Working The Back End: Turning One-Shot Sales Into A Continuous Stream Of Income

by Rich Harshaw

Marketing & Advertising-66 Strategies: Y2M TIP 19

For many business owners, marketing only means getting new customers. True, getting new customers is essential for every business, but it's only one facet of the OPTIMIZATION equation. To achieve geometric growth, facilitate the following three things:

1. Increase its customer base.

2. Increase each customer's frequency of purchase.

3. Increase each customer's average amount of purchase.

Marketing must address all three of these areas to OPTIMIZE a business. Roughly 95% of marketing dollars are spent "trying" to gain new customers. But failing to increase your current customers' frequency and amount of purchase, there's a good chance valuable resources are wasted.

Restaurants are notorious for "perpetual one-shot" selling. Typically, they ignore a proactive effort for enticing patrons to return. Here's a formula that can and should be applied to every business:

STEP ONE: Capture the names and address of all your customers.

STEP TWO: Systematically contact all your customers and ask for more business.

STEP THREE: When you ask for more business-OFFER a reward.

Sounds simple enough-and it is. But, struggling businesses aren't executing this formula. If they were, their profitability would double. They need to be contacting customers either individually or by letter. Don't resort to those ugly printed coupons on the back of a "lost child postcard" either. Instead, try a personalized letter that's professionally done instead.

Let's say you own a quaint but classy bistro in Dallas. You just opened your doors; however, a Tony Roma's restaurant located in the same vicinity is capturing all the business. How could you make the formula work? First, print up 1,000 small cards with a space for each customer to print his/her name, address, phone, and e-mail. Print the words "Grand Prize Eligibility Card" at the top.

Have the waiter hand each dining guest a card to fill out and inform them of a "give away dinner for two"-including unlimited bar drinks, appetizers, and desserts. Encourage customers to fill out the card. Then tell them the winner will be notified by mail or e-mail (whichever applies).

If most patrons fill out a card, you'll have a terrific customer base. But what do you do with it? Try this: pick a card every couple of weeks and notify the winner. That's the obvious part. But, here's the important part:

Send a letter, fax, or e-mail to everyone who entered your give away by saying something like this:

Dear (Name),

My name is Michael Francesco, owner of The French Connection Bistro on Addison Drive in Dallas.

I'd like to thank you for entering our drawing for a complete dinner for two. Jack Stevens won the prize and he

and his wife said the food and service were terrific. I'm sorry you didn't win the first prize. But here's the good news:

You've won a valuable second prize! If you will bring this letter in next time you come for dinner, I will present you

with a bottle of fine wine.

Thank you again for entering our contest. We hope to see you soon.

Sincerely,

Michael Francesco

P.S. Your wine will be waiting for you any afternoon or evening this month.

Please remember to bring this letter in with you.

Thanks again.

Assuming the restaurant offers good food at a reasonable value, people will respond to the offer. Let's say that Michael Francesco collects 1,000 cards in a month, and sends out 1,000 faxes/letters. If 10% respond, that's 100 people dining for a SECOND time!

Since they must bring the letter to claim their prize, the host or waiter can greet them by name, which people love. A certain percentage of these repeat customers will eventually become customers who can be contacted on a regular basis.

This Method Beats Passing Out Coupons

Compare this method to coupons. Most people who use half-off coupons are searching for more than just a good restaurant. Think about what message the coupon sends: Our place is so bad that we've got to give it to you at half price to make it worth your while. Plus, your profit margins take a hit. Now, if customers receive a letter saying they are a winner, your restaurant doesn't give people that "It's half price, so just put up with it if it's terrible," attitude. What if your restaurant doesn't have enough customers yet? The 3-Step formula still works like a charm:

 

? Get Names

? Ask for Business

? Offer a Reward

In this case, you would obtain a prospect list from an outside source. You could rent a mailing list; buy or trade a list from another restaurant; and/or get a list of certain types of people or professions.

Proactively seek to work the back end. Most businesses allow their customers to dictate their own buying habits-how often they'll come back, how much they'll spend when they do buy, etc. Why not profit from customers forever? Start immediately to do everything in your power to gain repeat sales from your current customers. It may be something as simple as writing a letter or making a phone call. But one thing is certain--if you don't ask for their business, your competitors will.

 

Y2M BONUS QUICK TIP

Be Specific

Yes... most people are lazy communicators. 99% of what's said in marketing and advertising is useless, non-compelling, non-specific, non-definitive, nebulous FLUFF. You say things like tastes best, highest quality, biggest selection, best service, and lowest price. But think about the impact of these types of statements on your prospects.

Your prospects fully expect you to claim that you're great. Who ever heard of a promotion that said, "Our prices are high, our service is terrible, and our quality is marginal at best!" To set yourself apart from the competition, you must quantify all claims made into specific, compelling terms.

Instead of saying largest selection, say... "15,400 square feet divided into 5 showrooms, with over 5,220 items from 327 manufacturers, in 20,222 styles and 460 colors, in price ranges from $.99 to $27,000." Which would you believe?

Instead of saying qualified mechanics, say... "Most auto repair facilities have one or two certified mechanics. We have 11 ASE certified mechanics on staff with an average of 16 years experience including 4 mechanics who have passed the coveted "L-1" test, and 2 who are double master certified." Where would you take your car?

 

Five Rules For Writing Headlines

Y2M Headline TIP

1. Your headline must convey to readers there's something they want. This rule is so fundamental that it's obvious. Yet the rule is often violated every day by scores of writers.

2. If you have news, such as a new product, or a new use for an old product, be sure to get that news into your headline.

3. Avoid headlines that merely provoke curiosity. Curiosity combined with news or self-interest can be the pulling power of your headline, but curiosity alone is seldom enough. This fundamental rule is violated more often than any other. Every magazine and newspaper contains advertising headlines that attempt to sell the reader through curiosity alone.

4. Avoid headlines that paint a gloomy or negative side of the picture. Instead, take a cheerful, positive angle.

5. Suggest in your headline that there's a quick and easy way for your readers to get something they want.

Just be sure to make your headline believable.

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