Maximizing Your Existing Customers To Grow Your Business

Audrey Kerchner

Chief Marketing Strategist, Inkyma

On this episode of Inkyma’s Marketing Strategies, Audrey focuses on Customer Retention Strategies. You will learn about ways that you can get more revenue from existing customers and how to get those customers to refer you to new customers. </p> <p>Links Mentioned In This Episode:<br><a href="https://www.invespcro.com/blog/customer-acquisition-retention/" target="_blank" rel="noopener">Link for Stats and life time customer value</a> <br><a href="https://inkyma.com/marketing-strategies-podcast/networking-how-to-maximize-this-effective-marketing-tactic/">E15 Networking How to maximize this effect marketing tactic.</a></p> <p>Email Marketing Tools We use to market to existing customers</p> <p><a href="https://admin.mailchimp.com/referral?code=OlFBTkipGkwETkM" target="_blank" rel="noopener">Mailchimp</a></p> <p><a href="https://go.constantcontact.com/signup.jsp?pn=inkyma" target="_blank" rel="noopener">Constant Contact</a></p> <h2 class="wp-block-heading">Maximizing Your Existing Customers To Grow Your Business Transcription</h2> <p>Audrey Kerchner:<br>It costs five times more in marketing dollars to get a new customer than it is to keep a current customer and 65% of your revenue comes from your existing customers. I get asked by potential clients and existing clients all the time, “How do I get more leads to grow my business?” But since only 18% of business owners focus on customer attention and less focus on growing their business from their existing customers, the question they really should be asking me is, “How do I maximize my existing customers to grow my business?”<br>Announcer:<br>Welcome to Marketing Strategies with Audrey Kerchner, sponsored by Inkyma, taking your small business to the next level with proven creative solutions designed to grow your awareness and connect to your customers, now here’s Audrey.<br>Audrey Kerchner:<br>So today’s show, we’re going to talk about customer retention strategies, ways to get more revenue from those existing customers you already have, and how to get customers to refer new customers to you.<br>Audrey Kerchner:<br>I’m Audrey Kerchner, co-founder and chief marketing strategist here at Inkyma. And Inkyma is a full-service marketing agency and we bring that big agency process and feel to small business owners. We do marketing strategy, branding, website design and hosting, content marketing, search engine optimization, social media, and digital advertising. To learn more about what we do, ask a question, or to schedule a marketing evaluation, go to our website inkyma.com. That’s I-N-K-Y-M-A.com.<br>Audrey Kerchner:<br>If you’re a new listener or a returning listener, welcome, thank you so much. We’re really glad that you’re here. We have quite a few previous episodes that you can listen to when you’re done with this one. We are on all of the podcast platforms, or you can even go to our website, listen to any episodes, review the transcripts, and we’re also on YouTube. So just search for Inkyma and the Marketing Strategies podcast will pop right up.<br>Audrey Kerchner:<br>So let’s dive into our topic about customer retention. But first, let’s talk about why it’s important. Why a strategy like this is something that every business should have in their marketing arsenal.<br>Audrey Kerchner:<br>So you’ve already paid for your existing customers to get them to become customers and they know you and they know how you operate. They like you. So that’s why you should really think about maximizing that. You’ve already done the hard work and made them customers. So having a strategy to keep them makes total sense.<br>Audrey Kerchner:<br>The other thing you want to consider is the lifetime value of a single customer. A lot of people don’t understand the concept, but really what that is, is what that person is going to bring you in revenue over five years, 10 years, 15, 20, however long your average relationship is. And to learn more about stats, about lifetime customer value, as well as the stats that I talked about at the beginning of the show, there’s going to be a link in the show notes.<br>Audrey Kerchner:<br>So lifetime values great, already paid for the customer is great, but when it really comes down to it, not having a retention strategy can cost you a lot of money. And I want to share an example with you of what this could be like from my own personal experience.<br>Audrey Kerchner:<br>So many, many, many, many years back, I used to be a direct TV customer before HD existed. And so when HD was coming around, you had to get all brand new equipment, new dish, new receiver, all that good stuff. So they were offering brand new non-existing customers, free equipment. So I called up, I wanted my free equipment. I was an existing customer for five years. Plus I had the NFL package. So I was paying a good chunk of money to these folks. And I had been for a long time, they wouldn’t give me free equipment.