Archive for September, 2009

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We have just finished some standard research, regarding how much a customer can cost you, this worked out to approximately between 7 and 10 times more, if you require a new customer, to the possibility of encouraging existing customer to spend more with you.

If we look at the calculations it can cost you approximately 20% to capture and retain one customer that would stay for a lifetime, obviously this is totally dependable on your business model and company, but if you could turn this around, it could only cost you approximately 2.5%, if you concentrate on your existing customers, working on the bases, that it costs 7/10 times less.

 If we look at this on a more practical view, would it be reasonable to suggest that it would be practicable to allocate a small amount of the your annual marketing or promotion budget, to spend on your existing customers, this just might be more profitable, but if you look at it, in a pound and pence situation, what would you rather spend, under these difficult times, 20% or 2.5%.

“Repeat business is always more profitable.”

We have all heard the saying that “repeat business is always more profitable.” well this goes with out saying, it is a common saying with the business world, and it quite true, so why do we, to a certain degree, Ignore this information. We all acknowledge this information to have some true meaning, so could we use this to our advantage.

We have written similar articles regarding a more complex solutions, in how to calculate and what is a new customer worth to your company, as we have mentioned, that is it can cost you between 7 and 10 times cheaper to do this, this may be the time to capitalized on this situation.

Pamper your existing customers, what do we mean by this, this could cover a large number of area and items. Do you have an existing customer base, how long have you had these customers, have you had these customer long or short time, are they new customer or have they just been signed up.

As you are all aware some companies like to categories there customer, long, short term, multi buyers, one off buyers, customer who will be guarantee long life customer, for the reference of this article, we shall call clients and refer them to as customers.

 If you are a small business or have just started, then you may not have had the time or the administrative backup resources or the relevant data to market or even to start collecting your data yet, but it is certainly worth at the start of your campaign, what ever this will cover, to possible categorize your customer, this you may do already.

What do we mean, long or short term customers, well there is nothing fancy about it, it is what it means, if you have a website or shop, or even a club, or even provide a services , which you may have a large amount of customer, you can easy place them into a category.

“What do we mean by categorise.”

A example of the above would be as follow, a on line shop facility, selling gifts, these would what you possible would call, one off customers, customers how have looked for a specific item, found it on your web site in our shop and bought it, there and then. if you look at the other side of the scale, let say you had a sub aqua online shopping website with a shop and a customer, purchased some diving equipment, we all know that, this equipment can be expensive, so you would assume that the customer, would certainly been a medium to long term customer, generally, nobody would buy equipment, which can cost hundreds of pounds, only to stop diving the following week. We mentioned about this area, of categorizing your customer, to get the best possible return, on what we call pampering.

If you know that your customer will be a one off buyer, then I am sure, that the life expectance of that the customer will be short, some companies, will wait for a period of 4 to 6 months and probably entice the customer with a voucher and some discount, once again depending on how much your vouchers and discounts are, and what they really cost  your company, these may be £5.00 or £10.00 or even 10%, but you have got to really ask yourself, if the customer is only short term, one or two buys only, why bother in losing £10.00, £5.00 or 10%,if you look at the true cost, something like an adverse associated business gift, these can cost pence and not pounds, this is something to think about, before you start to reduce your prices, some marketing companies call this indirect selling, you are not selling your direct product, buy prompting your product, in a unconcerned manner, knowing that the customer, may be only short term, and I can assure you that, this will cost less, than your ever day voucher and discount scheme.

We also have the medium to long term customer, these are the customer that have already, spent some money with you, but you know that, they like your service or products, these can be done in the same way, but with a different promotional gift, something that might be a bit more practical, but remember these promotional gifts will still only cost you pence and not pounds.

If you wish, you can promote, this in different way, you know that the customer likes your services or products, so you do not have to remind the customer of that, and you certainly, do not want the customer, to think that you are pushing home your product to much, a different approach may be that, you could send a small promotional gift, but from a different angle, this may be a environmental gift, associated with your business, at first this may seem, a bit of waste of time, but if you know the customer already and you known that they are happy with your services or product, then informing them that your company is concerned, with the environment, this may just increase your existing profile, with your existing customers, or it may be celebrating an companies event, one year birthday or a ten year birthday, or it could  be connected to a large Social or Sporting event or it could be could be just a Small Thank you, to all your valued customers.

Tried and tested

We all have our tried and tested way of marketing and advertising of promotion our business and company, but sometimes, we need to try out different things, to keep your business ideas fresh and active. We are not saying totally change your ideas, because I am sure that these have proven you correct in the passed and you will be happy with the way thinks are going.  

But next time, you look at your marketing annual budget, it may be time to try something, that you have not done before, and when you do, keep an accurate record of your findings, this will be invaluable information, if you don’t keep this information already.

We all know that marketing and advertising can cost you thousands, but if you promote your business within a different view, each item could only cost you pence. You could just spread the cost of a promotion and segment to each category, it would be to control your customers to see, if you are obtaining a good return rate, from these small promotions.

If you have read any of our other articles, then you will know that we have a small website selling gadgets and are also involved in business promotions.

Martin Smith   (www.gadgetsconncet.net)

Gadget Connect Business Promotions

A small business owner, and a mature student who is just finishing his degree in Engineering Management ,who is just trying to make life a bit easier, for anyone who wishes to read these articles, still new and hoping to improve as time go by.

Article Source:http://www.articlesbase.com/advertising-articles/ad-or-not-to-ad-could-this-be-the-question-1286524.html