Create Wealth from the Customers You Already Have

You probably don’t think of your customers as expenses. But if you add up all the money you spent to win their business, you will discover how costly they really are. To win them, you spent a lot of money on advertising, salespeople, a Website and other marketing initiatives too.

Customers are costly. In fact, many businesses report that it takes more than a year before a typical customer represents a profit, not an expense.

What is the solution? You could go on spending money to win more customers - and you should. But you need to do something else too:

You need to create wealth from the customers you already have.

Here are some proven strategies that can get that job done - whether you are a small startup or a major corporation. 

• Strategy one: Build loyalty. In other words, get your customers to buy exclusively from you, not from your competitors. If you own a coffee bar, hand out little cards that entitle your customers to a free eleventh cup of coffee after they have bought 10. Or if you are a car dealer, offer attractive predetermined trade-in prices for the new vehicles you sell, provided that your customers turn them in on the next cars they buy from you.
•  Strategy two: Offer volume discounts to encourage your customers to buy more. If you have a landscaping company, offer a year’s service to customers who prepay for the next ten months. That sounds like you are lowering your per-month price, and you are. But the point is, you are selling at volume and boosting your cash flow.
•  Strategy three: Upsell your customers to more expensive products. Airlines do it when they encourage current economy-fare customers to upgrade to first-class tickets. You can do it too. If you own a health club, for example, upsell your customers to more expensive memberships that include exclusive classes, massages and a tempting array of bundled benefits.
•  Strategy four: Expand your product line. If you build swimming pools, start selling water purification systems to your current customers too. Or if you operate a martial arts school, introduce new self-defense courses for the parents of the children who already come to your school.