Last week, I talked about how to keep visitors coming back to your website. This week, I’ll focus on steps you can take – online or offline – to get your customers to buy from you again and again.

It’s almost always more profitable to sell to an existing customer than it is to go find a new customer. With an existing customer, uncertainty about the quality or usefulness of your product has already been overcome, so less “selling” is needed.  You’ll notice I keep saying “product.”  By product, I mean product or service. (more…)

This past weekend was the Independence day holiday in the US.  That got me thinking about why I started my business in the first place, and why I bet most of you either have started or want to start your business – independence.

Independence.  From a boss.  From a paycheck.

Today’s Tip is all about a trap that far too many small businesses fall into.  A trap that undermines your independence and puts your business at risk.

The trap is allowing any one customer (or supplier, or distribution channel) to get too big.

Independence means not being reliant on someone else for survival.  The best way to do that is to diversify so that no single person’s actions can harm your business.

A lot of small businesses – especially service businesses – I know get started because they have one big customer, without whom they would be out of business very quickly.  To some extent, that situation is hard to avoid, but is one that should always be watched very closely.  If you find yourself in this position,  getting free from it should be your top marketing priority.

It’s obvious that if one customer accounts for 90% of your revenue and they stop buying from you, you’re in big trouble.  The same is true if all of your products come from one source, or virtually all of your sales come through one channel.  What is a little less obvious is this.  The situation is almost as dire if any one customer, supplier, or channel is responsible for 30% or 40% of your sales.

The rule of thumb I use is to limit any one source to no more than 20% of my revenue.  When anyone controls more than 20% of my income, I start to get nervous.  If they make it to 30%, finding a way to dilute their influence becomes an urgent priority.

Why?

Because, if 20% of my business vanished, I would survive.  Life would become a bit uncomfortable for a while, but the business would get through it.  If much more than that vanished, the survival of my company would be much more doubtful.  I suspect yours would be in trouble, too.

The next time you are looking at your financials, take a close look at where the money is coming from.  If you find too much of it in one place, diversify.

Last week, I talked about not undervaluing yourself by pricing your products and services too low. I suggested that you set your prices at or near the high end of the market. Fear is a natural reaction. I know – I’ve been there myself.

Here are five proven steps you can take to increase the perceived value of your offering – and your customers willingness to pay more for it.

1. Demonstrate the return on their investment. If your service’s primary benefit is that the customer will either save money or make money, this is an excellent argument to use. You need to show your prospect the expected outcome in terms of cost savings or additional revenue. Then show them how much more they’re going to make or save compared to what they pay you. To take this a step further, set your fee as a percentage of what is saved or made. Now you not only show the prospect the ROI, you essentially guarantee it.
2. Tie to price to quality. The belief that price and quality are related is widely held. If you’re selling a product, show that there are higher-quality components that cost more and therefore perform better, longer, faster, etc. If it’s a service, show that the people delivering that service are more skilled and/or more experienced than cheaper alternatives. After all, who would you rather operate on your heart – the doctor who charges $99 or the one who wants $99,000? Obviously, don’t use this “you get what you pay for” argument to justify higher prices if you don’t actually have a higher level of quality, skill, experience, etc.
3. Sell them a bundle. It’s no secret that the easier it is to compare the offerings of two different providers, the more price driven the purchase decision will be. Make it harder to directly compare. For example, you may charge more for your product but also includes additional accessories or extended warranty or service plan that your competitors charge extra for. If you’re offering a service, include a collection of ancillary services that your competitors are charging separately for – or not offering at all.
4. Provide proof. Testimonials can be the key to getting people to pay a higher price. The testimonials are providing social proof to your prospect that your product or service was worth the price. This is particularly important in for a service, where the quality can’t usually be evaluated prior to purchase.
5. Change the frame of reference. Don’t focus on comparing your product to your competitors. Instead, create an even more expensive offering as an alternative. Including the much more expensive option will change the prospect’s perception of the main product’s cost. The idea here isn’t that you expect to sell a ton – or even any – of your super expensive product or service. For example, if you are selling a service for $500, maybe you create a version of the service that you price at $5,000. When you sell to the prospect, talk about making a decision between the $5,000 and $500 versions – not about between your $500 version and a competitor. It goes without saying that the very expensive version better be something you are willing and able to deliver should someone decide they want it. Using this tactic to create a dummy product that you can’t deliver is, at a minimum, unethical.

Always keep in mind when setting your price, that your value in the customer’s mind will be directly tied to price. If you try to be the low-cost provider, you will be seen as cheap. This, of course, makes it very difficult to raise your prices over time. How successful do you think Wal-Mart would be if they tried to sell luxury goods at a premium price?

To your success,

Getting more sales is usually at the top of most small business owner’s wish lists. But how can you make that wish a reality?

Here are 7 ideas to leverage your efforts into additional sales.

1. Follow up.  After someone buys from you, don’t just sit around and wait for them to come back; follow-up with a “thank you” email (or note).  This needs to happen soon after the sale and should not try to sell them anything.  It should simply thank them for their business in a genuine way.
   Your later follow ups (there should be a regular schedule in place) should include an offer of some sort.  The possibilities here are endless – announce a sale, tell them about new products that will be available soon, remind them to stock up on consumable items, etc.
   Your follow up frequency will depend on the nature of your market, the products or services you sell, and the resources you have to commit to putting the offers together.
2. Upsell and cross-sell.  It’s a fact that people who just bought something are much more likely to buy something else.  Use your order page (or checkout counter) to tell customers about a few extra related products you have for sale. They could just add it to their original order.
3. Cross Promote with related businesses. Create a valuable package for your customers by working with other businesses.  Find a business who sells complimentary products and strike a deal to promote each other. The possibilities here are limited only by your imagination.
4. Leverage Product Delivery.  When is your customer likely to be most excited about their purchase?
   When they open the box.
   Take advantage of this excitement by including an offer for other related products you sell in the package. You know that you are talking to well qualified prospects, so this is a great opportunity to get new sales.  The best part is that it costs you nothing to send this offer because the postage or shipping charges are being paid anyway to deliver the purchased product.
5. Get Free Advertising.  Send your customers free products with their product package. People love to get free stuff, particularly useful free stuff.  The freebies should have your ad printed on them. You will get best results if you give away something that will be used (in view of others) regularly. It could be bumper stickers, ball caps, t-shirts, pens, umbrellas, etc. This not only gets your name in front of many more people than you could ever contact directly, but the person using your free item is probably a happy customer. The item with your name on it can start a conversation and give your customer an opportunity to refer someone.
6. Use Gift Cards. Sell gift cards (or certificates) for your products. This is an easy way for current customers to introduce you to people they know. You’ll make sales from the purchase of the gift cards, and when the recipient cashes it in, you can upsell to get them to make additional purchases.
7. Reward your customers for referrals. It’s natural for people to want to tell others about things they like.  You can encourage your customers by offering them an incentive to refer business to you. Just make sure that the value of what you are giving for the referral is less than what it would have cost you to go get that new customer yourself.

There you go. Seven ideas to multiply your sales for little or no additional cost beyond what you are already spending.