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Dear reader, if you have missed the article on Objection Handling -
the sixth step - Ask for Order (aka Close) - you may review it
here.The easiest way to build your business is through word of mouth. This is if you have clients. What if you have just started? In order to get referrals you need to communicate with your existing customer or if you haven't got any - network. For some of the businesses I work with the idea of communicating with their customers is not as appealing, they would rather spend thousands of dollars soliciting new business, then leveraging off their existing clients. Dear reader, consider this example - let's say that it costs $20 to attract a new customer and $5 to keep the existing one. Also let's say that you business begins with 30 customers. Should you focus on finding new customers and actually attract 10 of them, this will have cost you $200 or $20 times 10. Since your focus has been elsewhere, at the end of the period you find that you have only 5 of original 30 customers. Each of these customers has cost you $5 to retain, so your total retention costs are $25 or $5 times 5. The net result to your business is 15 customers, 10 new, and 5 retained, at a total cost of $225. Your average cost per customer is $15. Now, let's say that you focus on keeping customers (customer retention) rather then attracting new ones and you decide to spend an extra $3 per existing customer. You attract 3 customers as a cost of $60, or $20 times 2. However your retention efforts mean that you now retain all 30 of your original customers at a cost of, $240 or $8 times 30. This time your total cost is $300, at an average cost per customer of $9.09 In the second case, your total costs for the period are $75 greater. However your business has now 33 customers, over twice the number achieved with the first strategy. The sad fact is that even in those businesses that understand this, and say they have a focus on retaining customers and getting more value from them, they can't help but spend 70-80% of their marketing budgets on trying to get new customers. As soon as they have got them and sold to them - they tend to repeat. Now, dear reader, consider third scenario... No, I'm not going to bore you with the numbers this time, - consider that you've spent $5 more per customer on a formal referral program. So that 50% of your existing customers have successfully referred someone else to your business. If you still follow the numbers you'll end up with 49 customers. The key here is FORMAL and SYSTEMATIC referral strategies. Personally I have collected and used on various occasions 106 referral strategies. They definitely work and I spend almost nothing on advertising. “If you like to know more about these referral and other practical marketing strategies – consider to attend this event” Why is it easy to get business through referrals? Simply because it's not you who's promoting your business, but someone who had experienced it as a customer and was extremely satisfied. You are biased and they are not, thereafter can be trusted more.  © Outstanding Results Company Ltd. All Rights Reserved. |
