Expand your Business
The fact is, there are only three ways to expand business...
- Increase the number of customers
- Increase the unit of sale
- Increase the frequency of purchase
Here are some other things to think about:
You can increase profits 85% by retaining only 5% of lost
customers.
As much as 50% of your new customer business comes as a result
of inquiries generated by advertising.
More than 50% of inquiries come from people who will buy within
a year.
Creating profit starts with what you already know about your
customers. And if you're like most business owners, you probably
don't know what that is or how it can help. But it is this
information, knowledge you already have, that is literally
a hidden goldmine of profit that can increase your company's
bottom line, add business security, and guarantee future success.
It is this customer-focused information that will provide the
foundation for generating more sales, retaining and cross-selling
customers, and acquiring new customer business.
Advertising industry studies report that over 90% of the businesses
utilizing "Customer Focused Marketing programs" show
increased profits of 60 to 80%. Moreover, these increases covered
companies in all industries and services. Customer Focused
Marketing programs have proven time and again to be one of
the most valuable tools that have been discovered within Direct
Marketing because they focus on your market and it is truly
your market that determines the success or failure of your
business.
Ask yourself, "What are my customers saying to their
friends about my business?
- Are they saying anything at all?
- Am I restricting the amount of customers trying to buy
from me?
- Have I determined precisely what my customers need, what
they want, and what the requirements are for those customers
I'm trying to reach?
To begin, you have to develop a program that will help you
take the first steps in identifying and gathering the information
needed for your customer database. Use the following examples
for guidelines to beginning the develop of your database:
- What is your cost to obtain a new buyer?
- What proportion of one time buyers purchase again?
- What is the lifetime value of each new buyer?
- Who are your best customers? What do they buy? How often
do they buy?
- What sources can you array in descending order for production
of "customers" (buyers who buy two or more times
per period)?
- What do you know about the elasticity of demand (price
sensitivity) of your customer file?
- What product interests have you defined for each customer?
- What proportion of your volume comes from new, first time
buyers as compared to volume from "old customers"?
- How often do you promote your inquiries and catalogue
requests?
- How soon do you do this? When does to prove wise to stop
mailing them?
The more you know about your customers, the easier managing
your business becomes. Every item of collected data is an additional "Selection
Factor" and, when combined with all of the other selection
factors you can identify, increases your profits. Remember:
the more you know about your customers' habits and needs...
the more you demonstrate the ability to meet those needs...
the more they will buy from you!
Building and maintaining a customer information database is
one of the best investments a company (small or large) can
make. Database marketing can differentiate the types of customers
you have and direct sales efforts toward those that are most
profitable. Database Marketing can tell you what the customer
needs, what they really want (including their purchasing habits),
as well as the basic criteria needed to create the best customer
profile. It is this profile that is required to create
Database marketing teaches one very important lesson: One
sale doesn't create a customer. It's the second and subsequent
sale to the same buyer that creates a customer. You must successfully
identify your one time buyers and motivate them to become "multiple
time buyers". By finding the information needed I your
database to ethically exploit your relationship with customers
and creating a Customer Focused Marketing program, you'll develop
long term customers.
No two companies ate the same; what works for your competition
may bomb for you. It is important to find exactly what works
best in your business. One way is to develop Customer Focused
Marketing programs that hit emotional "hot buttons" and
cause prospects to react. These promotions use marketing and
sales analysis information from active profile databases, producing
significantly higher results. The more detail available to
develop your program, the greater your response rates.
Market conditions and ever-changing customer buying habits
require timely and accurate data to determine the most effective
promotional marketing approach. Program design must accommodate
a variety of functional and operational obstacles in order
to meet the demand.
Capturing that segment of the market whose profile best matches
your present requirements offers an immediate opportunity to
generate quick profits and acquire new customers. The program
designed for your business should allow design flexibility.
There are several innovative applications on the market to
fit your promotional marketing efforts including Timed Target
Marketing (to increase frequency of purchase), Cascade Marketing,
and Annuity Marketing.
Databases can work for you, and I hope this discussion has
enabled you to understand how.
And remember: most companies leave more profit on the table
than their total annual income!
Don't be one of them!
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