Who is most likely to buy your products and services?

Several years ago I worked at an ad agency in Birmingham that exclusively handled automobile advertising. You wouldn't believe how much dealerships spend each month on advertising – sometimes up to $250,000 a month! This advertising money was spent on trying to find that elusive “new” customer – someone that had never bought from them before or hadn't bought from them in a long time. Most businesses spend WAY too much money trying to find “new” customers.

What would happen if you changed your strategy and spent a bulk of your marketing budget on the customers you already have? It is a proven fact that a customer who has bought from you before is 7 times more likely to buy from you again than a new prospect! In that case, wouldn't it make more sense to spend a larger percentage of your marketing budget on past customers than it would trying to develop new ones?

OK, so how do you market to your past customers? You have to know who they are! Develop a system to collect your customer's contact information. A lot of businesses collect this information as a regular part of doing business. But do you run a restaurant or a retail store? Those types of businesses don't normally collect client information (notable exceptions – Radio Shack, CVS Pharmacy, Winn-Dixie, Sticky Fingers).

So what's the easiest way to get the information you need? Just use one of the “Baker Basics.” Take a legal pad and write “Join our mailing list” or “Guest Book” on the top, and set it out on the counter. Then mention it to your customers as they are checking out. You'll be amazed at the number of folks that will write down their name and contact information. Once you have that info, then it's easy to market to them via direct mail, telephone or email. Restaurants should also collect information about birthdays and anniversaries and send out coupons for a free appetizer or dessert for their special day.

Other restaurant variations would be a fishbowl for people to drop their cards in (Win a free dinner!) or a pad and pen on the table with a survey to fill out (How Are We Doing?). By the way, you WANT them to steal the pen, but that's a whole other column. Anyway, do whatever it takes to get their contact information.

One other thing – people who are referred to your business from someone else are 5 times more likely to buy from you than a new prospect. Where do referrals come from? Your past customers! Now it even makes more sense to market to them, doesn't it?

This works for all types of businesses. Collect your customer's contact information and market to them. Your business will grow faster than you ever thought possible.