Mention marketing to the average business owner and they think mainly of advertising, however there are far more cost effective, far more profitable and much easier ways to get yourself new customers ...
But first, we need to understand a simple idea about what business really should be focused on, and that's profitable customers. Not one time buyers but raving fans that will come back time after time and/or refer you to friends, family and colleagues. The first paradigm shift you need to make in your own minds and with your team is to realise that your goal is 'not' to sell your products or services; it is to buy customers. This fundamentally changes two things:
1. The way you approach your marketing, of which customer service is just one other and very important element.
2. The way you turn marketing from a cost into an investment and realsie life time value from your customers.
Let me explain.
When you "buy" a new customer with any form of advertising or marketing it costs money. Simple example, if you ran an advertisement for say £2,000 and got 100 calls and 20 sales then you spent £100 per new customer.
That number is your "acquisition cost" or "cost per sale." Essentially it's how much it costs you to buy a new customer. Take that one step further and you got 100 people who called or 100 leads so your "cost per lead" was (£2,000/100) £20.
So, if you don't already know these numbers you need to go and work them out. If you get a lot of business by word of mouth or passing trade you still have to count them as well.
If we follow this example and pretend it was a restaurant, we can presume each person coming in spent only £100 on dinner. How much money did you make from each customer? That's right, you lost money, It cost you £100 to get them there, £30 for food and drinks to serve them, £30 for staff and £10 for overheads, so all up £170 out for £100 in ...
In other words, all 20 of these new customers were on average a loss.
So, there are four ways we can turn them into a profitable customer right up front.
1.We can work on writing better advertisements. Create a better headline, a better offer and make sure we only advertise in media that makes sure we are getting to our target audience. From there we should be able to get a much better response, many of my clients we've doubled and tripled advertising responses with just a few simple changes. So, let's look at the numbers if we doubled the responses, and you can fairly easily do this. Now we get 200 callers and your cost per lead goes down to just £10 each ... That's a great start and assuming the other numbers stays the same, we are down to just £50 cost per sale and thus £120 out for £100 in. Still more work to do, but we are on track ...
2.Next we work on getting more of the callers to come in and buy. Boosting your conversion rate is often as simple as measuring it and as complex as creating scripts for your salespeople or receptionists to follow. So, what if instead of 1 in every 5 (20 out of 100) coming in we could get 2 from 5 and really make sure the marketing and advertising pound spent goes further. So, we are now getting 200 callers and instead of just 1 in 5 we get 2 people to come in and buy. That means we are up to 80 people booking in and buying from you. Your acquisition cost or, cost per sale is now down massively. Your £2,000 advert now gets you 80 buyers at just £25 each. So when we do the math, our marketing is starting to make a profit on ever new customer, just £95 out for £100 in. Great work ...
3.Next we need to get them spending more every time they buy from us. Instead of £100 each time, how can we work on raising sales, suggesting other items, a better wine list etc. all these ideas you can sit down now and work on. What else can people buy, Think of it like one of our clients, a pharmacist who offered ever single person who bought from him a bag of sugar free sweats that previously he only sold to diabetics without considering they are great for kids or if on a diet. He ended up selling hundreds of packs a week, just by asking.
4.Finally, and most important we need to get people back. Collect their details, send them a monthly newsletter, special offers, even a simple thank-you card and invite them back as often as you can... In the restaurant example earlier, you probably thought that acquisition cost was terrible and you would never run that campaign again? Not nessessarly. What if that person or group of people had such a fantastic meal and customer service experience that they came back many more times and not only that told all therr friends and family to try the restaurant, what would that do to your acquisition cost?
No matter what you do, remember you are buying customers and in our current economy it's getting more expensive every day... So once you've got them, keep them for as long as you can; stop chasing market share (unless you are a high volume producer) and start chaisng wallet share. Good service is absolutely essential; however that includes your follow up marketing. Keep in touch with them and give them reasons to buy from you or refer you time amnd time again.
