Most surveys show the average business loses about 19% of its client base each year. In fact, the authors of, “Customer Winback: How To Recapture Lost Customers – and Keep Them Loyal” estimates the average at 20 to 40% per year.
This means that if you have 500 customers and lose 19% or 95 customers you must get 95 new customers each year just to stay even.
Research shows it costs six times more to get a prospect to buy from you than it does to keep an existing customer, and it's 16 times easier to sell to an existing customer than to a new one.
So why would you spend any marketing dollars on new prospects before doing everything you can to get more business from your existing and past clients? Let me repeat that, “Why would you spend any marketing dollars on new prospects before doing everything you can to get more business from your existing and past clients?”
The truth is that the real money to be made by most businesses is from additional sales of products and services to their existing customers and those they refer. Getting repeat and referral business is something most small business owners are not proficient in.
If you want your business to be successful, you need to have a compelling reason, “Why should your customers and prospects do business with you, rather than your competition”? You need to become someone they will gladly and often refer new customer prospects to!
The one strategy that can do more for building your business than just about anything else you can do and the most overlooked marketing tool by almost every business is “Follow Up”!
You need to immediately put in place a strategy and an effective system to follow up with:
- Existing Customers
- Past Customers
- Potential Customers or Prospects
Since it costs six times more to get a new customer to buy from you, it just makes sense to spend much of your time, effort and money on strengthening your relationships with your existing customers and turning them into referral machines for you.
In developing a follow up system for your customers and prospects, you need to determine:
- The number of times you want to contact them and over what period of time
- The frequency of contact. For example, every two month plus on their birthday
- The method of contact. Will you send a greeting card, post card or letter? Research has shown that a greeting card will get opened 12 times more often that other types of mail.
- Determine the purpose of the contact. Will you be thanking them for buying from you, making them a special offer or asking for a referral?
A study done by the Association of sales Executives revealed that 81% of all sales happen on or after the fifth contact. If you’re only doing one or two follow up’s, imagine all the business you are losing. Not following up with your customers and prospects is like filling up your bathtub without first putting the stopper in the drain!
Here’s an example of an eight contact follow up system you could put in place in your business, modify it to meet your business needs:
1. When they buy from you – send a “Thank You” card
2. January – send a “New Years” card
3. March – send an Item-of-Value or Special Offer letter
4. May – send a “Referral Request” card
5. July – send a “Fourth of July” card
6. September – send an Item-of-Value or Special Offer letter
7. November – send a “Referral Request” card
8. Birthday – send a “Birthday” card
According to the Guinness book of World Records the Greatest Salesman of all time was Joe Girard. During his fifteen year selling career, he sold 13,001 cars … an amazing feat. What was his secret? Greeting Cards! Every month, every person who had ever bought a car from him got a greeting card. It didn’t matter if it was Christmas, Valentine's Day, St. Patrick's Day, or the person’s birthday ... Joe was a greeting card sending machine!
With today’s technology it’s not necessary to spend your time doing it manually like Joe and his assistants did! On the Internet there are online card sending services where you can send “REAL” physical full color glossy greeting cards, mailed with a real stamp, from your computer. The one I use has a ton of features, like being able to set up automatic mailing campaigns. And, it’s very inexpensive at $1.37 a greeting card, which includes postage.
According to the National Association of Realtors, 70% of homebuyers said they would use their real estate agent again. However, only 11% reported buying through the real estate agent they had used before. Why? Because clients haven’t heard from them and they assumed the agent didn’t want to do business with them.
Whatever your product or service, don’t let that happen to you!
Commit to putting in place a system to insure continual automatic follow up to your customers and prospects. Your business depends on it!
By Joel Weiner, Profit Wizard
As published in “Money & Profits Magazine”
More free 'Business Building' articles at www.GetWebsiteCustomers.com