Client Magnets Official Blog

Posts Tagged ‘Customer Loyalty’

Going through the work of identifying your target audience, really getting to know them and developing products to meet their needs can be very rewarding. If you want it to be financially rewarding, you’ll also need to learn the art of making repeat sales. Repeat sales generate eighty percent of the profits for a successful business. When you’re ready to move beyond the one-time transaction, here are some ideas for mining the gold of repeat business.

Breaking the “Find New Customers” Cycle
It’s difficult to watch someone work very hard to build a business, only to leave the additional income from repeat business on the table. That’s what happens when you’re constantly chasing new customers and making one-time sales to them, rather than offering new products and services to existing clients.

If you think about it, it’s actually easier to sell a product to a satisfied client, isn’t it? So it doesn’t make sense to get caught in the cycle of “go out and find more clients and sell them the same old product.” In order to boost your income considerably, you must, instead, begin creating new products that meet the needs of your existing clients.

Once you make up your mind to pursue additional business with existing clients, you can step off the never-ending cycle of chasing new clients and watch your income move up at the same time.

Learning What Your Clients Need
You may be asking yourself, “But how do I know what my existing clients need?” You can actually use the same process that you used to create your original products. Here are some helpful steps:

• Look at your client base as a target market.
• What questions are those existing clients asking?
• What additional needs continue to be unmet after they buy your product?
• What add-on products complement your original offerings?
• How could your product line be expanded naturally to meet more needs?

Here’s an example that illustrates how a one-product company can create add-on sales to its existing customers. A hypnotherapist specializes in smoking cessation hypnosis. She has lots of clients who come to her for that service, but once they stop smoking, she doesn’t ever see them again. She’s spending a lot of time and money in marketing to attract new clients.

Because her existing clients know her smoking cessation sessions work, they’re the perfect prospects for additional services. By listening to her current clients’ concerns, she learns many of them are ready to take on new challenges in life, now that they’ve quit smoking. She offers to help with visualization sessions so they can focus on their new goals.

By expanding how she sees her existing client base, and focuses on their needs, she has opened the door to a whole new level of income. You can do the same thing. If necessary, take some time off from marketing to new target audiences and turn your complete focus on your existing customer base.

Develop the habit of listening to your clients’ questions and determining what needs still exist. Turn those needs into products that fill them. Not only will your clients be grateful, you’ll also see your income multiply substantially.

You will always have to do some marketing to bring in new clients, but there’s far less pressure when you’re making repeat sales of new products to existing clients. Once you stop chasing new clients and focus on building more products to help your customer base, your whole business will turn around. Learn how to mine the gold of repeat sales to build a strong, sustainable business and a solid base of satisfied customers.

Bernadette Doyle is a small business marketing expert. Get more tips and advice at http://www.clientmagnets.com

We’ve all heard of some version of the 80/20 rule, and I love one of the alternate names for it – The Principle of Least Effort. You may have heard of this before, it’s also called the Pareto Theory or the 80:20 Correlation, but “The Principle of Least Effort” should be the name of choice for what we’re discussing, as that’s so appropriate for our marketing efforts.  Of course, in marketing we want the most results for the least effort.

This isn’t laziness — it’s just good old-fashioned common sense, finding a way to maximize results with the least amount of input.  That’s the basis of the 80/20 rule – 80% of situations can be attributed to 20% of the input.  It can apply to so many circumstances, both business and personal.

There are quite a few versions of the 80/20 rule that have been translated into sound business advice:
• 80 percent of results come from 20 percent of efforts
• 80 percent of activity will require 20 percent of resources
• 80 percent of complaints come from 20 percent of customers
• 80 percent of usage is by 20 percent of users
• 80 percent of revenue comes from 20 percent of customers

It’s that last version that I’d like to focus on because when we look at our revenue, you’ll realize how true it is – 80% of the revenue comes from 20% of the customers and the other 20% of revenue is made up of 80% of the customers.

So, if you want to grow your business, the best way, the most sensible way, and the fastest way is to figure out who your top 20% of customers are and provide products, services and offers for those people.  Now, for the other 80%, they’ll come along if they want to.  If they fall by the wayside, so be it.

But focus on the 20% that will give you the 80% return on revenue.

There are three key steps to making the 80/20 rule successful for your sales.

1.  Identify
Take a look at your customer base and identify your top 20%.  Who’s generating the most revenues?  When you do this, you’ll see that there’s a gap between your top 20% and the remaining 80%.  In my business, I’m seeing that gap widen.  I’m noticing a smaller group of people who are willing to pay more and more for my products and services.

2.  Focus
Focus on this 20% and think about what you can do to create offers for them.  Even during tough times, I’m still seeing a percentage of customers that are looking for higher value products and services.  I’m also noticing an increase at the lower end in that there’s a larger group looking for the lower ticket items.
Since I’ve noticed this happening in my business, I’ve responded by creating options and opportunities for both ends of the spectrum, but less within the middle ground.  I’m focusing more attention and energy to the upper end and the lower end, and if you’re seeing that in your business, that may just be the right course of action for you as well.

3. Create
So, now you’re focusing on creating low end and high end options – where do you get started?  In keeping with the “Principle of Least Effort”, I would say start with the high ticket items to make more revenues on fewer transactions.  This means you’re only going to need to find a few clients willing to pay top dollar, and you’re going to be earning the same amount as if you had ten times the number of customers with 1/10 of the revenue.  Which makes more sense?

If you’re struggling to meet goals or just looking for a better focus for your business or marketing efforts, remember the 80/20 rule.  Remember that it’s also going to be “The Principle of Least Effort”.

Bernadette Doyle is a small business marketing expert. Get more tips and advice at http://www.clientmagnets.com

Building a strong list of clients and prospects is an absolutely critical step in developing your business. It takes time and effort to refine your list, but every entrepreneur starts somewhere. Let’s discuss the three types of client lists used in direct marketing, where they originate and the value they have for your business.

Compiled Client Lists

When you rent or buy a compiled list from a list broker, they’ve pulled the names together by key attributes. For example, all the people on the list might be IT professionals. Another common way to compile lists might be firms in a geographic location with a certain number of employees.

Whatever the attributes the people on your compiled list share, the point of these lists is to narrow down the reach of your marketing to people more likely to buy your products. So that means you’ll need to focus in on what common characteristics someone who needs your product would have. Once you know that, you can order your list more accurately.

But having said that, it must also be said that compiled lists normally provide the worst response. Unless you find a particularly adept list broker, and a group of people who will absolutely be helped by your product, the return may be disappointing. You’ll have to decide if you’re willing to invest money in such a list, knowing the possible outcome.

Response List

There’s another kind of list you can invest some money renting in order to boost your marketing. That’s the response list, and that simply means it’s a group of people who have responded favorably to your type of product in the past.

They might be managers who have attended certain seminars or workshops that fill a need similar to what your product meets. Or, they could be a group that has bought a product related to yours. Another way response lists are focused is by the types of trade magazines they subscribe to.

No matter why they end up on the response list you lease, they’re more likely to respond to your marketing because they’ve shown an interest in similar products. In the past, they’ve taken action in response to someone’s marketing in a field similar to yours.

That kind of qualification can make all the difference in how successful your marketing is. Rather than simply sharing a characteristic, they’ve actually reacted favorably to products related to yours. They understand the value of what you have to offer, and it’s filled a need they have. That’s a stronger foundation for your marketing efforts.

House List

While both the compiled list and the response list can result in sales, one list you should be building from day one in your business is the house list. These are the people who have raised their hands and said “I’m interested in your product.”

They may have responded to one of your marketing campaigns. They could also be previous clients. No matter how your house list is built, it’s going to yield a much higher rate of conversion than purchased lists.

This is true because the people on your house list are already somewhat invested. They’ve already moved toward you by responding to your marketing. This is the group of people on which a successful business is built.

