What could we spend an extra £40,000 on?

One thought .... how would this impact on your bottom line in 2010

Is this you?

No matter where you are in your profession - whether you are new kid on the block, rising star, seasoned pro, or at the top of your game, you will always be looking to improve sales performance and increase profit margins!

It is no secret that the educated punter is more discerning than ever.
Conventional methods of marketing such as telesales, mail shots, advertising and even the internet are also getting competitive and this means more intrusive, less effective and more expensive.

You already have an excellent product, a great reputation and deliver the best possible service. So why aren't you getting more referrals?

Two main reasons:

• FEAR - Scared to ask for them and cannot identify the prime moment to ask
• You don't want to harass friends, family and existing clients

We'll cover all this shortly

I was recently looking at the marketing results of a business where a careful analysis had been conducted of their last 12 months marketing.

Particular reference was made to the source of new customer enquiries and the results were both a surprise and a confirmation:

30% from "walk-in" - in this case, location, location, location near a busy beach!

30% from web searching - "we searched for the product on Google, found your site, liked what we saw and called."

30% from word of mouth recommendation.

10% from "everything else" - which represents a mixed bag of external marketing activities:

• some print advertising - local media, schools magazines
• some networking - a few Chamber of Commerce meetings
• a few close strategic alliances - photographer, hairdresser, clothes shop, estate agent
  
• various bits and bobs of internal vouchers and brochures

I'm still surprised at how much money sales companies are prepared to throw at print media advertising (including Yellow Pages - now a door-stop) and for very little return.

The old adage that "one or two decent customers will pay for it" is actually wreckless spending and can no longer hold up against the significant returns from 21st Century marketing - in particular, web attraction.

If your business isn't "located" in a prominent position (like a holiday park halfway up a mountain) with plenty of footfall, then I would suggest that your sales stats would most likely be:

40% from web searching

40% from word of mouth recommendation and

20% from "everything else"

Thus - I ponder on two important questions:

1. How much of your marketing budget is invested in making your web site visible and attractive? And...
2. How much of your marketing budget is invested in recruiting your existing punters as your unpaid salesforce?

It occurs, however, that not a great deal has been said about referrals, recommendations - or whatever you call them.

Possibly 40% of your new business - and yet often left to chance with no robust systems.

So lets spend some time there

• Do you incorporate a brand standard that encourages referrals?

"Our business grows primarily by word of mouth recommendation, so if you are happy with the experience of doing business with us and our customer care, we would appreciate your recommendation to any family, friends or colleagues that you think might benefit from a visit to a business like ours."

When you create this brand standard then place it on:

• your web site?
• your welcome pack for new customers?
• your recall letter for existing customers?
• your email newsletter?
• your printed newsletter?
• your brochure?
• as a signature footer on your emails?
• on your blog home page?
• all over your facebook groups or pages?
• printed on your practice letterheads and compliment slips
• printed on your invoices?
• on the individual staff business cards?

• Do you make a "special offer" to new patients recommended by others?
• Do you offer a "thank you" for any existing people who recommend?
• Do you offer rewards for sales team members who ask for and receive recommendations?
• Do you keep a count on referrals and their sources?
• Do you set sales team and non-sales targets for referrals and team rewards?

Recommendations are perhaps the least expensive new clients - and new clients are your most profitable - and yet you seldom invest in an orchestrated campaign to encourage the patients who already trust, respect and like you.

And the crazy final fact is that those same existing punters are DELIGHTED when you ask them to refer.

Referrals simply make economic sense

• Referrals make better quality sales and are much easier to contact
• Saves time - closing rates are higher, 1 in 3, or better
• Promotes loyalty to your brand
• Improves customer service
• Increases job satisfaction
• Your clients become unpaid advocates and will give referrals

Think about what it can cost you for not asking for referrals.

Here's an example:

Every satisfied client is worth a minimum of 4 referrals a year
You have a database of 30 clients 30 x 4 = 120 referrals a year
1 in 3 will produce a sale = 40 extra sales a year
Say your average transaction is £1000
That means 40 sales @ £1,000 is equal to £40,000