Debbie has seen a decline in her business after some profitable years She struggled to find an answer for the downturn so she hired a business consultant to analyse her business and offer suggestions.
One thing became very clear after a few questions from the business consultant. Debbie was asked the following questions:
How many customers walk through your doors each week, month?
How many of those customers walk away without making a purchase?
What is the average monthly purchase for each customer?
Debbie did not have definitive answers for the questions. She took her customers for granted when things were going well. She assumed great prices, an ideal location and good service were enough to sustain her business. As she later found out, that was not the case.
Her business consultant told her, “Think of your customers as the engine that keeps your business going.” He also emphasized the need to put a higher value on each customer.
A survey done over a few weeks found that some customers were leaving because they could not find someone to help with their purchases. So Debbie agreed to hire one more person and focus more on top class customer service. Items in her store were also rearranged to make shopping easier for customers and to help sales agents upsell each customer.
The consultant then outlined a specific plan of actions that would improve sales. The strategy for improved sales included the following:
1. Get more customers through the door.
2. Increase the average sale per customer.
3. Give incentives to encourage repeat business.
This is how this strategy works: Assume that 100 customers make a purchase each week. Assume that each customer spends on average Ja$100,000. So in a week the sales total would be:
100 x $100,000 = $10,000,000
If the number of customers increase by only 5% and the average sale increases by 5% per customer, the new weekly sales figure would be:
105 x $105,000 = $11,025,000
This represents an increase of $1,025,000 in weekly sales.
There is also the matter of repeat business. The plan of actions included offering incentives to capture customers names, home addresses and email addresses. From a carefully managed list, a few would be invited to “Private Only” sales events. Also some of the “bigger” spenders would periodically get discount coupons to encourage repeat business.
This is a proven strategy that has succeeded in different line of businesses. Capturing customers information, creating a list, managing that list and treating each customer like gold will increase sales.
It is easier to retain an existing customer than it is to gain a new customer.
VALUE YOUR EXISTING CUSTOMERS!