<br>Audrey Kerchner:<br>They were offering it to people that had given them $0, zero loyalty, but me no. I had to pay for everything and it wasn’t insignificant at the time. So I dropped them and I switched to a different carrier. Then only after about a year, they started sending me marketing materials. We miss you, come back. I started getting phone calls from telemarketers with great offers, free equipment plus more. I never went back. I just kind of had a bad taste in my mouth and not only did I never go back, I also never recommended their service. And on top of that, I told my story. I, in fact, we’re 20 some odd years later and I’m still telling this story. What did this cost DirecTV?<br>Audrey Kerchner:<br>Well, let’s talk about financially. If you look at the lifetime value of a customer, it easily cost them $13,000. It probably cost them more than that because I’m being very conservative going back and using the old NFL ticket prices that I was paying and the $65 a month package, which I know it’s probably a lot more than that now.<br>Audrey Kerchner:<br>So that’s just revenue all by itself. That doesn’t include the marketing spend, the effort that they put into trying to get me back. And it doesn’t include anybody that not only did I not recommend to that I recommended to go someplace else, but those that I told my story to that may have decided not to go in that direction. So that’s what it costs them for not having a really good customer retention strategy in place early on.<br>Audrey Kerchner:<br>So now let’s talk about increasing your revenue from existing customers and what that really is, or sometimes what people like to call upselling. I don’t know, upselling got kind of a bad word. Let’s call it really good customer service, right? Because if you’re doing your job and your customers love you, they’re going to want to buy more from you. They’d probably rather buy from you than some unknown entity.<br>Audrey Kerchner:<br>So when you roll out new programs or services you should inform and create awareness among your existing customers first. You can bundle services together and make it more enticing for them to buy more than one thing at one time. And I think of those as value adds because you’re kind of thinking ahead. And then the other thing which I highly recommend, and I’m going to talk a little bit more about later are reoccurring revenue packages. Something where someone is paying a monthly fee and you’re getting paid continuously that makes your revenue stream so much easier to manage because you’re not getting these peaks and valleys of revenue, but it’s more steady. So we’ll talk more about that.<br>Audrey Kerchner:<br>So to kind of give you an example from what we do here at Inkyma, we do a bunch of different things, right? And what we do is we forward think ahead and bundle things together When we’re having initial conversations with clients about what we can do to help them.<br>Audrey Kerchner:<br>So let’s take branding as an example. Someone comes to me and says, “Hey, I need a new logo. I have a logo that needs to be refreshed. We’re renaming the company, we’re going in a different direction.” So of course, we’re going to give them pricing and strategy around rebranding, and included in that is going to be, let’s talk about your print assets, your business cards, your signage, right? Along with redoing the entire website. So you could call that upselling, but in reality, what it really is, is forward-thinking. We’ve done this enough so that we know that if someone re-brands they are certainly not going to put that brand new brand with all the new fonts and the colors and the taglines on an existing website, it’s going to look awful.<br>Audrey Kerchner:<br>And we are very, very conscious about brand continuity here. It’s one of our core thought processes that you have to be consistent across your brand. And so by coming forward and saying, “Listen, you need to do this, this, and this as soon as we’re done the rebranding.” They’re like, “Yeah, I didn’t even think of that. Yeah, I’m going to go ahead and do that. Let’s just put it all on the schedule and go from one to the next, so that at a reasonable point in time we are 100% rebranded and we can roll out the brand.” And they appreciate when we come to them with that versus it being like, “Okay, my brand’s done, oh, this looks bad. That looks bad.” And then on and on, it goes and they may decide to go someplace else. So that’s what the benefit of putting packages together does when you’re trying to sell more to existing customers.