How many do you need on your house list to become a success? That depends on how focused you are in learning what they need. If you have a small list of people who request information every time you announce a product, your conversion rate will be increasingly higher as you fine tune your products and marketing. For a house list, it’s not the size, it’s the quality that builds business.

Once you’ve spent the time and effort to build a decent house list, you’ll learn how it feels to sell out a seminar. You’ll know what it’s like to have tremendous response from little marketing effort. That’s when the tide turns to real success for your business.

Sometimes getting started in business requires renting or purchasing client lists. If you know up front that the conversion rate won’t be as high as from your house list, you can decide how much to invest in them. As your business begins to grow as a result, definitely compile your own house list. Focus specific marketing to them in ways that have worked before. In this way, you’ll build a group of loyal clients who can put your firm’s success on autopilot.

Building a solid list of people who need your products is very much like growing a crop. You must sow either time or money, and sometimes both, to reap the benefits of that kind of list. The question for you is, “What are you willing to invest to build your list?” To motivate you to make the investment, let’s first look at the benefits of doing so.

A Great List is a Long-Term Asset
You may have already made the mistake many entrepreneurs do of being short-sighted about your list. You may say to yourself, “Yes, I have thousands of names on my list now, but only the ones who bought this month are important.”

Developing and working with a list of prospects is a long-term process. Someone may raise their hand today and say, “Tell me more” but not buy until later. That interest they’ve expressed is still a valuable asset for your business.

You’ll continue to work with them and they’ll buy. By doing so, you’re building a structure that will sustain your business long-term. That business, stretched out over time, is what allows you to grow.

Here’s how it can be for you, once you’ve invested the time and effort to build your list:  Suppose you develop a seminar to serve a specific need. Over time, your hard work growing your list and continuing to offer them your product pays off. Each seminar gains a little more interest from your list until, finally, you announce a seminar and it sells out immediately.

Wouldn’t that be a fantastic place to be? That type of customer response takes time to develop, but it’s well worth it. A loyal base of customers who look forward to your next product is a fabulous asset.

When you’ve built trust with your list, and they’re eager to hear what you’ve got to offer, you can return again and again to the same people to sell products. You’ve taken the time to learn what the people on your list need, and you’ve developed products to meet that need. That’s when growth really becomes automatic.

What Are You Willing to Invest?
And so, we return to our original question: “What are you willing to invest to build your list?” Are you willing to put in the hard work, even when it seems as though no one is paying attention? Do you have a long-term view of what your list can bring to your business?

If you’re discouraged now because it doesn’t seem as though the people on your list are responding, dig deeper. If your list is too small, it may take a financial investment to grow your list by buying someone else’s.

If you’re not in a financial situation to do that, you must invest the time to find ways to increase your list. The investment you make, whether in time or money, will pay off if you keep at it. What feels like spade work now is going to reap big rewards. The secret is to keep at it.

It takes time to communicate effectively with the people who need your products.  It’s hard work to find ways to break into new markets and to develop new products. Learning what the people on your list need and creating those solutions isn’t always easy.

There’s nothing, however, quite like knowing there are people waiting for your next product. You can be in that position by deciding to invest whatever it takes to build the kind of list that will sustain your business long-term.

Do you think your sale is complete once you’ve physically delivered a product or service to a client?

I hope your answer is no. Because, if it’s yes, you are missing out on a golden opportunity to create more revenue for your business.

Once you deliver your product or service, you are actually in the prime position to make another sale to your client.  Every completed sale or delivered order should include an opportunity for your customers to purchase something else from you.

If your customers receive your product through the post office, you should include a bounce back with that order. A bounce back is an offer for another product. Something in addition to what was purchased. It doesn’t necessarily have to be your product. You could recommend a partner’s product and receive commission on that. Or it could be something of yours.

I recognized this as an area of hidden money in my own business.  I sent out mailings for quite awhile which didn’t include any bounce back offers with them. Since add bounce back offers, we’ve been generating extra revenues. It was something that I only needed to set up once and now it generating additional revenue every time we deliver a product to a customer.

