written on August 25, 2009 by Matt Minarik
I do ‘Lean Marketing'; which means using the most efficient means as possible to grow your business. Right now, Lean Marketing is the way to go as people need to grow their business but don't have a lot of money - gee, right now, I think that includes everyone (where did the money go?). One of the best kept secrets of sales and marketing is right there on your desk - it's your CRM database or your Rolodex; in direct marketing, we call it your House File. Here are some simple quick stats regarding your House File.
It is 5 to 50 times easier to sell something new to an existing (or past) client than it is to sell the same item to a prospect. That means if you are going to spend $50 on whatever it takes to get an existing client to buy from you, that you have to spend $250 to $2500 to get the same result! Yet 90% of all sales and marketing is spent on prospecting. Here is another statistic to make you want to work your customer file; if you are at 90% customer retention, and you don't get any new clients, then at the end of year four your business is just 66% of what it was before.
So, in these times, the easiest way to ‘Lean Market' is to work the House File. I have come up with four goals of your House File - or customer base. Not all four will fit to everyone, but these are the ONLY four goals you want to have with your current customer base. Here they are:
- Have them buy more. Now I know that sounds like a ‘Duh!?' statement, but you would be surprised at how few businesses try to sell more to their current clients. If they are buying $10,000 worth of goods or services a year, then see if you can expand to sell them $12,000 - that is a 20% increase right there. (one way to do this, by the way, is that I tell all my clients to increase their fees 7% over last year - and all who do say that the only ones who leave are the ones they wanted gone anyway.)
- Have them buy more often. This is a little more intriguing than the first rule, but still somewhat simple. If someone is buying $10,000 from you once a year, see if they can spend $10,000 from you TWICE a year - or, $2,000 each month instead of $10,000 once a year. By doing that, they are also fulfilling rule #1.
- Keep ‘em! Well, considering that you will be at just 67% of your business in four years with a 90% retention rate (see above), this makes perfect sense. But what this means is that you have to do marketing campaigns that are purely ‘Relationship' building campaigns and nothing more. (See below for how we combine this with other campaigns).
- Get Referrals. Finally, we want to do is to ask our clients to refer us to someone else. Referral based marketing is the #1 most efficient means of marketing there is. I try and have my clients do 3 types of referral based marketing (sales) for us: A) inside the company; B) similar companies of colleagues they know, and C) Networking type of organizations.
These are the four goals of the House File - and there are no more goals than this! There are ways to combine all four, but that is for another day. The timing of these campaigns is very simple. Starting today, for example, do campaign #1 - have them buy more. Try and think of a means to get your customers to buy more than what they are buying now. Then, one month later, do a campaign to get them to buy more frequently. Then, on month 3, do a simple relationship campaign - take them to lunch, golf or an event - or better yet, just buy them tickets for them and their spouse to go to. And finally, do a campaign to get them to refer some business to you. Then, on month five, you begin all over again with Campaign #1.
Ok this is great, but how do I do it with no money, you are asking? It's simple. Just pick up the phone and ask to meet your customer for breakfast, lunch or after-work beverages. Then just talk to them about THEIR business, not yours. Of course you can structure the conversation to go in the direction you want it to go: Buy More; Buy More Often; Keep ‘em; and Get Referrals, but make sure the meeting is all around them and their needs.
Just doing this strategy alone will increase your business AT LEAST 20%.
Do well, live long and prosper.
Matthew Mann Minarik
President, Hi-Q group
440-724-6363
mmm@hiqg.com