<br>Audrey Kerchner:<br>Now let’s talk a little bit about how current clients can help you get new clients, right? They’re your best advocates. And the great thing about this is that a happy client can actually– when they refer you, it’s kind of like you get a year’s worth of advertising price back from that referral. So here’s kind of how that works. Is people want to get referrals because they get the testimonial. It’s from someone that they trust. It’s like this person used it so I’m going to use them because we’re alike. You see this all over Facebook as well in the groups where there’s someone’s asking for a plumber or an electrician or a real estate agent. They want someone that’s at least somewhat like-minded. Even if they don’t know them personally, give them a referral and they can categorize it.<br>Audrey Kerchner:<br>I want someone who’s going to do a really good job at this. Refer that type of person to me. So the trust factor goes up and that’s free advertising. You’re not paying for that. You’re just helping because you did a good job with someone else that person’s referring you and paying that goodwill forward. Let’s talk about the next benefit of these referrals because it’s really, really powerful.<br>Audrey Kerchner:<br>The average number of touches in a sales cycle to get someone from not knowing you, to trusting you, to buy your product and service, is usually somewhere to six to eight touches. Could be less, could be more depending on the business, but let’s go with that 6-8 average for this example. Digital ads, Facebook posts, and emails to a cold audience. You’re at touch number one. “Hi, I exist,” right? A referral from someone you know personally who recommends your product or service to a friend, to a family member, you start out at step number five. Meaning that trust that they put into their friend, their family member, the person they know has been transferred to you. And so they’re much more open to the discussion with you about your product and services.<br>Audrey Kerchner:<br>And then the Facebook referral, you’re at a three, meaning, “Yeah, I don’t know that person, but they took the time to respond to my request. So I’m transferring a certain level of trust to who they recommended as well,” and that’s why that’s at us three. And I really love this because the difference for someone like me when they come in at a five or six when I’m referred from one business person that knows me really well to another business person, I get conversations like, “Well, so-and-so said you’re great. So I want to use you. Let’s talk about what we can do together,” right?<br>Audrey Kerchner:<br>That’s an amazing way to start a relationship versus, “Who are you? What do you do? What’s your background? Are you qualified?” Having to go through all of those steps, I even have to pull some of these folks back and say, “Well, let me tell you about my background so that you know who I am.” They’re like, “No, no, no. So-so said, you’re good. I know you’re good,” so I love that. And that’s worth its weight in gold to me. So if you want to know more about networking and referrals, go and listen to episode 15, I’m going to put it in the show notes. It’s a really great episode to listen to if you want to get into more of that type of marketing.<br>Audrey Kerchner:<br>So now that you’re excited to become part of what I like to call the 18% that are aware and are really smart and savvy about upping their marketing game with their current customers. Let’s talk about campaigns that you can create and what you can do with them.<br>Audrey Kerchner:<br>You’re listening to Marketing Strategies and I’m Audrey Kerchner, and we’re talking about leveraging your existing customers to grow your business. If you have a marketing question or a topic suggestion for our show, you can submit it on our website at Inkyma.com that’s I-N-K-Y-M-A.com. Just scroll down to the contact form. It’s at the bottom of every page there. Fill it out and we will absolutely get back to you.<br>Audrey Kerchner:<br>Okay? So let’s talk about some ideas, some inspirations for a customer retention strategy or a campaign.<br>Audrey Kerchner:<br>So the very first thing I want you to do is if you’re doing something now or you’re planning on doing something in the future, at the very least, make sure anything you offer to new people, offer to your existing customers, and even better, give them something more.<br>Audrey Kerchner:<br>It doesn’t have to be much more. So if you’re giving brand new people 10% off of a service, you give your existing customers 15% off and let everybody see it. Let potential new customers know that you take care of your existing customers. That type of marketing, all by itself, goes a really, really long way.<br>Audrey Kerchner:<br>The next idea or thought you can do is to send a thank you gift. Doesn’t have to be a lot. Don’t attach it to an offer. Let it just be a pure, thank you, right? Something small. “Thank you for being a customer. We appreciate your business. And we look forward to working with you in the future.” That’s it? The beautiful thing about something like that is that someone’s going to see that there are no strings attached and that they’re actually going to brag about it. “I work with company XYZ and they just sent me this great thank you gift for absolutely no reason,” right? Right there you’ve just got some more free marketing or very, very low-cost marketing because the gift itself could have been a $5 Starbucks card, right? You can’t run an ad for $5.