Is it any wonder that 95% of businesses go out of business after 5 years? It isn’t to me because I talk to so many business and they don’t even have a system in place to make sure their customers are repeat customers.

So many businesses run to the next customer like a gold miner blasting for that next vein of gold. Although I agree that every new customer can bring with them exciting new opportunities it could be a fatal mistake. It could be a big mistake because all too many businesses fail to take care of the gold strike they just had.

The most expensive part in many businesses is customer acquisition. Some companies don’t make a profit until they have made a second or sometimes even a third sale. I think Dan Kennedy says it best when he said most companies get a customer so they can make a sale where as Dan recommends you get a sale so you can make a customer.

This is a different mindset from most companies but it is very powerful. It takes time and money to get new customers but for a little extra effort you can make your customer a customer for life. In fact I call it my 9th  World Wonder of The World that of ‘Compound Customers’ Just like compound interest grows so do customers if cared for properly. I go into this concept in Compound Customers.

To break this down in its simplest of terms lets say you acquire a customer that buys a $100.00 product or service from you and your initial advertising costs are $50.00. To keep it simple lets say you still made a profit of $10.00. So for every $50.00 you spend on advertising you get $10.00 profit so it pays to buy as many customers as you can at $50.00 each.

Here is the spot where so many small and even bigger companies miss the point and can sometimes pay the ultimate price in failure later.

They get so busy making their $10.00 profit per sale that they miss the big dollars.

If they spend just a little bit more time and money making sure that each customer is just absolutely blown away by customer service and experience and institute a way to keep in contact with that customer they have now increased their profits by 500 %. In addition to a substantial profit increase they have also made their business much more competitor proof.

This sounds so ridiculously easy and yet most companies are not taking the time to set up this money machine printing press way of doing business. Competition changes and markets can become more competitive but if you have taken the time to build and maintain a good relationship with your customers you will be way more profitable than your competition and they will be left scratching their heads.

I think it is said that a rocket uses ¾ of its fuel getting off the ground and ¼ to get to its destination. It is the same with your business. All the hard work has been put into customer acquisition so why not take the easy street of customer satisfaction to propel your profits into the stratosphere?

Several more reason you will want to develope repeat customers are as follows.

1. Repeat customers are less price sensitive.

2. Repeat customers already have a relationship with you and know what to expect.

3. Repeat customers will tell their friends and that is even more business for you that cost you next to nothing and they won’t be as price sensitive either.

There are companies now that are starting to realize just how important it is to focus on repeat customers and some are putting their old advertising budgets into customer service and getting a much better return.

I have seen companies make substantial increases in revenue each year with zero advertising budget just by making sure their customers become cheerleaders for their company. In fact one of our franchises and now a second spend no money on advertising and continue to grow exponentially.

I can also say the reverse is true and that is if you are not creating repeat and referral customers on a continuous basis I don’t care how much money you have for advertising your time will come to shut the doors. I have seen this happen more times than I want to count.

Remember ‘What You Focus On Grows’ and if you focus on customer cheerleaders, repeat and referral customers your success is assured. It is the Law