Usually, if you get more customers buying your product or service – you’ll make more money.
The problem is what you have to do to get new customers. If you have to spend a fortune on advertising and promotion or lower your price to make your product or service more attractive more customers can easily cost your business a fortune!
And, that’s not good.
There are only three methods to increase sales in ANY business. I call them the Three Mos: #1. Mo’ People #2. Mo’ Money #3. Mo’ Often
#1. Mo’ People – Get more customers (more people who will buy from you).
Most businesses spend all of their time and money on this – getting more customers. They’ll mail out thousands of colorful brochures, pretty postcards, and slick sales letters. They’ll spend BIG bucks advertising in newspapers, magazines, circulars, and directories. They’ll have huge sales where they hope a new customer will be enticed by disgustingly low prices.
All the “Mo’ People” stuff that companies do to get new customers eats up a LOT of money and time. Plus…
It’s tough to make it work.
Companies that send out mailers are ecstatic when they get a 1% conversion rate. That means out of 100 mail pieces sent out, 1 person ends up buying something. You don’t need a PhD in math to figure out that it also means 99 out of 100 pieces of mail:
- never made it to the prospect
- were ignored (and trashed) by the prospect
- didn’t excite the prospect at all
- didn’t excite the prospect enough to get ’em to buy
Not only that, but if it costs $1 to send out each mail piece, then whatever you sell to that 1 measly customer better bring in at least $100 profit or your campaign ends up in the red.
New customer acquisition campaigns can (and do) work – but only when the per-new-person cost of the campaign is much less than the lifetime value of each new customer you get.
For example, if you’re selling yachts or private jets, you can send out expensive mailings to your prospects because just one single conversion will put you on easy street.
There’s a pretty famous new customer acquisition success story from a few years ago. You may remember a time when you couldn’t open a box of bath soap without finding a free AOL CD inside. But, here’s the deal… the lifetime value of each new AOL customer was somewhere in the hundreds of dollars – I’m guessing $400 at least. Each one of those CDs probably cost 20ยข or so to produce and distribute. So, if we do the math, AOL only needed to get 1 customer for every 2,000 CDs (.05% conversion) to break even. 2, 3, or 4 new AOL customers for every 2,000 CD’s (.1%, .15%, and .2% conversion) would mean a profit of $400, $800, or $1,200 for every 2,000 CDs. Now maybe you can see why those CDs were EVERYWHERE.
But even a successful campaign like this takes a huge amount of time and money.
Getting new customers is tough and expensive. If your business is brand new then you’ve got no choice. Customer acquisition campaigns are a necessary evil.
The good news is that if you’ve been around for a while and already have customers, there is far more money to be made with far less effort and expense if you focus on #2 and #3 – Mo’ Money and Mo’ Often.
#2. Mo’ Money – Get more money from your customers each time they buy from you.
#3. Mo’ Often – Get your customers to buy from you more often.
How do you get your customers to spend more money and spend it with you more frequently? By making sure they’re getting what they want from your business. And, what do they want? That part’s easy. Every good customer wants just one thing… COMFORT.
- Value conscious customers want to feel comfortable they’re getting good value for their money (CostCo Wholesale Club)
- Affluent customers want to feel the quality, service, and exclusiveness of your product is equal to their “station” (American Express Platinum Card)
- Early adopters want to feel comfortable your product or service puts them out ahead of the pack (Apple iPhone)
- Professional customers want to feel comfortable that the tools and service you provide will ensure their businesses run without a hiccup. (Nikon Professional Services)
Giving your customers what they want is a cinch once you know what it is they want and once you’ve decided you and your business are ready to satisfy that want.
So, here’s what you need to do:
STEP 1: Evaluate – You’ll need to take an honest look at your business and its processes. If your business isn’t ready (operations, call center, shipping, etc.) to make your customers comfortable, your first task is to work on your business until it is.
STEP 2: Educate – Once you’re sure your business or service can make your customers comfortable, you’ll need to make sure your customers fully understand just how comfortable you can make them. You’ll first let them know how your product or service will make their lives more comfortable. Then you’ll communicate just how your business is designed to make them far more comfortable than your competitors.
You can do this relatively easily and cost-effectively with a e-Newsletter delivered monthly to the customers email box.
Why only “relatively” easily? Because the newsletter won’t work if your customers see it as this thing that comes in the mail that you want them to read. You will have to make sure that your newsletter is a “comfort delivering” device. Each article, promotion, or testimonial MUST be written to deliver that feeling of comfort to each recipient.
STEP 3: Demonstrate – Finally, you’ll want to show people how comfortable you can make them. One good way to do this is with FREE trials. Another is to use testimonials where you introduce your entire customer base to a select few customers who have already had great, profitable, and comforting experiences with you and your business. Testimonials are a great way to communicate your business’ benefits – and the proof will be coming from folks your customers can easily identify with.
Yes, more customers CAN mean more profits, but the time and expense required to draw in new customers is HUGE.
Smart business owners have learned that focusing on their current customers is much less expensive, and just as profitable…
… if not more so.