P6M1 More Sales To Customers

This module might not have the glamour and glitz of attracting and converting customers…

you’d have to be crazy to ignore the contents of what you’ll learn.

Many businesses ignore the big opportunities to sell more to their existing customers because they don’t keep in regular contact, provide news and make new offers.

Spending Your Marketing Budget In The Most Effective Ways

I think you’re going to be surprised by these statistics.

Jay Conrad Levinson (Guerrilla Marketing) advises that when you spend your marketing budget, it should be split:

  • 50 to 60% on existing customers
  • 30% on target / hot prospects – these are people who have raised their hands and said “I’m interested” but haven’t yet bought or meet your tight criteria for likely customers
  • 10 to 20% on the universe/audience of all potential buyers.

Other direct marketing experts, like Peter Sun from Australia recommend spending 70% of your marketing budget on your existing customers.

Most small businesses reverse it, with most of the marketing money thrown at the mass market, with image based advertising in trade publications and one-off direct mail campaigns (B2B) or newspapers and magazines advertising (B2C) to attract new customers.

The only times I see too much focus on existing customers is in businesses with sales representatives where regular ordering is the norm and the sales reps have established a comfort zone of regular “cosy chats” and often need to be pushed to contact new prospects.

Your Customers Are The Major Source For Extra Profit


  • Three ways to grow
  • More customers
  • More transactions per customer
  • Higher contribution per transaction
  • Hidden Profit – Upsells and Referrals
  • Module – more transactions
  • Module – increasing customer spend per transaction – greater share of wallet
  • Module – keeping a customer longer by customer loyalty & satisfaction

Marketing Hourglass

I picked up this idea from John Jantsch of Duct Tape Marketing and loved it immediately because of its visual power.

We talked about the sales funnel in Pillar 5 Lead Conversion which is the top part of the marketing hourglass.

Can you see how much more financial stability your business creates if you build the lower half of the marketing hourglass with upsells & cross-sells, repeat purchases and referrals?

Back in Pillar 4 on Generating Leads and Outreach Marketing, I told you about building multiple sources of leads to fill your sales funnel as a way to protect your business from unexpected shocks.

Pillar 6 on Revenue Regeneration is an even better way to build a robust business that can thrive even in the toughest of times in the wider economy.

Customer Lifetime Value

Key concept – see Customer Lifetime Value from Pillar 1 Profit Drivers
First profit plus subsequent profits plus profit from referrals
Don’t leave to chance – strategy
Increased emphasis on
Lead conversion – how much a customer is really worth (Pillar 5)
Developing offers & keep in contact
Keep customer happy – cost of lost customer

RFM: The Value of Your Customer List

Recency – the last time the customer bought
Frequency – who is buying most often – who is hot & who is not?
Money – how much are customers spending on average?
“Porcupine on heat” vs Hyper-responsives
80/20 rule doubled
Precisely target your follow-up mailings

Profit Impact

Cost to acquire a customer £50
Profit on first transaction £80
Profit on each subsequent transaction £40
Net profit after 1st transaction = £30
Net profit after 2nd transaction = £70
Net profit after 5th transaction = £190
Net profit after 10th transaction = £390
The Great Formula to success
Repeat customers who make referrals

Show Me The Money

In Pillar 1 we identified the number of times a customer buys as a critical measure.
Double Your Profit – what did you assume in your way to double profit?
What happens if you double the number of times customers buy?
Set your goal for what you commit to achieving in Revenue Regeneration.

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