A Little on Business Marketing: Get your next set of clients from your current set

The top three ways to grow a business are referrals, referrals, and referrals. That is and always will be the best, most cost-effective way to grow a book of business. I can break down the investment in referrals in three pieces…

1) Take care of the customer. Paraphrasing Abe Lincoln, you can make some of the customers happy all the time, all the customers happy some of the time, but not all the customers happy all the time. Investing in good people with good people skills in positions of sales and customer-service roles ensures a good customer experience. People will pay a higher cost for goods for a better customer experience. 

To that end, it's important to keep great notes on every customer or prospect. Note their preferences. Note what they order and when they order.  Note the phone number that comes up on caller ID. Heck, even note the car that pulls into the parking lot. There is no excuse for not knowing your customer. One of the great parts of being a business printer is that we have plenty of paper in our office and plenty of pens from our promotional item store. 

2) Spoil your customer. I'm not buying anyone a Mercedes. But I do make sure walk-in customers walk out with something. The same goes for the clients on which we make delivery or prospecting calls. A bag or box for their purchase. A notepad. A pen. These are all elements of branding, which is the subject of the next segment.

Identify your best customers. The 80/20 rule – also known as the Pareto Principle – is that 80 percent of your business will come from 20 percent of your clients. Invest in a holiday gift – again a branded item – you send each of your top 20 clients with a handwritten note. When they know you care, they'll care to send you the business about which they care.

3) ASK for the referral. There isn't anyone in business who doesn't know another person in business. But you won't reach that next sale if you don't ask for it. How did the biggest burger chain in the world get to be the largest seller of potatoes? By ASKING if you wanted fries with that. You won't get your next set of satisfied, high-yield clients from your current set of satisfied, high-yield clients if you fail to ASK. This is free prospecting.

Photo by Gilles Paire, used with permission.

A Little on Business Marketing: Crush the can't-afford-to-market myth

Every month, the National Federation of Independent Business checks the pulse of small business owners like us. When you ask the question, 'How are things?' I'm going to tell you, 'I could always use more customers.' We all answer that way. But, the NFIB says with more specificity that we're really worried about recruiting talent, paying taxes, and managing insurance more than we're worried about marketing ourselves.

In light of all the other business ownership challenges and costs, we're faced with the decision to advertise. Or not to advertise. Instead, every business owner should ask, 'Can I afford NOT to advertise?'

If you're in the enviable position that you have so many clients you have to shut the door to new business, you're alone. Even Amazon needs more customers.

Since we conclude you can't afford not to advertise, the challenge is to find advertising value. The first part of any discussion of value is to determine budget. Take 10 percent of your projected gross sales times the markup percentage on your average sale. (Markup isn't margin, it's your gross profit above cost. Margin is gross profit as a percentage of selling price.) Subtract your business rent. This is your minimum marketing budget.  Do the same calculation on 12 percent of your gross sales. That's your maximum marketing budget. Plug in an extra 20 percent more of the min and max if you have not marketed yourself, your business or products before.

In the next five A Little on Business Marketing segments we'll touch on affordable ways you can reach customers, like Referrals, Mailings, Branding, Sponsorship, and Traditional Advertising.

John Wanamaker, an entrepreneur at the beginning of the last century, famously said, “Half the money I spend on advertising is wasted. The trouble is I don't know which half.” Wanamaker's is the store he founded. A building bears his name to this day in Philadelphia. More importantly, his trouble of knowing 'which half was wasted' lead him to pioneer marketing concepts like referrals and branding as the Father of Marketing. He made sure he wasn’t wasting half any longer… are you?
Photo: SergeyNevins, used with permission.