How to Create Repeat Business

Hi,

One of the most important secrets I can share with you is to give you the tools to building a business with residual benefits.

Editorial by
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:

1. 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?

2. 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.

3. But, before the customer got out the door, you should have given them a coupon for any of their family members to use.

I think you get the idea.  The way you treated your first customer very likely set the tone for every other customer who walked into your business.  Perhaps it is time to review the way you do it now and change it.

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.

4. 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.

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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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International Data Roaming costs are sending you broke!

Image via WikipediaWe continue to hear stories of travellers with smartphones (particularly iPhone users) incurring huge data-roaming bills, particularly Telstra customers.

One (big) reason for this is the charging mechanism used by Telstra (Optus also has its problems). Telstra charges 1.5 cents per kilobyte, PLUS a 50c per-data-session flagfall. A data session is a connection from your handset.

There can be (and often are) many simultaneous data sessions running on an iPhone, for instance the default e-mail setting is to check e-mails every minute - that means that even if you don't send or receive e-mails but don't change the settings you will incur a charge of more than 50c each minute.

Image via CrunchBase 

If you leave your phone on whilst roaming for a 16-hour day, that is more than $720 per day, just for (no) e-mail! It makes a mockery of the per-kilobyte charge, as the effective rate jumps up to perhaps as high as 2.5 or more cents per KB when the flagfall is included


 
People are constantly confused by the topic..  is it a call cost or a data pack cost?
 
You can actually use one for the other and vice versa - but be warned doing so will either save you a bucket of money or bury you in debt.  They accumulate cost diferently .. see this forum article about the data rate for either and how it is effected by which application you use (ie., talking or surfing the web)
 

Good News

  For the Aussie Business Exec's travelling to Bangkok
The "Asoke PA" service has set up a bargain deal on Thai Sim cards with Phone and Data Packs!
 
They can hook you up to include unlimited Internet use for about 15% of the rate you would pay in Australia.   The idea is to switch sim cards on arrival and use the local service.  

 

Apart from the massive savings on net use you will also save huge costs on phone calls

 

Make sure you have made sure you phone is unlocked so you can switch sim cards.

 

Asoke PA service is a new concept to provide "Personal Assistants" for busy travellers or those on short term stay. The PA's fastrack everything for you  to ensure a seamless experiencfe; Orientate, Translate and Negotiate.

 
see more at Asoke PA.
 
  

be sure your Second Startup Will Outshine Your First

What do the founders of Netflix , Zappos, Whole Foods, and Alibaba.com have in common?Image via Wikipedia

They were all started by entrepreneurs in their second (or third) act:

• Before Reed Hastings founded Netflix, he founded Pure Atria Software, which was eventually acquired by Rational Software. Soon after the acquisition, Hastings took a couple of years off to think about his next business, which would be Netflix.
• Before Zappos, Tony Hsieh founded LinkExchange, which was acquired by Microsoft for $265 million in 1999.
• John Mackey started a health food store called “Safer Way” in a garage years before he founded Whole Foods.
• Jack Ma founded China Pages four years before he launched Alibaba.com in 1999.

Image via WikipediaTake a look around and you’ll find that many entrepreneurs find their biggest success in their second act. In fact, I’d argue that having a chance at a second act is one of the best reasons to build your first business to sell it.

For starters, the second time around, you can bring all of your knowledge, contacts, and capital to a new idea, but I also think there are subtler factors that often make second acts more successful than the first:
1. You’ll feel less pressure.
When you are scraping tooth and nail to make something of your first business, every decision feels like do or die. Like a 16-year-old driving on the highway for the first time, new entrepreneurs tend to be a little heavy on the wheel, blowing every small problem into a life-threatening emergency (I know I did). In a second act, entrepreneurs mellow a bit and have a steadier hand at the wheel. Once a business owner has become financially independent, the pressure to succeed to feed your family is off.

2. You’ll be a better leader.
Being a bit mellower, entrepreneurs in their second acts often are better bosses. They tend to be a little more willing to give others credit and let juniors make mistakes — within reason — instead of micromanaging every detail. Like a parent who enjoys coaching his kids more than playing, the second-act business owner wants to succeed as part of a team, not just as an individual.

3. You’ll be motivated by a higher cause.
Once entrepreneurs are no longer motivated exclusively by making money, they are forced to find larger reasons for doing what they do — to start to think of how they can have a bigger impact on the world and make a difference. Being motivated by something other than money makes a founder much more likable as a leader and, therefore, better able to attract good people — loyal employees, partners and board members who want to contribute to a cause — to their mission.

So go ahead and build your first business — get the pressure, the mistakes, and a little bit of success out of the way. Then sell it and get to work on an even better second act.

John Warrillow is the author of Built To Sell: Creating a Business That Can Thrive Without You, which will be released by Portfolio/Penguin on April 28, 2011.