<br>Audrey Kerchner:<br>And then the last thing in this area of retention that I want to talk about, and probably one of the most important, is ensuring that you have strong feedback loops in place for issues and for concerns as well as if you’ve got happy clients, ask them for testimonials. If they’ve got an issue or concern, tell us, talk to us. If you’re happy, put a review out on Google, put a review out on Facebook. Send a review to us so we can put it on our website. That type of loop is invaluable. And if you want, you can piggyback that off of the thank you gift, right?<br>Audrey Kerchner:<br>Send out the thank you gift, ask them if they’ve got questions or concerns, ask them to put out a testimonial if they’re happy. You can do all of this through an email system or a CRM system. And the reason you want to do this is you’d rather have them complain to you on the phone, via email, via text message than putting it out on Facebook or Twitter or someplace else where everyone gets to see it. Or, as we often see, in Amazon reviews.<br>Audrey Kerchner:<br>So make sure you have that feedback loop in place. One so that it’s not out there for everybody to see, and you can take care of it the way you want to take care of it. But also it shows them that you do really care about what they think and what they have to say.<br>Audrey Kerchner:<br>So now let’s talk about getting more sales from existing clients, that upselling, that really good customer service.<br>Audrey Kerchner:<br>So the first thing I want to ask you is, do you have a reoccurring revenue model in place for any part of your business? If you don’t, you really should think of one. And I think every single business if you really stop and think about it, you could create one. It’s not just for a service-based business. It’s for retailers, one-time sale products. You’re seeing it more and more in the very, very big companies, which should be a little bit of an indicator to small business owners that, “Yeah, we can do that too.” So for retailers, let’s say you’re selling jewelry or accessories. You can still create like a ring of the month club where they’re paying you ahead of time. They’re getting sent to ring. It can be a surprise. It can be something that they’ve picked out, but it’s just something fun that they get every single month.<br>Audrey Kerchner:<br>If you’re a brick and mortar, they can come into the store and you can have a monthly event where people pick up their rings and they get to talk to each other and they get drinks and snacks and all sorts of fun stuff, right? And that can all get included in it.<br>Audrey Kerchner:<br>Accountants, you’ve got tax clients, you talk to them once a year. Why not talk to them four times a year? Increase your offering, spread that cost out that you’re sending to them with quarterly tax reviews, any type of bookkeeping that needs to be done so that you’re not just bogged down with people February through April, but that you’re actually getting a more steady income throughout the year. And other stuff will come up because they’ll ask questions during those quarterly sessions that they may not just reach out to you and just ask, right?<br>Audrey Kerchner:<br>So you’re building better relationships, which will get you more referrals. If you remember what we talked about earlier, and you’re making more money. Other types of subscription programs for services? You’re an auto dealer. What about car maintenance? We all have to have maintenance on our cars: Tires, oil changes, all sorts of stuff. Why not bundle them into packages that get sold monthly? You’re getting the revenue ahead of time and you’re probably ensuring that they come back to you for that small maintenance versus going someplace else. And you’re building a relationship. Then the last thing I’m going to share in this whole, getting more from clients, existing clients, is creating exclusive offers just for them and to get them not only just to get them to buy more, but to re-categorize them. So with existing clients, you really can put all your clients in one of three buckets.<br>Audrey Kerchner:<br>They’re high-value customer, they’re medium value customer, or they’re a low-value customer. Low-value is they bought one thing from you three years ago and you never heard from them again, but there’s the potential there, right? You have their contact information. Medium is they buy from you infrequently. Maybe they buy two to three things at a time, but they don’t come back all that often. High-value, they buy often, they buy a lot, they may refer you already. And so you definitely want more of those high value customers. You’re going to have to define who they are and what they mean to you. And this exclusive offer campaign, you can put offerings in place at each tier to try to get lows to mediums, mediums to highs, and you’re probably you’ll have some luck with getting your highs to buy more, but where you really want to focus and put your best offer is in those mediums, right?