What’s better than your next customer? Your paying customer.
It sounds simple, but many small businesses become so fixated on new leads that they ignore the monetary value of current customers. This manifests itself through poor customer service, failure to follow-up, or, even worse, not getting any contact information at all. Every business should have a CRM.
Regardless of your industry, at some point, a current customer will once again become a prospect. Or, at least you should think of them in such a way.
In this series, we will be evaluating why this mindset is pivotal to creating recurring revenue, and the ways in which you can use this to increase the success of your marketing.
THE SUBSCRIPTION MODEL
Why is SaaS – software as a service – and subscription models so popular? The simple answer is they lead to a consistent revenue stream. But the true insight is they understand the value of their paying customers and the difficulty that goes into generating new leads.
Most subscription models offer the ability to upgrade and/or purchase additional services. In addition, they provide support to address customer needs.
Companies who do this model correctly put more energy into retaining customers rather than obtaining customers. This is important especially for offline companies because it gets to the first strategy of this series: repeat business.
GOING BEYOND REFERRALS
Having a great product or service will go far in creating a loyal customer or generating referrals. But, how about your marketing campaigns?
If you are like most companies, you develop new digital campaigns to target your “ideal customer.” But, the most overlooked strategy in generating higher conversion rates and getting the most out of your marketing dollars is targeting two distinct customer bases.
TARGETING PEOPLE WHO BUY
If they brought from you once, they will do it again. From a psychological perspective, people like familiarity. You can use this to your advantage by stacking your products or services in a way that encourages past customers to re-engage with your company.
Here are the most effective options:
- Expansion/Add-On Options
- Upgraded Products/Services
- Complementary Products/Services
Now there are various timeframes, and channels that would make this strategy most effective or even vice versa. But with the right combination of marketing channels, this is not only your most reliable marketing segment for conversion but also your easiest with the right CRM and digital marketing software.
TARGETING PEOPLE WHO DO NOT BUY
For a lead to have visited your website or business, it is safe to assume there was some level of interest. Whether it was the timing, prices, or product offered, there was a reason your lead did not buy. Therefore, targeting this marketing segment is more of an experiment than a sales process.
Many companies who reach this step only hammer the prospect with more of the same. However, rather than continue the same losing strategy, the more effective method would be isolating exactly WHY a lead did not convert.
Here are two key campaigns to find the right answers:
- Special Discounts/Coupons
- Other Products/Services
The beauty of such a strategy is that successful testing turns a lead into a new customer who has now entered your “People Who Buy” marketing segment. While more difficult, this strategy alone you can serve to double your sales revenue. Plus, lower or even eliminate your marketing cost per customer with the right guidance.
Spend less time generating new customers, and spend more time providing value to the customers who support your company. It will reward you monetarily and has the potential of creating a successful referral network.
Whether you are online or offline, you don’t have to be a SaaS or subscription-based business to develop a consistent revenue stream. Thoughtful marketing, creative product offerings, and stellar delivery will drive your small business to continual success.
