Posts Tagged ‘referrals’

This is part of a series of posts on what you can do to be more successful in your business this year. To get a free report full of success tips for your business, click here.

Let’s talk about repeat customers. These are the backbone for many businesses. The more repeat customers you have, the less you have to worry about getting new customers. Yet, many businesses put most of their efforts on gaining new customers, and not enough on keeping repeat customers. With repeat sales, you may be grateful for them, but what do you do to ensure that they happen? What procedures do you have in place to not only get repeat customers, but to service them continually and to tap into them as a resource for new business?

Gerry Linda, of Gerald Linda & Associates, provided this piece of advice on repeat customers:

The best advice I can give is to stay close to your current customers. This is formally called retention marketing and it is often overlooked in favor of the pursuit of new customers. However, current customers pay all the bills. This is akin to dancing with the girl who invited you to the party. So keeping current customers is Job #1; Job #2 is up-selling and cross-selling them and Job #3 is obtaining referrals from them. By the way, as part of this process, it is essential to formally measure customer satisfaction. Repeat sales is not the same as satisfaction. Customers may be deeply unhappy and actively seeking alternatives. The only way to determine satisfaction is to assess it directly via research.

Gerry offers a lot of great advice here. I thought I would break it down piece by piece and add in my own advice to really help you get a handle on getting and keeping repeat customers.

Lost in Pursuit

It is true that in sales there is a tendency to focus on new customers more than old ones. Sometimes this is built right into the system, with reps getting a greater commission on new sales. Even without that trigger, sales reps may not think they are growing if they aren’t constantly going after new customers. And since new customers take more time and effort, going after repeat sales often gets shortchanged.

Part of the problem is that a large number of repeat sales happen anyway, without an active pursuit. If you do a good business, your repeat numbers are probably pretty high. However, they could be higher. And, as we will see, its not just the repeat sale that matters. Repeat customers can add more than their return business. Start thinking referrals, testimonials, and up-sells.

Keeping Current Customers

The fact is, you should have a plan for keeping current customers. There should be sales and marketing devoted just to them. For instance, if you have a small company with two sales people, you might consider devoting one to new sales, and one to repeat sales. This is two different personality types, by the way, so it may come down to hiring the right people. In the sales world they are called the hunter and the farmer.

A lot of salespeople are hunters. This is why they naturally pursue the new sale and sometimes neglect the repeat sale. Your business may already have farmers, but maybe they are in customer service, or some other part of your business. Tasking the right people to take care of repeat customers is important.

As part of your plan, you should have ongoing communication with your current customers. Send out weekly emails, write a blog, do monthly webinars. It may be a good idea to write out a marketing plan just for repeat sales. One nice thing is that you don’t have to worry about the prospecting, which is often the most expensive and time-consuming part of getting a sale. Spend energy on keeping current customers, and your repeat ratio will rise, and with it your bottom line.

Up-Selling and Cross-Selling

While keeping current customers helps keep the blood flowing in your business, you still need to grow. So you have to go out and get new customers, right? Well, yes, but not so fast. Gerry talks about up-selling in his piece of advice, and he makes a great point. Often, you can actually increase your profit with your current customers.

Up-selling is when you sell a current customer on something more expensive. Its not more expensive just for the sake of it. Maybe they started with your basic package, but they are ready to upgrade.

Cross-Selling is when you sell your customer something else, besides what you have already sold them.

If you have a decent customer base, you can make a lot of money with these methods. Good money, too. Often, you are looking at a better profit when you up-sell and cross-sell. For one thing, it is not as expensive to get the sale. Secondly, you can put a larger markup on some of these products.

Think about your business. Do you have any kind of upgrade available. If not, maybe its time to put one in place. Maybe you need to add a few extra services and sell a higher-priced package. Maybe its a new complimentary product. There are tons of ways you can offer an upgrade.

A cross-sell can be very easy, but it can also get you in trouble. If you try to add on new services or products to your business, you may get distracted from your core. You know best what you can handle and what you can’t. You are ready to add a separate line if you are organized and profitable with what you currently offer. If its still a daily struggle, do yourself a favor and don’t add anything extra.

You can cross-sell without adding services or products yourself. You do this by affiliating your business with other businesses who sell to the same customer. So, if you sell windows but not doors, you can partner up with a company that does doors but not windows. All you do is sell your customer on this other business and collect a fee. Pretty easy way to make some extra money.

Referrals: The Oil Well Waiting to Be Tapped

There is another way to make money from your repeat customers. They can provide you with referrals.