<br>Audrey Kerchner:<br>Because you’re already making money off of them and they’re a lot easier to convert to highs than it is lows to mediums. So now let’s talk about how to get customers to refer you to their friends, their family, to refer you on Facebook, to do all these great things.<br>Audrey Kerchner:<br>A campaign that would work for this, that I really like is that the existing customer gets something and the new customer gets something if they sign up, right? So it’s a win-win for everybody. And I’ve seen a lot of these campaigns out there. I’m sure you have, refer a friend and get $10 off, and then your friend gets $10 off, right? That sort of thing. It’s a really effective program, except for when it’s not executed properly. That’s where the devil is in the details. Some business owners make it so difficult to do this process that people just throw their hands up and go, “You know what, it’s not worth it.” What you want to do is make it super, super easy for the person that’s referring and the person that’s signing up because that’s indicative of how easy it is to work with you. And let’s face it. We’re all busy and we all want companies to make our lives just a little bit easier no matter what it is.<br>Audrey Kerchner:<br>So if I want to feel good about referring someone, I want you to make it easy for me. So don’t just say, “Hey, sign them up. Do these 10 things, jump through a hoop, and then guess what? You’re going to get your $10 off.” No, make it super easy. Create a handout, create a link that has information on a page where literally all they have to do is hand someone something or copy and paste a link onto a Facebook page when someone’s asking for a referral. And that’s where you’re going to actually be able to really maximize on an idea like this.<br>Audrey Kerchner:<br>Another concept is more psychological at its base, but it’s extremely powerful. When someone new comes instead of asking, “Oh, how did you hear about me?” Ask who referred them, right? It’s a subtle difference in language, but what it does is it starts to plant the seed. “Oh, people refer this company. Oh, are they going to ever want me to refer? Are they referable from my perspective, because they’re asking me who referred me. They’re assuming that someone referred me to their business.” It makes a difference. So when you do get that client and then someone does refer them, put a process in place, email, text, thank the person who referred the new customer. “Thank you so much. It means a lot to us. We appreciate you helping our business grow.” There are two things here that are really important in this language. It’s the word help and it’s the gratitude.<br>Audrey Kerchner:<br>We are at an emotional level, tied into those words. If we have helped someone, if someone expresses gratitude to us, it opens all of these emotions and triggers in our brain. And so we’re going to want to do more of it, right? We love being appreciated and we love being helpful at our root level. And so when we do that, all of a sudden it becomes a partnership and not an exchange of currency. So just by sending that quick text message and saying, “Thank you, we are so grateful that you helped us grow our business. We look forward to working with you in the future.” That right there, boom, that could encourage them to even do more. So don’t discount sending those and the power and the benefit that they have.<br>Audrey Kerchner:<br>So now that you’re inspired to start getting more business from your current customers, making your current customers more happy, let’s take some action on that because all of this information is really good unless you don’t do anything with it. Then it’s just useless to you. So action #1 is really a question. Are you doing anything today with your existing customers? If the answer is no. What I want you to start out with is the retention piece of this, right? You might be tempted. “Oh, I want referrals. Oh, I want to upsell.” No, no, no. You start with retention, right? Keep your base solid. Your existing client base that is 65% of your revenue needs to be rock solid for you first.<br>Audrey Kerchner:<br>If you are already doing something, hopefully, you’re doing something with retention. Think about this, listen to the episode again, review the transcripts and see if there’s anything more you can be doing. Can you make it better? And if you feel like it is the best that it can be, then move on to another strategy and implement that as well. Ideally, you want to constantly keep improving your business. And so here’s an avenue where I think every time you put more effort into it, it’s going to give you dividends back tenfold.