How to get 1200 new customers
in the next year
If you're an SME selling any kind of professional
service to individuals - you're a consultancy firm, software team, private
clinic, solicitors, accountants, whatever - then the most useful business
asset is simply a steady flow of new
customers. Follow
these 24 steps and you'll get them.
These methods are neither secret nor complicated. Getting
new customers is just about deciding your goals, doing the numbers, and
planning resources. Yet most people think it's about luck: throwing out
a message and hoping it sticks.
That's wrong. The point here is that marketing is a
process, not a product. An iterative series of logical stages
that builds successful customer relationships over time. Nothing here is difficult,
but for many people, it'll involve a change of thinking.
Ready? Here we go...
1. Decide how many customers you want. If your average customer
spends £350 a
year and your business needs £35,000 a month to run,
you need 1200 customers on your books. If that number is
now zero, that 1200 is your new customer target.
2. Decide how much you're prepared to spend to get one customer. £10?
Your marketer will giggle. £500? Your marketer will salivate. £100? Maybe that's
workable: a third of first year revenue from that customer. (Yes, you have to
think like this.) This is your maximum cost
of acquisition (COA)
and it's a figure any marketer will understand.
3. Decide how fast you want those customers. How about one year
to get those 1200? Do you have the cash to
keep going until you hit that breakeven figure? Can your business
handle the customer volume of a hundred new people each month? Plan and replan
until you can say yes.
4. Work out your monthly marketing budget. (1200 customers @ £100
each) / 12 = £10,000. That's your monthly marketing budget.
5 Choose a marketer. Google for 'marketer' and 'copywriter'
then ask three of the results if your monthly budget is realistic for your new
customer target. A good one will talk first about steps 1-4 rather than ads or
mailers. He will not be prepared to work on results only - i.e. you can't pay
him £100
and expect to buzz in a customer the next day. He will, however, be prepared
to submit to monthly reviews, and you have the right to cancel after
a notice period if it's not delivering.
6. Replan your financials. Once you've found a marketer
prepared to work within your budget, go back to your
running costs above. You have just discovered you need £45,000 a month to run
your business, not £35,000. Cut £10K from your costs or square things
with your bank manager.
7. Decide whether your business is viable. If
the numbers don't work, take a long hard look at yourself and decide if being
in business is really the way to deliver your financial goals.
But once you've made your decision, stick to it.
8. Decide where your customers are. 80% of professional
services are consumed by people within 10 km of the provider's street address.
On a sheet of A4 paper, list the postcodes covering your market. This is your
catchment area.
9. Decide your target's characteristics. Is your customer
male? Under 40? Earning £100K plus? Work out what your customers are like and
rank their characteristics from most important to least. (If you're a makeup
artist, 'Female' will be characteristic 1.) If you can find 6 clear traits that
describe your average customer, brilliant: you've got your target demographic.
10. Find a list of people with
your top 3 characteristics. There
are a million creative ways to do this. Let's say there are 120,000 people who
fit. Buy that list and tell the list owner how many times you intend to mail
it. (3 is a reasonable maximum.) You now have your prospect list.
11. Format that list in a way that lets
you manage it. Many
excellent 'customer relationship management' applications let you do this
in awesome detail. But CRM doesn't HAVE to
involve software; many great shopkeepers rely on a card index. The simplest
and cheapest is a) your existing booking system, if you've got one; or b) an
Excel spreadsheet. Put the names and addresses in the first few columns - remembering
to separate firstname and lastname - and add the demographic data in the next
few. Then add 48 further columns grouped into 12 sets of 4. Label the
groups Jan, Feb, Mar ... and the columns Week 1, 2, 3, 4. Finally, put in the
dates you'll mail each contact (10,000 a month in the first week of every month.)
You now have your contact strategy.
12. Work out the response rate needed to deliver your target
number of customers - for 1200, it's 1%.
The higher the percentage response you want, the higher your cost of
acquisition will be. Above 5% or so, it will be very, very high. (There may be
reasons that justify spending it - i.e. if you haven't got many prospects,
but each one's of high potential value.)
13. Decide on an offer. What will
persuade someone to become your customer? A free first consultation? A sample
box of veg?
Write this offer down in one sentence. If it takes more than one, start again.
14. Create a mailer to deliver your offer. Let's say it's
a postcard, although depending on your parameters it could be a letter, phone
call, email, or Google Ad. Creative execution is NOT the place to save money;
make it professional.
