Mining your own diamonds…
In the early 1900′s, Reverend Russell Conwell – founder of Temple University, Philadelphia – gave a popular speech called “Acres of Diamonds.” In it, he said: “Your diamonds are not in far distant mountains or in yonder seas. They are in your own backyard if you but dig for them.”
Whether you are a business owner, marketing professional, or other entrepreneur, it is crucial to remember your backyard diamonds are your past and present satisfied customers. You may currently be focusing most of your efforts on growing front-end sales. Once a sale is over, many businesses move on to getting the next new customer, ignoring the one they already have a positive relationship with.
The big mistake is not developing a continuing stream of sales from existing customers – ignoring their lifetime value. Do you calculate the lifetime value of a customer? Try it – you might be surprised. As an example, Asda reckon an average customer spends around £105 per week on the family shopping. They do this for an average of 50 weeks every year (allowing for holidays) – that’s a massive £5,250 every year. And how long do customers stay loyal to any one supermarket? Research done by J Sainsbury suggests that the average time between shoppers making a significant change in their supermarket of choice is 6.7 years.
So the Lifetime Value – of each and every customer – is a massive £35,175…
So your real diamond mine is in the continuing stream of sales that can be realised over the lifetime of your existing and past customers. Plus, it costs much more to acquire a new customer than maintaining a relationship (some research suggests as much as 20 times the cost of looking after an existing one). When you ignore customers you’ve already served, it’s like throwing money away.
Once you’ve made a sale, your customers know, like, and trust you and are more likely to buy from you a second time. Here are some tips for you to effectively mine your “acres of diamonds”:
1. Organise your Contacts: You have to be able to get back in touch with your customers again to be able to market and sell to them. Maintain a centralised customer database to organise names, addresses, and phone numbers. Keep track of purchase histories and interests.
2. Collect Information: Depending on your business, there are a variety of ways you can collect customer data such as sign-up sheets, website forms, postcards, and so on. Be creative – use free offers, VIP or loyalty programmes and contests to provide incentives.
3. Regularly Communicate: No matter what business you are in, find methods to stay in regular communication with your customers. Ideas include a newsletter, e-zine, holiday cards, coupons and special offers. For some businesses, it may work to take a client out to lunch or send a hand-written note. And, don’t forget the telephone… but for goodness sake, do something!
4. Offer Proof: Provide case studies and testimonials to show how you have helped other customers. In your communication, you can provide helpful information, offer seminars, and provide useful tips to keep your business on the top of your customers’ minds and to remind them of how your company can help them.
5. Testimonials Sell: For word-of-mouth, there is no one that can sing your praises like a satisfied customer! Nothing speaks louder to a potential customer than a peer. Ask for testimonials. Post these on your website or feature them in your newsletter. Remember, if you don’t think to ask, they may not think to offer.
6. Cross-sell and Up-sell: Make sure customers know the entire range of your products or services. Once your customer is in your sales funnel, they are much more likely to buy larger-ticket items from you. Based on their past buying habits, offer them the deluxe model, more options, premium or value added services.
As you start to work your backyard diamond mine, I can’t emphasise this enough – take good care of it. Appreciate your loyal customers by offering them special deals and incentives. You need customers more than they need your business.
There will always be about 20% of your customers who will give you 80% of your business – Mr Pareto’s Law works! These are the people who should receive most of your attention, energy and time. By concentrating on your best customers, your marketing efforts will become more efficient and cost effective. It also rewards these customers because they are getting the most personal attention.
Keep in contact with your customers and keep them delighted. In return they will continue to give you their business… even in these challenging times!