<br>Audrey Kerchner:<br>The next thing I want you to think about is, I want to do this, I want to do that. Figure out how to automate it. Don’t make these manual processes. They’re going to just start to annoy you. You’re going to not want to do them. When you get really, really busy, these are the types of things that are going to fall off your plate first. And so if you automate them, then you can just let it go, let it do its job, and then look on it on occasion.<br>Audrey Kerchner:<br>So, think about your email systems, your customer relationship, your CRM systems. Think about any systems you have in place already. And can these help with that or put in new systems? Yeah, there’s going to be a cost associated to it, but automation is far cheaper than having a person do something. And automation doesn’t call out sick, automation doesn’t need holidays, and they work weekends. So automate as much as possible.<br>Audrey Kerchner:<br>An example is <a class="wpil_keyword_link" href="https://admin.mailchimp.com/referral?code=OlFBTkipGkwETkM" title="MailChimp" data-wpil-keyword-link="linked" target="_blank" rel="noopener">MailChimp</a> has a built-in automation where you can send birthday emails or even birthday postcards to your clients. And it can, as long as you have the data of when their birthday is, or maybe you just have the months or something like that, it can just send this stuff out. And then once a year come January, you can change the card, the email so that they’re not getting the same thing every year. Pretty simple, but extremely effective when you remember someone’s birthday.<br>Audrey Kerchner:<br>And the last action I want you to take is whether you’re just starting this if you’ve been doing it if you’re trying to increase it. I want you to be consistent. Don’t start this and stop it and then start it and stop it continuously. Keep it going. This is what you call a farming tactic, not a hunting tactic. And so it’s going to pay dividends over months, over years, but it’s got to be consistent. And when it comes down to it, it’s less expensive than any other marketing tactics you’re doing like digital advertising.<br>Audrey Kerchner:<br>So set up a good plan, stick to the plan, and make sure you’re tracking your results. That’s really important. That’s what’s going to keep you going because you put this stuff in place. It can be a little tedious, but if you’re seeing amazing results, if you’re seeing good things, then you’re going to be more likely to stay with it. And then of course the automation piece will help with that too.<br>Audrey Kerchner:<br>So here are my final thoughts on this particular topic. It’s really exciting, right? And it’s really gratifying when you put stuff like this in place and you’re getting testimonials back and you’re getting referrals coming in. I want you to think about staying balanced. Don’t go overboard on client retention at the expense of new customer acquisition. Because as a growing business, you need both, right? So you need both types of tactics.<br>Audrey Kerchner:<br>Some people ask me, “I’m worried about the money and implementing something like this new.” What I want you to think about is pulling out some of the budget from your existing marketing tactics for new acquisitions and spending it on this.<br>Audrey Kerchner:<br>So spend a little less there, spend a little more over here and the return on investment will be much higher for you in the long run. And to that, I have one last statistic for you. A 5% increase of spend in a customer attention strategy alone, all by itself, increases your profits by 25 to 95%.<br>Audrey Kerchner:<br>Here at Inkyma, we like to give back to the business community. I provide a free 45-minute marketing consultation to any business owner. Maybe you want to talk about lead generation, retention, and how will that mix looks together and to be balanced, or we can talk about your website or branding anything at all. Just go to our website in Inkyma.com. That’s I-N-K-Y-M-A.com. In the upper right-hand corner, there’s a button to schedule a marketing evaluation. Click it, select your time and we are on the calendar together. If all you have is just a quick question, scroll down to any one of our pages on the site, fill out the contact form and I will get back to you personally.<br>Audrey Kerchner:<br>So hopefully you found the information in this episode, inspiring and helpful. Maybe you want to share it. I’d be grateful if you would help me spread the word about Marketing Strategies and share it with all the business owners that you know. Thanks for listening and have an amazing day.<br>Announcer:<br>Thanks for listening to Marketing Strategies, sponsored by Inkyma. Online at I-N-K-Y-M-A.com. 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