Making the Most from Your Customer Base
You’ve heard the figures: it costs the average company 6 to 10 times more to acquire a new customer than it does to make an additional sale to an existing customer. So why do so many companies devote most of their resources to customer acquisition at the expense of customer retention?
If your “customer retention program” consists merely of an annual catalog mailing, you’re leaving lots of money on the table. Here are some suggestions for making the most of your valuable house file:
More Frequent Contacts. The single biggest way to increase profits from your house list is with more frequent contact. It’s hard to contact customers too often. Develop a plan, test to determine what works best, then implement a consistent strategy.
Segmentation. Segmenting your file goes hand in hand with developing a contact strategy. Divide your file by recency, frequency and monetary parameters and test to determine which segments to contact more often and which to drop.
Upsells. Never let an interaction with a customer slip by without asking for an additional sale. Make offers on inbound phone calls, in fulfillment packages, and when online customers start the checkout process.
Product Line Extensions. Some companies ride a one-trick pony. If you’re selling garden sheds, customers are only likely to buy one. Consider what else you can sell them, such as tool organizers or lawn care products.
Affiliate Marketing. Can you team up w with non-competitive companies selling to the same market? Send a joint mailing, or endorse their product in your enewsletter (if you’re comfortable doing so) in return for a similar favor.
List Rentals. There’s hardly an easier, lower cost way of generating additional income than by renting your house list. For more on this subject,click here.