New vs. Repeat Business


Once upon a time, I worked for a business in which salespeople were paid bonuses for prospecting. In other words, they were incentivized to find brand new customers. This seems like a logical thing to do, as it allows you to grow your customer base. However, salespeople, like the rest of us, have only so many hours in the day for work. The result then is that a focus on prospecting leads to a lessened emphasis on existing customers.

Upon a very basic superficial analysis of our sales data, we suspected that this incentive program was flawed. So, we undertook a more detailed analysis of our customer sales history. What we discovered was that the average order size of repeat customers was more than double that of brand new customers. This was definitely an eye opener. And, this was before considering the fact that repeat customers purchased from the business multiple times, whereas a large number of new customers never returned.

Based on this, we completely flipped the incentive program to focus on repeat business. This led to increased order sizes, more repeat orders, increased commissions for salespeople, and more profitability for the company.

The point is to not neglect your existing customers. You already have them. They purchased from you for a reason. Give them reasons to come back. Focusing solely on new business is bad practice. While you need to attract new customers, definitely nurture those who already give you money.

Answering Negative Comments Online

Social media is a beautiful thing. It allows you to get closer to your customers and get instant feedback. This provides companies with lots of really good feedback, both good and bad. However, the question is….what do you do with the negative comments found on Twitter, Facebook, Yelp, etc.? This is a big question.

You basically have three options:

  1. Do nothing. This is the easiest alternative. You can choose to ignore the comments. However, this is not a good idea. Ignoring the comments don’t make them go away, nor do they fix a potential problem. The complainer may cut off patronage and continue to say bad things about you.

  2. Apologize. You can say you’re sorry for what happened. Thank them for their feedback and promise to prevent the problems from happening again. This resonates with customers. They like to know that you are listening and care about their customers. With this alternative, you could also provide some sort of reparations as well, e.g. refund, coupon, etc., but you don’t necessarily have to.

  3. Refute. Finally, you can refute the negative comments. Maybe the customer did something wrong or had unrealistic expectations. In these cases, defend yourself. The mantra ‘the customer is always right’ is wrong. Customers shouldn’t necessarily be able to get whatever they want, whenever they want, especially when they are being unreasonable. In fact, some chronic complainers use online complaining as a form of blackmail, expecting you to apologize, give them their money back, etc. If you use this option, be sure to be tactful, thanking them for their feedback before refuting their claims. Other customers who see this course of action might be impressed that you didn’t simply lay down for unreasonable customers.

Being able to effectively respond to online complaining should be a crucial part of any company’s promotional strategy. Need help with this? Feel free to contact me.

What are your Goals?

Does your organization have specific marketing goals? And are those goals evaluated regularly?

If your answer to either of those is ‘no,’ then you should consider revamping your marketing activities. By having specific goals, you create specific targets to work towards. This allows you to focus and have direction. Alternatively, if you don’t have goals, your marketing efforts are likely not going to be as effective as they could be.

Your goals should be clearly written, easy to evaluate, and measured regularly. For example, “increase month over month sales by 5% in each of the next six months.” This is a clear goal, it is easy to evaluate, and can be done so monthly. If you miss a goal, you can then reconfigure what you’re doing to improve your chances of meeting the goal at the next measurement period.

If you don’t have goals, or you do but don’t measure them, how can you know how well you are doing as an organization?

An added benefit of creating goals is that it forces you to step away and take stock of where you are and where you want to be. This allows for some consideration of changes in what you do to improve the performance of the company.

Final note: the creation, evaluation, and updating of goals should be treated like any other marketing activity you do. It is probably as important as your promotional activities.

Sales Patterns

Do you have a firm understanding of the ins and outs of your sales data? Are there different types of customers who purchase different types of products from you? In a previous career, I was involved in digging through our company’s sales data to develop a deeper understanding of what our customers bought. This was a B2B business, and we had detailed information on each customer, including their industry and location. We were able to develop profiles of different customer types and identify clusters of products that they commonly purchased. This allowed us to arm our salespeople with lists of products to focus on during sales calls. We also used this information to create promotions targeting various customer types. This helped our salespeople be more efficient, which was good for them as well as the company.

If you have the ability to link sales data to specific customers, you can also do this type of analysis to gain a better understanding of your customers and how to target them with products that they’re most likely to consider purchasing.