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[L330]Lifetime Value Of Customer

by Derek Naylor, Der

I urge you to sit up and pay close attention to this. Acquiring new customers is not a new concept to you. How to do it most efficiently might be. But the mere act of acquiring a new customer has likely been a goal of yours for years.

However, increasing the value of each customer is a rarely thought of act in most industries...including yours.

And I'm not talking about raising your rent here either. That's one way to increase their value, but it is usually hard to scale and sometimes causes you to lose a customer.

I'm talking about cross-selling, up-selling and forming alliances that each put hard cash into your bank account each time your customers raise their hand and accept these valuable offers.

I believe, and I think you ought to consider believing, that your customer base is the single biggest asset you have. Yes, even bigger than your sites themselves.

Your sites don't have credit cards or checkbooks. Your customers do. And, if you're an enterprise with more than a few facilities, you likely have thousands of credit cards and checkbooks just itching for you to give them a good reason to make a deposit into your account.

In order to fully understand this concept, you need to start thinking of each customer as somebody with more needs than just storage. Let's explore a few ideas...

Since most storage decisions take place around a move, your customers probably need:

A realtor, a mortgage broker, a carpet cleaner, a mover, packing supplies, insurance providers, etc. The list can go on and on but I'll stop there for ease of understanding.

Like you, each of those professions has a significant cost to acquire a new customer. Some in the thousands! Do you think they would pay you a finder's fee of $100 if they're accustomed to paying $200?

Of course!

Or, equally as good, do you think they'd send you a new customer if you sent them a customer? Multiply this out in a few industries and you have bigger profits either way.

Too complicated? Not really, but let's simplify this one step...

You already have an inventory of packing supplies, insurance and a few extra spaces that need to be rented. How many times, after the initial rental "pitch", do you offer insurance, packing supplies or your referral program to your customers? If you're anything like most facilities the answer is a resounding NEVER!

Do the math; take your total number of existing customers and sell a small percentage of them $100 worth of extra product. What does that do to your bottom line? Sell another percentage of them an upgraded or additional space, what does that do? Get a few of them to give you one or two more referrals, what does that do? Not only does that increase your profits but it self-perpetuates this entire process and it starts all over again.

Are you starting to see the HUGE possibilities?

I don't want to belabor this point so I'll wrap this article up by saying this: Your customers are absolutely, positively willing to pay you more than they currently are. Spend time everyday thinking about this and put automated systems in place to capitalize on this truth - it might be one of the most profitable decisions you've made since you decided to get into the self-storage business!

I challenge you to take the next 30 minutes thinking about this article. Make a list of ideas and beta test a few of them.

Copyright 2006 Derek Naylor

"Your diamonds are not in far distant mountains or in yonder seas. They are in your own backyard if you but dig for them."

Whether you are a business owner, marketing professional, or other entrepreneur, it is crucial to remember your backyard diamonds are your past and present satisfied customers. You may currently be focusing most of your efforts on front-end sales. Once a sale is over, many businesses move on to getting the next new customer.

The big mistake is not developing a continuing stream of sales from existing customers – ignoring their lifetime value.

Your real diamond mine is in the continuing stream of sales that can be realized over the lifetime of your existing and past customers. Plus, it costs much more to acquire a new customer than maintaining a relationship. When you ignore customers you've already served, it's like throwing money away.

Once you’ve made a sale, your customers know, like, and trust you and are more likely to buy from you a second time.

Here are some tips for you to effectively mine your “acres of diamonds:"

1. Organize Contacts: You have to be able to get back in touch with your customers again to be able to market and sell to them. Maintain a centralized database to organize names, addresses, and phone numbers. Keep track of purchase histories and interests.

2. Collect Information: Depending on your business, there are a variety of ways you can collect customer data such as sign-up sheets, website forms, postcards, and so on. Be creative - use free offers, VIP programs, and contests to provide incentives.

3. Regularly Communicate: No matter what business you are in, find methods to stay in regular communication with your customers. Ideas include a newsletter, ezine, holiday cards, coupons, and special offers. For some businesses, it may work to take a client out to lunch or send a hand-written note. And, don't forget the telephone!4. Offer Proof: Provide case studies and testimonials to show how you have helped other customers. In your communication, you can provide helpful information, offer seminars, and provide useful tips to keep your business on the top of your customers' minds and to remind them of how your company can help them.

5. Testimonials Sell: For word-of-mouth, there is no one that can sing your praises like a satisfied customer! Nothing speaks louder to a potential customer that a peer. Ask for testimonials. Post these on your website or feature them in your newsletter. Remember, if you don't think to ask, they may not think to offer.

6. Cross-sell and Up-sell: Make sure customers know the entire range of your products or services. Once your customer is in your sales funnel, they are much more likely to buy larger-ticket items from you. Based on their past buying habits, offer them the deluxe model, more options, or premium services.

As you start to work your backyard diamond mine, I can't emphasize this enough - take good care of it. Appreciate your loyal customers by offering them special deals and incentives. You need customers more than they need your business.

There will always be about 20% of your customers who will give you 80% of your business. These are the people whom should receive most of your attention, energy, and time. By concentrating on your best customers, your marketing efforts will become more efficient and cost effective. It also rewards these customers because they are getting the most personal attention.

Keep in contact with your customers and keep them delighted. In return, they will continue to give you their business.

Article Source : online marketing webinars

About Author

Both Derek Naylor & Wendy Maynard are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Derek Naylor has sinced written about articles on various topics from Home Management, Brain and Heart Conditions. Derek M. Naylor is the President of Storage Marketing Solutions (SMS). SMS has created, and proven many turn-key marketing solutions for the self-storage industry. Additionally Derek has helped thousands of businesses increase their profits by helping t. Derek Naylor's top article generates over 6600 views. to your Favourites.

Wendy Maynard has sinced written about articles on various topics from Writing, Internet Marketing and Makeup. Wendy Maynard, your friendly Marketing Maven, publishes REMARKABLE MARKETING, a weekly ezine for business owners, freelancers, and entrepreneurs. If you're ready to skyrocket your sales, easily attract customers, and have more fun, subscribe now to get yo. Wendy Maynard's top article generates over 5400 views. to your Favourites.