The Australian Small Business Blog

Monday, October 12, 2020

The Fourth Profit Driver – Increasing the Number of Times a Customer Buys

by Dr Greg Chapman

In an earlier article I described The Five Profit Drivers marketing system. The fourth of the Five Profit Drivers is Increasing the Number of Times.a Customer Buys from You.

It is six times easier to sell to an existing customer than to sell to a new one, yet businesses spend more time finding new customers than going back to their exiting ones to see if there was something else with which they can help them. The best place to find gold is in a gold mine!

One business owner told me how a client they hadn’t heard from in 3 years had called him. The owner thanked them for contacting them again after all this time, but the enquirer had not realised they had used him before. It was just luck that this customer had called him again, but how many others had forgotten him and gone somewhere else?

If you do not stay in contact with your customers, why should they stay in contact with you? There are many ways you can stay in contact with your customers until they need your services again. Here are some examples. It starts with the follow-up after the first sale. This could be as simple as a Thank You card, or for more expensive services, an appropriate gift. Real Estate agents often send a bouquet of flowers to a buyer of a new property (often provided free by the local florist who wants to introduce themselves to the new resident).

Newsletters are a popular way of staying in contact. Your newsletter could contain ‘How to’ information that your customers can use. It could also include seasonal offers or specials.

You could send them a card. If you know their birthday, send them a birthday card. Many businesses collect this information as part of their service. For example mortgage brokers need that information for loan applications. A restaurant could offer customers a free meal on their birthday. (Of course no one will come alone for a meal on their birthday!)

Give your clients a regular “How is it going?” call. You will surprised how often such a call uncovers new opportunities for you. You could also take them to lunch.

Why not send them an article you think may be of interest to your clients? Or even a joke. This is all about staying Top of Mind with your customers so that whenever they need a service you can provide, they think of you first. This is all about building a relationship with your clients so they don’t want to do business with anyone else. Coffee shops should remember the names of their regulars, and make them feel special.

Loyalty programs in some businesses are also a great way of retaining clients. Airlines do this very effectively with Frequent Flyer programs. Customers will actually accept mild timetable inconvenience or even higher prices to maximise their points. In a coffee shop it could be as simple as a card that is stamped so that every sixth cup of coffee is free.

For your most loyal customers you could have a VIP program that provides special service in recognition of the business they give you. Finally you need a way to track all this. Businesses that excel at this Profit Driver use Customer Relationship Management software (CRM) to manage and track their follow-up programs.

What strategies are you using to Increase the Fourth Profit Driver - the Number of Times a Customer Buys from Your Business?

The First Profit Driver article is here. The Second Profit Driver article is here. The Third Profit Driver article is here.

May Your Business Be –As You Plan it!

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Dr Greg Chapman is the Director of Empower Business Solutions and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success and Price: How You Can Charge More Without Losing Sales.

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