Every
business needs customers. Our business would fail without them. But
only focusing on customer acquisition is a short sighted strategy. Sure,
you should keep building your customer base, but you should also focus
on your existing customers too. What is the average spend of a customer?
Do you have other products and services to offer? It is much easier to
sell to an existing customer than to continually keep looking for new
ones.
Back End Products
If you have a range
of products and services which you can sell to existing customers, you
can increase your income quickly, simply by promoting them. By focusing
on your 'back-end' products you can easily increase your income, without
having to chase down new customers all the time.
Companies like
Amazon are experts at this. Have you noticed that whenever you purchase
from them they also offer you a range of other products which people
have bought with that same product? McDonald's do this across all their
stores too. If you don't hear "Do you want fries with that?" after your
order, someone is going to get fired! I That's because McDonald's and
Amazon know that by applying the strategy of an up-sell they can
dramatically increase their profits across the board.
Price Hike
You
can also test a price increase with your products. Just a small shift
in pricing can have dramatic effects on your business. Many business
owners are scared to try this because they don't want to scare off their
loyal customers. But look at banks and utility companies. Mobile phone
companies also do this all the time.
No sooner have you entered
into a deal with them and you're getting a price hike. The reason: it
works. People are often too busy to change providers, so they accept the
changes. By testing a small price change of even only 10% you can
determine what flexibility you have in your pricing.
Ask For Referrals
Have
you got a referral system in place to reward your customers when they
bring in a new customer? This could be as simple as a discount token for
referring a customer. When customers know they will be rewarded for
bringing in new clients, they start to think of ways to do it. Imagine
an army of sales representatives all working for your company bringing
in new customers. Focusing on rewarding your existing customers like
this is another method of finding new customers very cheaply.
Offer Guarantees
Many
people don't purchase from you because they can't see the value of what
you offer, or they don't want to risk it. By offering guarantees you
help them overcome this potential roadblock to their purchases.
Guarantees increase sales. They show a customer that you are serious
enough about your service of product to offer a refund if the customer
doesn't get value from it. Guarantees build customer confidence.
Testimonials also help potential customers overcome some psychological
barriers to purchasing your products or services.
Look After Your Customers
Looking
after existing customers can be a much better way to increase your
profits than only focusing on finding new ones. Existing customers can
keep buying from you for a long time. Do you know your return on
investment for a single customer? How much does the average customer
spend with you year after year?
ROI - Return On Investment
Knowing
your ROI also empowers you when it comes to advertising. If a loyal
customer spends money year after year in your business, it's worth
paying for advertising to acquire a customer. Perhaps your advertising
budget is limited? When you realise the amount spent by each customer
year after year, you will be likely to spend much more on advertising,
knowing you will be making that money back, and building your business.
Authority and Status
Increasing
your authority and status as a business owner can also have an impact.
Status is perceived to be worth more by people even when the same
products are being sold. Companies like Harrods charge much more than a
normal store, simply because they have premium pricing based on their
status and profile.
Don't Focus Only On Customer Acquisition
Although
customer acquisition is a necessary part of owning a business, there
are other ways to build profit into your business model. Up-selling to
your existing clients, increasing pricing, status and looking after
existing customers are all ways to increase profits without getting
another single customer.
Knowing your return on investment is an empowering way to find the
value of a customer over years in your business, and price your
advertising accordingly. By changing only a few things within your
business, you can dramatically increase profits.
Customer Acquisition
Acquiring
customers can be done very effectively with pay per click advertising.
With pay per click advertising you can set a budget, target a specific
market audience and test and measure to produce the best results. When
you know your return on investment - the value of a customer, you can
use this to understand how best to budget your advertising.
Many businesses worry about spending on advertising. However,
knowing your ROI, and learning how to do pay per click advertising is
probably the best use of your time if you already have a profitable
business model. Once you have a profitable campaign, you can simply turn
it up for more instant customers. Then move on to other advertising
methods, testing them and measuring until another profitable campaign is
built.
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