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 | ARE YOU MAKING SALES OR CUSTOMERS?
By Herman Holtz |
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| There are business people who pursue sales, and there are business people who pursue customers. The same thing? No, it is not the same thing. Far from it.
It costs a great deal of money to make a first sale, no matter what business you are in or how you do your marketing. Mail order is one way of doing business, of course, a very popular way. (Mail order is not a business per se, after all; it is a way of doing business, just as selling door to door, standing behind the counter, or conducting an auction sale is a way of doing business.) And the conventional wisdom in mail order is that it probably costs you about one-half your selling price to get a first order from someone. That is, if you do a mailing to sell a $10 item, you have to expect to spend $5 for each order. That makes it very difficult to turn a profit on a $10 sale. To make it work for you, you must reduce that cost for getting orders. And the best way to do that is to make customers, buyers who come back to buy again. And again. And again. It's that first sale to a new buyer that costs so much. Sales made to buyers who come back to buy again cost you very little. And there are those who say that a buyer is not a customer until he or she has come back at least twice after the original sale. It doesn't cost any more to make a customer than it does to make a sale. Both cost money to make. But that first time, what you made was a buyer, and a first-time buyer is not a customer. Not yet. You must convert that buyer into a customer by persuading him or her to come back and buy again and again. There are two things you must do to make this conversion happen: First, you must have something more to sell that the buyers want or a consumable that the buyer will want more of, and you must make the buyers love doing business with you. If you were an entertainer who appeared on the stage you would soon learn that you must save something for an encore. When the audience loves what you did and doesn't want to let you go, you must be ready with another song, another story, or another dance. And when a buyer loves what you have done in making that first sale, be ready with an encore: Be sure you have something else to sell. When you fill that first order, enclose some attractive literature and get a "bounceback" order. That one costs you nothing to get. I recently bought a telephone by mail. It arrived in a very short time, it was most reasonably priced, and it worked wonderfully well. I was so delighted that I called up and ordered two more, although there was nothing in the package soliciting more business. When the second order did not arrive for two weeks, I called the only telephone line they company had listed in their original little catalog to inquire. The person at the other end of the line told me I would have to call a customer service number, which he gave me. When I called that number, I didn't get through; it was not a working number. I was so outraged by this time that I wrote a letter of complaint. I have yet to hear from these people. And of course I will never buy anything from them again. That is of course what not to do. They missed their chance to create a customer in me, when I was all but begging them to convert me from buyer to customer. They might have yet salvaged the situation had they answered my letter, but they were not bright enough or caring enough to do that either. A recent study revealed that it costs five times as much to create a new customer as it costs to keep one that you have. Seems pretty foolish to cut corners when that costs you customers, doesn't it? Most people buying by mail for the first time are a little nervous about it; it seems risky, dealing with strangers many miles away. But when they have a good experience in their first purchase by mail, they soon come to love it. It's convenient and comfortable, and they can usually save money. One thing that makes it a good experience is prompt service. If it is not possible to ship immediately, send a postcard acknowledging and thanking the buyer for the order. If the customer has a complaint, attend to it cheerfully, willingly, and immediately, even if the customer is wrong. (Of course, a customer is never wrong.) Welcome every first-time buyer into the "family" of your contented customers. People love to get a feeling of belonging, and most will welcome that sentiment. There are many ways to endear yourself to your buyers so that they will want to come back and buy from you again and again. One way is to do exactly what you promised to do. Buyers are not forgiving of dealers who deceive them. If you promise prompt service, deliver prompt service. (I make it a practice to fill all my own orders immediately so that they are in the mail the next morning, for example.) A great many people base their business strategy on prices. They proclaim that theirs is the lowest price. That is a strategy of limited appeal. Not every one is looking for the lowest prices. A surprisingly large number of people prize convenience above low price. That is why they will pay "convenience store" prices, rather than plod through the endless aisles of a supermarket to find the one or two items they want and then have to wait in a long checkout line to pay for the items and go on their way. People like to be recognized. With today's computers, it's easy to send a thank you note to a new buyer, along with the merchandise, addressed to that new buyer by name. Start a database, and keep a record of what each buyer has bought. Send each one a postcard, along with some sales literature, a few days after filling the order. Thank the new buyer, express the hope that whatever they bought (identify it) has been highly satisfactory, and invite them to order again. They will be astonished and pleased. So many businesses simply take their customers for granted. How nice to be greeted personally and thanked for your business. It doesn't matter whether you sell products or services. Arrange things so that you have something to follow up with, and not only to get those bounce-back orders, but to make those buyers your customers and friends for life. When you are still doing business with many of your original customers after many years, you know that you have a stable business that can weather recessions and other disasters. Use your imagination. Suppose that what you sold that first- time buyer is not a consumable, and it is the kind of item of which a buyer is not likely to want more than one--a wrist watch, for example. That does not mean that you may not be able to sell that buyer more wrist watches, perhaps as gifts to family and friends. Sweeten the deal by offering a special discount to anyone who buys more than one. If the buyer liked what he or she bought from you, there is a good chance that you can sell more than one to a customer. (Remember that I wanted to replace all the telephones in my home with that great telephone I bought from the dealer who rejected my offer to become a regular customer.) One of the most successful business enterprises today is the Home Shopping Club. They quickly converted my own wife to a faithful customer. She loves them. And why not: They cheerfully accept all returns of merchandise that you decide you don't want, for whatever reason. They give prompt service. They deliver what they promise. And they use computer automation very well. They make it painless to order. Recently, my wife liked something so well she wanted to send one to her parents in Florida. When she said she would like to order something sent to her parents, the salesperson at the other end of the line came back immediately with her parents' names and address, asking for verification. It can hardly get much easier or much more pleasant than that to do business! Make your buyers feel good about doing business with you, and they will make themselves regular customers. ### Herman Holtz is a freelance writer, best-selling author of more than 60 how-to-do-it books on business subjects, and publisher of shorter monographs and books on disk. Stop by his Web site at http://www. Bellicose.com/freelance/ for more tips and send him an email request at holtz@paltech.com for a free report. |
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