When you have an effective system that will allow you to profitably get and keep quality customers that will return to do business with you over and over again, and then actively and enthusiastically refer you to others, your business will produce more profits than you can possibly imagine. And then everything else falls into place.
On the other hand, if you don’t have enough customers buying from you or using your services regularly, then you’ll not likely stay in business for very long, and will never have the chance to make a profit.
Now, let’s take a minute and look closely at the individual components of this important business skill…
Knowing How To Profitably Attract Quality Customers
Customers are the lifeblood of any business. Without customers buying the products and services you have to offer, you wouldn’t have a business to begin with. But customers alone, aren’t enough.
You want quality customers… customers who are pleasant to deal with. Customers who return to repurchase from you again and again. Customers who you can sell to and realize a reasonable profit from.
And you want to be able to profitably attract them. In other words, the return you realize from your investment of advertising or marketing dollars to acquire new customers, should be positive. You want a positive R.O.I., or return on your investment.
Next, you want to…
Ethically Exploit Their Maximum Financial Potential
Each of your customers has certain needs and wants. And the more of those needs and wants you can handle for them, the more benefits you can provide them, and the more profits you’ll realize.
It should be your goal to sell as many products and services to your customers as they need.
You shouldn’t take advantage of them or your relationship with them, but you should make every effort to sell them everything that you can ethically justify selling them.
It really comes down to this, and I’ll speak very frankly. If you really do provide the best products and services in the marketplace (if you don’t, you’d better rethink your ethics and why you’re in business), and if you really are the business who can serve your customers’ needs better than anyone else (and if you’re not, you either need to become that business or get out of the business), then you have a moral and an ethical responsibility to make sure that every one of your customers at least has the opportunity to take advantage of them.
And you should do everything in your power that’s reasonable and ethical to give them that opportunity.
Next you want to…
Convert Your Customers To Advocates Who Actively And Enthusiastically Refer Your Business To Others
By definition, an “advocate” is someone who is a backer, a supporter, a promoter, a believer, an activist, a campaigner, a sponsor.
The last thing you need is a database full of one-product, or one-service customers who buy the minimum amount from you, complain about your prices every time they make a purchase, and give the rest of their business to the company or business who has the lowest prices or a “better deal.”
There’s no way you can make a profit on these types of customers. Besides, they make your life miserable and drive you crazy in the process.
Who you want are customers who not only give you all (or the majority) of their business, but re-buy from you repeatedly, year after year. You want customers that are so happy and so pleased with what you do for them that they actively and enthusiastically campaign for you. That the story they tell about you, is so compelling that the people they tell are nearly forced to call you and ask for your help. Those are the people who make your job fun, enjoyable and profitable.
And finally, you want to…
Keep Your Customers For Life
Reliable studies demonstrate that the more needs a business handles for a customer, the longer they can expect that customer to do business with them.
In the insurance business for instance, an agent increases their chances of keeping an insured for three years or more by the following percentages…
- 45% if the agent insures only the auto policies
- 50% if both the auto and homeowners policies are insured
- 60% with auto, homeowners and life policies
- 97% with auto, homeowners, life and health policies!
While these figures are illustrative of the insurance business, the same principle is true of most other businesses. Banks, for instance, have studies that show the difference in customer retention with a customer that only has a checking account, versus another customer with multiple checking accounts, a savings account, an IRA, their car financed through the bank, and a number of other services.
The idea is that by serving all the needs your prospects or customers have, with the products and services you provide or have access to, you lock yourself in and the competition out.
And obviously, the longer you retain your customers, the more income you will earn from them, the more chances you will have to sell them additional products and services, and the more referrals you can get from them. It all adds up to increased profits for you.
Retention of your customers… the ones you’ve spent so much time, effort and money attracting and convincing to do business with you is critically important.
More than one study suggests that it costs six times more to get a prospect to buy from you than it does to get an existing customer to purchase from you again, and that it’s sixteen times easier to sell an existing customer than it is a new prospect.
When you add it all up, for every 5% increase in customer retention, you’ll generate a 30% to 45% increase in profitability over an 18 month period.
Depending on the nature of the products and services you sell, if your repurchase rate isn’t in the high 90 percentile range, you have some work to do.
A lost customer is more than just a lost customer, and their attending profits. It’s much more.
But for now, just keep this important point in mind… if you’re going to be successful in business, no matter what type of products or services you sell, you’ve got to have an intense focus on your customer. You’ve got to find out what they want and do everything you can to help them get it.
And if you want to make a fortune rather than just a living, you can’t do it for only a few. You must do it for large numbers of people.
The success of your business will depend on how well you serve your customers… the people who buy from you!