lifetime customer value

If you don’t have a strategy for maximizing the lifetime value of a customer, you’re missing out on a big opportunity to bring in revenue. Carol shares some great tips in a recent post on MasterCard.Biz, “Repeat Business: How to Sell More to the Customers Who Already Love You.” Carol begins:

“While it’s tempting to be chasing the next new customer all the time, that actually can be an expensive strategy. Certainly, you need to set up a marketing funnel to attract new customers, but so many small business owners forget to systematically reach out to past customers who already know and (hopefully) like them.

In fact, it’s much easier – and more profitable – to sell deeper into your existing customer base. For one thing, the sales cycle is probably shorter. And, if you need to bring in some cash quickly, a marketing campaign targeting recent buyers can work really well.

Here are five techniques to sell more to your previous customers:

1. Remind them

Whether you are a service provider or marketer of goods, sometimes your existing customers need a reminder.  If you are a hair stylist, personal trainer, housecleaner, or even accountant, just email or call to book the next appointment.  Even better- try to set it up during your current appointment.  Taking control of when your customer buys- instead of waiting for them- can be incredibly effective.

Also, think about target coupons. Does your POS system or another database keep track of specific items a customer purchased? If it doesn’t, it should.

You can set up notifications for when an item is expected to run out to remind the customer to buy it again. Personal toiletries are one example of a type of item that is easy to track.   Maybe even put them on a subscription service for their convenience and to ensure their repeat business—a win-win!

2. Have them refer a friend

People usually associate with people who are like them. If you have a client who loves your product or service, chances are they know someone – or several people – who might also like it.

Most people get a kick out of being the person who “found” something – the amazing bath salts, gourmet bakery, online retailer, etc. It’s really easy to generate a unique coupon code that someone can give to their friend(s) and then receive some kind of gift or discount if their friend redeems it when making a purchase.

How great would it be to have someone else do your marketing for you?  Don’t forget to reward them in some way if you can (based on industry requirements).  Businesses from Uber to Dropbox to Ellen Condren Design have all built their businesses on offering their current “referring” customers and the new customers as special incentive.”

You can read the rest of the post here.