How to Double Your Sales Without Doubling Your Advertisement Budget?
Let’s us be upfront with one very important statistic. 98% of businesses fail in the first 5 years and the top reason is simply insufficient sales. And when we dig deeper into this, the number one reason for the lack of sales is due to poor/insufficient/zero marketing. So knowing this problem, we can then focus our energy in solving this to make sure you are the 2% that thrives.
But even though we know that the problem is an issue of marketing, getting the attention of potential customers is now getting tougher than before because of a phenomenon we call “Clutter Factor”. Each consumer gets anywhere from 3,000 to 30,000 marketing messages per day via all different means like newspaper, magazines, tv, radio, billboards, leaflets and so on. And this clutter factor increased the cost of getting the attention of a customer by 3 times compared to what it was 10 years ago.
Since we are paying 3x more to get the attention of a customer, we should expect better results, right? Actually, the results that we are getting today is half of what it was 10 years ago. It used to take 4 attempts to get the attention of a potential customer, but today it takes 8 attempts before you can get the attention of the customer simply because of the sheer volume of clutter that they are facing.
So we are now paying 3 times more while results is half of what it used to be a decade ago, and with the ever increasing types of media, more clutter, more magazines, newspaper etc today, how then are we able to capture the attention of our desired customers and get them to come into our stores then?
Sidetrack: Before I continue, there’s a very simple and effective thing that you can do to increase the conversion of your leads by as much as 100 times (based on a study done by MIT), and it is so simple to implement but not many people know about this. So if you are the one to implement this, you can be assured that you will crush your competitors in closing your leads into customers. I will share this tip a little later as I need to cover the current topic we are on now.
As I was saying, the cost of actually getting a new customer is now much higher than before, so either you find a source of advertisement media that is cheaper or you become really good at cutting costs to make up for the increased expenses of acquiring customers.
But there’s a problem with these 2 tactics.
Cheap media will soon be discovered by your competitor and demand will surely push up the cost of advertisements eventually.
Cutting expenses is a downhill battle because there’s only so much you can cut in your business before quality and service suffers, which incidentally is another reason for lost of sales leading to eventual demise of a business.
There are 2 key metrics that you need to know.
Firstly, it costs 5-10 times more to get a new customer than it is to sell to an existing customer who’s bought from you before.
Secondly, here’s the breakdown of why customers stopped buying:
– 1% Die (can’t do much here)
– 3% Move away (can’t do much here unless you are a national business)
– 5% Form other relationships (you definitely can win them back but this is a small segment that is not worth our effort for now)
– 9% Leave for competitive reasons (you definitely can win them back but this is a small segment that is not worth our effort for now)
– 14% Due to product dissatisfaction (you definitely can win them back but this is a small segment that is not worth our effort for now)
– 68% Stop buying your product or service because of an attitude or feeling of indifference.
That last segment with the 68% is the key to doubling your sales without doubling your advertisement budget. Given that is costs 5-10 times more to get a new customer, it should only make sense that you should go after the low hanging fruit of the 68% of past customers that bought from your before but stopped buying due to a feeling of indifference.
How? By simply setting up an effective follow-up system.
Now don’t dispel the simplicity of this method. Study showed that 80% of companies out there do not have a formal follow-up system in place to encourage repeat purchases from past customers.
And another wonderful benefit of having a formal follow-up system in place is also to encourage your existing customers to purchase more often from you, another key to doubling business. If you can reduce the buying cycle of a customer from once every 6 months to once every 3 months, you’ve just doubled sales without doing anything extra simply by doing more effective follow-up.
I am sure you have heard this plenty enough, “Out of sight, out of mind”. This is definitely true of business given that there’s so many competitors out there, so if you are not in front of your past/existing customers often enough, they will tend to forget you and when they need your type of products/services, the company that just happen to be in front of them at that fortunate point in time will most likely win their business.
The keyword here is “fortunate”, and what we want to do is to have a strong marketing system so that appearing in front of our customers often will not be a fortunate thing, but rather one that we plan and execute masterfully. No business ever survived long term just by being fortunate.
