Marketing to current customers
requently, when new
customers call to inquire about our marketing programs, they
ask the question, “Why should I market to current
customers, since I already have their business?”
Let’s begin with the definition of a
“current customer.” The fact is that the only
people who you know for sure are your current customers are
those who are standing at your counter, at
this very minute. Everyone else is a free
agent! There’s no written contract. They can go wherever
they want. Hopefully that will be back to you, but maybe it
will be to a competitor. You’ll never know for sure
unless they return to your store.
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You can never be 100 percent sure that any
customer will return to your store with her next order, because
she’s under no obligation to do so. Maybe she will, and
maybe she won’t. In other words, it’s just as
important to continue to promote your services to someone who
regularly uses your cleaners as it is to someone who has never
done business with you before.
It’s well known in business theory,
that you can only gain increased sales in three ways:
1. You can
attract new customers. (This is an important avenue, but is
also the most costly.)
2. You can get
your current customers to come in more frequently and bring
larger orders.
3. You can
offer additional services to your current customers.
That’s it! Those are the only ways
you’ll ever increase your sales.
As you can see, two of the three ways to
build sales are by marketing to your current customers. These
people previously have been to your store. Hopefully, they
liked the service you provided. And, unless they have any
unresolved problems, they can easily be encouraged to increase
their expenditures with you.
The first step in developing an effective
marketing plan for your business is to insure that you are
charging enough for your services and that your costs of
performing those services are tightly controlled. You
can’t offer current customers a substantial discount, or
any other lucrative inducement to bring in additional volume,
unless you can afford to do so and still make a profit.
In addition to developing marketing
programs, the Golomb Group works with its members to help them
control their overhead costs, which gives them the ability to
utilize a wide variety of marketing programs.
Recently, we suggested to Golomb Group
members, through our newsletter, that they run a
Valentine’s Day promotion, utilizing a verbal coupon.
This promotion was to run from February 1 through February 14.
It was to be sent only to current customers. Several of the
members implemented the program and were well satisfied with
the responses they received.
One member on the East Coast called
because, after he had completed the promotion, he estimated
that he had “given away” $234 in free drycleaning
and was questioning how he benefited from giving away his work.
It was a legitimate concern and I agreed to help him determine
if this was a prudent business maneuver.
He stated that he had sent out 230
Valentine offers and that he had received 61 responses. He was
not sure if he had received responses from 61 different
customers or if these had been multiple responses from the same
customers. Because he had not tracked that aspect, it was
impossible to determine how may times the same customers had
accepted his offer.
I personally was not concerned with the
answer to that question. What did concern me were his gross
sales for the two-week period (Feb. 1–14). He stated that
his sales volume, for the two weeks, was $6,683, after
deducting the $234 in discounts he had given as part of the
promotion. I then asked his sales volume for the same two-week
period in 2003. It was $4,367. That was an increase of $2,316.
Or, in other words, a 53 percent increase in actual cash flow!
I realize that this is not a high-volume
cleaning plant, but his relative success emphasizes the point
I’m trying to make. It also allows me to demonstrate what
a powerful tool marketing to your current customers can be.
This increase in sales occurred at a time
when many cleaners around the country are suffering sales
decreases of 10 percent to 30 percent. I also know that a
record number of drycleaners are closing their doors. I’d
venture to say that, right now, we are seeing the greatest
number of store closings since the 1970-74 combination
polyester, leisure-suit, coin-op drycleaning debacle.
My final question to this drycleaner was,
“Would you trade $234 in free cleaning for an increase of
$2,316 in sales?”
Would you?
Dennis McCrory is president of The
Golomb Group Inc., a firm that
designs marketing programs for drycleaners. Contact him at The
Golomb Group Inc., 7664 Plaza Ct., Willowbrook, IL 60527
Tele: (800) 679-5856 E-mail: dennismccrory@golombgroup.com
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