There are only two ways that you can increase your sales volume... You can increase the number of customers you have by adding new ones, or #2, you can sell more to your existing customers by having a marketing strategy that increases the frequency and amount of their purchases.
Businesses spend most of their time reacting when business is good, and most of their time and money trying to get new customers when business is down. Seldom do they try to generate more business from their existing customer base. Yet, prior customers represent the greatest potential for rapidly increasing sales and profits. They are a ready group of pre-conditioned buyers for which the acquisition cost is already paid.
If, during the time period in which you incurred these marketing expenses, you acquired fifty new customers who had never done business with you before, your cost of acquisition for each customer was $16. Say you ran a newspaper ad for $800. ($800/50 = $16). Companies tend to have no idea how much it costs them to acquire a new customer, much less what the "Lifetime Value" of that customer is. They don't know that it is six times more expensive to get a new customer than it is to get additional business from an existing customer. Consider at a company with 3,000 customers in their files. It's not unusual for a company with this size customer base to only do $350,000 to $500,000 in business a year. This equates to roughly $100 to $160 per customer, per year.
In this case, the company could increase its sales and not even add a new customer. If 300 of those 3,000 customers could be offered a "special offer to our preferred customers," with a "60 day money- back guarantee," all of which culminated in $200 in additional business from each of that 10%, the increase in sales would be (300 x $200) $60,000.
Funneling new opportunities through an existing access is a lot easier and cheaper than coercing new customers. Taking market share away from a competitor is a lot more difficult and expensive than adding a service or product to your arsenal. It also elevates you above the competition. What extra product or service can you add to your existing line(s)?
Which "special" incentive can you create for your existing customer base?
The point to be made is this: leads are a direct prediction of your sales volume and must be responded to, in some way, as quickly as possible. If you can't get to them physically, then send them a letter explaining your position (out of stock, over-booked) and how the demand for the value of your product or service has temporarily placed you in that position. Offer a special bonus for those who will bear with you and wait.
Also, with this same letter, ask who feels unable or unwilling to wait, and make every effort to handle those prospects. Both those who commit to wait and those who feel that they cannot wait are telling you what your sales volume will be. This kind of letter will create good will as well as save you otherwise lost sales and the referrals that would have followed. If you don't respond, you are creating "bad will" (same as bad- mouthing - but you're targeting yourself) as well as lost sales. You are also undermining your monitoring efforts by losing control of the leads.
Attention to lead response demonstrates dependability, the number one criterion sought by end-users. It's not the price, it's not the product - it's dependability that people want. Pay attention to your marketplace and it will continuously pay attention to you, and secure your future.
Monitor your own response rate to inquiries. Keep records of the inquiry date, first response date and sale percentage in relation to response date.
Daniel Wadleigh is a nationally published marketing consultant and has programs for start-up and existing businesses including effective web sites, e-mail/database, other non-internet ways to drive them to your website, and low cost ways to get more new customers.
Go to: http://www.more-new-customers.com to get free copy of "Marketing to Men vs. Women- the 8 different responses" and a Free copy of "Market Research- 7 Questions to Ask to Start-up and 7 to Ask to Improve Any Business."
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