It’s much easier – and usually more profitable – to generate money from existing customers. Yes, you can find new customers, but there is a cost to acquire them.
In “Five Ways to Make More Money Without a Single New Customer,” Carol’s recent post on the Bank of America Small Business Community, she shares some tips on how to leverage your existing customer base. Carol begins:
You’ve probably heard that it costs about five times more money to acquire new customers versus retaining existing ones. Obviously, the expense and effort of acquiring new customers can be worthwhile. That said, are you doing everything that you can to maximize profits based on your current customer base?
Your customers already value your product or service, so it’s extremely cost-effective to try to get them to buy more from you. Follow these 5 tips to get more from the customers that you already have cultivated.
1. Add higher revenue and margin items to your offerings.
Whatever products or services you offer, you probably can add some extras that provide greater perceived value to the customer while maximizing your profits.
There’s a reason why fast food chains ask, “Do you want fries with that?” With a profit margin of around 75 percent, they are probably the most classic example of high-margin product add-ons. Your sales staff can easily increase profits by forming the habit of offering an extra pack of batteries or other related items when they sell electronic devices or a yearly website audit when creating a new website. So, when customers and clients make a purchase, have related products and services to suggest.
2. Incentivize more frequent purchases.
Sometimes, regular customers will buy your products or services more frequently if you just remind them that you’re out there. For example, when a personal trainer calls customers to suggest that more frequent visits will help them reach the fitness goals that they’ve nearly achieved, the extra business can be significant.
Don’t forget the value of loyalty programs, either. Caffeine-driven customers often stop by more frequently to get their cards punched when a free latte is in the offing. As a small business owner, you know your customers well. Target their current buying habits and untapped potential to identify the incentives that might encourage more sales.
You can read the rest of the post here.