When you have an effective system that will allow you to profitably get and keep quality customers that will 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.
So, how do you get to that level of business? First you have to look at the components of this business skill.
1.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: those you like working with; those who purchase from you time and again; customers who generate a profit for your business. 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.
2.Ethically exploit customers’ 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. If you really do provide the best products and services in the marketplace and if you really are the business that can serve your customers’ needs better than anyone else, then you have a moral and an ethical responsibility to make sure every one of your customers at least has the opportunity to take advantage of them.
3.Convert your customers to advocates who actively and enthusiastically refer you to others.
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 that 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. You want customers who not only give you all (or the majority) of their business, but buy from you repeatedly. You want customers who are so happy and so pleased with what you do for them that they actively and enthusiastically campaign for you. The story they tell about you should be 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.
4. 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 his chances of keeping an insured customer 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. 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 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
Retaining the customers 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 16 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. If you’re going to be successful in business, no matter what type of products or services you sell, you must have an intense focus on your customer. You have to find out what they want and do everything you can to help them get it. The success of your business will depend on how well you serve your customers.