Work Your Customer List First
The first thing you should do to improve revenues and profits is to work on your customer list. However, there are situations where going outside may be more lucrative. It all depends on your situation.
Once you determine the lifetime value of your customer, you’ll want to spend as much money as you need to, but never more than a lifetime value of the customer, to get as many new customers as you can.
For example, if the lifetime value of a customer is $50 per year and you don’t do anything to sell them a second time, you have a limited budget. However, if you can upsell them to $75 and you can get them to three purchases a year ($225), all of a sudden, you have four times the marketing budget.
When you have four times the budget, you can run ads when your competitors can’t, you can offer lucrative sales commissions, you can do promotions when competitors can’t, they don’t understand where the profit is, but you do.
Next, you can “out package” your competition.
You can add more products or more value to your proposition to get new clients. Find and talk to a joint venture partner and explain the concept of “lifetime value.” By explaining the concept of “ lifetime value, “ you can convince them to give you (either free, for cost, or less than cost) products and services with a high perceived value and high-profit margin.
They will give you these products because you will be able to convince them that for every ten people you give their product to, as a bonus for buying your product, they’ll get two or three new clients with potential long-term, ongoing revenues. This idea will enable both of you to do incredible deals. You both get more clients with a potentially good lifetime value.
However, you’ve got to give them the information they need to embrace the idea. Walk them through your proposal and acknowledge and identify all the inherent negatives and fears and then overcome those fears. When they understand how the backend works, it will make sense to them.
Another Strategy Is To Joint Venture With A Competitor
The idea is to acquire a competitor’s customer list that they don’t recognize as valuable. Ask them to give you the names of their inactive customers or ask for the customers who have canceled. Or that they couldn’t convert. Offer to reciprocate with a dollar amount per name or share of the profits.
Your competitors may have spent thousands of dollars building their list. For you to share your profits with them will save you time and money. And for them, they would never have tried to reactivate these people or customers. So from what they saw as lost customers or prospects, they could now make thousands of dollars quickly.
Conclusion
These are ideas to think about. You can modify the types of companies and products (offerings) in many different ways. If you use this strategy.
Let us know how it works.
