Imagine this.
You own my favorite sushi restaurant in our little town, we visit weekly, you know our faces and our preferences and welcome us warmly each time. Then suddenly one week, then two go by and you don’t see us. We stopped coming.
Maybe you think of us one day and wonder where we have gone. Maybe you never notice we’re missing. Either way, what happened? How could you find out? Did you do something wrong and upset us?
It wasn’t anything you did, we simply moved to the next town over, just 10 minutes away, a drive we do frequently. But we stopped coming because our routine changed.
And you had no way of calling, texting, emailing or mailing us to get back in our routine. We just went away. And if you hadn’t noticed out absence, you had no way of being alerted that we had stopped coming. We were simply a small loss of weekly sales.
Most likely we were not the only customers that simply drifted away.
That’s where a lot of your customers go. You simply fall off their radar screen. And have no idea when they disappeared, or why, or how to get them back in.
Almost everyone we talk to wants more new customers. Of course! You always need fresh faces coming into your business. But that’s not where the money is – the money is with your long term, repeat customers.
The success of your business can not be reliant on individual transactions. If every new customer only visited you once, eventually you would run out of people. Build a long term, loyal, repeat customer base that you have control over.
Your goal is to move people along your customer journey. Turning new customers and first-time visitors to your business into happy, repeat guests. Then, turning those repeat customers into loyal, avid fans who choose your business over all others and refer their friends. And knowing when you haven’t seen them in a while you have the ability to lure them back.
To do this, you must create a system of marketing to capture and nurture every customer that comes to your business. That starts with building a customer list.
The top 10% of your customers and their repeat business bring in the majority of your revenue. (We have the stats to prove it!) These are not one-time transactions – all your money is made on repeat transactions.
Don’t Make Decisions Based On Your “Feelings”
When you know your actual numbers, you stop making guesses about marketing and your decisions are based on facts instead of feelings.
Here’s one of our client’s sales, segmented into groups based on spending. When you look at their top two segments, you can see that 46.88% of their sales come from 8.44% of their customers. (If you were analyzing your sales, this would likely hold true for you too.) Since they know these numbers, they know where to best spend their marketing dollars, getting those top 437 loyal, happy customers to come more often, spend more money, and refer more friends.
Your three buckets of marketing must be treated differently because they have different value to your bottom line, and the messages need to speak to each audience differently. This means the marketing will vary in cost because the return varies.
Focus on turning one-time transaction people into repeat customers. Which means building one of the most valuable assets you can have – a detailed customer list. The easiest way to do this, and almost every business is doing it in one form or another, is with a loyalty program. The larger the number of active, loyal members, the larger your results because you can target different marketing to different segments.
A customer list is your most valuable asset for three reasons.
Your existing customers are where the big money and profit is. It is 8 times more expensive to get a new customer than to keep an existing one. Your success does not depend on how many new customers you can attract, it’s about how many customers you can KEEP coming back.
Marketing to your list will grow your sales, increase frequency of visits and build a relationship of loyalty.
Your existing customers know how to get to you, they know what they like about you and your staff, they know your service and products, and they appreciate the value they are getting when they spend their money with you. It doesn’t take much effort to convince someone like that to return.
A customer list’s value is in the ENGAGEMENT it can build between you and your customer, the connection you can forge. This is the superpower you have over the National Chains and Big Box stores. They are too big to be able to do this. They aren’t “real”.
Building a connection creates an iron cage around your customers, making them so loyal to you that you are most often their first choice. Communicating effectively via multiple channels – direct mail, mail, app notifications, social media posts, and texting – is the key to building that strong connection and mining all the money that is held in you customer list.
When it comes time to sell your business, having a customer list is a critical asset that increases the selling price. The ongoing revenue from your existing customers is a large factor that influences the buyer decision because it means they’ll continue to have a steady stream of customers.
Buyers can assess the size, loyalty, and purchasing patterns of your customer base, which helps them evaluate the potential profitability and sustainability of the business. It reduces the risk associated with starting from scratch.
Potential buyers will conduct due diligence to assess the viability, financial health, and growth prospects of the company. A customer list helps validate the revenue claims made by you, allowing buyers to verify the customer base, and associated financial records. It provides transparency and confidence to the buyer during the evaluation process.
You customer list can significantly increase the attractiveness and value of your business to potential buyers.
During the Covid-19 pandemic, the value of a customer list became even more evident. Customers were no longer coming into businesses, which meant that without a list you couldn’t communicate with them. You may have started a contactless way of doing business, or added additional safety protocols, you may have held special events – but without a list to share the news, many customers would never hear about these changes.
Many relied on social media followers, which are a great tool, but they aren’t nearly as targeted as communication to customers who have given you money in the past. A large percentage of those followers have never even been to your establishment.
A crisis doesn’t need to be as major as a pandemic, it can be as simple as a power outage. Over the years, we have had clients have fires that temporarily closed their business, road closures that prevented access to their parking lots, natural disasters, broken gas lines, ferocious weather and all sorts of other obstacles that negatively affected them. With their customer list at their fingertips, they were able to keep they customers informed and influence them to return when the time was right.
Your Challenge: Start building a customer list. It makes your marketing much easier and far more profitable, and gives you a safety net when things change
At the foundation of our program is a loyalty program that uses a customized app that starts building your customer list immediately. Then we target, manage and deploy all the marketing strategies you request – and they go out automatically – increasing customer retention, with higher visit frequency and transaction size. It’s that easy and you are only a phone call away from getting started with a 90 Day Free Trial. Click the Button Below to book a call.
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