Revenue is in Relationships
Copyright Ray Pons, reprinted with permission.
The rule of real estate is location, location, location. In business it's relationships, relationships, relationships. No matter what the product or service of your business, real revenue comes from the quality of relationships with customers.
If we can agree that the basic purpose of a business is to attract and retain customers, it follows therefore that there are only 5 ways to boost your bottom line:
1) Keep the customers you have
2) Bring in more customers
3) Increase the average transaction size (unit sale)
4) Increase the frequency of purchases
5) Say "No" to bad customers/prospects
In short: keep what you have, bring in more, sell bigger, sell more often and avoid the dogs.
Do any one of these and your business will grow. Do two or more, and do them well, and your business can grow by quantum leaps and bounds; geometric growth instead of mere linear growth.
For this article, we will focus on strategy #1, keeping the customers you have.
Many business owners make the mistake of under-serving existing customers (taking current relationships for granted) and focus too much on chasing new customers (attempting to establish additional relationships).
Never underestimate the need to satisfy, serve and, yes indeed, to sell, existing customers. You can't fill up a bucket if you don't plug the leaks. It follows therefore that you can't build a business by getting new customers if existing customers are dripping out and going somewhere else.
Real profits and predictable, stable revenue streams come from long-term relationships and repeat business with loyal customers. Existing customers know you, trust you and like you. They've already established a relationship with you and are not as likely to be as skeptical or suspicious as new prospects might be.
Some experts declare that if served and cultivated properly, existing clients/customers will account for 80% or more of a company's future growth. As such, your #1 priority should be customer satisfaction and relationship retention.
It is easier and nearly eight times cheaper to serve and retain a current customer than to find a new one. Eight times cheaper!
Deepen your relationships grow your business.
Consider moving money away from shotgun advertising campaigns for new customers and direct these valuable dollars toward strategic incentives and promotion for current clients.
Continually communicate with customers. Don't worry, when done correctly, you can't over-communicate. Communicate with them in person, letters, faxes, emails, via your website, brief newsletters, etc.
Get to understand client needs and wants better and broader. Find creative, innovative ways to fulfill as many additional desires with more products, new introductions and extra services.
Create specials that are exclusively offered only to existing clients. Reward multiple purchases in meaningful ways - like the buy 10 get one free cards often used by coffee chains.
Never sell a customer only once. You want ongoing relationships and ongoing sales. Real profits come from repeat business. Repeat business comes from enduring relationships. Revenue is indeed in relationships.
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