You can go about referrals two ways: willy-nilly or purposeful. Willy-nilly takes referrals when they come. Purposeful puts in place a good system for asking for and getting referrals.

Tapping into current customers for referrals in a purposeful manner can fill up your prospect list. Suddenly, without focusing on new sales, you have a bunch of leads for just that, new sales. Done right, you will have to do a lot less cold prospecting.

Referrals are often not tapped to their fullest potential. This is an oil well of new business that you don’t want to ignore.

Satisfaction

In the end, your success with repeat customers all comes down to whether you do a good job satisfying your customers. If you have high customer satisfaction, repeat sales will come easier, as will up-sells and referrals.

Gerry Linda suggests doing regular customer satisfaction surveys. You need to keep your finger on the pulse of current customers. Part of having a high satisfaction rate is being willing and able to adapt your business to customer needs and desires.

I would suggest one other measure of customer satisfaction. This will help in getting new sales, as well. Have a strong plan for getting testimonials. Go out of your way to get customer testimonials. Collect them directly and also ask customers to fill in reviews online, at third-party sites like Yelp, Google, and Facebook.

If this is easy, and you get a lot of great testimonials, then your customer satisfaction is likely pretty high. If this is a struggle, and you aren’t getting good testimonials, you need to take action to improve satisfaction.

Repeat customers are the source of life for your business, perhaps even more than you realize. Value them. Put your plans in place to keep more customers and to get more out of each customer. In time, you will see focusing on customers creates an engine of growth within your business, one that can be more easily sustained then the constant turnover of digging up new customers from scratch.

photo credit: alancleaver_2000

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Bradford Shimp helps small businesses build a great web presence. Start with a web site, and go from there. BroadRiverCreative.com.

This is part of a series of posts on what you can do to be more successful in your business this year.

Every one of us wants to make our business the best. We want our customers to know that when they work with us, they are getting the best service, the best product, etc. But how do you go about making our business better for your customers? What should you change?

First Care, Then Ask

According to Phil Morley, of NewsReleasePro.com, finding out what customers want is important and straightforward. First, you need to care. Then, you need to ask. Here is what Phil had to say when I asked him how a business could be more successful in 2010:

The number one thing a business can do to be more successful in 2010 is to develop empathy for the customer. In other words, put yourself in your customer’s shoes. People have a lot of choices these days on where to buy products and services, and they choose a vendor based on the total experience not just lowest price. As business people, our job is to deliver a better overall experience than our competitors.

How do we learn what they are looking for, what they consider a ‘good’ experience? We ASK them. We ask them beforehand, where possible, what they would consider to be a successful experience using our product or service. We ask them afterwards how we performed, did the experience live up to their expectations? If they say ‘no’, then we make changes. If they say ‘yes’, we ask for referrals.

Develop empathy for the customer. In other words, put yourself in your customer’s shoes. People have a lot of choices these days on where to buy products and services, and they choose a vendor based on the total experience not just lowest price. As business people, our job is to deliver a better overall experience than our competitors.

How do we learn what they are looking for, what they consider a ‘good’ experience? We ASK them. We ask them beforehand, where possible, what they would consider to be a successful experience using our product or service. We ask them afterwards how we performed, did the experience live up to their expectations? If they say ‘no’, then we make changes. If they say ‘yes’, we ask for referrals.

A Simple Plan

This is a simple plan, but one that often trips up small business owners. From personal experience, I know that there is often a disconnect between what a business does and what a customer really wants. In fact, the road to customer dissatisfaction is often paved with good intentions.

Build Asking In

Things would always turn out better if business owners took the time to get to know customers and to ask them what they want. Mike Michalowicz, author of The Toilet Paper Entrepreneur and a favorite guru of mine, builds the ask into the sales process. The first step for him in launching a product and selling it is to do a survey. His goal is to find out if what he is thinking of offering is indeed what people want.

What if you did this before launching a new product or service, or doing a tweak? If you ask your customers and prospects if they would like what you are planning, you can get a good idea of demand. Maybe people don’t really want it, but they can tell you what the do want. And if a lot of people say that they love the idea, you have already built a list of active leads to follow up on when you launch.

Ask Out of Relationship

Getting to the ask can be as easy as a survey. However, it always works much better when you take the first piece of Phil Morley’s advice: empathize with your customer. By taking time to care about and to get to know your customer, you will have an easier time understanding them and an easier time talking to them. I suggest that you keep in constant communication with your customers. A weekly email is a very good idea. You’ll do a better job of it if you devote yourself to really getting to know your customers. And if they can see that you care for them, they will respond better and more often to your communication. In this way, you can develop a relationship where you can ask customers all sorts of things and really fine-tune your business to their needs and wants.

