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How to turn selling efforts into repeat business
by Bob 'Idea Man' Hooey

 


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A "Secret" note for Business Owners and Sales Managers

How to turn selling efforts into repeat business

by Bob 'Idea Man' Hooey

Most organizations are so preoccupied getting ‘new’ customers; they pay scant or little attention to their existing customers. It is a major mistake if you let them `slip away' as you have just wasted your money and your efforts in getting them in the first place. You see, by spending time on retaining and getting repeat business from your existing customers, you reap the following benefits:

• You save on advertising costs to get a new customer in the first place
• They already exhibit a need for your product/service so they are your target market
• You can have a more effective, targeted mail out or marketing program
• You can ask them what they want and then seek to satisfy them
• If they are happy with your organisation they will tell others - the power of word-of-mouth
• You can make your existing customers an offer which can extend to include their friends and colleagues

Because you have already spent your advertising money on getting a new customer, it makes good sense to work at keeping that customer. For your organization to grow and be successful, you need to develop an on-going relationship with your existing customers, so they think that your business is looking after them. If they have already bought from you, then they are your target market -so don't forget them.

The chances are, if they are happy with your business, they will buy from you again - They just need ‘reminding’ of the benefits that your business can offer them. At least that would be logical, wouldn’t it?

US based researcher Jack Parr did some survey work to discover how customers felt about a large well-known North American company’s goods and services. He surveyed a total of 6000 customers, which represented a wide cross section of industries and organizations. His findings would be representative of typical ratings or results for most companies.

• 2 percent of customers surveyed said goods and/or services were poor.
• 5 percent rated them fair
• 60 percent rated them good
• 33 percent rated them excellent.

On the surface this seems to be a great result and a cause for celebration. After all, 93 percent of their customers said their goods and services were good or excellent. (Really?) Many companies would be celebrating with these results.

The next question is the definitive one. They were also asked, “How willing would you be to purchase from the company again?”

• Of those who experienced poor goods or services, none wanted to be repeat customers. This would be expected.
• A mere 7 percent of those who rated them fair would be willing to be repeat clients.
• 62 percent of those who rated them good would deal with them again.
• 95 percent of those who rated their goods and services as excellent would be willing to be repeat customers.

These results (about 2/3 repeat) tend to mirror other studies which reinforce the premise of making solid and consistent customer service an integral part of the sales process and not just an add on to take care of unhappy clients.

Point to Ponder:

"The future does not get better by hope, it gets better by plan. And to plan for the future we need goals." Jim Rohn

No company will keep all of its customers forever, but generally if you take care of them you will keep them longer. Based on Parr’s research study, a company with an ‘average’ customer service rating would keep only 68.8 percent of its customers after just ‘one’ business’ cycle.

In a fierce global market where you face competitors who are committed to improving, an average company must attract close to 33 percent of its business from new business just to maintain its revenue basis.

Exemplary customer service is a solid foundation to selling or business growth and retention of clients. This has a dramatic financial impact on your bottom line.

In fact, a study by Bain % Company, a Boston based consulting firm confirmed that the average Fortune 500 Company could ‘instantly’ double its revenue growth rate with a 5 percent increase in customer retention.

They went on to conclude that a small to mid sized company could double its profits in ten years by simply increasing its customer retention by 5 percent. Interesting parallel, time line comparison, and results.

What does it cost you to acquire a ‘new’ customer? $_____

Calculate your overall costs in advertising, processing, sales commissions on new sales, and other expenses for the past year divided by the number of new clients you or your firm generated. Understanding your ‘true’ costs will help you focus on the value of retaining and sustaining existing clients instead of ignoring them.

Often that figure is 5 to 10 times the cost of keeping one and expanding the business they do with you.

Here is an interesting exercise to reinforce this process:

To help you measure your potential to secure repeat business, ask yourself these questions. Discuss your answers with your customers, colleagues or employees.

• How good is your customer service? Where do you think you or your company need to improve?
• Have you got systems in place to ensure consistency of service and product development? What are they?
• Are you happy with your brand or image - are you relaying the `right' message? What is the image your think your customers have of you?
• What does your organisation do for customers that your competitors are not doing? Do have at least one distinctive differential?
• Do you make the most of the testimonials from your satisfied customers to keep the momentum going? Do you acquire and track them?
• Have you promotional activities in place which targets your existing customers and which makes them `feel' valued and special? What are they?
• Do you survey your existing customers on a regular basis to help improve your product or service to them? What are they telling you?

So, how did you rate?

Believe it or not there's much more to know when it comes to maximizing your potential for repeat business. Selling is simple; it is the work you invest to make it work that takes effort. Keep your existing customers coming back for more and getting them to `spread the word' about your business.

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© 2007 Bob ‘Idea Man’ Hooey www.ideaman.net All rights Reserved. Used with permission of the author.

Bob ‘Idea Man’ Hooey is a productivity strategist and creativity catalyst who regularly writes for North American Consumer and Trade Journals, on-line magazines and company intranets. He is the author of 10 books including 2 on selling; and the 48th person in the history of Toastmasters International to earn their coveted professional level Accredited Speaker designation. He is a professional member of the Canadian Association of Professional Speakers and the International Federation for Professional Speakers. Visit his website for additional articles like this one: www.ideaman.net

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2/12/08


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