If you’re delivering some type of service, rather than a product, you can still implement this bounce back offer. When you’re delivering a coaching or training program to a client, this is the perfect time to approach them with additional services. This is the time when that client or customer is going to be most motivated to work with you or hire you again.

You’ve surely heard the expression “strike while the iron is hot.”

At the end of an appointment, automatically say to clients who received the training services you offer, “When shall we set up your next appointment?”

You want to be certain to get the next date on their calendar right then and there.

After you’ve done a day’s training, make sure that you’ve arranged or booked a debrief meeting with the client at the end of that day. During that debriefing you’ll be making your recommendations for what they need to do next. That is when you present them with their options and schedule for what they need next.

Whatever you do, don’t leave the building.

Don’t leave and then try to get them back on the phone two weeks later.  Because you won’t be the most important thing on their mind two weeks later. When you’re physically there with a client is when you are of most importance to them. That’s your biggest opportunity to make additional sales.

Bounce backs can make a big difference to your business because they can have a cumulative effect. So, even when you think you’ve completed a sale, implementing some type of bounce back offer could significantly increase your revenue and bring out some hidden money for your business.

Does this scenario sound familiar? You’re working sixty plus hours a week and yet your income remains stagnant. You couldn’t be any busier, but you’re no more successful than last year. If any of this rings a bell, consider this possibility: the real problem with your productivity may be the time you spend avoiding clients instead of connecting with them. There are three steps to turning things around and having the connections with clients that build business.

Step Number One: Track How Your Time’s Being Spent

The activities on which you spend your time determine your income. If you take a hard look at how your time’s being spent, you may find a lot of busy work and very little client contact.

Are you actually talking to clients, or do they have to hunt you down? Does it take multiple calls for a client to receive a price quote? Do you actually quote prices or promise to get back later, but never do?

Whatever it is you’re doing besides connecting with clients, it probably isn’t producing income.

What’s needed is time in front of clients making your offer. Identify the ways you’re avoiding doing that and you’re ready for the next step.

Step Number Two: Make a Commitment to Connect

Once you’ve identified the things you’re not doing that could put you in touch with clients, make a commitment to change. Tell yourself that for the next week, or month or whatever time period, you’re going to return calls or finish price quotes, whatever it is you’re not doing now.

Make this commitment serious by adding some conditions. For example, you might say, “Every day this week, I will return client calls before I can eat lunch.” The point is to make it a high priority commitment in your life. Make this an iron-clad thing that you must do, because it’s so important to your business.

Step Number Three: Dig Deeper to Discover Why

If you’re still having trouble facing your clients, it’s time for a little soul searching. Is it possible you’re avoiding clients because you’ve erected mental barriers? Is there some belief inside you that’s keeping you from being responsive? Until that’s resolved, you may be saying “I need more clients” but you’ll continue to avoid doing the things that attract them.

Perhaps you feel you need more education or training first. Maybe you feel your website’s not quite perfect. Those are both mental barriers you’ve put in place to keep from moving forward.

It’s actually quite possible to make great sales without having much in place at all. Tell yourself it’s time to get down to the basics—returning calls, making appointments, completing price quotes—anything that will help keep you connected to your clients.

Once you’ve made the commitment to stay connected with your clients, the energy in your business is going to change. You’re going to see opportunities appear that can bring you great success. By making yourself open and accessible to clients, you will naturally attract more business and begin to reach your goals. All it takes is identifying how you’re avoiding clients now and making a commitment to take a step back toward them.

Did you know that 20% of your efforts drive 80% of your business’s results? And, that 20% of your clients generate nearly 80% of your annual revenues? These are simple examples of a proven and well known concept called the 80/20 principle, or Pareto’s Rule.

If you were to take some time to analyze your business’s results, you would find these statistics true. In fact, it can be a useful task to complete, as it will open your eyes at some of the underlying dynamics present within your current business structure. You will also be surprised to discover that within the top 20%, the 80/20 rule applies again. 20% of your 20% is 4%, which represents the absolute top tier of your client base. This group is the driving force behind your business’s success.

With this information in mind, how can you leverage it to grow your business?

In many cases, your top tier clients will demand more from you than your lower tiers. They will often demand more of your time, personalized support and readily available help. And, they will often want to know more about other services or information you have to offer. Because this group demands more, this is your best opportunity to leverage your products and services.

Here are simple steps for identifying existing opportunities within your top tier of clients:

Step 1- Take a moment and identify who your top tier clients are by name.

Step 2- Review which products and services they have ordered in the past, any spending patterns and any information which they have recently or previously requested.

Step 3- You may even want to consider calling them to find out what additional services they may be interested in, if there are any particular parts of their business that they would like to address given the opportunity and to solicit any general feedback that they are willing to offer.

This information should be what you utilize initially when developing your products.

For example.  Let’s say you begin offering a top level mentoring program aimed at this group –  in particular, giving customized solutions and more access to you as a professional. Because the demand for your services will be higher, your ability to provide the services directly will be reduced. With increased demand and decreased supply, you can charge a premium. Instead of $500 for your services, you may be able to charge as high as $5,000. And, if just 20 of your top clients sign up for this value added service, you have just effectively increased your income by $100,000. When you put this increase into perspective annually, and then over the life of your business, you can begin to see the tremendous financial impact you could experience if you implement this business concept into your current offerings and operations.

As you develop your online business, think beyond just digital products such as ebooks. Think about how you can design solutions which specifically cater to your top, top clients, the 4% we identified earlier. When you have focused on sharing your unique talents with others, there is a demand for it.

To begin this process, work through the 3 simple steps outlined above with your top clients. This is your target audience, which will provide the information you require to build an information empire.

How does it feel right now when you think about growing your business?

About finding new prospects?

About the revenues you’re making?

There’s a good chance that you’re sometimes feeling confused, even overwhelmed. You know the clients you are serving are really happy with what you’re doing, and yet, maybe you’re frustrated that you’re not getting the message out to a big enough audience.

Once you do get that message out, though, you’ll be making the money you could and should be making.  

I know firsthand how it feels to be in that very place.  I was in a similar situation several years ago – making some sales, doing okay, but nowhere near where I needed to be considering all the hours I was putting in. I felt that I needed to promote myself 24/7 to get anywhere close to my sales target. Some days, I would just sit at my desk all day, constantly promoting my business to bring in clients.

Despite everything I knew, I just wasn’t able to pull it together in a way where I could market my expertise consistently and make consistent predictable income.

And what I had to do – and what you need to do – is to step back and really start to analyze what you’re doing in your business. What’s working? What isn’t working?

If you’re only making money when you’re constantly working on promotion, your business strategy for success translates into “work longer and harder.” And as much as you really don’t mind working hard, you want to know when all this hard work is going to finally start paying off.

One of the first things you should realize is that, not only do you need more clients, you need clients to spend more money with you.

At one time, the only thing that I was offering was a £50 e-book and a £350 training course. Even my very best customer could only spend £400 with me. Ridiculous in hindsight. Now I’ve got single products that cost more than that.

The next thing you need to realize is that you have to find a way to make sales that isn’t dependent upon you personally. You have to be able to generate income without having to promote your business 24/7. In my business that meant setting up an automated process for converting interested people into paying business.

And the final thing you need to realize is that you need to find ways to increase your visibility in the marketplace.

Taking a minute to analyze the way you do business will force you into a whole new way of working, as the light bulbs begin to go on and you discover what your business needs in order to grow.

Chances are there’s a limit on how frequently someone can purchase from you. Even your best, most loyal customer.

And you probably think that there’s nothing you can do about that. But you’re wrong. There are definitely ways to stop restricting the frequency of your customers’ purchases.

