Your Customer List
How much does a customer spend with you over 10 years?
Thanks for requesting these hints and tips. I’m going to assume that you are beginning marketing, so I’ll cover some really basic stuff first (apologies if you know it already!) Saying that, it’s often useful for even the most experienced marketer to go back to basics occasionally. I’m going to send out one hint or idea a week, to make these hints easily digestible. And remember there is no point in learning about this stuff unless you plan to actually put it into practice.
You won’t find a lot of this stuff in “traditional” marketing text-books – I’ve spent a number of years experimenting, travelling to conferences around the world, and applying these techniques to build my business, and they work, very well indeed. But it takes a while.
No “Silver Bullet”
As you will realise reading through this, there is no “magic” trick that will somehow transform your marketing overnight (beware, there are a lot of people selling “Silver Bullets”. If there was such a thing they’d be using it to make themselves rich, not selling it to other people!). But there ARE a whole set of techniques which can be combined to make your marketing a success.
Lifetime Value of a Customer
There will be some readers who visit your shop once, buy (or don’t buy) and you never hear from them again. And I’m sure you have customers who pop in every week or two and buy several books at a time. It’s really useful to think of this in terms of the “lifetime value” of a customer. So a one-off visitor may spend say £10-20, whereas a regular reader may spend hundreds of pounds a year with you. To work out the lifetime value, simply work out what a typical customer spends with you each year, then multiply by 10 (let’s assume that they remain a customer for 10 years).
An Example
So for example, a customer who spends £100/year for 10 years is worth about £1000 in lifetime value to you. Anything you have spent (on advertising or the many other forms of marketing marketing) to get them to become a customer in the first place will (hopefully) be covered by your first few sales. And it’s also useful that your staff understand this – losing a high value customer could cost you a lot more than a single sale! One of the intriguing facts about this is it estimated to be about 10 times less expensive to sell another article to an existing customer than to find a new customer who has never bought from you.
Your Customer List
I’m sure you know who your best customers are. But do you have their contact details? Building a customer list is one of the key steps to marketing success. You can start really simply – you can even just use a book, although there are lots of really good software applications to help – we use a web-based system called Aweber (www.aweber.com), but there are plenty of others, including MailChimp (www.mailchimp.com) and iContact (www.icontact.com). (I have no association with any of these companies, so choose carefully!)
What Information Do I Need?
The key things you need to collect are your customer’s name and email address, and their postal address, if you know it. The reason for this list is it gives you a means of helping your customers. The more information you have, the more help you can be. So for example if you know which customers are interested in continental cuisine, you can alert them when the next interesting title is available (or tell them about book signings etc). There are various ways of doing this: Email (where the customer has it) is the least expensive way of doing this, but you might find that a postal mailing can actually more effective. If you are based in a densely populated area, you could even pay someone to drop off mailings to a list of addresses.
Why Do this?
There are several reasons: firstly, as you help your customers, your name will be fresh at the front of their mind, and they will feel somewhat “indebted” to you for helping them. So next time they walk past your shop, or consider buying a present, you are more likely to be the place they think of first; Secondly, a business with a customer list is significantly more valuable than one without such a list; And finally, taking action sends a message to your staff and your customers that you’re serious about your business (if you weren’t you wouldn’t be reading this!)
Why Not Do This?
Doing anything different carries with it a risk of “failure”, and that is enough to put some people off doing it. As you’ve had the confidence and strength to set your own business up, I doubt this is an issue, but be aware that whenever some people notice others doing something different, they will tend to remark on it and may criticise it simply because it’s not what “they would do” (which is probably nothing!). It will cost you a tiny amount of time and effort to start building your list up, and you might be surprised how quickly it grows.
What Next?
Having started to build your list, next week we’ll talk about things you can do with it…
Good Luck!
