Are you acting just like most other small businesses out there? Do you ignore or fail to communicate to your existing customers often enough?
I’m not talking about saying “Hello” and “Thanks for doing business with us,” when a good retail customer comes in. Or, about automatically sending another catalog to an existing catalog customer. Do you mail to them? Do you change things up? Do you send new offers to them? Do you call or write to them?
Accepted Fact Number 1: for the average business, 80% of their new business comes from existing customers. This is true for business-to-business as well as business to consumer operations.
Accepted Fact Number 2: You are most likely to get a strong referral from a customer in the first three months after their last transaction. Do you ask for a referral or send a pass-along offer they can give to a friend?
Accepted Fact Number 3: A new customer or a recent buyer is most likely to buy from you again in the next three months to six months.
It seems like a good idea then to spend at least some of your time promoting to and selling to your existing customers. You put a lot of time, effort and money into getting them. Why waste it by making no attempt to even keep track of them?
Do you want examples of how profitable that market can be? Look at how well good direct marketing companies work that market. Lillian Vernon, Dr. Leonard, Michigan Bulb, BMG Music, Hume Publishing and so on are all companies that constantly mail to their existing customer base. Yes, they do test new lists, but always in conjunction with their existing customer base.
Yes, you must continue to do things to attract new customers. People are so mobile now that many neighborhoods experience population changeovers of from 10 to 15%. The average small business can expect to lose up to 15% of its customer base every year. A pretty good reason to work at getting new customers, as long as you remember
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