John Paul is a contributing writer for the Business Journals Digital Network’s “How-to: Growth Strategies” series. Below is his most recent installment.
I find myself telling people all the time, “I don’t care whether you took a high school economics class or graduated from Harvard… the most basic foundational lesson you learned is that your No. 1 source of new business is the person you are currently doing business with.”
This philosophy lies at the core of any effective marketing plan.
These customers already exist, have already had the experience, and are aware of the good and bad associated with buying from you.
Existing customers are without question the most overlooked source of new business for any retailer.
The challenge for most businesses is the absence of an exact marketing plan on how often previous owners should be contacted, or what message will make them respond the most.
The way to combat this is to build a marketing plan that allocates enough resources on a monthly basis to send out communications to your previous customers to generate a response that results in new business.
I have broken a pre-planning strategy down into five points. Regardless of what industry you are in, these must all be addressed before a plan can be created.
1) What’s the size? The size of your owner base will be the greatest factor in determining the amount of effort and dollars required for effective marketing. Once total audience is determined, you can apply the frequency of how many people are contacted every week, month, quarter and year to effectively market to this audience. Once the frequency is applied, you can set a calendar or schedule of events to take place in your plan.
2) What’s the message? The greatest point of all in terms of a message is that no message is a bad message. Every piece of direct mail or email that gets sent ultimately makes an impression. The bottom line is that a message should always be sent and it should be created by knowing what a customer base is most likely to respond to based on what are the best products or services you sell.
3) How’s it sent? There are three methods I find most effective; the mailbox, email and telephone.
Every American has a mailbox. Direct mail is one of the only methods in marketing where you can physically place a message in someone’s hand. The latest data showed 94 percent of adult Americans have an email address, thus email is another very valid and more cost effective way to market.
The final and absolute most critical form of sending the message is the telephone. The telephone is the lifeline of any business. I am a huge advocate for outbound calling as it is the only source for live two way interaction between a buyer and a seller.
4) How often? I believe you are best served using the following:
• Email – can be sent 2-3 times per month and you can send a message to all your owners at once for no cost.
• Mail – can be sent every 30 days or set to send every 60 days if the customer base is too large to contact all owners each month.
• Phone – can be used 3-4 times per year. This is used sparingly as it is the most intrusive form of outbound marketing.
5) How long do you do it? The easiest answer of all. Forever. Once you develop a system to mine your existing owners and outwardly market to them for new business, you never stop.
The return on investment and dollars spent to keep an existing customer pale in comparison to the dollars needed to create a new customer.
The main source of new business is the person you are currently doing business with. I would invest my marketing dollars in this area before spending a penny targeting the mass public.
John Paul Strong