04/07/2022
// What comes first, the customer or the sale? 🤔//
Before you write me off as being crazy, let me clarify a little.
Most businesses are marketing and selling from a position that is philosophically wrong.
One of the greatest marketers of all time, Dan Kennedy, used to have a saying “You don’t get customers to make a sale… you make a sale to get a customer”
That may sound like just a semantic difference, but these concepts are polar opposites.
If your primary goal is marketing to generate sales you are going to hinder yourself in several ways.
People who have never bought from you before are the HARDEST to sell.
They are skeptical and often have to see your ads several times before they will request info, call in, or buy.
They require a heavier advertising investment to get their attention.
Because they are unfamiliar with you and skeptical, they take more convincing and are harder to close for your sales people… taking more calls/visits/request more info mailed/emailed/faxed and often wasting more of your sales people’s time and resources.
The inverse of this is doing everything you can to simply generate the first sale, JUST so you can gain a customer.
* A customer meaning, a person who has completed a transaction with you, and had a pleasant experience *
When you are simply chasing sales, you are being transactional.
You are often not focusing on building a buying relationship and looking to do what’s best for the customer.
Instead, you are usually looking for ways to make the most money you can on that initial transaction, while HOPING the customer is satisfied enough to return.
As Dan also says… “Hope isn’t a strategy.”
Contrarily, when your primary focus is getting a customer, your main goal is simply starting a buying relationship – even if you make no money or take a small loss.
Doing everything you can to remove all of the most common barriers to buying: price resistance, risk of dissatisfaction, convenience etc…, and building a bridge between you and your market is the highest priority and will pay the biggest dividends.
Why?
Because people who have completed just one successful/enjoyable transaction with you, are 4-5 times easier to sell again, and way more likely to refer family and friends which equates to reduced advertising costs, and more repeat business.
Especially when you have a strategy in place to boost the amount of return visits, and incentivize referral business.
This is direct marketing 101, but I was reminded of this recently when trying to help a fairly new luxury barbershop find ways to get new clientele.
They were advertising solely with the purpose of generating haircuts at the highest possible price/profit margin, while also trying to build general awareness and establish their brand in a new town.
They were on the higher end of the price scale and were having a hard time getting people over the barrier to trying them out, even though the quality of service was excellent.
What I challenged them to do was come up with an offer that lowered the barrier to sale substantially, and took away the risk from the client for the initial service.
Here’s the mathematics on why this works even though it sounds counter-intuitive.
The “Chasing sales” method:
$35 Haircuts - 20 new clients per month = $700 in sales
7 Return customers the next month - $245 in repeat sales
2 referrals - $70 sales
Total revenue in 60 days = $1,015
*This does not include regulars they had already established, only new customer revenue
The “Chasing customers” method:
$35 Haircuts + FREE Hot Lather Shave for 1st timers (normally $30) - 32 new clients = $1,120
15 return customers - haircuts only - $525
3 add on Hot Lather Shaves - $90
12 referrals - $420
Total Revenue over 60 days = $2,155
This strategy doesn’t always deliver this dramatic jump and isn’t always possible for some industries where you have a large, one-time transaction like selling a home or spinal fusion surgery… but for most service-based businesses, professional practices and retailers… this can be modified to work for you.
Just remember… The purpose of generating the sale is to get a loyal customer… not just to make the cash register ring once.
www.Businessbuildingtechnician.com