Are you cudgeling your brains trying to figure out how to increase the bottom line? Routinely, CEOs and business owners trying to show a bigger profit for the next quarter flail in every direction, including:
If your bottom line needs tweaking and profits are plummeting, look no further than your current customer list. Cherish the ones you are already serving, and new customers will all be gravy.
Consider this statistic from Bain and Company: a measly 5% increase retaining your current customer base results in a whopping 125% increase in profits. It’s hard to argue with statistics like that.
You want every customer, even one who has bought just a single time, to remember your company with a smile on his face. There are three ways to ensure a happy memory:
When your customers remember you, and when that memory is favorable, you’re on your way to higher profits. If you can move one step further, making that memory an enthusiastic one, you and your company will be positioned as a leader.
It’s a sad fact, but 89% of consumers will leave you, taking their business to a competitor, if they have had a poor buying experience and follow-up. And you will probably not even know it’s happened. According to a Harris Interactive study, just 4% on average complain directly to the seller if something goes wrong. That means 96% just leave, and don’t come back.
How important is this? According to Parature Customer Service, companies in U.S. lose close to $83 billion in sales each year from unhappy customers. That’s where your bottom line is going.
If customers do complain, they need to get satisfactory resolution within one week. According to Harris Interactive, over half of consumers, individuals and businesses, give a brand a single week to clear up problems before they move on to another company.
Another crucial statistics, also from Harris, is that just a single percentage point of all consumers say they have a good customer service experience every time.
If one of your customers is happy, on average he will spread the word to 15 other people. If he is unhappy, he broadcasts that fact to 24 people, all potential customers driven away before the buying experience can even take place.
The more effort you spend on the people you already do business with, the more products you will sell. This is incontrovertible. According to Marketing Metrics, the probability of selling to someone you have done business with is 60 to 70%. The chance of selling to a new customer is a measly 5 to 20%. It’s clear where you need to spend your time.
Show your customers you appreciate their business. Experts recommend making regular, consistent, non-selling contact between purchases. For example, if you come across information online that might be of interest to a buyer, email the link. Your interaction doesn’t have to be complex. In fact, the shorter it is, the better. Just let the customer know you value him and have his best interests at heart.
On the anniversary of his first sale, consider giving the buyer a physical gift. This shows personal interest. Make it useful and attractive. The physical gift will be a constant reminder of your brand.
As an example, Cutting Boards USA makes wood cutting boards, an item used in kitchens on a daily basis. Fishermen use them to cut bait. Crafters and wood workers love them. You can buy wholesale cutting boards quite inexpensively and have them laser-engraved with your brand. Practical gifts like this are powerful marketing tools.
Is it worth the effort and expense? Here is one final statistic from Bain and Company: it costs six to seven times more to attract a new customer than it does to simply retain one you already have.