How to Create Repeat Business Part 2

The feedback was active about my recent article  How to Create Repeat Business I decided to continue with a few more ideas about this important topic.


by... Phillip R Smith  FAICD AII AIM CD

Founding Director of Central Insurance Brokers Perth West Australia

and Aussie Exec Tours Bangkok.

Here’s one more idea you can use after the sale in last week’s Dry Cleaner example...
Always give the customer another chance to spend more money with you when they place their order.  Before the customer returns for their clothes, you could have someone call and say….

“Mr. Smith, when you brought your clothes in yesterday, you indicated on the raffle ticket that your wife’s favorite color was blue.  I thought you might be interested in a limited shipment of exotic blue silk scarves I had exclusively imported from India.  We’ve only got 10 of them left, and I am giving our newest customers the first chance to look at them. They are great anniversary or birthday gifts.  Would you like me to set them aside for you to look at when you pick up your clothes?”


Are you getting the idea?  What intrigues me is how much time and effort a business goes through to get a new customer, and then totally ignores them afterwards.
You have worked hard in your business.  You’ve taken all the risks and you have developed a product or service that can make you some money.  You put your money into advertising and promotion. 

Now it’s time to generate the key to your long-term success and profitability. Your profits are in creating lifetime customers. 
The final portion of this very important concept is to look at your database.  When I do seminars I find out that most of the attendees have an impression that database marketing is simply “direct mail” and that it didn’t work when they tried it.
Nothing can be further from the truth.  Direct Mail is only one small aspect of database marketing.  I’m really talking about the technological ability to mass customize your customer list.  In other words, you use the computer to do your hard work for you.  But the computer has to have the information before it can do the hard work.
What is so often overlooked by many businesses is the “Lifetime Value” of a customer.  With most businesses, the lifetime value is often ‘0’.  They spend needlessly on advertising for new customers and that new customer only buys enough to pay for the acquisition cost and never comes back.  What a waste!

But with database marketing strategies working for you, every customer becomes a potential lifetime profit center, not just a hopeful.  Inexpensive software now allows you to do all kinds of neat and innovative things with your client list.  But, you must create the list first.
The first step you must take is to think very creatively about what you want to accomplish, so that you gather the right information.  And then you have to sort the information for the specific applications you have created to follow-up with your customer and get them to come back and spend more money.
Let me go back to the Dry Cleaner example I used. He could have analyzed his database and discovered that 77% of his clients live within a 10 block area of this store.  80% of those who live nearby have 2 or more children under the age of 10.  With that information in hand he could easily design a promotion of some type that would be very specific.
Let’s suppose that there is a Pizza Parlor next door.  He can propose a Joint Promotion. The Pizza Parlor will offer a 50% off special just to the children of the Dry Cleaners customers.  Now, he can use Direct Mail effectively.
He makes the following offer.  He will buy their 2 kids a 12inch pizza to share, if the parents bring in at leas $25 worth of cleaning during the specified week.  Probably the free offer of food for their kids is almost impossible to pass up, and let’s say that 300 families show up for the offer. Let’s also assume that they didn’t only bring in $25 worth of clothing but $45.
If you do the math it comes out like this.  300 families at $45 average = $13,500.  Deduct the 300 pizzas at half price; probably about $5 is $1500 dollars.
Here it is:
$13,000 Income from Cleaning

1. Minus 244 Advertising Cost
2. Minus 1500 Pizza cost
3. Equals $11,756 in profits.

All because he allowed the customers to spend more money with him.  There are many other benefits from this type of attitude.
His customers really appreciate the effort and creativity that went into this type of promotion, as opposed to just putting an ad in the paper.  His competitors don’t know what is happening, and they are left scratching their heads instead of running right out and copying him. The Dry Cleaner can continue this type of marketing month after month with astounding results.
I’ve come full circle on this concept and I know you get the idea that you can join the endless search for new customers, always worrying about how to get more of them; or, you can approach every customer as the “first” in your business life, and turn them into lifetime “profit centers” by creatively interacting with them.
People want to be recognized, rewarded, and appreciated.  Do it well, and they will reward you with increasing amounts of their business.
Do it poorly, or not at all, and they will reward you with never coming back.  You generally get one chance to convert that prospect to a lifetime profit center.  Don’t blow it, because they won’t give you a second chance.


Forward a copy of this newsletter to a colleague; it may be just what they need to take their business to another level.