If you're like most business owners, your answers are probably a) Not enough and b) All of them. What about former customers? How many do you have and how many would you like back? Probably a) Too many and b) All of them. And finally...how about prospective customers? How many do you have and how many of them would you like to become a customer? I'm guessing not enough and all of them!
This post is all about the 60:30:10 Marketing Plan and is my take on how you should be spending your marketing dollars. It's based on a few different things I've read.
You should spend 60% of your marketing budget marketing on your existing clients, 30% on your former clients and only 10% on looking for new business. Why is that?
According to
Small Biz Trends:
The probability of selling to an existing customer is 60-70 percent. The probability of selling to a new prospect is 5-20 percent.
That's because your existing customers already know, like, and trust you and your product and/or service. And the same with your former clients...unless something bad happened, you should be able to sell to them fairly easily if you can get them to come back.
Also from Small Biz Trends:
80 percent of your future profits will come from just 20 percent of your existing customers.
The
Pareto Principle in action again. A lot of experts say you should fire your bad customers, but unless they're really abusing you or your business, it often takes time for customers to develop:
The average repeat customer spends 67 percent more in months 31-36 of their relationship with a business than they do in months 0-6.
An article in
YFS Magazine (Young, Fabulous & Self-Employed) states:
Leading experts recommend that businesses spend 75% of their marketing budget
to retaining existing customers (and re-engage them). Yet surprisingly,
most companies do the exact opposite. Even larger corporations like Max
Factor cosmetics and Target (not just the little SMBs) make the mistake
of spending too much money chasing new customers (or ones that have
left) and often ignore their existing ones.
They didn't say much about marketing to former customers, so I modified their percentages to come up with the 60:30:10 Marketing Plan.
Also from YFS Magazine:
Every dollar spent on direct marketing to retain existing customers is actually worth fifty times the equivalent amount spent chasing new customers. With above the line advertising
(traditional mass media advertising: newspapers, television, radio,
outdoor, Internet), it is very hard to capture the attention of new
customers, embed your message in their mind and compel them to act.
It is much easier (and cheaper) to reinforce your message with an existing customer and encourage repeat visits.
And some additional tips:
- Spend 75% of your Marketing Budget on Existing Customers
- Prepare to Maximize Return on Investment (ROI)
- Realize that Frequency Lifts Sales by 75% More Than Upselling
- Brick and Mortar? Focus on Customers Within a 6-mile radius
One of the best ways to market to existing, former, or potential clients is with direct mail and the best way to use direct mail is with
SendOutCards.
"How much will this cost me?", you may be asking. If you use only SendOutCards in your marketing, which many people do, you can expect to spend $40 per year per existing customer that you'd like to retain plus $400 the first year. Remember...60% goes to existing customers, 30% to former customers and 10% to potential customers. As an example, let's say you have 100 customers...your costs will be $40 per customer, $4,000 for all 100. That will cover 9 cards to each of your 100 customers, 9 cards each for up to 50 former customers and 9 cards each for up to 17 prospects. Seven of the nine cards are automatic...you just add the person's name and birthday and they'll automatically receive a birthday card, a holiday card, a Thanksgiving card, plus a card for each of the 4 seasons. You can add one or two of your own marketing cards to go out when you want.The $400 will get you setup in the system and will include your own handwriting font, four signatures, the ability to put custom branding on the backs of your cards, and more.
"What about after the first year?". It's even better...$100 plus $40/customer. That's for the entire year!
You can also include gifts with your cards. Check out this
video of some of the cool gifts we have available and who you should send them to.
For more information, check out this
blog post from last month and feel free to comment,
email me, or call or text me at (707)685-1382.
Interesting days
Today -
Violin Day and
Hot Cocoa Day
Tomorrow -
Bouillabaisse Day,
Monkey Day and
Roast Chestnuts Day
Next Wednesday -
Sangria Day,
Go Caroling Day and
Games Day
January 13 -
Make Your Dream Come True Day,
Peach Melba Day,
Rubber Duckie Day,
Public Radio Broadcasting Day,
Skeptics Day and
Sticker Day
Posts
BIG NEWS! Visa Gift Cards are now available for your sending! In multiple denominations, ($10, $25, $50, $100), you are sure to find just what you are looking for. And not to mention, it is the perfect gift for anyone that is hard to shop for during the holiday season! Fees may apply when using outside of the U.S. Visit the 
