WHY DO YOU MAKE A SALE?
No- I have NOT lost my mind.
In fact this question is probably the most IMPORTANT question you can ever ask yourself if you want to succeed in business.
I am going to strongly encourage you to STOP what you are doing right now and grab a pad of paper and turn off your phone – and close the door.
This could be the most important 10 minutes you have spent in a long time.
DO YOU MAKE A SALE TO GENERATE CASH OR TO GET A CUSTOMER?
The economy is challenging right now for many business. It’s also very challenging for many consumers.
Business is trying to generate more cash to stay in business and consumers are trying to preserve their cash with an IRON FIST.
That’s why sites like Living Social and Groupon have exploded.
It satisfies both.
But I have been reading how some successful Groupons have actually put some businesses out of business.
How could a successful Groupon promotion put someone out of business?
Simple- Generate a lot of new customers at a loss without any way of keeping them coming back and you are out of business.
I recently consulted with an auto repair facility. They were starving for new business.
They had overhead. They had staff to pay. They had suppliers to pay.
But their bays were empty most of the day.
So after numerous calls from telemarketers from various deal sites and coupon programs they finally broke down and did a Groupon.
They had a GREAT promotion.
They got flooded with new business and 90 days later were on the phone with me begging me to
help them find a solution to their problem.
THEY DID NOT UNDERSTAND THE DIFFERENCE BETWEEN MAKING A SALE AND GETTING A NEW CUSTOMER!
Let me take a step back here with you for a minute so it can make sense.
First- You need to know what you can spend to get a new customer?
Meaning if you make a 100 profit on a new customer – well if you spend more than 100 dollars to get a new customer you will be losing money.
Second- Here’s what most don’t understand.
If you are marketing your business properly the REAL MONEY comes from the repeat business you get from that customer.
If your customer stays with you 5 years and spends 1000 a year with you than that customer is really worth 5000.00 dollars!!!!
DOES THAT MAKE SENSE?
Ever see a company “give something” away to new customers and wonder how they can do that? It’s because of that concept that’s called the LIFETIME VALUE OF THE CUSTOMER!
If you don’t know these numbers for your business your job is to immediately find them out – -and use them when making your marketing decisions.
Ok – Now that you understand these concepts let’s get back to the question I asked and my clients issue.
YOU SHOULD BE MAKING A SALE TO GET A CUSTOMER- AND HAVE PROGRAMS IN PLACE TO KEEP THEM COMING BACK AND INCREASING THEIR LIFETIME VALUE!
The company I was consulting with had never heard of this concept.
They were simply doing a Groupon because they desperately needed some cash flow.
The deal they gave was ½ off their regular oil change and then of course Groupon took their cut and fees.
At the end of the day this little adventure cost them 3000.00 – They did 300 oil changes and lost 10.00 on each one!
Their problem is that they had nothing in place to follow up with these clients.
They were simply HOPING they would come back. I am famous for saying HOPE is clearly NOT a strategy!!!!
BOTTOM LINE: YOU NOW UNDERSTAND THAT YOUR MISSION IS NOT TO MAKE A SALE BUT TO GET A NEW CUSTOMER.
THERE ARE NUMEROUS WAYS TO ACCOMPLISH THIS. IN FACT A NEWSLETTER LIKE THIS ONE IS JUST ONE WAY!
IF YOU ARE INTERESTED IN LEARNING MORE WAYS JUST SHOOT ME AN E-MAIL AT BRIAN@profitandwealth.com and of course stay tuned to this newsletter!
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