Are You Trying to Make a Profit From Your Marketing Efforts?
You will have a much harder time marketing your business with this mindset.
Here is what I mean…
Automotive shops as an example…use an oil change advertisement as a “lead in” service to offer in efforts to obtain new customers. Not a bad idea at all except when you try to profit from the oil change. And many of them try to…
How many times have you seen a coupon in the newspaper with an oil change priced above $10.00 as a “special price?” I have seen a few too many…and with the exception of diesel vehicles and specialty vehicles…this price point is trying to earn a minimal $1.00 in profits so the owner doesn’t feel bad giving the discount. Their first mistake.
“An automotive shop that mailed out coupons providing no savings (due to printing errors) produced similar results to the ones with actual savings. The coupons both produced minimal to no customer retention after the sale.”
Our earlier focused articles on retaining the customers you do have, as that is the least expensive and most profitable form of marketing.
But since this post focuses on new customer generation, we should be focused on one primary thought here.
Lifetime Value of the customer.
What is the value of a customer to your business over their entire buying cycle with you? How many referrals can your business earn from this customer? Using the example above:
What if the automotive shop gave away their first three oil changes to a new customer? Most shop owners would cringe at the thought of losing the $50.00 in supplies and parts…and the total of $100.00 in labor over the three oil changes (at most). For a total of $150.00, you can cultivate a lifetime relationship with a customer by providing additional back – end services and products that will enhance the customer’s vehicles (keep paying attention internet marketers).
And a lifetime automotive customer is worth a minimum of $3000.00 over a five year period to an automotive shop! So how many times would you like to trade $150.00 for $3000.00 in sales in your business?
My questions to you and your business from this post and my challenges to you are: