Business service industry professionals advise on the power of direct mail, loyalty and referral programs.
There will be little objection to the idea that acquiring new customers is important to building a business, but cultivating the treasure that is your current customer base offers the most authentic path towards sustainable and efficient long-term growth. Almost fifty percent of businesses maintain a great focus on customer acquisition rather than customer retention, compared to barely twenty percent that focus on their retention. This is troubling when one considers that it costs about five times more to gain a new customer than it does to market and upsell to an existing one. Also, existing customers are five to ten times more likely to buy than is a potentially new client. A review of this data makes it clear that focusing on increasing the lifetime value of a current customer rather than just increasing the number in the customer database is not just less stressful but it’s also much more cost-effective.
Rich Panowitz, Minuteman Press International Area Manager in Houston, affirms these facts, saying, “The day you stop marketing is the day you give up on your business. It’s that simple. You need to continually educate your customers to the products and services that you offer. Upselling to your existing customers using tools such as direct mail and promotional products to showcase items they might be ordering from someplace else is absolutely necessary.”
For every four chances that comes their way to make a sale, most businesses are successful making one of them. With a 25% success rate not being too bad, forethought is needed to see the problem because those same businesses will tend to lose half of their customers every five years. A cycle like that invites decline unless it’s supported by a massive influx of new business. Yet businesses that close deals at a stronger rate, around 33% (or one of every three opportunities that comes their way) also have stronger retention rates (roughly in the area of 70%). So, those companies are endowed with a great advantage and can anticipate more growth and more profit.
True progressive companies, referred to as the top 10%, take it even further (but not for obvious reasons) because the success ratio for initial sales is still about 33% for them – BUT these very successful businesses maintain remarkable customer retention rates in comparison of about 95%, effectively driving their profits by upselling and marketing more services and products every year to their existing customer base. Logic dictates that the essence of meaningful growth for any business must be finding ways to market and sell more to existing, loyal customers as this is more often going to be where the highest profitability resides.
Sumner Misenheimer, owner of the Minuteman Press franchise in Newburyport, MA, has a staff that understands the need to keep connected to the active customer base. He adds, “We acknowledge the need for expansion and growth and a significant part of that formula is addressed by the many services and products we provide at Minuteman Press. We have countless outlets at our customers’ disposal for this purpose such as direct mail and unique promotional items that will be well-received and help to strengthen the relationships that have been initiated and maintained, encouraging repeat business.”
Too many companies, according to studies, are getting stuck in a system that has them trying to attain more new clients to replace those lost and this is a system that is defined by constant selling of new products to new customers which can be an expensive pursuit. To sustain this, it’s necessary to invest more money and effort only to hover around the 33 percent success ratio for new sales. Instead, faster sales, greater profits and an enhanced advantage is gained by marketing and upselling premium add-ons, upgrades of established services or products to an existing base of loyal customers. They are willing to do more business as they enjoy a familiar and trusting relationship with you bred from personalized customer service and proven satisfaction.
With profitability higher than new sales, the chance to deepen customer loyalty, the (almost) guarantee that referrals will increase, plus a shorter sales cycle due to an already established relationship, upselling and marketing current customers yields unique benefits. According to Constant Contact, 82% of small business owners have said their main source of new business is referrals.
Capitalize on the initial sale and follow-up period
While marketing and upselling can happen at many points during customer sales, there are advantages to hitting on the initial sale period and immediately afterwards during follow-up periods. During the initial sale, chances to add value are ripe with the addition of relevant services. Complementary products supplement the customer experience and offering support packages or customer loyalty programs that, for example, can promise a free t-shirt or other promotional item after the first ten purchases are examples of simple ways to establish upselling and marketing early in the process. Another example could be if a customer needs help with website design and maintenance, there could be an added support incentive possibility – at a premium price, naturally. The important element is added value, rather than simply adding token options without much thought. Always consider which additional or new products and services they could possibly benefit from and then go about offering them.
