Читать книгу No B.S. Guide to Maximum Referrals and Customer Retention - Dan S Kennedy - Страница 8
Оглавлениеby Dan Kennedy
The best motivation for redirecting your energy and investment from pursuit of new customers to retaining, better monetizing, and multiplying the customers you have is going to a “money math” class. In this book, Shaun Buck does a masterful job of presenting the true math of the lost customer. Frankly, it’s a bit of a slog. You have to stop, think, and calculate. It’s worth it. Please do. Other chapter contributors also point to the math. Here, I’d like to start you with a simple but profound calculation. It requires you to know a number you probably don’t know, and it’d be better if you gathered up some information rather than guesstimating.
The number to know is: What does it cost you to get a new customer?
This is the cost of all your public advertising, marketing, promotion, promotional discounts on first transactions, plus some allocated percentage of your entire overhead—the same percentage as new customers contribute to revenue—added together, then divided by the number of new customers occurring, by month and by year. If, for example, you have three stores of some kind, and you spend $15,000.00 a month on advertising on radio, TV, print, online, plus 20 hours of yours or an employee’s “doing” social media (20 × $50.00 hour = $1,000.00), and your rent, light, phone, payroll, taxes and other overhead is $60,000.00 a month and you find that 30% of your revenue comes from new customers who never return equals $20,000.00 . . . . your total tab for getting new customers works out to $36,000.00 for the month. If you got 300 new customers, the cost is $120.00 each.
In “big thumb math,” then, the lost customer costs you $240.00, because you invested $120.00 to get him and it’ll cost $120.00 to replace him.
Getting a grip on these numbers is very important. This is how you make informed decisions about your marketing investments.
Most business owners are underinvesting in marketing, by the way, thus stunting and restricting their growth and leaving themselves vulnerable to competition—which can be cured by my advice in Chapter 16. If this hypothetical business is par, the $120.00 being spent should be $240.00, thus the lost customer cost is really $480.00. But it’s even worse. Lost customers can’t refer, and beyond an early customer life surge, every customer should at least bring in one a year. So, in the year you lose one, you lose another $240.00 to $480.00, bumping the total to $480.00 or $960.00. This is called: attrition cost.
The reason a lot of businesses’ profits fail to increase is that these costs of attrition are outweighing the profits gained from restocking with new customers.
If this business invested $60.00 a year per customer just “making nice with” their existent customers for purposes of retention, it could avoid spending $240.00 to replace a lot of wandered-off ones. But, actually, they’d also recoup the money by increased patronage from the retained and happier, more engaged customer.
Investing in reducing attrition is every bit as useful, potentially profitable, and valid as is investing in acquiring new customers, but few business owners treat the two as equals.
I’ll stop. There’s more math to come.
You were already interested in retention and referrals when you got this book. But I want you exiting it persuaded, convinced, and determined about it. So, this book is, in part, a big, long, fat sales presentation for investing in your own very, very robust retention and referral systems. As if we had them out in the back seat of the car in boxes and were in your shop or office selling them.
It’s not that simple.
But, also, pretty much everything you need to construct those systems is here, in these pages, and at online resources you’re directed to, that expand the book.
It all starts, though, with commitment and determination. My speaking colleague of many years, the famous Zig Ziglar, frequently used the old chestnut that to breakfast a chicken contributes, but the pig is committed. The sports term is: all in. Constructing, implementing, and maintaining a retention system and a referral system requires investments: attention, interest, desire, time, energy, and money. If you had $100,000.00 to spend, which would you be more likely to do: Hire a salesman to go out and get new accounts or hire a retention and referrals director tasked with reducing attrition and boosting referrals? If your schedule got re-arranged to cough up ten hours a week, would you be more likely to invest in marketing, prospecting, and selling to get new customers or in marketing to retain and raise the value of existent customers? Truthful answers are revealing.
