August 25, 2015
The Compounding Interest of New Customers
We all want to grow our businesses. And there are only two ways to do this: More volume from existing customers or get new customers. There is no doubt the first way is easiest. They already know that you provide excellent services. But growing your biz with new customers is potentially much better. But also much harder….
It’s instructive to think more about these two ways to grow. In reality, you’ll be working in both spheres. They typically require you to wear a different ‘hat’ when managing each. This blog is focused on the way new customers are like compounding interest.
Getting new customers is certainly more expensive than many things you do for your business. And getting to ‘yes’ takes time. This post is not about those techniques, but rather the ‘why’ behind that effort. New customers bring new volume, but they often also bring new service ideas and other ways to improve your services. These two points may well be more important than the new volume. And new customers know other potential customers, thus expanding your opportunity sphere.
It has been said that a new customer can be worth ten times the direct dollars they pay in. Again, this is because they also bring in new ideas, suggestions, and prospects. It is your job to make sure you are listening intently to their comments. And then act on many of them.
Many software packages provide a ‘Welcome Letter’ function that prints a letter for each new customer. This ‘Welcome Letter’ is typically auto-printed out the first day after they pay their first invoice in full. A great technique is to include a mini survey in this letter, such as, “How did we do?” and “How could we do better?” When they take the time to answer these types of questions, you should listen (and respond) carefully. Feedback from a new customer is priceless.
New customers are precious, treat them as such.
So how can software help you in this task?
1) Use your software’s ‘Welcome Letter’ function. It is usually automatic so you won’t forget. Stuffing ‘Welcome Letter’ envelopes should be your first task each day, right after making the coffee!
2) Good software tracks when a customer came into your system, so you can quickly find all new customers added in the last 20 days, or so. Look through that list every week (Friday?) and then drop them a thank you note, or even better, call them to visit.
3) If your new customers come directly from a specific marketing effort (an ad ? Home show? mailing? Or etc) , you’ll probably have a ‘Source’ record that will allow you to see all the customers AND their payment dollars that this ‘Source’ has brought in. What a great way to evaluate each of your marketing efforts! By looking into the downstream payments you be able to see what kind of dollars those customer have brought in. Sweet.
We consistently argue that the number of ‘Source’ records is almost always directly correlated with your success…. If you look at them.
This is where software can make you money. It allows you to stay focused on your new customers in a way that is simply not possible with lesser software packages or no software. Keeping focused on new customers, means your business will grow.
If you think of new customers like compounding interest, you will tend to give them the attention they deserve, and your business needs.