The 80-20-Rule

Are you Using the 80/20 Rule in Your Business?

Like I guess many business owners your #1 priority is to get more business coming through the door. Most business owners (like me included) focus on generating new business with new customers and clients. They spend all their time, focus (and money!) on trying to get new people to buy their stuff.

BIG MISTAKE!!

I’m guilty too of this mind set until recently when I started testing a few new ideas on existing customers. Remember these are the guys (and gals) who have got their wallets out and trusted you enough to buy something from you. Shouldn’t we focus on trying to nurture the relationship with them further?

According to recent research from Bain & Company it costs 5 x more to get business from a new prospect than it does from an existing one.

This is what we decided to test out in my own and on some of my clients businesses.

TEST #1

Customers of a membership site was split into two groups. A control group and a test group. For 12 months we ran the test here are some of the results.

The test group every 3 months were sent a gift – these included some sweets, a book, and a birthday card and got a call from the owner once in the first month.

After 12 months here are the results

The average retention from the test group increased from 5 months to nearly 9 months. The membership fee each month was $97. So on average this increased the customer value from $485 to $873. Pretty good considering the total cost to implement the “gifts” was less than $50 for the year.

But here’s where it got really interesting….

The test group also on average bought another $91 worth of stuff EACH over the next 12 months.

So by implementing a simple customer appreciation system the company over doubled the first year’s customer value.

TEST #2

An estate agent I do some consultancy work for did 2 really clever things.

Immediately when they signed up a new tenant they asked for a review. Over 50% of people agreed to leave a review. This had a double impact. Firstly they got tons of great reviews (they got over 50 reviews of an average of 4.5 out of 5) their nearest competitor has 6 (with an average rating of 3).

If you were searching online and you saw the 2 agents in Google which would you choose?

For leaving a review they were also entered into a competition where they could win a cash prize of £250. Not a bad return to become the market leader for a cost of £250!!

The second thing they did was to call all new tenants within 48 hours of the tenancy starting to see if everything was ok. Any problems then could be quickly dealt with before they became long term “issues”

Although they don’t have real conclusive data at the moment because this is a new strategy being tested they have found that after care has dropped by 7%.

To out this in perspective on average the company gets around 150 calls per day from tenants. This has dropped to around 140 over the last 3 months. The company reckons this will save them around £10,000 p.a. in staffing costs.

Can you see how effective this could be in your businesses?

The best bit is these strategies are simple and cheap to implement and they have a huge positive impact on the bottom line PLUS you get happier customers who buy more stuff!

Don’t get me wrong you still need to focus hard on acquiring new customers but don’t let this be your primary focus. You should have systems in place to look after clients as soon as you acquire them. If you do this over time your customer life time value will be much higher than your competitors.

Why is this important?

Simply put, you can out spend your competitors (if you need to) to acquire new customers because you know they are worth far more in your business than theirs.

Think about things today how you can implement a customer appreciation strategy in your business. Don’t over complicate things. You could try:-

  • A Personally written thank you note when they buy something
  • Birthday cards
  • Small gifts
  • Surveys (great for some feedback too!)
  • Competitions
  • Gift tokens at certain milestones
  • A personal call from the business owner (you’ll be surprised how effective this is!)

Get creative but more importantly look after those people who have bought from you in the past. I can virtually guarantee you’ll be remembered for it and it would generate tons of goodwill for the future.

 

I have been running my own successful internet based businesses for the last 16 years. I also love helping others start and grow their own businesses online too.

I am the author of three Best Selling books (one on creating profitable webinars, another on Facebook Ads retargeting and the 3rd on how to generate leads for local businesses).

My areas of expertise (and passion) are in Webinars (live and evergreen), Membership & Continuity Programmes, Infusionsoft, Facebook Ads Marketing, Sales Funnel Creation and Optimisation, creating High Ticket Programmes, Info-Product Creation and Traffic Generation and Conversion.

I am also an Infusionsoft Certified Partner, Google Adwords & a Bing Ads Accredited Professional (for my sins!)

I have been lucky to have worked in in wide range of industries including: property investment, SEO, PPC, estate agents, coaches and trainers, real estate agents, hotels, letting agents, furnishings, hotels, event management, web design, gifts, student accommodation to name just a few!!

If you are really serious about taking your internet marketing to the next level then we should talk!

Why not schedule a FREE 1 to 1 “How To Build A Successful Online Business” discovery call today?

Infusionsoft
Webinars
Facebook Ads Marketing
Sales Funnel Creation
High Ticket Programmes
Google Adwords
Info-Product Creation
Membership & Continuity Programmes

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About The Author

Damian Qualter

I have been running my own successful internet based businesses for the last 16 years. I also love helping others start and grow their own businesses online too.

I am the author of three Best Selling books (one on creating profitable webinars, another on Facebook Ads retargeting and the 3rd on how to generate leads for local businesses).

My areas of expertise (and passion) are in Webinars (live and evergreen), Membership & Continuity Programmes, Infusionsoft, Facebook Ads Marketing, Sales Funnel Creation and Optimisation, creating High Ticket Programmes, Info-Product Creation and Traffic Generation and Conversion.

I am also an Infusionsoft Certified Partner, Google Adwords & a Bing Ads Accredited Professional (for my sins!)

I have been lucky to have worked in in wide range of industries including: property investment, SEO, PPC, estate agents, coaches and trainers, real estate agents, hotels, letting agents, furnishings, hotels, event management, web design, gifts, student accommodation to name just a few!!

If you are really serious about taking your internet marketing to the next level then we should talk!

Why not schedule a FREE 1 to 1 “How To Build A Successful Online Business” discovery call today?

Infusionsoft
Webinars
Facebook Ads Marketing
Sales Funnel Creation
High Ticket Programmes
Google Adwords
Info-Product Creation
Membership & Continuity Programmes

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