Simplx Blog

Because it´s easier to sell to an existing customer than to a new one, we can´t stress the importance of a solid customer list enough. Having a solid customer list is vital for your business to grow and develop online.

Unlike a traditional business, online businesses do not attract pedestrian traffic. All of your traffic comes directly from your marketing efforts. When you remind current customers that you are offering them specials that non-customers are not eligible for, they feel part of an exclusive group.

Marketing: Every Sale Costs
Prospects vs. Customers
Customers are people who have bought from you, while prospects are those who have shown an interest in your products or services (by visiting your site) but who have not yet made a purchase. Prospects are important, as they can be converted into customers with effort on your part.

With so much competition on the Internet today, you must set your business apart from the rest and offer something the prospective customer cannot resist. If what sets you apart is a report on the five things you must know before purchasing a DVD player, or the ten reasons most homebuyers are frustrated with the mortgage lending process, include that information! You must create bait that interests your visitors. Without it, they can´t be “hooked.”

Use newsletters, auto responders, and forms in order to capture your visitors´ contact information. Make sure your Privacy Statement is clear on what you do with that information. People want to know if you are going to rent or sell their information to other companies.

Marketing Costs and Existing Customers
Did you know that, depending upon your industry, it can cost 5-10 times more to acquire a new customer than selling directly to your existing customers? Currently, the average conversion ratio is 1.4% online for first-time visitors. That means that, on average, for every 100 visitors to a website, less than two visitors convert to a sale. With an average marketing cost of 18 cents per new visitor, that´s nearly $13.00 to capture one sale.

In contrast, the conversion ratio formarketing to existing customers is 7.9%, with an average marketing cost of 5.7 cents per visitor. What does that equal? Each sale will cost you less than $1.50 in advertising costs.

Note: The figures above are based on industry averages found in research done by StatMarket.com

Which is more cost-effective? Marketing to existing customers. Why is the conversion ratio so much higher? If the customer has had a good experience with you, you’ve created a sense of trust and confidence. That trust and confidence will raise your conversion ratios and also increase referrals from your current customers. By selling a quality product and delivering great customer service, you build customer loyalty and help prevent customers from switching to your competitors.

Contacting and Selling to Existing Customers
Increasing Your Customer Base
If you don´t have at least 100 existing customers, sell some of your products as “loss leaders” at cost or below cost to build your customer list. This strategy will benefit your business in the long term.

Another way to increase your customer list is to sell items on auctions. Again, sell the items at or near cost to create a customer list you can market your website to. Be careful to read the auction´s rules; many auctions allow you to market to customers only after they have purchased from you.

Cross-Selling
Also take advantage of “cross selling.” If customer X bought Product A, make sure they know about Product B, C, etc. If your customer doesn´t purchase your other products, send an email and politely inquire about their lack of response. Once you´ve discovered their specific objection to buying, you can then address the problem. Chances are, other customers may share the same objection. Following your inquiry, consider offering your customers a discount on their next purchase as a reward.

Secret URL
When contacting your customer list regarding a special, make sure you give them a “secret URL” with the special pricing. Do not display this URL anywhere on your site. Only specially invited customers should have access to it. With this setup, they will know they are exclusive.

Take Care of Your Customers
How often, when you hear of a special advertised by a provider you do business with, do you inquire and are told it is “for new customers only”? What type of message are they sending to you about customer loyalty? Take care of your current customers first. You will be rewarded in the long term.

Other Tips

• Keep in contact with your customers at least once a month—even if it´s just an email asking how they are enjoying your product or service.

• Ask your customers if they were pleased with the customer service they received from you or how you can serve them better.

• One of the most effective ways to keep in contact with your customers is to send them a newsletter. It´s easy to create your own electronic newsletter or e-zine.

• Make sure your newsletter is more than just a sales pitch. Customers will tire of that quickly. Give some great tips that they can´t get anywhere else.

• Come up with creative ways to overcome customer resistance.

Your goal is not simply to be a company that sells products. Your goal is to be the solution provider to your customers´ problems. If you are stumped about what content to include in your newsletter, send out an email to your customers asking what they´d like to read.

TIP: You´ll get a much better response if you offer an incentive for them to reply. Offer a free e-book or discount on your other products. Remember, customers are valuable. AOL spends $157 on average acquiring a new customer. Existing customers are cheaper to market to and tend to buy more.

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