Boosting Sales: Making the Most From Your Existing Customers

Here is an interesting question: how much does a customer cost?

As a business owner, you already know that customers are not free. Sure, THEY are the ones who are giving money to YOU. But by the time they set foot in your store or place of business, you have already spent a good deal of money on them.

The most direct way you pay for your customers is with advertising dollars. Your entire marketing budget is specifically designed to get your customers to show up at your place of business. But you buy your customers in other ways, as well. You offer special sales and discounts. You put money into the appearance of your store. You hire clerks with good customer service.

Take a moment to try and figure out how much each of your customers costs you. If you bring in 100 customers to your store every week but spend $1,000 on advertising every week, then your potential customers cost you $10 each. And not all of them actually make purchases. If only half the customers who come to your store actually end up buying your product, then you are spending $20 per paying customer!

Now then, how much are you getting back from these expensive customers? Is each customer buying a $40 item? If so, you are only netting $20 total! On the other hand, if you can convince them to buy TWO $40 items while they are in your store, then you will net $60 per customer instead. This is equivalent to the profit you would normally make from three customers. And all it takes is a little more customer service and convincing on your part!

This perspective is not usually embraced in small businesses. Sure, your customers are real people, so it is difficult to think of them as a commodity. We are not trying to make your customers less human. If anything, this perspective makes you realize how valuable to you each and every one of your customers is. This will cause you to treat them with even more respect. What is more, viewing your clientele in terms of the amount of money you are spending on them will help you realize why you need to maximize the amount of products you sell to each one of those customers.

This point is so often overlooked by owners of small businesses. Many sellers focus on bringing in as many clients as possible. The general idea is that as long as you can get a client into your business and get them to make one purchase, then they have served their usefulness. Sellers then move on to concentrate on getting the next customer in the door. This is a short-sighted, *disposable* view of your clientele.

Using that method, a shop owner can make a reasonable profit. But they do not realize how much money is used up in getting all those folks to visit their place of business for such a small return. It is time for you to take a more sustainable view. Customers, like any other resource, are a commodity. You have spent a good chunk of money on these customers; now, get your moneys worth out of them! The *one customer; one sale* tactic will keep your business short of achieving its full profit potential. If you really want to step up to the next level of business volume, you need to get the most out of every single customer. So focus on getting many sales from each customer. Make those sales large and recurring!

Here are some examples of how to get your existing customers to spend more. A common way to increase the amount of a customers bill is to add a warranty of some sort. This is a common technique for selling electronics and certain types of equipment, but it can work for many types of purchases. Anything that could wear out or stop working over time is a candidate for a warranty sale. If you like, include many options for the time span of the warranty. Most purchasers of warranties NEVER end up using them. This means that the price of the warranty goes directly into your profit with NO costs for production, services, or advertising! That is a type of value you are not likely to find with any other kind of product.

Another very cost-effective way to increase each customers purchase is to make suggestions for similar items. If a customer is interested in a sweater or a pair of jeans, suggest some shoes, a purse, and other accessories that would look good with the item. This may even increase your likelihood of a first purchase, since the customer will perceive the original item as even more flattering when paired with the extras. If a customer buys cat food, make sure they do not leave the store without also looking at your selection of cat toys and scratching posts.

Subscriptions to newsletters and blogs are a great new add-on for many types of products. These can sometimes be priced even higher than the original item! They are nice items to include with books, collectors items, or any product of great interest to a particular group of customers. This is also an opportunity to make use of *chain reaction* advertising: you could sell a book that includes an offer for a newsletter subscription. In the newsletter you include ads, articles, and reviews of CDs and videotapes of the authors interviews. When the customer purchases interviews, they will see an ad offering admission to the authors local seminar! There is really no end to the chain of advertising that you can offer with supplementary items!

To have the best chance of success, make sure the offer for an additional product is immediate. Suggest the extra item, warranty, or subscription while the customer is still deciding on a product. Additional impulse buys should be recommended at the cashier, at which time you could also hand the customer a flyer for a new offer. Do not wait until a couple weeks later to send them a mailing; if you do this, then you are paying all over again for a customer whom you have already bought!

The main reward of using this technique is a huge boom in profits. You will bring in much more money for the same amount of advertising. Your customer costs remain the same, but you make a larger profit from each customer. This will also gain you customer satisfaction and loyalty. You will introduce them to other products that they will like but did not know existed (or did not know they needed). This lets them be part of a community dedicated to a particular book, video game, or cooking technique that they are fond of. And the more items they purchase from your store, the more likely they are to think of you when they are in need of something else!

It is time for you to get your moneys worth out of your expensive customers! By investing a little extra time when the customer is in your store, you can maximize your profit from each person who shops with you. This results in higher profits and a loyal, happy clientele.

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