Lock in clients for a lifetimeJan 01, 2007
Clearly no business leader in their right mind would deliberately limit the amount of business a customer can do with them but, even so, thereâ€™s a good chance thatâ€™s exactly whatâ€™s happening in your business right now. Instead of passively waiting for the next customer to call, it may surprise you how many of your customers would be willing to sign up for a programme where you supply your product or service automatically at pre-determined intervals.
Start by asking yourself honestly whether any of your clients could derive more benefit or get a better outcome as a result of doing business with you.
Could they get better results, or more value, or save time, or more convenience, or could you eliminate more of their concerns, or could they get more pleasure or fulfilment, or more success, or more security when they do business with you than they do already?
If your answer is â€˜Yesâ€™ in even a handful of cases, you owe it to your clients to show them how to derive the greatest possible benefit from whatever transaction they carry out with you.
You can do this by locking in sales in advance. It is a simple technique that allows clients to decide the quantity of products or services they buy from you and/or how long they want your service to continue. This not only delivers a better outcome to your customers, often at a reduced price, but can also give you guaranteed future cashflow.
This is achieved by letting your customers buy as much from you as they want, when they want it. If you just ask them how much they want and how often, the answer may surprise you.
You may discover that many of your clients will readily make a longer-term commitment to do business with you if you give them the option or an incentive to do so. Others may prefer to buy now, at todayâ€™s prices, as a hedge against future price increases or to ensure continued availability. Either way, youâ€™re locking in sales in advance.
When you subscribe to a publication, the publishers often give you the option of subscribing for one, two, three or more years… with a substantial discount for the second or subsequent yearsâ€™ commitment.
This not only enriches the publisher, it also gives subscribers more valuable content for much less than the subscription price they were initially willing to pay and means theyâ€™ll get longer and greater value out of their subscription, which in turn gives the publisher more opportunities to connect to and bond with their readers.
Merely by offering three for the price of two, or buy two and get one free, or any other variation on this theme, youâ€™ll be surprised and delighted to discover that clients who typically buy one product or service at a time will go for the higher quantity.
This was clearly demonstrated with a support programme I was marketing a few years ago. A one-year programme was offered for Â£4,750 or clients could go for a two-year programme for Â£6,250 – 80 per cent of clients chose the two-year option.
When the company only offered the one-year programme, no one had a choice so their average purchase was Â£4,750. By offering two choices, the average value of each transaction leapt by an average of 25pc, the entire transaction was a lot more profitable for the company, their clients received much better value for money and they locked competitors out for two years.
Thereâ€™s no point in holding your customers to single purchase transactions if they would receive greater benefits by buying from you in a time-structured manner. Tickets, for example, can be sold by the day, the performance or the season and given the choice, many people will buy a season ticket.
Optometrists can provide eye examinations on their own, or they can supply them with an annual supply of contact lenses, solutions or eyeglasses.
Carpet cleaning companies can wait three years for a client to call them out to clean their carpets again or they can convert their clients to a service where they automatically have their carpets cleaned every six months until further notice.
If thereâ€™s sufficient financial incentive, a surprisingly high percentage of clients choose this option and for the carpet cleaning company six visits over three years is many times more desirable than one. Talk about multplying results.
It can be such an easy process to make the transition from selling single transactions to on-going, long-term lifetime contracts or service level agreements that make it hard for your customers to switch to your competitors. As long as you educate your customers to understand why youâ€™re doing it and the resultant savings allow you to pass the benefit on to them, you can frequently lock in repeat sales for years.
Itâ€™s not unusual to convert between 30pc and 80pc of single-transaction customers into repeat purchasers who can literally double or triple your business overnight.
For more information, visit www.dspconnect.com“