look at the formula for lifetime value it becomes obvious that most money is made at the back end. The purpose of the first sale is simply to obtain a new customer. You make your money on everything you sell after the first sale.
So how do you get your customers and clients to spend more with you?
Have more back end products, market your backend products to your existing customers and provide a very good service so that your customers stay longer.
Yes there are various ways of doing all of those activities, but that in a nutshell is what you need to do. Most companies do not do this however. They direct most of their marketing and selling effort to obtaining new customers and leave existing customers to fend for themselves until they finally move to a competitor.
If you do have back end products begin to market them. If you do not have any back end products begin to create them. If you cannot create your own backend products then form alliances with non competing companies and sell someone else’s products to your customers and share the profits.
· If you are providing products and services your customers require.
· If your products and services are of a very high standard.
· If your levels of customer service are high and you make it your business to keep improving those levels of service.
· If you show your customers you care about them and not just about the money they give you.
There is only one thing remaining to do in order to obtain referrals.....
Most people will not ask for referrals. Remember that your customers are busy just as you are. They may be very happy to give referrals but need a little prompting.
If you are reluctant to look someone in the eye and ask for a referral there are many simple referral systems you can use so put a few in place. I will cover some on my blog in the future.
Referrals will always bring some of the best business that is available to you so please do not waste this valuable resource.
Some of the points on this page may seem simple and you may be tempted to dismiss them because of that. Clearly there is much to do in each of these areas but you must make a start. Most people spend their time looking for something new and complicated.
If it is not complicated how can it possibly help?
Unfortunately, spending your time looking for the new and exciting while you ignore the obvious and the basics will cost you dearly.
Of all the 471,500 new businesses started in 2007 only about 4% will make it to celebrate their 10th anniversary. I am sure there are many reasons why a business closes down but insufficient sales is likely to be high on the list. Do these companies fail because they are not using the most recent cutting edge marketing ideas? I suspect that most fail because they are just not doing the basics very well.
This page and this web site is really about you. All that matters is the benefit you gain from reading what I write and listening to what I say. Stick around for a while. Subscribe to my newsletter and read the blog. Apply some of the ideas I give you to your business and if you benefit then it is worth your time listening to me further.
If you do not like my style (I realise I do not suite everyone) and you get nothing from the ideas you will find on this site then I suggest your time will be better spent elsewhere.
It is the things you do not know,
that you do not know,
that make all the difference.
Your business will only improve if YOU find out the things you do not know, or things you think you know but are not using, and apply them in your business. Start today by subscribing to my newsletter. You may just find that is one of the best decisions you ever make for your business.
If you are reading this you are probably looking for ideas and information to help you grow and develop your business. Congratulations! Most people never actually look.
I look forward to getting to know you in the future.
Have a Great Day!
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