Mastering Sales and Selling More – Part 2
In the last Tips In Ten we talked about selling more. We talked about how small businesses had a few options to sell more:
1. They could go out and generate more leads and, simply because sales is “a numbers game”, they would convert more prospects into customers. This is a good strategy but time consuming (usually because prospecting is a resource-intensive effort).
2. They could generate more revenue dollars per existing customer by developing add-ons like upsells and ancillary sales. This is a good way to do less work and earn more money from each customer.
But there are other ways to sell more. Two more I’d like to cover today are related: Generating more revenue without doing more prospecting. One way is through repeat sales and the other way is from referral sales.
Repeat sales is when your customers buys from you once… then buys from you again. This makes your profit much higher because you didn’t have to spend a lot of money to market to that customer to convince them to buy. If you’ve ever bought more than once from any company, you have improved their bottom line dramatically.
Referral sales is when your customers love you so much that they refer their friends and family to you. A word-of-mouth referral from a trusted friend or family member is the most valuable form of marketing there is. Consumers can be cynical of sales pitches because we live in a world that overwhelms people with marketing messages. But a referral cuts through those messages and encourages people to buy. And, these can be higher profit customers for you because you didn’t need to market to them either. If you’ve ever bought anything because a friend gave it a glowing report then you have taken part in referral marketing.
By ramping up your repeat and referral sales with intentional programs, you can increase the amount that you sell while decreasing your expensive marketing and time-consuming prospecting… and that means more profit for you. (You won’t want to eliminate them altogether but you can reduce them slightly).
Here’s how to do that. Up-front it might take slightly longer than ten minutes to put the programs into place but, once they are in place, you only need to spend about 10 minutes per day managing them.
Start now by thinking about who your current customers are and what they buy. The more you think about this, the more effective the rest of this effort will be. Ask yourself:
- What is their demographic?
- What motivates them to buy?
- What else do they buy?
- What needs do they have in my life that they fulfill with my products and services and with the products of other businesses?
Once you’ve spent some time thinking about this, you’re ready to create ways to sell more through repeat and referral business.
Repeat business is slightly easier to do because it’s often simply a matter of finding something else that you offer that your existing customers need. But here’s what takes ten minutes a day: Don’t wait for them to come shopping at your business. Instead, take ten minutes and proactively think about and then recommend something that they might find valuable.
In many businesses, these ten minutes might be spent on a single customer in which you think about their needs and then decide how one of your products or services fits. In some cases (especially in low ticket retail situations), it might take less time, but if you spend 10 minutes on a single customer to figure out what they need and how to present it to them, you’ll be fine. Most of the subscribers to this email are in the kinds of businesses that can spend 10 minutes on a single customer.
And here’s the result: With just 10 minutes per day, you’ll be presenting your solution to someone who has already bought from you and who trusts you. They know the value you deliver. And if you do this every week day, you’ll present an additional 261 products or services to people who are more likely to buy from you. (When I say more likely to buy I mean that people who have never bought from you before might convert from prospects to customers at, say, 5%, which means that 5% of your pitches will sell. But presenting your solutions to existing customers might create additional sales volume among that group of a much higher percentage; say, 15% or 20% of your pitches might sell; perhaps even more.).
So, let’s do the math on this. Let’s say that each month you have 100 prospects and you convert 5% of them and earn $1,000 each. That means you’ll have 5 customers and you’ll earn $5,000 which was an expensive $5,000 to get because you had to market to those 100 prospects. Over the year, you earn that steady rate and make a respectable $60,000.
Now it’s time to add in repeat sales. If you take ten minutes and pitch to one of your customers each day, and you convert them (at a higher percentage) of one per week, you’ll have an additional 52 sales per year. If those sales each bring in $500, that’s an extra $26,000. And guess what: More of that $26,000 is profit because you didn’t spend a lot of time or money on marketing!
So, how do you get more repeat business?
- Start by making unsolicited recommendations. If you’ve added good value in the past your customers will appreciate that you’re thinking about them, even if they don’t buy from you.
- Some business might want to implement a popular type of system: The buy ten get one free. We’ve all seen this in retail, fast food, and auto maintenance situations but there’s no reason why it can’t work in other places.
- Create an “insiders club” in which frequent buyers get ongoing discounts (which might still be more profitable to you than if you marketed your business to new customers).
Referral sales are similar. Referral sales are successful because people tend to hang out with people like themselves. Soccer moms have soccer mom friends. Newly married couples have friends who are also newly married. Small business owners talk to small business owners. Empty nesters spend time with empty nesters. If you target your products and services to a specific demographic, you’ll increase your likelihood of sales to that demographic through referral sales.
It works because, over coffee, one entrepreneur will say to another, “I’ve noticed that your business really took off this month. What happened?” And the other would reply, “I’ve been working with Jim’s Business Consulting”. Voila. Referral.
As a business owner, you need to do what you can to encourage these. These are difficult to implement and difficult to monitor but there are a few things you can do.
- Invite customers to give you the name and contact information of their peers. Note: This is difficult to do and it’s not always met with enthusiasm my customers but it is a mainstay in the financial services industry and there must be a reason why they continue to use it.
- Hand out coupons with a special customer-specific code on each one. When they hand them to their friends and their friends use those coupons, you’ll be able to track with “source” customer handed out the original coupon and you can reward that existing customer with some kind of bonus, discount, or kick-back. This is a great way to build your business but you do need a system that can track these things.
- Simply ask new customers who walk through the door, “how did you hear about us?” and keep track of the people who say, “I heard about you from my friend”.
As you can tell, these will take ten minutes or less each day simply because they are so fast once your referral program is up and running.
Ultimately, to get the most repeat business and referral business in just ten minutes a day is to spend that daily 10 minutes ensuring that you add LOTS of extra value for every single customer. When you do that, you will become invaluable to your customers and they will naturally buy from you again and tell other people about you.
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