- Posted April 21, 2014 by
Why Having A Customer Database Is Mandatory
''Acquiring a list of buyers is the name of the game'', according to business strategist, Dave Skavland of Novato, California.
Understanding how to do this is the key to increased revenue. ''Most local businesses are not doing this properly, if at all," adds Skavland.
There are only three ways to grow a business:
1) Increase the number of customers
2) Increase the average transaction value per customer
3) Increase the number of transactions per customer
Many businesses focus only on acquiring new customers, not realizing that it can cost 6 to 7 times as much as marketing to existing ones. ''Don't forget those that already know, like and trust you'' says Skavland. Customers that have bought once are more likely to buy again and are receptive to what the business has to offer.
A properly constructed funnel consists of the following:
• lead magnet - this is a 'bribe' that offers value
in exchange for contact information
• tripwire - this is an irresistible, low-cost offer that converts your lead to a buyer for the first time
• core product - this is your flagship product or service
• profit maximizers - this is your 'profit center' - where you offer upsells and cross-sells for maximum profit
• return path - this is where your customer returns back to the list, ready for future promotions
Having these steps in place will make a difference.
It may surprise you to know that some big companies like McDonald's, Best Buy and Amazon don't make their profit until they hit the 'profit maximizer' stage. The revenues are continually reinvested in acquiring more buyers.
There are a number of traffic sources to consider.
Newspaper advertising and coupon mailings have low open and conversion rates. Text messaging and email marketing are proven winners, plus you can track your ads in real time adjusting as necessary. ''Facebook advertising is very productive'' says Skavland. ''People spend a lot of time on their phones and mobile devices, so it just makes sense to put your ad where the attention is.''
''Digital signage is my favorite way to go'' says Skavland.
Placing a tablet at the check-out counter visually draws people in to engage the company brand. They can sign up for special deals and offers, or even play games and enter contests or sweepstakes.
"It's the best of both worlds for the business owner,'' adds Skavland. ''The customer's attention is fully engaged on their brand while e-mails and cell phone numbers are seamlessly collected in the background. This type of service is virtually hands-off for the business owner, which means they still have the time to tend to their daily operations.''
Communicating with customers builds loyalty, fosters brand awareness and increases profits; so why not get started?