Become the Customer

You’ve heard of method actors. Marlon Brando used to “become” the character. Other actors do it today, not even dropping character in between scenes. You need to “become” the customer. Spend time with them, friend them on Facebook, ask them questions, think about their motivations. The closer you can come to understanding your customer, the better you can shape your business to meet their needs. Plus, you will naturally care for them and protect them, and they will feel that you are one of them.

Some pretty amazing things will happen to you if you start to think from your customer’s perspective and build your business accordingly. In my next article in this series, I will talk about some practical ways to build customer relationships and we will hear from a few more experts on the topic of customers.

photo credit: Big D2112

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Bradford Shimp helps small businesses create and maintain a professional web presence at BroadRiverCreative.com.

The best marketing that can ever take place for your business is when one friend recommends your business to another friend. That close bond of trust between two friends cannot be replicated on a large scale. Yet, you can tap into the power of that trust by using the referral.

You do this by helping spread the real stories that real people tell about your business. You can also play a big part in encouraging those stories to be told.

You have doubtless seen ads where real customers tell their stories. Even if you doubt just how real these customer are, there is a good chance that you trust what they are saying a little more because of the perception that they are real. You don’t know the people in the ad, but you can relate to them because they are real.

Why do you have an easier time relating to what a customer is saying about a product than to whatever is coming directly from the company’s marketing department? Here’s why. A marketing department often thinks from inside the company. A real person thinks about how the product or service betters his or her life. In other words, a real person thinks like you or me.

What does all of this mean for your business? Well, for starters, whenever you get the chance, shut up and let happy customers do the talking for you. They will have a very easy time connecting with other potential customers, because they have been in the exact same place. In this way, a customer can often do a better job communicating your message than you can. They speak from a place of trust and focus on the points that are going to matter most to their friends. Often, they will tell friends about you after they hear their friends complain about something or mention a need. They have a relationship and out of that they can provide a recommendation that would be worth gold if it could actually be bought.

Good referrals can’t be bought, by the way. They must be earned. I don’t mind if you offer a reward for referrals, I just don’t think its that useful. If you want consistent referrals, you need to build consistent communication with your customers. You can ask for referrals at the end of a sale if you want. But the fact of life is that people make suggestions through daily interactions. Your customer may not know anyone who needs your product today, but they may have a conversation a year from now where a referral will make perfect sense. Your job is to keep your message fresh in that customer’s mind, even if the sale happened a year ago. You do this by providing useful information via blogs, newsletters, webinars, and more.

Keeping the conversation going is probably the best way to ensure that your story is being spread. You put your effort on keeping the story alive in the minds of your customers and fans. They do the job of spreading the story, one to one.

Since asking for referrals one time is not the most effective thing (you will basically get a list of cold leads), use the capital of trust that you build up during the sale to ask for something else instead. I like to get a few things from the customer. Of those things, a testimonial is an important component. Ask your customers for testimonials that you can use in your marketing. And if you get a great testimonial, take it further by asking to sit down with the customer, record an interview and make a case study out of that relationship.

And there is one more thing that you can ask for at the end of the sale that will help spread your story. Ask your happy customers to post online reviews. Sites like Yelp, Google Maps, and Angie’s List can drive referrals and make it possible for customers to post comments and reviews about your company.

This is a better use of the after the sale ask, because that review or testimonial will be viewed by people who are considering your service. That is the magic of letting customers spread your story. Whether they do it one to many with online reviews and testimonials, or if they are doing one to one referrals, real customers can communicate with real customers and get your message across better than you could ever hope to.

photo credit: hectorir

Recommended Reading

I am constantly on the prowl for good business books. Right now, I am reading Crush It, by Gary Vaynerchuk. I love Gary’s take on passion and business. This book will give you a kick in the butt to get up and get moving as you pursue your passions and your business.

If you are interested in Crush It, you can get it through Amazon by clicking here or by visiting your local bookstore.

Have a Small Business Question? Ask me and I will answer it here – email me with your question now.

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Bradford Shimp is the publisher of All Biz Answers. He is also the co-creator of Idea Anglers, a place to see your ideas come to life through collaboration. Follow on Twitter @bradfordshimp. Let Bradford help you with your business – visit BroadRiverCreative.com

As we move back toward a more personal approach to business, thanks to trends in social networking, I believe that the customer relationship is growing more and more important. The goal of your business should not be just to get the sale, but to develop a relationship with each customer that will lead to more sales, testimonials, referrals, and mutual gratification.

