Six Times More Profits... yet chances are it's ignored

It costs one-sixth as much to sell something to one of your
existing clients than it costs to go out and find a new
customer.

And yet, almost every single company I talk to spends two to
three times more effort on finding new clients than
investing in old.

Do you see the problem here?

Quick fix.

Next week, you need to set aside your cold call list, or
your mail outs going out to recruit new clients.

STOP finding new customers just for the week.

Instead, spend that same period of time getting in touch
with your existing customers.

- Send them a new product update

- Phone them just to say hi

- Ask for their honest feedback on your company. Ask them to
tell you what you are doing wrong (painful but effective)

- Think about how you can create a vibe within your customer
base (customer appreciation events, special discounts or
membership cards for customers only, but them something as a
thank you, send out 1 thank you card a day for a week - each
customer gets 5 cards, etc... be creative)

- What can you do that makes them say "wow! no one else has
ever done that for me."

- Look at Nascar.com to see how they create community within
their customer base.  How can you copy parts of their
"system" and put into use in your business?  You want to
create a devoted following - and if you aren't doing
specific things to create this... you don't have a devoted
following.

For the next week put your time into your existing clients -
and measure the results you get. Guaranteed you will find
extremely promising results just from this simple test.

Try it... you might like it. 

Your customers certainly will.

Comments

[David Porter]

Troy,

You hit the nail on the head again. Many small businesses spend a lot of money attracting new clients and don't realize that your "advertising" should be shifting from the public to your "practice" as your business matures.

When we started our business 14 years ago, we decided then to build our practice by word of mouth. Instead of running adds to attract new people, we invested our "advertising dollars" back into our client base.

It has been a lot more fun building deep relationship with people rather than having a revolving door business.

David Porter

[Rex Hammock]

I couldn't agree with you more. I preach the lifetime value of customers all the time. However, where exactly do you get the statistic, "It costs one-sixth as much to sell something to one of your existing clients than it costs to go out and find a new customer."? In some cases, in can cost thousands of times more to get a new customer than to sell something to an existing client. Some businesses (those who sell to one customer, say, the U.S. government) have no choice but to sell to existing customers (their challenge is rather to come up with other things to sell to them). And on the other extreme, a theatrical-release movie perhaps, they get one-shot or two at the most to create a mass market of new customers. (I'm glad it's them and not me.) Again, I agree with you about the vital importance of deepening the relationship with existing customers -- and recognizing they should be the focus of ones marketing attention. It's just the "six times" statistic I'd like to know more about.

[Troy White]

The numbers definitely vary on how much it costs to attract a new client versus getting tthe same amount (or more) in sales from existing clients. 6 times as much was a recent number I saw in in trends tracking newsletter.

While no one is perfect in this area - I find it fascinating how few companies do this simple little thing.

When was the last time YOU got a personal thank you from someone you bought from?

Very rare indeed.

But, there is a growing number of entrepreneurs who "get it" and actually do treat their clients like gold.

And (for some strange reason) they all seem to be VERY successful... and for some other strange reason - their customers LOVE THEM!

We can all strive to be better at this simple skill. One of the best books I have just read on this is Indespensible by Joe Calloway. Absolutely one of the best I have read... highly recommended.

Keep on writing those thank you's!