As a MarketingforSuccess.com reader, you already know how important it is to stay in touch with your past clients. But if you’re like most successful entrepreneurs, you’re probably not exploiting this profit center as effectively as you could be.
The fact is, very few of us really take the time to stay in touch with our past clients. If we do, we’re usually not doing it in a way that really connects with them and makes them feel valued. And that, my friends, is a big—and expensive—mistake.
In my not-so-humble opinion, past customers are the single best source of new business. After all, it costs 7 times more to get a new customer than it does to get an old customer to buy from you 
again.
And because your past customers already know you and trust you, they’re willing to pay more for your products…buy other products on your recommendation…and send their colleagues, friends, and family your way.
In fact, referrals and cross-selling are the single most important reason you should market to your customer list. Here’s why:
- Depending on your market, you may not want to depend solely on repeat business. For instance, when I sold real estate my clients typically didn’t buy another home for 2-3 years. Of course, I wanted (and usually got) that business. But if I depended solely on repeat customers, I wouldn’t have been able to grow my business as quickly as I did. And as Dan Kennedy likes to point out, momentum is a key element of massive success. Focusing on referrals and back-end opportunities helps create that momentum.
- Referrals are pre-qualified and looking to buy—now. If you need a new dentist, what’s the first thing you do? If you’re like most people, you ask friends for a recommendation. Only after exhausting all other options will you begin to look in the phone book, online, and so on.
Likewise, your referrals are coming to you pre-qualified and ready to buy. Your happy customers already identified that the referral needs your help. If you played your cards right, they raved about your services. And if you really hit the nail on the head with your past-customer marketing plan, your old customers built you up in the referral’s mind as the only logical option to fill the referral’s needs.
That’s powerful stuff. A prospect that is pre-qualified, ready to act, and already trusts you is less expensive to connect with. They’re willing to pay more for what you’re selling. And they tend to be much easier to work with.
And that brings me to me last and most important point: referrals are cheap—the good kind of cheap, that is.
As I mentioned above, converting a new prospect to a customer is expensive. They don’t know you. They’re skeptical. And you have to convince them that you’re the best choice out of all the options available to them. That’s expensive, and depending on your market, time-consuming as well.
But because referrals come “pre-sold” on your services, you don’t have to do any of that. All you need to do is get them to buy. And you can do that, can’t you?
But as mentioned at the beginning of this article, there’s a right way and wrong way to market to your customer base. And that goes double for referrals.
You see, there’s a specific strategy to maximizing your referrals. If you do it right, you can dramatically grow your business almost overnight. But if you do it incorrectly, you run the risk of alienating your customers and losing their business.
That’s exactly what I’ll show you in my next article. I’ll show you what to do—and more importantly, what not to do—in order to maximize your referrals. And I’ll even show you a simple way to “re-activate” those customers you haven’t contacted in awhile—just by sending a simple letter. See you next time around!
- Paul
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