15. Produce the mailer. For each decided group - women? men?
Under 40s? ABC1s only? - give them a trackable reference in the communication
as the 'call to action'. It's easy: put a different email or web page address
on the mailer for each group, or a special phone number PIN or password to claim
their offer, anything that's easy for the prospect to use and
gives you useful information on what sort of prospect is responding. You can
go right down to individual names, if you like; any Jack Smith would visit a
web page named /all-
about -jack -smith.html.
16. Create the fulfillment. These are the pages on your website
or the phone script at reception that lets your prospects take advantage of the
offer: it's what they experience first when they respond to your call to action.
An email autoresponse? A booking form on the web? Briefing your reception staff
with a script? You've already got the prospect's interest; this is how you turn
a prospect into a customer.
17. Send out 10,000 mailers. You're now at day 1, month 1 of
your year-long rolling campaign (remember, you budgeted for reaching 120,000
people in one year.) And wait 2 weeks.
18. Clean your database. If your budget allows, phone
each person between 7 and 14 days after the mailing (i.e in week 2) to check
they stilll live there (20% won't) and received the mailer (a further 20% won't
have.) Remove the first group from your list, and remail the second group.
Correct misspelled names and address errors; these suck. (As an aside: see if
you can get their mobile numbers and email addresses during this call. Anyone
who agrees to a text or email reminding them their appointment's due is a great
customer.)
19. Deal with any 'white mail' - mailers that get returned as
undelivered. Pile them up and delete each one from your database in week 3 of
every month. This is IMPORTANT, or you'll be wasting half of each mailing within
two years.
20. Follow up responses. In weeks 2-4 of each
month, make sure you acknowledge everyone who's taken the trouble to approach
you. Those who took up the offer, send them a thankyou. Those who asked about
you, send them a letter or call them. Those who visited a web page, mark on your
spreadsheet as hot prospects. Decide from this who gets mailed next month, and
with what. You're gaining the ability to predict who, where, and how many of
your audience will become customers. These are the results of your marketing.
21. Mark your spreadsheet with all this
info. Against
each person mailed, add the date and what you sent them in separate columns.
Create a key: E for those who emailed, T for those who phoned, W for those who
visited a web page but didn't respond further, anything that's useful. Each
week, total the instances of each letter and contrast them with the demographic
data against date contacted. THIS IS THE MARKETING REPORT and it's how you manage
your marketing. This is what will add value to your business. Treat it well.
22. Track your responses. In week 4 of your first month, see who
responded by phone. See who responded by email. Count how many came through each
response option - yourbusiness.com /women.html and men @ yourbusiness.com, how
many asked for Extension X or offer code Y. And of course how many took up the
offer and became CUSTOMERS. (100 if all's going to plan.) This is where the real
work of marketing is done.
23. Review your marketing report monthly. Each week 4, you'll
know what kind of customer finds your offer appealing, how
many people out there are like them (and therefore hot prospects), and if your
estimated response rate (and therefore cost of acquisition) was realistic. Decide
if a) you like the kind of customer you're getting; b) if the response rate is
on target; and c) if your cost of acquisition is acceptable. If not, change
your creative or change your offer. Or your budget. This is how you keep your
marketing budget on track.
24. Repeat steps 12-22 each month for 12 months.
That's it, really. The only decisions to add are a) whether you send
a different mailing to the hot prospects and customers you've identified (yes);
b) whether you remail those who didn't respond last month (yes, if their demographics
are the same as those who've responded - they're hot prospects); and c) whether
you want those 1200 in six months instead of a year, in which case it's time
to talk to your bank manager again.
Now bask in the knowledge your business has a proper marketing plan
that's delivering qualitatively definable customers at a quantifiable rate! Mention
to your bank manager that the £120,000
marketing budget he agreed has now added £420,000 to your turnover and will
add another £336,000
next year, assuming 20% 'churn' (customers you lost this year.)
Also mention that you can do it again.
And that's how you get 1200 customers in the next year.
Of course, you're too busy to handle all 24 steps yourself.
So having decided you want 1200 customers, you want someone
who can take on the task of delivering them to you. One way
to do this is to engage an experienced marketer like Chris
Worth,
who's done it for companies as diverse as Fortune 500s and 10-man SMEs. Contact
him here.