One of the most important secrets I can share with you is to give you the tools to building a business with residual benefits.
Phillip R Smith FAICD AII AIM CD
Founding Director of Central Insurance Brokers Perth West Australia
http://www.centralins.com.au/ more about me at http://www.ps.austhai.biz/
Residual means “the constant, reoccurring stream of income that is a direct result of a system that you set in place, and that creates the environment for the Customer to continually revisit and purchase from your place of business.”
The systems I’m going to give you over the next few weeks, when implemented, will accomplish this for you.
You may think this is about getting new customers or clients, but your wrong. It’s about keeping clients and making them more and more profitable.The process actually starts with the mentality you have about your very first customer.
Most businesses are constantly trying to get new customers and forgetting about how profitable an existing customer is to their bottom line. They function as though every day is the process of getting that “first” customer.
Image by rjs1322 via Flickr
Retail, service, or manufacturing, it really doesn’t matter, the problem is the same. They are constantly thinking, “How do we get more customers.” And day after day, they go through the motions of advertising, marketing, and hoping for new customers.
What I’m trying to say is that your attitude regarding that first customer must change. Ask yourself a few questions about that first customer, like:
· How did you treat them? What did you think about that first customer?
· What happened the moment they walked out of your place of business?
· What did they do?
· What did you do?
· Did you do the necessary follow-up that is necessary to create a life-time customer?
Whatever happened with that first customer is likely what has happened with every first customer since then. Let’s say that you’re a Dry Cleaner. I take my shirt, pants, or coat into your cleaners for the first time. You greet me pleasantly, take my garments, and I am pretty sure they will be done professionally and ready to pick up in four days. Then I leave while you go to work on them.
What’s wrong with this picture? Opportunity is always lost on the initial visit of a first time customer.
Let me give you a list of what should have been done:
- Why didn’t you have a good reason to collect my name, address and phone number? It would have been very easy. You could have done any one of many things. Here’s one…
You could have asked me if I would like to enter the drawing for $50 worth of free dry cleaning, and handed me the entry ticket, along with a pen, to complete. If you’re a bit above average, and most of you are because you’ve subscribed to this newsletter, you will have already figured out that it would also be nice to have some more information for that customer to add on the form.
How about the names of the other family members, especially the spouse’s name. In other words, the form can include lines for the wife’s favorite color, number of children, anniversary date, birth date, and many other questions that can help you in the future.
You could have asked them most anything and because you were offering them a nice
prize, they most likely will respond. If not, what did you lose?
- When your business is slow, you can input the data you are collecting and put it into the computer, or you can hire a part time high school student to do it. If you are still using a shoebox with dividers, that’s ok also. Just make sure you have a system that lets you get to the customer when it’s important. A computer is so much easier and there are software programs that help you immensely.
- But, before the customer got out the door, you should have given them a coupon for any of their family members to use.
Your client list is the single most valuable asset you own, when used the right way.
I’ll go over that in the next issue, but for now, let’s continue about the process of how to treat your customer.
- Always give the customer an opportunity to add to their purchase before the transaction is completed. This is as simple as you asking the customer, “John, this fine suit is a very expensive type of cloth. We’ve found this fabric really gains back its luster and crisp look if you do (whatever). I’d be happy to treat your suit that way for only $1.95.
The five-dollar-an-hour part timer at McDonalds is taught to do this every time---“And would you like fries with that sandwich, sir?”
Not only would you increase your cash flow, but also your profits soar unbelievably. Let’s do some Math. If it cost you an average of $5.00 to get a new client (the cost of advertising divided by the number of responses), and if the cost of your service or product is $5.00, then you would have to do $10.00 worth of dry cleaning just to break even.
At that point you haven’t made a single cent of profit. Now, if you can add on a $2.00 up-sell prior to delivery, you have just increased profits 20%.
The Math proves it. You didn’t make a cent on the original $10, but on $12, you make a profit of $2.00. That’s 20% more than you would have had.
I can tell you with confidence the team at "Central Insurance Brokers" are very focused about Customer "Value added" measurements. The client team system is focused and moulded around Customer priorities and the evidence of it's success is consistent growth of repeat business, since 1980.
It's one thing getting a customer but it's a whole new ball game keeping them and crew at Central do it well! It's why they are leading the way and watched by so many.
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