Friday, April 06, 2007

Week 32 - In It For the Long Term

Try signing your customers to a longer term agreement, for exampl, rather than a dozen bottles of wine once off, the program becomes a dozen bottles every six months. This becomes a recurring agreement until the customer cancels. Terms work very well for people in a seasonal business (pool cleaners, gardeners) who instead of servicing a customer once and walking away, signs them to a 6 month service program. You may give a discount for this commitment but the main benefit to you is the introduction of stability to your cash flow and therefore ability to forward plan.

Could you ask your customers for a longer term agreement? If you are a tax accountant you could sell your customers a 12 month package of financial checkups, tax planning and ultimately the tax return. What about a window cleaner or personal fitness trainer? Of course, these businesses naturally lend themselves to this type of program. Even a bookstore can offer to send the book of the month to their customers, or what about a dentist that sells an annual package of check-ups, 2 cleaning sessions and a tooth whitening program?

Stop now and write down all the ways you could get your customers to purchase in volume or sign them to a longer term agreement. Don’t get stuck focusing on what your industry is currently doing - look outside and borrow ideas from other industries. For example, I don’t think I have seen a dry cleaner offering a frequent cleaner discount card just as the coffee houses do. Nor have I ever received a call from a dry cleaner asking if I was satisfied, as car servicing businesses do.

Implement a reminder system

Because you now know that you must have your customers’ names and contact details, you will be in a position to implement a reminder system. Dentist and doctors do this very well but what about toner cartridge suppliers, clothing stores or fine restaurants for example? Some products such as a lawn mower are bought only once or twice in a lifetime, but in general most businesses can find a way to remind their customer base that it could be time for another visit. Spend some time thinking about how you could condition your clients to receiving your regular updates including how and why they should come back to see you.

Actively work your customer list, but remember the golden rules:

  1. Communicate with genuine interest in your customer’s well being.
  2. Offer real value in every communication, rather than just asking for more business (for example, a shoe store might include the latest European fashion in a small booklet, a car servicing business might send a city map, or a free test drive offer. At that point, you can ask for their repeat business, but not beforehand.)
  3. Keep your customer database “clean”. In other words, don’t send your clients the same offer three times and don’t continue mailing people who have passed away or moved from the city.

Most of the methods I have described over the past few weeks give you the tools to generate far more leads in a more efficient manner. Let’s review;

  1. By making contact with people who have purchased a complementary product or service before or after yours, you can pinpoint those most disposed to your offering.
  2. Using your systematic referral program you will be training your own indirect sales force to spread a consistent message.
  3. Finally, actively ensure you sell to each customer as frequently as possible.

Combination of effort in these three areas virtually guarantees you an increase in profits.

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