Thursday, August 5, 2010

About Those Krugerrands You Have ...

Most small business owners want more revenues, so they chase after new clients.

They neglect their current clients -- who already trust them -- in favor of running ads and promotions to convince strangers to buy.

This is a mild (and expensive) form of insanity.

Think about it: Your current clients have already qualified themselves as ideal prospects ... because they've given you their money.

So it shouldn't be hard to convince them to buy again and/or refer others. Recognize this and you instantly gain economic security.

By contrast, ignoring your clients to look for new ones is like leaving a chest full of Krugerrands unguarded on the front porch ... while you chase nickels and dimes down the street. You may return sweaty, exhausted, with a handful of new revenue, only to find your real treasure has been snatched away by a competitor.

In my own business, I doubled sales twice in 4 years by convincing existing clients to buy more often and refer others. I call this "inside marketing."

You can do the same and double your sales -- if you recognize and act on the opportunity.

Ask yourself two questions:

1) How much revenue comes from existing clients? (If your business is at all average, it's about 60-75%.)

2) How much revenue comes from new clients, buying for the first time? (It's probably 25-40%.)

Now. Three more questions:

1) How much is your marketing/advertising budget?
2) How much is your client retention budget?
3) Why is 2) so much smaller than 1)?

Finally, the most important question:

What are you going to do about it?

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