For example, if you work as a consultant and are brought on board once every two years to do a big project for a client, at the end of that project they don’t need you again for another two years.

The frequency of this transaction is only once every 24 months.  But finding ways of serving that client every 12 months will increase the frequency of their purchase from you and thus increase your income.

This is possible even if you think you’re in a business where it’s not.

A person who sells corporate entertainment told me, “Once someone has bought this type of entertainment they probably aren’t going to want it at the next conference.”

And another person said, “I sell weddings. I’m a wedding planner. And hopefully once people have got married and they spent money on a wedding they’re not going to need that service again.”

Now both of these statements are absolutely true. And they may very well apply to your business too.

Here’s where it’s time to begin thinking outside the box. It’s time to begin thinking more broadly about how you can leverage that relationship you’ve built up with that customer who trusts you enough to give you money. How can you offer them new, additional, complementary solutions?

It doesn’t have to be that you just try to get them to buy the same thing again and again. In fact that’s typically not a good thing to do.

You need to find a way that you can continually add more value in new forms and other ways to give them the opportunity to spend more with you.

For example, a consultant might offer an annual check-up to ensure that the customer’s project is on track. This will increase that customer’s purchase frequency to every 12 months.

Even a wedding planner’s work doesn’t have to be one-time only. Why not broaden your offerings to include anniversaries, christenings, any future event your customer might want to celebrate?

So look at your existing business and think of ways to offer additional services that will bring customers to you more frequently. That’s how you’re going to turn one-time sales into recurring or continuity business.

It’s the big question. Should you offer a guarantee? The marketing gurus will assure you that guarantees increase customer confidence and therefore sales, but many of the small business owners I talk to are concerned about the potential costs of refunds, and attracting unscrupulous customers who will receive the goods or service but then take advantage of the refund option. So what should you do?

In my opinion, there is no contest here. After over 11 years of being in business, I believe that guarantees are essential, for the following 3 reasons.

1. It’s A Question of Business Ethics…

While there certainly are dishonest people who will take advantage of your guarantees, the majority of people, in my experience, are good and decent and have genuine reasons for requesting refunds. Think about it, wouldn’t you rather those customers were talking to YOU, giving you suggestions to improve your product and service, than running around all over town bad-mouthing you? It’s been shown over and over, that a complaining customer who gets their problem resolved, is actually MORE loyal than a customer who never had a problem in the first place. So just from the point of customer relationship, you MUST offer a guarantee.

2. The Extra Sales You Generate Far Outweigh The % Of Returns

Many business fortunes have been built (and resurrected) on the strength of guarantees. Lee Iacocca turned around Chrysler when he said ‘If you want to know who builds them better, take a look at who guarantees them longer.’ I know what you’re thinking. That’s a big car company and has no relevance to you as a small business owner? Not so. Whatever business you are in, offering a big, bold guarantee inspires confidence.
A guarantee is your way of saying to your customers, ‘I’ll take the risk’. For a hesitant prospect, the guarantee can be the deciding factor that finally nudges them into action. I know you might be concerned about people ‘taking advantage’, and the truth is, there are a couple of low-lives out there who will. But ultimately the extra sales you will make will far outweigh the number of returns (genuine or not).

3. If YOU Can’t Stand Behind Your Product Or Service, Then Who Can?

If you are selling a product or service that you cannot strongly and fairly guarantee, then maybe you should find something better to sell. Even if you are in a situation where results are dependent upon the client, you can find something to guarantee eg ‘If you complete all the assignments, turn up to all the sessions and STILL don’t get the promised results, then it’s free.’
Even if you are selling something where the results CANNOT be easily predicted because there are so many variables, you can find SOMETHING to guarantee eg ‘you’ll never be kept waiting more than 10 minutes for your appointment’, ‘if at the end of the one hour session you don’t feel like you’ve just had a weekend away, then it’s free.’

The bottom line is guarantees WORK, and if you aren’t using them in your business, you are almost certainly missing out on sales and opportunities, So what are you waiting for? Go guarantee something!