You may have several marketing campaigns and joint ventures. But how do you know which ones are bringing you the best returns unless you have a way of monitoring them? You may think that as long as the business is coming in it doesn’t matter.
But what happens if business starts to drop off?
How can you start to find a solution unless you know where you are sourcing your customers?
When you take out advertising your main goal is to get customers to buy now. But have you noticed how that isn’t always the case? Some people may respond now, but they don’t all buy now. Does that mean that the advertising campaign was unsuccessful? Not necessarily. Some people may simply be further along the buying timeline than others.
Imagine that you have a ruler that extends from zero to the number twelve. Zero is the point at which people are not at all interested in your products or services. Twelve is the point at which they buy from you. The space in between is the buying timeline where customers start expressing an interest in your product. Your objective is to lead them along in the process so that they will reach the point where they make the decision to buy. So how do you go about this?
As with most things in business, if you don’t have the right motivations, then these reflect in your actions and can sabotage your efforts. Remember that while an increase in sales is a benefit that results from an active customer referral program, it should not be your primary objective. Your main objective should be building relationships with both new and existing customers.
What you need to look at is the lifetime value of a customer. Then consider how much it costs you to acquire each new customer. Advertising can be expensive, and even if you do your research, there are no guarantees that it will bring you more new customers. However, investing in an active customer referral program, if done properly, can deliver more guaranteed results.
Here’s guide to avoiding common mistakes made by businesses when setting up referral programs:
To do this I need to explain what’s known as the “Lifetime Value” of a customer to you. No matter how large or small your business, no matter what product or service you sell, you must first calculate the Lifetime Value of your customer. Once you know it, you can decide exactly what you can afford to spend to bring in a new customer – and the best way to go about it.
In a nutshell the Lifetime Value of a customer is…
Do you know what your customers really want?
I mean REALLY want?
I’ll get to the point. Have you ever heard of the radio station WIIFM?
It Stands for ‘WHAT’s IN IT FOR ME? “. It’s what your customers always think of first when listening to you talking about how wonderful your product, widget or service is.
It doesn’t matter what you are selling…you have to cater to the customer’s self-interest.
Put yourself in their shoes. Don’t you do the same? When some boring Website/ Sales person/ Leaflet goes on about how wonderful the company is or how long it’s been in business I just switch right off.
I want to know how this is going to do one of the following:
- make me more money
- save me time
- make me more beautiful
- feel fitter
- more attractive to the opposite sex
- make me live longer
One very powerful way to make your business stand out from the crowd is to use testimonials. After all, you can go on about how great you are until you’re blue in the face, but, let’s face it, you’re bound to say good things about your business – it’s expected. Even businesses with the most appalling service will tell you how great they are!
However if someone else talks about how good your business is – it is instantly more believable. That is why it is so important to collect testimonials from delighted customers. You may already have them in the form of thank you letters. Are you using them?
As a business owner you need to be resourceful if you want to grow your client list. One of the most effective ways to get easy access to a volume of qualified customers is to set up joint venture partner agreements. Naturally you need to be selective about who you choose to work with as their conduct will reflect back on your business. But if you get it right it can be a very successful way to grow your business.
There are two ways in which you can set up a joint venture. One way is to link up with other businesses that regularly refer business to you. The second way is to use gifts and free offers from joint venture partners as a way of building relationships with your customers.
For example, if you want to generate more income you have to be focussed on sales. You need to be having as many sales conversations as possible.
So ask yourself:
- How many sales conversations did you have last month?
- How much income did you bring in?
One of the things I focus on and get my clients to focus on each week are sales conversations. We track them because we know that the more sales conversations you have = more income.
If you have been in business for some time you will know how important it is to build relationships. The more you know about human nature, the easier it is to build these relationships. It also will help you understand why customers buy. Here are some simple human nature facts that when applied to business relationship building can be really powerful.
Every business is unique and you may find that your customers respond differently to reward programs that you may offer. Sometimes a subtle approach to saying thank you is a better option for your business than a formal reward programme.
Low Key thank you gestures can be just as effective as formal reward programs. When gestures are subtle or more informal they often come across as being more genuine. For example if you know one of your customers is a coffee connoisseur you could keep an eye out for a particular brand or blend. When you find one you can keep it aside as a thank you gift.
When there is an occasion to reward your client for referring business to you, a gift that reflects their personal interests will go a long way towards building good relationships. That type of gesture shows that you genuinely care and take an interest in your customers.