Can You Meet More of Your Existing Customers' Needs?

Struggling to dig up new prospects? Established customers are a mother lode waiting to be mined.

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A client of mine in the spa and pool industry expressed concern that his sales had grown stagnant. He was still advertising and working on lead generation, but new customers had slowed to a trickle. I asked him, “As a percentage of your marketing efforts, how much is devoted to new customer acquisition and how much is devoted to current customer sales?”

“What do you mean current customer sales?” he asks. “Once we sell a spa to a customer, that’s it. They’re not going to come back and buy another spa one week later. A lot of our customers come in to buy chemicals and accessories, but that’s all. All of our efforts are focused on finding people who want to buy a new spa or pool.”

Gold to Be Mined

Unfortunately, my client didn’t understand the value of his customer base. There is gold in your existing customer base waiting to be mined. Many retailers focus on the first or “front-end” sale and spend a disproportionate amount of time looking for new customers when the real gold mine lies in “back-end” sales or continuing stream of sales.

You’ve probably spent a lot of money acquiring customers. When you ignore them, not only do you miss out on potential revenue, but you also flush your return on the investment made in acquiring them right down the toilet.

If you have convinced people to do business with you, it means they have already given you a vote of confidence. If you’ve provided good service and met (or exceeded) their expectations, it’s likely they would give you a second vote of confidence or third or fourth. You may even get their lifetime vote of confidence.

Capture the Contacts

You must be able to contact your customers in order to market to them. That’s why one of the first pieces of advice I give my clients is to capture their customers’ contact information at the point of sale.

At many retail stores, you know that the clerk always asks for your name, address and phone number. They don’t even give you a reason; they just ask for it. They assume you will give it to them, and you know what? Most do without question. It’s so automatic that customers feel giving their contact information is just part of the purchasing process.

Every small business in America should be doing the same thing. But to go one step further, you should also be capturing your customers’ email address. This is the “holy grail” of marketing because you can market to your customer again and again at no cost.

If customers are reluctant to give you their email address, offer them a coupon or something else of value. The effort to obtain your customer’s email address will be repaid many times over.

The Lost 20 Percent

Depending on your business, a large majority of your customers lie dormant, having only transacted business with you once or twice. Your remaining customers are those who are loyal to you and from whom your profits can be significant.

Though it may vary for you, the average number of customers a business loses is about 20 percent annually. The average business spends six times more to attract new customers than it does to keep old ones. A survey on “why customers quit” found these reasons for not coming back:

  • 3 percent move away
  • 6 percent develop other business contacts
  • 9 percent leave for competitive reasons
  • 14 percent are dissatisfied with the product or service
  • 68 percent quit because of an attitude of indifference toward them by the company.

So 82 percent of the customers who stop doing business with you are unhappy. Unfortunately, unhappy customers don’t usually complain. A study from the Research Institute of America says the average business will hear nothing from 96 percent of unhappy clients who experience rude or discourteous treatment.

Not only is having unhappy customers driving up the cost of customer acquisition, but it is also costing you potential lost sales. The same study found that unhappy customers tell their experience to at least nine other people, jeopardizing additional potential sales.

So what do you do to get these people using your business again? You assume the statistics are right and that you did something to offend them.

Tell them the truth — that they haven’t been buying products or services from your firm for quite a while and you sense something is wrong. Make sure you communicate this in a way that conveys genuine concern for their well-being. Believe it or not, this simple approach has a magical effect on inactive customers.

Identify Unmet Needs

Let’s go back to my client who mentioned that he didn’t know what more to sell his customers after they purchased a spa, a one-time purchase. He couldn’t sell them much more than chemicals and accessories, but he could provide complementary products and services that might interest his customers.

How? I advised my client to meet with the owners of other businesses that provide complementary products and services and strike up a commission or referral deal. This way he could still benefit from his relationships with his customers and also provide them with other products and services.

To maximize this strategy, you might consider asking your customers what they are lacking and then find out how to solve it. As the saying goes, find a need and fill it.

Virtually every successful small-business person will tell you that finding and fulfilling unmet needs is the name of the game when it comes to winning customers. The better you do this, the more customers you’ll win.

About the Author

David Frey is a small-business marketing consultant and author of The Small Business Marketing Bible.


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