One of my favorite direct response experts, Dan Kennedy, once explained maintaining and growing a customer base by comparing it to ranching. To paraphrase Kennedy, customers in a relationship with your business are like “cattle” grazing in your pasture.
To grow, businesses must spend resources marketing to prospective customers…ie. acquiring more cattle and growing the value of their “ranch.” What surprises Kennedy, however, is that many businesses invest thousands or even millions of dollars marketing to acquire “cattle” while failing to invest anything at all in marketing to their current customers to “build a fence” around their ranch.
In my 17 years of professional experience helping business owners use direct response marketing to sell everything from big ticket home improvements to services like dry cleaning to family meals at restaurants, the highest response rates and ROI come from marketing to current customers. Not only does marketing to current customers drive sales and grow your share if individual customers’ spending in your category, it also makes it harder for your competition to, as Kennedy would put it, “rustle” your customers over to their pasture.
Following are four key components to an effective marketing program targeting current customers that will help you “build that fence” to keep your customers in your “pasture” and “rustlers” locked out.
1. Acquire Customers’ Contact Information : If you want your customers’ contact information, you have to ask for it. There are a variety of simple ways to do just that. You could simply put a clipboard on your counter with a pen and an email sign up sheet saying something like “Sign up for our email list for news and deals from Your Business.” Another option is to put a fish bowl or response box on your counter for customers to drop business cards or entry forms into. You could offer a prize or just ask people to drop in their info if they want to hear from your business with updates and specials. You could also offer customers a special deal on their next purchase that you will mail or email to them as an incentive for getting on your mailing list. Another approach is to verbally ask customers for their email address or other contact information at the cash register or on the phone, entering it in your point of sale system or database right then.
2. Send Your Customers Postcards and Letters : Acquiring and storing your customers’ contact information in a database is useless unless you put that information to work. If a customer went to the trouble of giving you their address, they want to hear from your business. An inexpensive and highly effective way to reach out to your customer base is direct mail. Mailing deals, sale announcements, coupon offers and news about your business is a great way to engage current customers and generate referral business. You can take it a step further and personalize the letters or postcards with variable data printing. The ultimate way to personalize your mailing program and net the biggest possible ROI is to customize both the content and timing of your mailing to individual customer needs. Content can be tailored to individual consumers by mailing them deals for products or services that they have previously purchased from your business. Timing should also be optimized so the mailer arrives right before the it will be time for the customer to purchase those products or services again (i.e. an oil change every 3k miles). Timing and relevance have been known to boost response to customer mailings, which can be in the double digits normally, to as high as 50%! A great example is one of your favorite restaurants mailing you a card for a free meal on your birthday, it has a great chance of influencing where you tell all your friends to meet up for a birthday celebration…especially since it’s already one of your favorite restaurant. Smart direct mailers like that can net an ROI percentage in the thousands because of their turbo-charged response rates…an ROI usually only seen with email programs, because of email’s extremely low cost per piece.
3. Email Customers News and Deals : If you’ve got a good customer email database, a few clicks of your mouse can bring you traffic, phone calls and referral business…right now! There’s nothing like email to drive immediate business through the doors, often for a monthly investment far less than the cost of one dinner at a nice restaurant. In creating your email campaigns, it is even more important to follow the same principles of timing and relevance that work for direct mail. This will not only to boost your response, it will keep irrelevant and poorly timed messages from being reported as spam and hurting the deliverability of your future email campaigns.
4. Build Customer Connections With Social Media : The best way to get fans and followers on social media channels like Facebook and Twitter is to invite and incentivize your current customers to connect with your social network pages. You can and should do this via in-store marketing like signage with your Facebook URL and Twitter handle. To really get as many fans and followers as possible however, it’s important to conduct marketing campaigns reaching out to your customers and inviting them to connect with your business online. Email is often the choice channel for campaigns to grow a social media fan base because the message is most often received when customers are connected to the Internet via a computer, tablet or phone. They can thus immediately act on the call to action of the email by clicking a link and connecting with your business on the social channels being promoted.
To sum it up, marketing dollars are scarce in any business and using them wisely them can be the difference between winning and losing in the marketplace. The biggest waste I see in marketing on a daily basis, is businesses allotting all of their marketing dollars to activities geared to drive new customer traffic without spending a half a penny or half a second on a plan to get those customers to share their contact info and re-market to them for repeat business and referrals.