<P>Measuring your number of customers is a lot more than just leads x conversion rate. Here is the formula I use:<BR><BR>Total customers = Current customers – customers who leave + New Customers + Leads x Conversion Rate. <BR><BR>Most of us think of only one thing when it comes to increasing our number of customers and that is more leads or more prospects. Here are some simple suggestions of ways to obtain more leads:</P>
<LI>Offer a competition. </LI>
<LI>Give away free information.</LI>
<LI>Purchase a mailing list. </LI>
<LI>Compile a list of lapsed customers. </LI>
Measuring your number of customers is a lot more than just leads x conversion rate. Here is the formula I use:
Total customers = Current customers – customers who leave + New Customers + Leads x Conversion Rate.
Most of us think of only one thing when it comes to increasing our number of customers and that is more leads or more prospects. Here are some simple suggestions of ways to obtain more leads:
- Offer a competition.
- Give away free information.
- Purchase a mailing list.
- Compile a list of lapsed customers.
- Keep a list of those who contact your company.
It is true that the more leads you have, the more customers you will have. However, it is the most expensive way of obtaining new customers. Quite simply, if you have the wrong leads, then you will have a very low conversion rate. Inappropriate leads can even give you a conversion rate of nil. The first thing you should do is to check the quality of your leads. Here are a few simple tips. The best leads are those prospects who seek you out. They may visit your retail shop or your website or contact your company by phone or email. They may seek a price either to buy or to compare this with your competitors. In some cases your prospects may even sample your products. A simple case is when a prospect comes into your showroom and requests a test drive of a motor vehicle. Referrals are another great source of new customers. There are two types of referrals – those that are generated by word of mouth and come seeking you out. The other referrals are those you seek deliberately by simply asking your customers or even rewarding them for referrals. Note that this second group is not as effective because you often need to sell to them as opposed to the first group which have come to buy from you. Generally, the next best leads are your lapsed customers. These people trust you because they have used your products and services before. Often it is not difficult to win some of these customers back. The next best group of leads is those prospects that have the same characteristics of your best customers. If your customers are male and aged 45-60 and have a disposable income of more than $100,000 then you simply need to find more of these types of people. The skill is to really get to know your customers and find out as much as you can about them. This will help you identify who is likely to order from you and who is not. The next thing to work on is your conversion rate. Here are seven ways of increasing your conversion rate.
- Have better leads. Even if you don’t have great selling skills, your conversion rate will be high if your leads are strong.
- Have a compelling offer to buy from you today. Why should your prospects buy from you instead of every other alternative available to them? You’ve got to be able to answer this question.
- Employ skilled sales representatives and marketing people. Selling is the most important skill you can learn. Reward your best sales people and seek out marketing experts. The benefits of paying more in terms of salary or commission for these skills are likely to outweigh the costs. Of course, make your people accountable and measure their performance.
- Contact prospects often. Do not give up after one unsuccessful sales call. It can take seven or more contacts to get a new customer.
- Use multiple media. People respond in different ways. Do not rely wholly on say, the telephone, to convert prospects into customers. Use also visits in person, direct mail, emails, fax broadcasts and other methods of selling. Develop a reliable system and automate it where possible.
- Respond quickly and promptly to enquiries. List benefits as well as the price. Even though your prospects ask for a price, you can still give a number of other reasons to buy from you. Fewer people than you think buy wholly on price. Do not fall into the trap of trying to be the cheapest company in your market.
- Train your customer service people thoroughly. This includes the receptionist through to the sales manager. Treat all of your employees as being part of the sales process and train them accordingly. For my business, I like to obtain new customers directly where possible. If you learn and adapt direct response marketing to your business, then you can also obtain new customers directly. This simply means that your prospects respond immediately to your direct marketing – be that an email, a letter or a telephone call. However, before you can do this, you still need to have someone to market your products and services to. It is just, that having obtained these prospects or leads, it is possible to immediately convert them into customers.