It’s a sunny, hot day and you’ve been working in the yard. Mowing grass, pulling weeds, watering plants to keep them from wilting.
After a few hours, you’re beat. Your scalp is sweating, the sun has slightly burned your neck and your throat is dry and scratchy. So you head into the house for a tall, cool glass of iced tea.
First you have to put the ingredients together, which is really pretty simple. You brew the tea, two tea bags for each glass of tea. You slice some lemons or oranges into wedges.
Once the tea is brewed, you sweeten it if you’d like, then pour it over the ice cubes you’ve filled your tall glass with. Add a wedge of lemon or orange and you’re ready to enjoy.
But then you do the strangest thing.
You see, there are about 12 ounces of tea in your glass. But you don’t drink it all.
Instead, you drink just 2 ounces. Then you pour the rest down the drain!
Plus, your behavior gets even weirder. Because you’re still thirsty, the next thing you do is brew another tall glass of iced tea and drink it in exactly the same manner. Sip 2 ounces, then pour the rest down the drain.
But here’s the worst part of all. Not only did you do this today, but you’ve practiced exactly the same ritual for many years. And in all likelihood, you’ll continue to do this for years to come.
So I have a simple question for you…
Is this really any way to drink iced tea?
Now, if you have even a shred of sanity, the obvious answer is, “Of course not!”
But here’s the deal. While this is obviously the strangest way to drink iced tea, most people don’t give a second thought to marketing this way.
You see, if you really want to quench your thirst, the most direct path is to simply drink more of the iced tea that you already have. Not to constantly keep brewing another batch, drinking a fraction of it, throwing the rest out and repeating the process over and over again.
And the same goes for marketing. If you really want to increase your sales and profits, the fastest, most reliable way to achieve this is to market more to the customers you already have.
Here’s why. The greatest obstacle to making a sale is trust. People who don’t know you have been burned before, probably many times. So once you’ve earned their trust it’s far easier to sell more to them than it is to convince a new customer to take the risk of buying from you.
But that is not the way most companies choose to market. Instead, you invest your limited time, money and energy in chasing down every new type of media and every new technology that comes along. Why? All in the hopes of finding the next new customer.
Try the 50-50 Profit Solution
Now, don’t get me wrong, finding new customers is an important piece of your marketing plan. But the fact is, it should not be the central piece of you plan. Not if you want to maximize your sales and profits.
As a marketing consultant, I’ve spoken with hundreds, if not thousands, of business owners over the years. And I can tell you with complete certainty that 95% of all businesses market in the strange way I described drinking iced tea.
They invest no more than 15% of their time marketing to their existing customers and devote 85% or more of their resources in a myopic effort to find more new customers. And they repeat this process hour after hour, day after day, year after year.
Is it any wonder then, that their sales and profits remain in a holding pattern?
Here’s how to fix this, quickly and easily.
Make a pledge to shift your marketing plan to focus equally on finding new customers and selling more to your existing customers. Instead of devoting just 5% to 15% of your time to marketing to existing customers, pledge now to use my “50-50 Profit Solution”. Shift the balance of your marketing so that it’s an equal 50/50 mix of finding new customers and selling more to existing customers.
Here’s a quick starter list for selling more to your existing customers
- Upsells. Whenever you make a sale, offer your customers another related item at the same time. Study after study have proven that the best time to make a second sale is when the customer has their credit card in their hand placing an order.
- Cross sells. Offer your existing customers incentives to purchase your other products or services. While you may assume that your customers diligently scour every page of your web site, eager looking to buy more from you, that isn’t the case. But if you’ve delivered – and hopefully over delivered – on the product or service your customer initially purchased, there’s a strong chance they’ll buy something else. All it takes is you assuming the responsibility to make your customers aware of your other products or services, not defaulting that responsibility to them.
- Bundling. Offering standard, silver and gold options for your product or service gives you the ability to increase the dollar amount of every sale you make. For each successive version, you bundle in more components. What you’ll find is that you’ll make a nice percentage of sales at the gold level and a good number of sales at the standard level. But where you’ll really shine is by making a significant number of sales at the silver level, which automatically increases the dollar amount of each of these sales and sells more of your products or services to these customers at the same time.
- Customer appreciation sales. One of the best ways to sell more to your existing customers and keep them coming back for more is to hold a Customer Appreciation Sale. Acknowledge your existing customers by making them an offer that no one else gets – or offering them a preferential price or bonuses that no one else gets. By showing your appreciation, you treat your customers like they’re truly special, which they are. And they’ll reward your appreciation by buying more from you now and more in the future.
These are just a few of the many ways to shift the balance of your marketing to the 50-50 Profit Solution. Pledge now to test at least one of them (or more) in the next few days. I can promise that you’ll love the immediate increase you get in your sales and profits.
Am I nuts? Am I right on target?
Feel free to let me know – or share your own experience with this topic – by leaving your comment below.
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