Business

Jewelry Marketing Plan: Business Growth Strategies Part 2

In a recent article we discussed “buying customers” as the definition of marketing.

Yes, you can specifically and accurately measure, virtually down to the penny, what you pay to acquire the typical new customer. And you should, because it will help you make better decisions about how to spend your marketing dollars and put you in a position of power when dealing with the media and other marketing channels.

The same formula can be used when calculating what it costs you to reacquire a customer who has already bought once.

Mr. Miller’s car dealer pays more than a salesman’s commission in marketing dollars to send that car up for sale. There is an allowance for national advertising, an allowance for the regional dealer group that jointly advertises, and an allowance for the dealer’s local advertising budget. In total, the marketing budget for a single car runs into the hundreds of dollars.

But it could be much less, if Mr. Miller allocates per CUSTOMER, instead of per car.

Focusing on your existing customers

Consider this. Mr. Miller spends – oh, let’s say hypothetically, $360.00 – on the advertising necessary to sell a car. Or better yet, let’s say bring in a buyer. If you follow the example of the typical dealer and the practices above, you will continue to do the same type of media advertising week after week and year after year, and hope that when it is time to buy another car, the customer who bought the first one will come. to him again.

Frequent Friendly Communication

On the other hand, what if Mr. Miller adopted the practice of sending that buyer a greeting card once a month and did so every month? Sometimes the card would simply be a greeting. Happy birthday or anniversary; Happy holidays or happy new year. Other times, Mr. Miller may make offers to the client. It could be for service work or to consider buying another car. Sometimes he may simply recommend other products and services in the area that can add value to his clients’ lives.

If it really cost him two full dollars to print and mail each of these greeting cards (a really high price), Mr. Miller could send the cards for 180 consecutive months. That’s 15 YEARS of customer contact and relationship building before it would have cost you your entire allowance, for the customer to come back and buy again.

How to secure customer relationships

Now, we know that the typical buyer is in the market to buy another one because every two or three years. By following the “re-acquisition” approach we recommend, Mr. Miller no longer leaves it to chance whether he will win that customer back. He practically GUARANTEES it, because he has built a relationship, instead of just advertising it.

The most important thing to remember in this scenario is the drastically reduced repurchase cost, compared to the original cost of buying from the customer. If it takes three full years to win this buyer back, with his investment of $2.00 a month, he will have spent only $72.00. What happens to the other $288.00? Because that is profit for Mr. Miller.

This is what we call “buying back” your existing customers at “wholesale” rather than “retail” rates.

Almost everyone knows that it is much easier and less expensive to keep your existing customers than to buy new ones. It’s much easier, cheaper, and more profitable to keep your existing customers coming back than it is to constantly have to buy new ones.

Still, few companies have “frequency of purchase” marketing programs specifically designed to keep customers coming back. They allocate few, if any, dollars to this specific purpose, leaving existing promotions for their customers in the “afterthought” category.

What an incredible and unforgivable mistake!

Why would Mr. Miller, or you for that matter, want to spend $360.00 to get a customer back in the door, when you could do it easier, for $72 or less?

Reacquiring existing customers is much less expensive and much more profitable, so at some point, if you really focus on it, you can eliminate the entire costly process of acquiring new customers at retail price and strictly opt to go back to buy from those customers at wholesale price.

This is what you do…

Specifically, here are our recommendations for you and Mr. Miller…

  • Make frequency of purchase marketing programs the number one priority on your list of marketing initiatives. You want to be seen as “your car dealer,” “your plumber,” “your podiatrist,” or “your jeweler.” Reach out to your existing customer base at least six times a year, preferably monthly. It doesn’t have to be a request every time, but it should be most of the time. Remember, if you don’t ask your customers to buy, they can’t stay with you.
  • assign up to 50% of your marketing budget to your existing customer base, if you are an existing business that sells a consumable product. And we consider cars a consumable. (We have worked with a company that sells bird feeders through a franchise operation. They offer a lifetime guarantee on their feeders. It may only be a $20-$50 item, but it is not a consumable, because the customers never have to buy another. Of course, the seed they sell is consumable. Cars, on the other hand, are about to die after three or four years, despite their sky-high prices, so they are consumable).
  • Have private sales.
  • Use bounce offers.
  • Use frequent buyer cards or clubs.

Don’t be afraid to sink this large portion of your marketing budget into your existing customer base. This is so profitable that you’ll still be able to do all the new customer marketing you want, using whatever excess profits you make by shifting your marketing emphasis to this re-acquisition strategy.

Consider using up to 25% of your budget to solicit new customers from the existing customer bases of other non-competing businesses that have the same type of customers as you and to whom you would pay a small commission only when one of your customers also becomes a customer. one. yours.

Finally, the value of an existing customer is so great, make sure all employees understand it and empower them to make existing customers happy. And make sure you have a system in place to reactivate inactive customers.

Obviously, those just starting out in the business, or simply don’t have enough existing customers or a line of consumable products, should focus on buying new customers. But as soon as you get those new ones, you need to have a schedule to get them back and get them back more often, over a longer period of time.

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