Marketing, or the promotion of your business, can be a costly endeavor. For some businesses, the money it takes just to get prospects in the door is often as much or more than is made in total profits when you sell to them.
Some businesses look at spending money on marketing as a negative, or a “wash,” so they don’t aggressively engage in it. But marketing doesn’t have to be a business cost. It can really be an investment… an investment that returns a significant amount of profits to you, if you understand and approach it properly.
In most cases, it’s easier and it costs less to sell additional products and services to your existing clients than it does to new prospects.
Some studies show that it costs up to six times more to sell to a new customer versus an existing one.
In many instances, businesses actually lose money on each new customer they attract, because the costs of marketing exceed the profits they make on the first sale.
If that’s the case, then it only makes sense to systematize your client acquisition activities, and sell more to your existing clients.
There are four primary ways to build a business…
- Get more customers.
- Get customers to buy more.
- Get customers to buy more often.
- Extend your customer’s “buying lifetime.”
For now let’s limit our discussion to item number two… how to get customers to buy more. This is the most cost-effective way to do business.
So, if you want your business to grow… really grow… and do it in the least painful way, and with maximum results and minimum costs, you need to establish a systematic way to get people to upgrade their purchases and/or to buy additional products.
People go through a variety of emotions prior to, during and after a purchase. Especially, a large purchase. In the time leading up to a purchase they go through a phase of excitement and anticipation about what your product or service will do for them.
Sometimes there may be periods of skepticism or doubt, but if the person really wants what you’re offering, those feelings will be pushed aside, and excitement and anticipation will take over.
After a sale is made, it’s not uncommon for a person to go through what’s known as “buyer’s remorse”… a feeling of uncertainty… not knowing for sure that they made the best or wisest decision.
In time, those feelings can be overcome as they become more comfortable with the benefits of using your product or service.
But, at the time of the sale, your prospect or customer is probably the happiest and most pleased with you and your relationship than at any other time.
In fact, they are so happy that they have said, “yes” to your offer, and have opened their wallets and given you some of their hard-earned money.
Sometimes, depending on the size of the purchase, a lot of their money. You’ve just solved a problem for them. So, this is the ideal time… when they are most pleased with you and when you’ve come to their rescue… for you to recommend other options or additional purchases.
At this particular time more than at any other time, your customer is most likely to be receptive, open and willing to any suggestions you may make. So take advantage of the situation and timing, and recommend other options that would be in his or her best interest.
“Bundling,” “Packaging,” “Cross-selling” and “Up-selling” are just a few examples of how you might provide additional products or services to your customers at the time of purchase.
Any upgrades or additional sales you make in this manner are pure profit, since no advertising costs or other overhead expenses were incurred to create the sale. By incorporating this one simple step into your sales process, you can increase your sales amount per customer significantly, and really boost your bottom line.
Now, suppose you don’t have anything else you can offer your customers. You only have one product or service to sell.
Look around at complimentary, but non-competing businesses and see what products or services they might provide that you could offer to your customers. You want products or services that would be logical compliments to what you offer.
Then make arrangements with the businesses that provide those products to make them available to your customers. Remember, if your product and service really will help your customers solve their particular problems… if it really is in their best interest to purchase from you…
…then you have an obligation to see that they get the very best use of that product or service.
And that may mean that you make other products that will help them maximize the use of your product available to them… even if you don’t sell them yourself.
This article is one is a series of The 20 Most Common Marketing Mistakes.