When it comes to growing your business, what comes first – the chicken or the egg? Do you have to invest a lot of money in marketing in order to generate more business, or can you increase business without spending a bundle and reducing your profit margin?
Most business owners think they need to increase their marketing budget in order to ramp things up, but I’m here to tell you there’s another way to get the results you’re after without spending a lot of additional money on marketing. How? Well, In order to take two steps forward, you need to take one step back and review your existing client base first.
Business owners often make the costly mistake of assuming one-time customers will become long-time, loyal clients after the initial sale. This assumption is not only costly, it’s incorrect. Unless you nurture and grow your relationships with clients, you can’t assume they’ll continue to choose your business to meet their needs. So take a moment and do a quick inventory of your one-time clients. How many of these “inactive customer” files are taking up space in a filing cabinet or on your computer? It might make you feel good to think you’ve got a long list of customers or clients, but if they’re not coming back, they really aren’t customers, they’re only one-time buyers.
After taking stock of your “active” versus “inactive” customers, I bet you’ll start wondering whatever happened to Susie Shopper anyway? She seemed so interested and enthusiastic at the time of the sale, so why haven’t you seen her since? Did Susie Shopper leave you? If so, why? You won’t know the answer unless you talk to her directly, so here’s where the accountability piece comes in to play for you and your business.
Among the many reasons customers leave a business is a perceived lack of care and concern from the business. The other reasons customers leave you include unfair or high pricing, unresolved complaints and better offers from competitors. Given today’s business landscape, if a customer thinks you don’t care about them, they’ll just move on to the next business and then the next. Gone are the days when customers were just numbers (and thank goodness for that!), so make sure you’re holding yourself accountable for maintaining relationships with your clients or you’ll risk losing them to a competitor who not only cares, but follows through, too.
Since customers often purchase your product or service because they have developed a relationship with you, it makes sense to concentrate on strengthening your existing relationships. It’s important to your customers and therefore should be important to you, too. Also, consider the following statistics:
- Repeat customers spend 33 percent more than new customers.
- Referrals among repeat customers are 107 percent greater than among non-customers.
- It costs six times more to sell something to a prospect than an existing customer.
When faced with these facts, you have to wonder why businesses spend 80 percent of their marketing dollars going after new customers and clients rather than growing their business by nurturing, retaining, and maintaining the customer relationships they already have instead. Your marketing dollars will actually go further if you focus on your existing customer relationships, and it doesn’t have to be as difficult as you think. Treat your customers as partners, show them you truly care, satisfy them with products and services that meet their needs and develop promotions or incentives that reward them for doing business with you.
Customer loyalty is a long-term challenge that you must work toward every day and with every transaction – no matter how big or small. So in the end, it’s really neither the chicken nor the egg you need to think about first. It’s the nest that holds them both, and that nest is only as strong as you build it, my friends. FBN