Why a Former Client is the Best Client

Last time, I told you about an easy an inexpensive way to grow your business by marketing to your past customers and maximizing your referrals.

This time around, I’m going to go into more detail and explain how to overcome the two biggest obstacles to creating your own past customer marketing program.  And I’ll even give you a simple strategy to reactivate “lost” customers—complete with a form letter you can swipe.

Now, most of us know how important marketing to our past customers is.  And yet, over 80% of business owners don’t have any sort of post-sale follow system in place.

In my experience as a marketing consulting and copywriter, I’ve found there are really only two reasons why business owners don’t market to their past customers.

First, they’re worried about alienating their client base. And there’s good reason to be concerned. After all, the fastest way to destroy good will is to treat your customers as nothing more than a commodity.

When you treat your customers as commodities and not people, they start to resent you.  Your communications stop being “welcome guests” and become “annoying pests”.  And when that happens, you’re dead in the water.

Luckily, there’s an easy way to get around that problem.  All you have to do is provide something of value every time you contact your customers. That “something” can be information. It can be a token of appreciation.  It can be just about anything that your customers will assign some value to.

The nice part about focusing on creating value rather than just asking for referrals or repeat business is that it’s easy. As a business owner, you’re already an expert in the eyes of your customers.  All you have to do is share some of your knowledge.

Best of all, when you focus on providing value, referrals just sort of happen.  When you provide real value to your past customers, they don’t need much encouragement to refer new business to you.  A gentle nudge and an easy way to send in the referral is all you need.  In fact, anything more could be overkill.

And when you provide value to your customers with every newsletter, postcard, or email you send, you can communicate with them more often, too.  Because if you share useful information that’s relevant to your customer’s interests, they’ll read everything you send them.  So you can “touch” your customers 2…3…or even 10 times each month and ask for gently ask referrals each time. Just imagine what that would do for your bottom line.

Second, many business owners have neglected marketing to their past customers that they don’t know where to start.  They don’t have any sort of past customer marketing program. They’ve been out of touch for months—sometimes years.   And as time goes on, it becomes harder and harder to find a reason to get in touch with those customers.

But there’s an easy way to get around that problem too.

All you have to do is apologize.

Yes, apologize.  It’s an amazingly simple and very powerful strategy.  And almost no one uses it.

Simply mail a deeply apologetic letter to your list of past clients.  If you don’t have addresses, hire a college kid off Craigslist to go through all of your old files and pull together a mailing list.  It will probably cost less than $150—and the return on investment is almost limitless.

The letter can read something like this:

“A Sincere Apology from __________.  And a Free Cup of Coffee, Too.

“Hi, __________.  I just wanted to say I’m sorry that it’s taken so long for me to get back to you.  It’s no excuse, but things have been so crazy that I just totally lost track of things…and frankly, I’ve been feeling a little guilty about it.

All I can say is that it won’t happen again.   I really appreciate your support of my business. And as a little “thank you”, I’ve enclosed a free gift: a $5 gift card to your local Starbucks.  No strings attached.

Have a great day, and thanks again for your support!
Sincerely,

Joe Blow

Joe Blow Enterprises, Inc.”

Now, some of you may balk at the idea of giving away $5 to every one of your past customers.  And depending on your industry and the size of your list, maybe that is too much.

But if your average customer is worth, say, $300 or more, you should absolutely use this strategy.  If your average customer is worth less, only offer the free gift to your best customers.

By the way, don’t make the gift dependent on the prospect taking any action. It’s tempting to hold off on giving away the free gift until they respond.  Don’t.  Offer it upfront and without any strings.  The reciprocity that simple gesture builds is extremely powerful—and it’s why this strategy works.

Reciprocity is an extremely powerful motivator.  Used correctly, it can dramatically increase your bottom line profits.  And if you don’t believe me, just look at Frank Kern. His success is built almost solely on his deep understanding of the power of reciprocity.

Now, what the gift is doesn’t really matter, as long as it has some value to your customers.   However, tangible, concrete gifts tend to have a higher perceived value.

And here’s another important caveat: don’t make the gift in this first mailing business related—no offers of free consultations or $50 off their next carpet cleaning. That comes next.  And that’s what I’ll be talking about in my next article: how to create a complete push-button system that stays in touch with your clients for you.

– Paul