If you want to grow your business and increase your profitability, then you need to increase the Lifetime Value of your customers.
If you are a business owner or have ever worked in a sales or marketing field, you know that acquiring a new customer is way more expensive than servicing and selling to an existing customer.
Existing customers and past customers are significantly less expensive, because you already know who they are and how to get in touch with them and you don’t have to go out and find them, which is the expensive part.
If you are a brick and mortar business and don’t yet have a database of your customers, then you need to do that IMMEDIATELY. Even better if you are also collecting information from browsers that are prospective customers that you can add to your database and then specifically target with a marketing campaign.
A database of your customers and their activity is the most valuable asset you have in your business, and if you aren’t taking advantage of that fact, then you are missing out big time.
If you don’t have a database of customers, then you don’t know how to get in contact with your existing customers or past customers.
If you don’t know how to get in touch with them, then how can you market to them and increase their value to your business?
Increase The Lifetime Value Of Your Customers
If you can’t get in touch with your current and past customers, then it is almost like having to re-acquire them every single time you do business with them, and like I started this post with, a new customer is the most expensive customer to get.
The specific data that you collect and maintain on your customers will depend on the kind of business you are in, but at a minimum it should include name, email address and phone number, and in most cases a physical address as well.
You will also want to maintain data about their buying history with you, including products, services, frequency, amount and more.
You need to have a plan, a specific process that you have in place to keep track of your customers, keep up with their preferences and their buying habits and …
Amazon comes to mind as a company that does this really well. They send you recommendations based upon past purchases and even things that you browsed but didn’t buy at the time.
If you think this is strictly for online business, then think about your local grocery store. They are the ultimate brick and mortar store, but have started working this process as well with their loyalty programs. In addition to getting discounts on fuel and other products and services, I now get personalized coupons in the mail or via email based upon previous buying habits to encourage me to buy more of the same from them.
Are you creating that kind of loyalty with your customer base?
If not, then you need to get the ball rollin so you can do that, and you need to start today.
Remember that the number one thing that you can do to grow your profits and increase your profit margins in your business is to increase the Lifetime Value of your customers.
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