They say that 80% of your revenue comes from 20% of your customers. A loyal customer is estimated to be worth ten times the value of a one-time purchase! Yet, the average company invests six times more to win new business than to retain its current customers.
Imagine the impact on your company if 25% of your previous customers suddenly purchased from you again today. It’s not unrealistic as you may think. That’s because those who’ve drifted away typically aren’t dissatisfied – they’ve simply been ignored. Statistics show that if you approach four former customers with a new offer, one of them is likely to buy! But first, you must identify the right customers to contact and what offer will be the most compelling.
Database marketing in its most basic form can be as simple as building an excel file of all of your customer contact information. If you are lucky, you may have the ability to track the last time each customer made a purchase, the value of that transaction and (if you are really lucky) exactly what they bought! Once you have the list, segment your customers by type, frequency, recency and dollar value! Then, you’ll know who your best customers are and will be able to develop specific marketing tools to communicate with them frequently (at least once a month). E-blasts (graphic email messages) are the most cost effective method and if your list is qualified (true customers who want to hear from you), they usually have a pretty high success rate. Direct mail is also a good option but costly and should be used to market to your BEST customers who are very likely to respond.
Stop ignoring your customers today. Think of a compelling offer, pick up the phone and call four really good customers that you haven’t heard from in a while. Let me know how it goes!