1. Don’t be greedy. If you always try to profit from the first sale, you ignore the real value of the customer. This is a mistake. If you do not invest as much as you could to get customers – you will not get as many profitable customers as you might. Also, your competitor, who does know the value of a customer, can outspend or underprice you – or both.
2. Concentrate on customers more than prospects. Research by McGraw-Hill into why retailers lost customers showed that 68% went elsewhere because of indifference or the attitude of their salesforce. Only 14% went because they were dissatisfied with the product or service and only 9% went to the competition. Your customers will remain loyal if you pay them attention.
3. Go where the money is – all customers are not created equal. 10% of cognac drinkers account for 50% of consumption. 39% of cognac drinkers account for 44% of consumption. The remaining 51% account for only 6% of consumption. So focus on the top 10%.
4. Never lose an opportunity to cross-sell. Research by banks into the number of accounts held by customers and their likelihood of switching showed those with four accounts or more were 100-1 against switching, those with only one account had a 50% chance of switching. Your existing customer is 3-8 times as likely to buy as an identical non-customer. Someone who has responded to a promotion is twice as likely to buy. Anyone with any relationship with you, however slight, is more likely to buy.
5. Never spend without testing. Look before you leap.
6. Test new products on customers first. They appreciate being treated as special – and to you they should be. The risk is lower: they are more likely to buy. Only if it sells well to them is it likely to sell outside.
7. Never lose a chance to communicate. Here are some golden opportunities: When you have anything to say of interest to customers or prospects new product, price, offer, news. When they are about to decide. When your competitors are cooking up something. When something big is happening in the market.
Those who communicate most do better than those who do it least. Do not worry about talking to customers too often. Worry about being a bore. Talk whenever you have something you think will be of interest. But do not mail or phone just for the sake of it. Think constantly what prospects and customers might be interested in.
8. Say “Thank you”. A retailer rang up a file of customers one month after a product had been bought to say “thank you; do you have any questions?” They didn’t ring a similar file, and researched the difference.
70 percent of those rung said they welcomed the call and would like more. 45 percent of those they did not ring said they would welcome such a call. Over the next 6 months 13% more of those called bought compared with the others. The average number of orders increased by 16% per customer called.