Everyone needs an Elaine.

Not Elaine Benes (from Seinfeld) – the Elaine I’m talking about came up in a discussion at the workshop I did this morning for the Overland Park Chamber on marketing to your existing customers.

The discussion was on the importance of employees carrying out your key marketing differences to your customers -really representing all of your best values and qualities to give ‘Wow’ service.

One of the participants was from Grandma’s Office Catering and she used the example of one of their caterers (Elaine) that was a perfect example of what we were talking about.  Elaine not only had a great attitude and made everyone smile, she was also reliable, on top of her responsibilities and a great ambassador for the business. 

Elaine gets customers to call in and rave about how much they like her, even when she’s just doing her job.

So how do you get your own Elaine?

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Picture by Prettywomen_1969 

If you’re an established business (i.e. out of the start-up phase), there’s a pretty good chance that you’re making a major mistake that’s costing you a lot of money.

You’re setting a goal to grow next year – maybe you’d be happy with a 10% top line growth.  With that in mind, you start building your marketing plan and think of all the ways you can spend money to attract the new customers you’ll need.

Of course you’ll need add quite a bit more than 10% of your current revenue base to get a net growth of 10%, what with customers leaving you or spending less…

Wait – does that make sense?  You’re going to spend a lot of money on getting new customers (there’s been several studies that show that new customers typically cost 3 – 7 times more to acquire than keeping an existing customer would cost).

How much are you going to spend on keeping those existing customers?

If you’re like a lot of businesses, not much at all – and that’s the problem.

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I just got back from a cool night out at the new Power and Light District in downtown Kansas City.   We had a chance to visit the newly opened Vinino’s Restaurant, hear from the Cordish Group on the approach / philosophy on marketing for the district.  We also had a chance to take a 4 or 5 block tour of the district with a preview of what attractions are coming in in the next few months.

Overall it was extremely impressive and I think everyone should be really excited about the potential for downtown Kansas City.  They are truly building a top notch destination that everyone is going to enjoy and be proud of.  There’s going to be a really interesting mix of events, venues and destinations that should make it a fun place to visit often. Read More…

I’m on a newsletter list for The Simple Truths which is an online company that specializes in inspirational books and CDs for the workplace.  The owner, Mac Anderson, was previously the founder for Successories and has taken a similar approach with books and movies that was so successful with motivational prints.

They have a great article (part of a chapter from one of their books) that focuses on the intangibles that makes the difference between customer service and a fantastic customer experience! 

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I ran across this quote from Scott Adams (Dilbert Creator) and got a chuckle from it:

“If there are no stupid questions, then what kind of questions do stupid people ask? Do they get smart just in time to ask questions?”

Scott Adams

Of course as teachers down through the ages have suggested, the only stupid question is the one you didn’t ask (although having been in a number of corporate all hands meetings, I’m not sure I agree with that…).

So if the stupid question is one you didn’t ask, what stupid questions regarding your business are you guilty of?

Have you asked your customers what they want from you?  Lately?

Have you asked where the growth in your business is really coming from?

Have you asked how you should best spend your marketing money – primarily on existing customers or on new acquisitions?

Although it doesn’t seem like it, this is leading to something. (no really…)  These are hard questions – and not likely ones that you’re currently asking, but I believe that you should be asking them.

As an example, take a look at this Blog entry from the Inc. website:  Do you focus on your Existing Customers?

Although it’s a short post, they make some great points about the criticality of Customer Service:

1. It’s substantially cheaper and easier to get existing customers to buy from you than to get new customers to buy from you.
2. Most businesses focus their efforts on acquisition rather than expanding sales within their base.
3. This particular example indicates over 75% of revenue comes from repeat customers.

It’s not explicitly mentioned here, but generally new sales come with reduced margins and are generally less profitable.

This ties in really well to an ongoing conversation I’ve been having with a Sales and Marketing Analysis company here in Kansas City.  The crux of it is that it’s pretty common for 80% + of revenue to come from the top 15% of your Customers and that your best bet to grow your company is to get your existing customers to buy more of your products (rather than getting new customers in the fold).

Obviously you don’t want to take this to extremes, but allocating your marketing budget at least partially towards your existing customer base will likely go a long way towards increasing your bottom line.  It’s not the traditional line of thinking, but there’s a lot of common sense to it.

And building your bottom line is never stupid…!

What Stupid Questions are you not asking about your business?  How do you treat your customer  base today?  Please share your thoughts here.

Shawn Kinkade  www.aspirekc.com