Following Up With Your Customers = Free Money!
Who wants to get more money from their customers barely lifting a finger to get it?
Of course, what business owner wouldn’t (including me!) so I’m going to talk about one of the biggest mistakes business owners make resulting in them leaving a shocking amount of money on the table.
I’m talking about following up with a customer after a sale.
Let me explain this in the form of a case study.
There was a woman named Cathy who ran a website that sold supplies for exotic birds. She was investing tons of money in advertising and paying hundreds of pounds every month in Google AdWords as well.
While she wasn’t losing money on the products, she was only just breaking even.
She didn’t understand why she was doing all of the right things by buying advertising and offering competitive prices and still not becoming successful and highly profitable.
Now, let’s pause for a second…
The above situation accurately describes nearly every failed business attempt in the world. At first glance you may think “she needs to raise her prices” but that isn’t the solution. If she raises her prices less people will make a purchase which may mean that she makes even less money with the higher prices that have higher per sale profits.
So what could she do to keep her prices competitive and also generate more profit?
There are only 3 ways to grow a business.
1. Get more customers
2. Increase your profit per unit sold (which could mean increase your prices or find a cheaper supplier)
and 3. (which almost no-one does) Increase the times your customer purchases from you.
Follow up with past customers.
It really is that easy.
This is the secret that all businesses that fail don’t understand.
Cathy is already advertising and bringing customers into the store so why not follow up with them at a later date and ask them to come in and make another purchase?
I’ve purposely used an example that deals with an offline business to show you how this system can be applied to any business on the Internet or in the real world.
So how does Cathy follow up with her customers?
The first step is that she needs to get their contact information. I recommend that you get first name, last name and e-mail address. Some people say to get the phone number and address but that’s something that requires a lot of time (making calls) and money (buying stationery and stamps).
How does she get this information? It’s as simple as printing off some simple sheets of paper that ask for basic information and telling the customer that you will e-mail them coupons, priority notification of big sales and special events.
Here’s what one of these might look like…
As you can see, this is a very basic format. Obviously you could spice it up, put your logo on the top of the form and print it on thick card stock to make it look professional. Once you have the card printed up you just hand it to each of your customers and tell them that they will get discount coupons and advance notice of sale events for their name and e-mail address.
Will all of them want to be on the list? No, they won’t.
But will a good portion of them want to? Yes!
Don’t be discouraged if only a quarter of your customers signup to be on the list. You need to remember the fact that if they didn’t want to be on your mailing list that they probably wouldn’t have cared if you sent them e-mail so it’s better to not have them.
Be polite and courteous regardless of their decision.
So now Cathy has printed up some cards to allow people to be on her coupon and sale notification club and is asking people that come through the store if they would like to signup. At the end of each day she is entering them into her e-mail autoresponder system (we’ll talk about autoresponders later.)
The customer automatically gets an e-mail that thanks them for their purchase and patronage and welcomes them back into the store giving them the address, hours of operation and Cathy’s name and contact information in case they have any questions.
Now Cathy has build a relationship with this customer and the customer feels like Cathy truly cares about them.
So what happens when Cathy wants to generate some additional profits?
She simply goes into her e-mail database and sends out a broadcast e-mail that goes to all of her subscribers and informs them of a special discount day only available for Priority Coupon & Discount members. She is offering either a free bag of basic bird feed for their birds with any purchase over £15 PLUS a 10% discount on any purchase over £50.
This gives the people on the e-mail list of the exclusive feeling of being in a club of people that the public aren’t a part of and will definitely bring some of them into the store.
So why is this so much more profitable than the initial purchases these customers made?
Because Cathy was paying for advertising to generate those customers and now she is bringing those same customers back into the store at no cost by keeping in contact with them.
What that means is that she doesn’t have to factor in the cost of advertising with these customers because she already did that. That means that there is much more profit in these customers.
And the best part is that Cathy can follow-up with them for as long as they remain on the mailing list which will bring in quick surges of customers and sales for many years to come.
As long as she keeps building her list with those little cards, she will eventually get to a point where she no longer has to advertise and can rely solely on her repeat customers.
I realise I haven’t gone into minute detail about each aspect of the process because I just wanted to give a broad overview of the idea and to give you an inside look at why businesses fail and how following up with past customers can literally take a business that is struggling to survive and make it a thriving and profitable venture.
It’s incredibly important that you realise the importance of following-up in your business.
Following up is an intrinsic part of any business and if you don’t use it and use it properly, your business will ultimately fail.
In the next article, I’ll over some exact sequences and ideas that you can use in setting up your follow up sequence for maximum effectiveness and maximum profit.
See you then!
[...] leaving to follow her dream … to move to Costa Rica. Source: costa rica travel – Google News Following Up With Your Customers = Free Money! – nickthegeek.com 01/15/2009 Who wants to get more money from their customers barely lifting a [...]
[...] Who wants to get more money from their customers barely lifting a finger to get it? Of course, what business owner wouldn’t (including me!) so I’m going to talk about one of the biggest mistakes business owners make resulting in them leaving a shocking amount of money on the table. I’m talking about following up with a customer after a sale. Let me explain this in the form of a case study. … Source:Following Up With Your Customers = Free Money! [...]