Keep 'Em Coming Back for More
The more often people buy from you, the more you sell. It's such a simple idea that it sometimes gets overlooked. It's also one of the only three ways to grow the amount of money coming in the door of your business.
1. Increase the number of customers
2. Increase the average value of each sale
3. Increase the frequency of sales
Let's look at three management tips on increasing the number of times your customers come back looking for more: Product Consumption Strategies, Follow-up Communication, and Lower Prices.
Product Consumption Strategies
Product consumption strategies are methods of getting your customers to use more of whatever your selling, so they need to come back and get some more. Unfortunately many of us think of these as tricks to get us to buy more, buy there are also some great examples of consumption strategies that really do help people out.
Perhaps the most famous story of consumption strategy comes from Benjamin Cheevers fiction novel, The Plagiarist, where a marketing executive doubles shampoo sales overnight by adding the word "Repeat" to "Lather, Rinse, Repeat". Well it turns out that's not quite how it happened in real life but you can see the value in educating your customers in a certain way.
Craft stores often run or sponsor classes on scrapbooking or cake decorating as part of consumption strategies. Why? It's not to make money on the classes. It's to get people to buy more materials from the craft store. When you go to scrapbooking class, you are expected to bring scrapbooking supplies. Where do you get them? From the craft store sponsoring the class. If possible they even host the class in their building so you're in the store already. They are helping their customers use what they are selling. Sure it's a marketing strategy, but it's also giving the customers something they want.
I once heard of a paper manufacturer who added direct mailing services to their business. They were able to be very competitive in the direct mail services business because they didn't really care if they made money at that. They offered direct mail services at competitive prices, and guess who supplied the paper and the envelopes. I love this example because they went out of their way to find out what their customers were doing with their products, and then they helped them do it faster, easier and cheaper.
The fundamental concept behind consumption strategies is this. Find out what your customers are using your products and services for, and help them do more of it.
Follow up Communication
Follow up communication gets people coming back for several reasons.
If you want people to come back to your business, you need to remind them you are still there, and that they still want or need what you have to offer.
My dentist now sends me postcards in the mail whenever I haven't been in for a while. They remind me that I'm overdue for a checkup or a cleaning. The result is that I now go in more often. They have even gone so far as to keep copies of my dental plan on record so they can tell me the maximum number of cleanings my plan will pay for each year. This is valuable to me because I want to get the most out of my plan. It's also valuable to them since I now come in more regularly.
In many industries a quick call to see how your customers are doing brings you to their mind and results in more business. My automobile service company sends me postcards for scheduled tune-ups. The furnace cleaners call every spring to remind me it's been a year since the last cleaning. If I get a call from 10 cleaners and one of them is Joe from last year who did a good job, where do you think my business goes? To the person I've already dealt with because I already know they will do a good job.
Follow up communication should not be an after-thought. It should be a consistent, planned part of your day to day business strategy.
Lower Prices
Finally let's talk a little about lowering price, because although it can work to increase repeat sales you need to be careful about using it. There are a few ways to offer a lower price. One is to lower your price. Another is to have a sale. A third is to offer discounts to your repeat customers.
As far as lowering your prices in general, you need to find the market price that brings you the most profit. More sales at lower profit margins may or may not be a good thing. The only advice I can give here is to know your real costs and make sure you don't fool yourself into thinking direct labor and materials are your only costs.
Sales are a great way to bring people in, and get people back. The offer of a sale is enticing. When having a sale it is important to understand that the event is just as important as the pricing, so make sure to factor your advertising costs into the equation. Be careful of having too many sales, or people will start to stay away during regular business waiting for the next sale to happen instead.
Discounts for repeat customers are a great one, especially when combined with an expiry date. Try giving your customers a coupon every time they come in that's good if they use it before an expiry date. If you know how often people normally come in and make the expiry date just a little before that you can entice people into coming back a little sooner, and in the long run a little more often.
Summary
Consumption strategies, follow-up communication and lower prices are three great management tjps for getting customers back into your place of business more often. The important thing is that rather than leaving it to chance, sit down and plan how you are going to get people to come back a little more often than they do now.
About the Author: Daryl Cowie has shared management tips with 1000s of people in over 30 countries around the world. His mission is to help you and your company turn business opportunities into business realities. Sign up for his free business management home study course at http://FreeManagementTips.com
More articles by MediaCenter@BoundlessThinking.com
Print Article | Download PDF | 47 views | Apr 03 2008
|
|
