Delivering on Strategies for customer acquisition is one of the most expensive and time-consuming activities in growing your business. Some business owners even resort to taking out loans and serious financial stress to get new customers on their list.
Acquiring a new customer is an expensive and time-consuming process. It takes time to build credibility and trust with people. Work on your strategies for customer acquisition long after they make their first transaction to maximize the lifetime value.
On average, a prospect will have from nine to fifteen interactions with you or your marketing system before they buy; that’s a significant investment of your work and time.
Ask yourself what it would be like if your existing customers could do a large part of your marketing for you?.
Sound too good to be true?
An Untapped Source of Value in Your Business
Once a new customer is on board, you can build on that relationship and keep them for many years. The return on the initial investment in your customer acquisition strategy will lead to many future years of sales.
This is where a lot of business owners leave money lying on the table. In fact, many just focus on making the first sale and then hope the client will come back. They never bothering to follow up or keep in touch, as they say, the fortune is in the follow up.
That loyal customer and the relationship that you have built up is a valuable asset. Don’t forget that as a business owner, you need to get the maximum return on your marketing investment.
The fortune is in the follow up, look to your existing customers first
So smarter is better when every advertising dollar counts.
Each one of your customers you have built a trusting relationship that can shortcut the time to grow your customer base. In a world where trust is a scarce commodity, the prospect conversion rate skyrockets where the introduction is via referral.
Multiply Your Marketing Investment Returns
Did you know the conversion rate from leads to sales for new customers averages 30% to 40%. Compare this to conversion rate for referrals that sits at around 80%. Using referrals can multiply your response rate by three times, or more.
Let’s see a simple example of how a marketing referrals strategy pays off. The following table shows a comparison of two strategies for customer acquisition;
Strategy 1 : A marketing campaign that targets new customers
Strategy 2 : A marketing campaign that invests in a referral program, targeting existing customers
Let’s Take a Look At Both Scenarios
Marketing to new customers versus marketing through a referral program. Referrals generate more responses, lower costs, better conversions, and much higher lifetime value for the same investment.
That’s a big increase in return on your marketing dollars. Can you see how a strategic shift to marketing to referrals makes to generate greater customer lifetime value?
A lot of business owners understand this intuitively but are too busy. as a result they fail to do the numbers or understand the connection. It often makes sense to use a combination of both strategies.
Five Ways to Generate Referral Business
So here are five ways you can get in touch with your “referral” customers. Start tapping into the value that lies within your loyal customers by creating some of these referral systems.
Bring a Friend Free – Offer a free first visit for each new person they bring along. Alternatively offer a group discount if they all buy at once.
Gifts – Free movie tickets, restaurant tickets, bath towels and make sure it’s decent quality. You can do this before and after each referral.
Web Site Link Back – Ask for a link back to your business or sales site. Give them a commission on each sale.
Get The timing Right – Wait until you get a compliment from your customer. This is the best time to ask for referrals.
It’s Ok To Say No – Let your customer know it’s alright to say no to your request. This takes the obligation off them and increases the chance they will agree.
Can you see how building a loyal customer base can give you a platform to boost sales growth? Not to mention slashing your marketing costs? Imagine your profitability in six years just by implementing this strategy alone.
If you have any questions then please use the comments below. How can you implement some of these ideas ion your business today?
© Copyright 2021 Reboot Business Strategies Pty Ltd.
P.S. There are literally dozens of ways to generate new referral business, these are some of our favorites. For these and other ways to give your business a quick reboot call us on 1300 424 222 or visit www.getrebootednow.com to learn more