Its time to treat customers as friends, and perhaps even discover a few amazing new relationships in the process.

Friends Communicate

In order to start and maintain friendships, you need to communicate. You can’t build a friendship by calling someone once or twice a year to ask them to do something for you. Yet, that is all the communication many small businesses offer, the sales call. Likewise, a card every year on Christmas will not a friendship make.

To make friends with your customers, you need to communicate personally with them. Now, since you will not be building deep relationships with most of these customers, it is okay to use a tool of mass communication such as an email newsletter or blog. Even then, commit to breaking out with a few personal notes or phones calls each year.

I believe you should offer some kind of communication at least once a week. This is ideal because it will keep the conversation alive with the customer and also force you to talk about deeper things than your latest sales push. Customers will appreciate the constant stream of communication if it is valuable to them in some way. Make your customers feel like insiders, teach them about something, offer them something, etc.

Friends Stick By Each Other

The nice thing about friends is that they are willing to give you the benefit of the doubt. Really good friends will slap you around a little when you screw up, but they will never leave your side. By developing friendships with your customers, you will be increasing their loyalty factor greatly and you will benefit from more honest communication from them.

A customer will be far less likely to leave you if he or she feels a deeper connection with your company. It is your job to make this connection happen. There are lots of ways to do it. It starts with the communication. From there, it moves into being personable and caring for your customers. Be a giver, and you will be appreciated.

Here are a few things I suggest that will help you make that deeper connection with customers. Consider organizing customers into focus or advisory groups. Ask them for their opinions on things related to your business. You can do this on the small scale and formally meet, or on the large scale and sign up customers to receive emails surveys throughout the year.

Another thing you can do is to throw a party for all of your customers. A good, cheap, way to do this is by having a family picnic. Invite your customers and their families. Depending on your budget, you can even ask them to pitch in on the food.

You could also use social networks to connect more with your customers. Engage with them on Facebook and Twitter. Consider setting up a Tweetchat just for your customers. Build community with the people who buy from you. From community comes loyalty.

Friends Share a Common Story

The hallmark of friendships are shared experiences. By building communication and connection into your customer relationships, you are allowing for the creation of a shared story line. Customers want to be part of a bigger story. They don’t care about being a number on your financial report. They don’t care nearly as much as you do about the ins and outs of your business. Your job is to find something that they do care about, and work to make them a part of that story with you by their side.

Sweetriot is a candy maker with a story. They have built their whole business around fixing the world with chocolate. A customer doesn’t just buy from them, they join the story of saving the world. The same is true of Tom’s Shoes, where one pair of shoes is given to the poor for every pair that is bought.

You don’t have to make your story about charity. Companies like Apple and Google have a narrative that customers feel they are a part of. You just need a singular focus. You need to make your customers feel like they are part of something when they buy from you. Whether they are helping save the world, joining an elite club, or bettering their lives, the story needs to impact them.

When your customers buy in to a story, and not just a product, they are much more likely to share that story with others. This leads to more customers and more friends, and soon, your business is growing in ways you never thought possible.

Before you get overwhelmed about how to create a unique story, I want tell you about MemberHub and Matt Harrell. Matt and his dad created MemberHub with a team of people. They have designed what I think is a pretty sharp group collaboration and communication tool, which is perfect for large organizations like churches. I know a lot about Matt and MemberHub and feel like I am part of their story. Why? Because they share their story openly. They have a blog, use Twitter, and are happy to talk to customers on the phone. They haven’t invented an elaborate story. They have just been open and committed to communication.

You can do this. You don’t need to have the best hook in the world. Just be yourself and let it show. The right kind of people will be attracted to that. Before you know it, your business will have a narrative that others can plug in to.

So, what action should you take now? First of all, create a regular communication outlet. I suggest a blog and email newsletter combination. The blog can feed the email. Don’t like to write? Then record video or voice. Just make it happen. Until you start opening up this stream of communication, you will not understand how much it can impact your business and life for the better.

photo credit: constantly_Jair

Have a Small Business Question? Ask me and I will answer it here – email me with your question now.

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Bradford Shimp is the publisher of All Biz Answers. He is also the co-creator of Idea Anglers, a place to see your ideas come to life through collaboration. Follow on Twitter @bradfordshimp. Let Bradford help you with your business – visit BroadRiverCreative.com