After the initial sale is secured another great chance presents itself in terms of upselling and marketing. For instance, when new products and services are released, it is the perfect opportunity to reach out to the current customer base and boast about them and using direct mail is a fantastic way to drive these types of announcements to their homes, where they will pay off. Always review what types of services are currently being offered and then consider things that could be done differently or additions that could come on board to increase their value, perhaps for a small fee. The main objective is to keep sales opportunities with existing clients “fixed on the radar” while you engage in new business pursuits. Gaining new customers is exciting and, naturally, important, but nurturing those long-term relationships with existing customers and selling more to them is the nucleus of sales efficiency and abundance. It is precisely what business owner’s need to direct their focus, based on evidence generated by multiple studies.
Mark Calis, owner of Minuteman Press, Washington, DC, is well-versed in the dire importance of maintaining continued marketing efforts in the direction of the current customer base, as he says, “Constant open communication with your client base is key in keeping them informed on new products, latest news, specials and promotions.”
Referral programs made easy through printing industry professionals
Encouraging greater depth of brand loyalty among existing customers through referral programs that make it worth their while to share the good news of your business with colleagues and friends has merit (not to mention stimulating repeat sales and boosting customer lifetime value). These types of programs, done well, will effectively result in customers doing some valuable marketing for you which will cause a nice decline in cost per acquisition and higher profitability. Not many people are more likely to make purchases from some company they find randomly on the Internet over a business that is personally recommended by a friend or colleague. If trusted friends can attest to the reliability and value of a brand and goes as far as to refer them, the people referred are more likely to stick with that business service for the long-term, when the other options are companies to which no personal connection exists.
Research supports this assertion as studies have illustrated that referred customers have nearly a twenty percent higher lifetime value than non-referred customers; and although your customers may be happy with your services and products, greater than eighty percent of these satisfied, loyal customers are more than willing to recommend your products and services but only about thirty percent actually end up following through with the referral. The reason for the discrepancy between customer satisfaction and those actively referring new customers can be attributed to the fact that many businesses do not always make it easy for current customers to refer others their way. Creating a referral program in partnership with a marketing specialist within the business services industry can provide your current customer base with ready-made printed collateral designed specifically for referrals, indicating reward incentives to bolster the referral collection numbers. With the right marketing materials, it is possible to provide the current customer base with tools to make the referral process much simpler and they will be happy to share stories of their satisfaction with everyone, thanks to the easier method to do so as well as the reward incentives.
Of course, when setting up referral marketing campaigns, invest trust in a marketing specialist who can advise on ways to pay close attention to analytics and assess which kinds of rewards and channels will be most effective as time progresses and results come in. Businesses that spend 5% on the loyalty market are 25% more profitable – Constant Contact
Ron Rubin, New England Regional Vice-President for Minuteman Press International emphasizes the importance of continued marketing and upselling to the current customer base with support from marketing specialists, as he said, “It is very important for every business to market to their existing customer base and Minuteman Press offers many products to do this such as direct mail, promotional products and so much more.” So, for businesses who have not been focusing on the lifetime value of their customers as much as they should be, the time is now to reset their perspectives in favor of a more productive system that will maximize the value of every single customer they will ever acquire. A study by The LMC Group tells us that it is eight times more effective to bring an existing customer back for repeat business than it is to, instead, get a new customer.
Brian Sisti is the Long Island Area Manager for Minuteman Press International, the world’s largest and number one-rated digital print, design and marketing franchise. He has seen how the impressive outgrowth resulting from Minuteman’s award-winning training program extends itself far beyond the benefit of the many hundreds of successful franchise owners, effectively arming the clients of every Minuteman Press center with same dominant and persuasive marketing strategies needed to sustain customer loyalty. Brian adds, “At Minuteman Press, we train and work with our franchise owners to review these important strategic facts to the benefit not only of their own businesses but of their clients businesses as well. As a result, each Minuteman Press franchise owner (our own client) can not only cultivate their own long-term clients, but go further and help ensure that the formula for customer retention flows directly into the working marketing strategy of all Minuteman Press customers. Our franchise owners are able to sit down with their customers and analyze their marketing programs. In the end, the better our stores’ clients do, the better our own stores will do and we are dedicated to that synergistic relationship.”
Whether a business owner is beginning or continuing to cultivate the great treasure that is the loyal customer base through marketing, upselling and incentives, the investment in long-term growth by doing so is straightforward and lucrative.
To learn more about joining the #1 rated Minuteman Press franchise family, call us at 1-800-645-3006 or simply fill out the contact form on this page.