As I pointed out in an earlier article, there are only three real ways to build a business:
- Get more customers to seek you out and spend money with you.
- Get customers to keep coming back to spend money with you.
- Get your customers to give you more money every time they buy.
And there you have it: an MBA boiled down to a few lines.
Now, you might say, "So, where am I going to come up with all these great ideas I'll need for selling them additional products or services?" That's a great question; keep asking yourself that, and you'll come up with more and better answers.
Personally, I get up at 5:00 every morning and immediately focus on that question. I've been doing that for years. I think about my customers and about what they want the most. I try to get inside their heads and hearts and really understand them in the most intimate way I can. I look at the products and services that have sold the best for us over the years, and I think about related items that I know they'd want to buy.
This is time spent working on my business, not in it. It's just me with a cup of coffee and quiet time in the morning, when there are no phones, faxes, or distractions. I'm able to focus on my business and my customers, and what I can promote to them next.
We strive to do 12-20 major promotions to our customer base every year. Depending on your business, that may seem like a lot to you, or it may seem like a little; but in our case it involves a tremendous commitment of time, work, and effort. It's worth it, though, because that's where all the profits lie: in increasing the frequency that customers re-buy from you and then increasing the average profit margin per transaction.
If you focus on those two specific areas and maintain a new customer acquisition system that automatically brings in a steady flow of new customers, you're going to be light years ahead of your competition. You're going to make your competitors green with envy, too, because you'll be making huge profits by doing less work than they do. Reselling to people you already have a relationship with is like dealing with friends. In fact, we always personalize our letters that way, greeting them with, "Dear Friend." That's how we think about our customers. It's easy to do business with friends.
Here's another way to sell more products and services to your customers: hold special events for them. You can also invite new customers to these events. Now, this works better for some businesses than for others; but then, you can say that of any marketing example that I give you. One of my colleagues owns a local pet boutique, one of those upscale stores that sells premium food, treats, toys, and clothing for dogs. They offer special grooming services as well. She holds an average of three special events a month to build relationships with her customers, and to encourage sales of higher ticket items. These events are usually small; sometimes as few as three or four people show up, and sometimes there are as many as 20.
But she tries to make them fun, and most of her events are educational in nature. For example, she might bring in a veterinarian or dog groomer to give tips on how her customers can keep their dogs healthier or neater. Some of her events are just informal things she ties into the seasons. You're limited only by your imagination here.
She promotes her events through social media: she's on Facebook and Twitter, and has a website where she posts pictures of her customers and their dogs. The events are excuses to re-invite people to come back into the store, and they give those people reasons to come back. Even though only a small group might take advantage of a given event, each event is still important. Not only does it help her build customer relationships, it also sends a message to her entire customer base that says, "Here's a business that really wants to educate me on the ways I can improve the quality of my dog's life, and my life with my dog." It's altruistic in nature, but at the same time, the more often she can get people to come into the store, the more likely they'll purchase her dog grooming services and premium dog food-the two high-profit items she sells.
And because she always sends out a notice to the local media every time she schedules an event, she gets a tremendous amount of free advertising. The newspaper and radio station love to announce her events, since they believe that keeping people aware of what's happening around town is a community service. So in addition to the regulars, new customers often show up too; and on top of that, word-of-mouth kicks in. Events like these are a great, dirt-cheap way of helping you stay close to your customers.
Never underestimate the power of altruism. Sometimes people will tune you out if it's obvious that you're staying in touch just to try to sell them something. But if you offer them a fun, non-sales event to take part in, they'll feel your business is different from all the others-that you care about more than just getting their money. And you should, even though your ultimate purpose is to make it easier for them to rebuy from you. Solidifying your relationship with your customers is a crucial part of that process.
So if you're worried about marketing too aggressively to your customers and chasing them away, as I used to be, hold more events like these. Find some excuse to invite them into your business to look at or learn something new, and make it fun for them. Little promotional celebrations won't cost you money, they'll make you money. Too many business people hesitate to hold such events because they're worried about the expense-but they're looking at things backwards. Done right, the benefits of small promo events far outweigh the costs, especially if you specifically invite only your best customers-that is, those who've spent the most money with you in the past. These are the same people who are most likely to spend money with you in the future, particularly if you go to the effort to make them feel special.
That's where all the profits are, and frankly, it's both fun and educational. The more you try to build your relationships with your best customers, the more you'll enjoy them-and you'll also gain fantastic insight into the larger marketplace consisting of those who could end up becoming your best customers, if only you understood their wants, needs, and desires better. That knowledge can be useful for future promotions.
Make an effort to spend more time with your customers, especially in non-selling situations where you can drop your guard somewhat, so they'll feel they're getting to know you better. It's a simple strategy, effective because it combines salesmanship with the altruistic concept of serving the customer in the highest possible way.
Write down those three main business-building methods I started this article with and commit them to memory. Think about them daily. Anytime you're frustrated and confused about business, just return to the reality that there are only three ways you can build your business: by acquiring new customers, by getting existing customers to buy more, and by getting them to buy for a higher profit margin. That will help you understand what you have to do to make more money any time you feel you need to.
The more you realize that all your profits come from those two final business-building methods, the more you'll put your focus and energy into those methods. In the end, you'll work less, but make more money. And isn't that what it's all about?
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