Marketing Your Business – Most Ignored Marketing Rule #7 – More Customers Doesn’t Mean More Profit

Usually, if you get more customers to buy your product or service, you will earn more money.

The problem is what you have to do to get new customers. If you have to spend a fortune on advertising and promotion or lower your price to make your product or service more attractive, more customers can easily cost your business a fortune!

And that’s not good.

There are only three methods to increase sales in ANY business. I call them the Three Mos: #1. Mo’People #2. Mo’Money #3. mo’frequently

#1. Mo’People – Get more customers (more people who will buy from you).

Most companies spend all their time and money on this: getting more customers. They will mail thousands of colorful brochures, pretty postcards, and clever sales letters. They will spend BIG dollars advertising in newspapers, magazines, circulars and directories. They will have big sales where they hope a new customer will be attracted by disgustingly low prices.

All the “Mo’ People” stuff that companies do to get new customers takes a LOT of money and time. Plus…

It’s hard to make it work.

Businesses that send advertising by email are delighted when they get a 1% conversion rate. That means that out of 100 pieces of mail sent, 1 person ends up buying something. You don’t need a PhD in math to figure out that it also means 99 out of 100 pieces of mail:

• never got to perspective
• were ignored (and trashed) by the prospect
• didn’t excite the prospect at all
• did not excite the prospect enough to buy

Not only that, but if it costs $1 to send each piece of mail, then whatever you sell to that miserable customer brings in at least $100 of profit or your campaign will end up in the red.

New customer acquisition campaigns can (and do) work, but only when the campaign’s cost per new person is much less than the lifetime value of each new customer you get.

For example, if you’re selling yachts or private jets, you can send expensive emails to your prospects because a single conversion will put you on an easy street.

There’s a pretty famous new customer acquisition success story from a few years back. You might remember a time when you couldn’t open a box of bath soap without finding a free AOL CD inside. But here’s the deal… the lifetime value of each new AOL customer was hundreds of dollars, I’d guess $400 at least. Each of those CDs probably cost about 20 cents to produce and distribute. So if we do the math, AOL only needed to get 1 customer per 2,000 CDs (0.05% conversion) to break even. 2, 3, or 4 new AOL customers per 2,000 CDs (0.1%, 0.15, and 0.2% conversion) would mean a profit of $400, $800, or $1,200 per 2,000 CDs. Now maybe you can see why those CDs were EVERYWHERE.

But even a successful campaign like this requires a great deal of time and money.

Getting new customers is difficult and expensive. If your business is new, then you have no choice. Customer acquisition campaigns are a necessary evil.

The good news is that if you’ve been in the market for a while and already have clients, you can make a lot more money with a lot less effort and expense by focusing on numbers 2 and 3: Mo’ Money and Mo’Frequency. .

#two. More pasta- Get more money from your customers every time they buy from you.

#3. Mo’frequently – Get your customers to buy from you more often.

How do you get your customers to spend more money and spend it with you more often? Making sure they get what they want from your business. And what do they want? That part is easy. Every good client wants only one thing… COMFORT.

• Value-conscious customers want to feel comfortable that they are getting good value for their money (CostCo Wholesale Club)
• Wealthy customers want to feel that the quality, service and exclusivity of their product is equal to their “station” (American Express Platinum card)
• Early adopters want to feel comfortable with your product or service, it puts them ahead of the rest (Apple iPhone)
• Professional clients want to feel comfortable knowing that the tools and service you provide will ensure their businesses run smoothly. (Nikon Professional Services)

Giving your customers what they want is a piece of cake once you know what they want and once you’ve decided that you and your business are ready to satisfy that desire.

So this is what you should do:

STEP 1: Assess – You will need to take an honest look at your business and its processes. If your business is not ready (operations, call center, shipping, etc.) to make your customers comfortable, your first task is to work your business until it is.

STEP 2: Educate – Once you’re sure that your business or service can make your customers comfortable, you’ll need to make sure your customers fully understand just how comfortable you can make them. You will first let them know how your product or service will make their lives more comfortable. Then, you’ll communicate how your business is designed to make them feel much more comfortable than their competitors.

You can do this relatively easily and cost-effectively with a monthly email newsletter sent to customers’ email inboxes.

Why only “relatively” easily? Because the newsletter won’t work if your customers see it as something that comes in the mail that you want them to read. You’ll need to make sure your newsletter is a “comfort delivery” device. Every article, promotion or testimonial SHOULD be written to give that comfortable feeling to every recipient.

STEP 3: Demonstrate – Finally, you’ll want to show people how comfortable you can make it. A good way to do this is with FREE trials. Another is to use testimonials where you introduce your entire customer base to a select few customers who have already had great, profitable, and rewarding experiences with you and your business. Testimonials are a great way to communicate the benefits of your business, and the proof will come from people your customers can easily identify with.

Yes, more customers MAY mean more profit, but the time and expense required to attract new customers is HUGE.

Savvy business owners have learned that focusing on their existing customers is much less expensive and just as profitable…

… if not more.