Now, 3 questions that you might have:
1. I do have a list of my past customers details, how can I get them to buy more from me?
2. I am in those type of business that sells one-off stuff (eg: pool installation), how can I get them to buy more from me?
3. I don’t have any contact details of my past customers, how can I follow-up with them?
I will answer each of the three questions one at a time starting with the first one.
“I have the list of my past customers, how do I get them to buy more from me?” If this is you, you have it made. This is by far the simplest scenario to deal with. You simply get in touch with your past customers, either by phone call, mail or email, and you do one of the following:
– tell them that you’ve missed them and ask them if they need any of your products/services that you offer
– tell them about specials that you are having now
– inform them of new products/services that may be of interest to them
More often than not, you will find a lot of them returning to make use of your services or buy your products after the initial follow-up.
If you are in those type of business that sells one-off stuff, then the next logical step to following up with your past customers is to offer add-on servicing. For example, pool installers can offer pool cleaning/servicing or even pool cleaning products. Another thing you can do is to see what other complimentary products/services that your customers might be interested in. For example, people with pools in their home will most of the time, need landscaping work done every now and then. So one thing you can do is to approach landscaping companies and set up a deal where you endorse their products/services and send your customers to them, and in return, they pay you for a percentage of the fees earned.
(Or you might just simply do a referral swap where you refer customers to them for landscaping work, and in return, they refer their customers to you for pool related work. A win-win joint referral swap agreement. I am sure if you can set up a few of these sort of arrangement with different providers, you will soon find yourself swamped with so much work that you won’t need to do another day of advertising or promotion in traditional media anymore.)
The 3rd question is definitely the most common one. Understandably, a lot of businesses do not have in their normal practice, the habit of collecting contact details, nor is it on the onset logical to ask for contact details in the first place. For example, a restaurant normally only has the phone number of the person making a reservation, but apart from that, has no other means of getting access to customers’ contact details.
One way to overcome this is to run a weekly draw for free lunch/dinner, and all customers need to do to enter, is either to leave their business card in a fishbowl near the front counter, or they can text their contact details to a dedicated phone number, or they can email in their details to enter into the draw. Now your job is to make this draw prominent by promoting it at any avenue possible. Overtime, you will be able to collect a sizable list of contact details that you can go back to over and over again to push your promotion or marketing to get repeat businesses.
By actually using phone calls, mails, emails, and targeting past customers which is the most targeted form of advertising, you are actually spending very little in order to acquire potentially a lot of sales.
Now for the secret tip that I promised at the beginning of this article.
Just imagine that you are able to close up to 10 times better for every lead that comes in through your door. How much better your business will be? Well, 10x better closing will typically mean an increase of 10x in sales, so you do the math. A MIT study done showed that your odds of closing the sales increases by 100 times if you follow up with the prospects within 5 minutes of receiving their contact details. This is because they just got acquainted with you through your advertisement or just join your promotion and they remember you well enough, and once you sent them the first piece of contact either through text message or email, they tend to remember you better as compared to all the other competitors that are pitching to them at the same time. I bet you are asking the question of how you are able to follow up with every prospect within 5 minutes of getting their contacts given that you also need to work in your other areas of business at the same time.
Another thing that you should do is to appear in front of your customers or potential customers often enough in order for them to remember you constantly. A study shows that it can take up to 6 exposures before someone actually sees your ad. Imagine if you have to advertise the same advertisement/promotion 6 times in a single week (assuming you are running a weekly promotion), how much is that going to cost you. Well, there’s a way you can appear in front of your potential customers all the time and be constantly exposing your advertisement/promotion to them over and over again, daily even, and it can be almost free or can be done very cheaply compared to advertisements in traditional media like newspaper for example.
These are so powerful that I can only share this with serious business owners who’s also part of my insider club. All you need to do is simply fill in your name and email address below to join my insider club and these insider strategies will be revealed to you.