Wed 18th April
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What’s your single biggest asset?
Most businesses tend to think of their assets as things like premises, or motor vehicles or other tangibles. Beyond a shadow of a doubt, your biggest single asset is your current customer base, along with your potential customers, and the ones who have already used your services.
It’s not just because they’re helping you pay the bills today – they're also your biggest guarantee of success tomorrow.
Did you know that 66% of your new business will come from your existing customers? It costs 10 times as much to get a new customer as it does to retain a current customer. This can happen in a number of ways
First of all, there is referral business. If you offer an excellent level of service, you’ll enjoy excellent word of mouth referrals to your customers’ family and friends.
Then of course, there’s the opportunity to up-sell or cross-sell to your existing customers. Time after time, I speak to garage owners whose customers use them for a basic service, but head off to a franchise for their tyres or exhausts. So why does this happen?
In the majority of cases, this is simply because they haven’t been made aware that they can have exactly the same service at their local garage.
So what’s the lesson to be learned from this? Well it certainly tells us much about where we should be directing our marketing spend. Very simply, you should direct it at your current customers first, followed by your recently lapsed customers.
Only when you’ve exhausted these avenues should you think about spending money to recruit new customers, with no cost or low cost promotions.
A further point to remember is that when you look to keep your current customers happy, you should compete on service and not on price.
First of all, customers are more likely to respond to “extras for nothing” as opposed to “money off”. So throwing in a free carwash and wax with each service, leaves a warm glow that dropping your price won’t achieve.
Secondly, if you drop your prices, you’ll find it extremely hard to return them to their original levels at any time in the future. And your new lowered price quickly becomes the norm, which means you're under pressure to drop it even further.
It’s a slippery slope and one that you should resist at all costs. So go out there today and make sure your customers know how much you value them. It’ll pay dividends in the long run.
Pat O’Grady is a specialist advisor to the motor trade. He can be contacted on 087-2671031 or through www.patogrady.ie.