The growth claims that I am about to make here are pretty big and audacious but, I can assure you we will be covering things that are all based on math, science and logic of business growth. These points are not just my personal opinion. They are so powerful it could change the way you do business forever. If you do the techniques discussed correctly then they will work 100% of the time.
Enough talk lets get to it.
My big wild Growth claim: “You can double your business without finding any new customers”
What I am about to teach cannot help you unless the following is TRUE about your business:
1. You have some existing customers now
2. You do great work
3. You have integrity
4. You desire to grow-Your business relies on repeat service OR referrals to thrive
I like new customers just as much as the next guy but I learned some amazing secrets over the last decade running several successful companies. The Lifetime Value of a customer relationship is worth 10X+ the Transactional Value. Constantly chasing new business is hard, expensive and exhausting.
My first real business was a cleaning company that I founded in 2008. It started out very small but eventually grew to producing over $150,000 per month in revenue.
I ended up selling that business and moving to Costa Rica with my family which has been an amazing experience.
With that being said, I can tell you with 100% certainty that the biggest reason ALL of this was made possible was due to “Relationship Marketing”
(What is relationship marketing? It’s simple, really. When you properly invest in the relationships most important to your business like VIP customers, influencers, employees, etc, you reap a HUGE financial benefit from it. That is the essence of relationship marketing)
Lets talk numbers
When you spend $1,000 on marketing/advertising it is pretty easy to see if the investment was worth the effort and the cost, right?
When you invest $1,000 into relationship marketing with your VIP clients, your employees or people who have referred you business, it can be more difficult to understand the ROI.
I can tell you this, it is HUGE.
Lets talk about “Repeat Rate”
for a moment.
If you have a company whereby you offer a repeat product or service the science and math of repeat rate is probably the single most important business metric you could ever understand.
Having a low repeat rate is the primary cause of a small business getting “stuck” and not growing. This reason is simple. For every new client you bring into your small business you are losing a past client without realizing it.They move on.They forget your company name.They connect with a new similar company.
Because there is no established relationship there is nothing “sticky” about your business. You are just another provider in a sea of providers.By neglecting relationship marketing you are essentially turning your business into a commodity and whenever a new shiny offer is presented to your client they jump on it.
Brand loyalty and personal relationships with your clients is the key to fixing this issue.
Your current book of business is like a bucket. You pour new clients into the top in an attempt to fill up the bucket. You spend your money and time trying to find ways to keep the water flowing into the top of your bucket. This is how 90+% of small business operates but there is one small problem.
There are holes in your bucket.
Past clients are leaking out just as fast as you find new ones and this simple fact is the reason your revenues and profits are staying flat.
New customers are important but only after you plug the holes in your bucket.
Look at this graph tracking two identical businesses over time. They have the same number of customers to start with. They offer the same services and both get the exact same amount of new customers every month.
Here is the only difference:
Bob does not invest in relationship marketing which result in many more holes in Bobs bucket.
Mary decides to invest 5% of total revenue back into relationship marketing and has far fewer holes in her bucket.
The results are astonishing.
After 1 short year you can see that Mary is already up $38,000 in revenue from Bob. This number is AFTER accounting for the expense of her relationship marketing.
5 years into their journey Mary’s business is cranking out more than 2.5X the revenue of Bobs.
Finally after 10 years of implementing this simple strategy Mary hits almost $8,000,000 in revenue against Bobs $1,000,000.
If we are honest with ourselves and just slow down for a moment, it is easy to see why this makes sense.
Mary is creating massive amounts of goodwill, trust, love and loyalty with her brand. Bob is just another commodity.
Relationship marketing with customers always results in a higher repeat rate, more referrals and a much more “sticky” small business.
Author Emmet Murphy shows in his book, Leading On The Edge Of Chaos, that reducing customer defection by only 5% can increase profits by at LEAST 25% and as much as 125%.
Relationship marketing with employees always results in a higher level of job satisfaction and more productivity.
In fact, according to the Gallup State of The American Workplace Report your employees will experience a 240% boost in performance just because you engage them and show you care.
Why does this work?
The reason relationship marketing is so effective is easily explained by well established psychological science experts. In 2010 the APA (American Psychological Association) did a study called “A Little Thanks Goes A Long Way: Explaining Why Gratitude Expressions Motivate Prosocial Behavior”. This study shows in great detail the power of triggering what is known as the “Gratitude Effect”.
To put it simply, when you express genuine gratitude to your clients and staff, really good stuff happens.
The Gratitude Effect is a powerful trigger in the brains of your customers and causes them to feel compelled to continue the relationship.
This is not about manipulation, rather, it is about relationships and being intentional in the way we engage our most important business assets, our clients and our team.
Are you being intentional in your most important relationships?
Most people feel a sense of pride and thankfulness when thinking about their employees and customers, but very few take the feeling they have and execute on the actions required to move the needle for their business.
Thinking warm and fuzzy thoughts does not help your business but doing warm and fuzzy things does.
My assertion is that we all stop looking at our customers as a Gazelle to be hunted down and consumed.
You are not a Lion looking for a meal when trying to drive revenue yet that is how we behave.
Start looking at yourself as a farmer and not a hunter.
Each customer you have is more like a tomato than a Gazelle. If you water the plant and nurture it you can have hundreds of tomatoes over many years from a single plant! We need to shift in the way we view sales and business growth with a stronger emphases on retention and loyalty. How do you get started with relationship marketing? The good news is that it couldn’t be simpler.
Follow these steps to make it easy on yourself and start plugging the holes in your bucket.
1. Keep It Simple
2. Find an easy way to stay top of mind all year long with your customers by creating a drip campaign.
3. Find a way to keep your employees motivated and encouraged throughout the year by investing in them periodically.
Some of the things that you could consider using to “touch” your important relationships are:
- -Thank you’s
- -Email newsletters
- -DIY tips to add free value to the relationship
- -Appointment reminders
- -We miss you postcards/emails
- -Gifts for referrers
- -We appreciate you greeting cards for staff
- -Surprise letters of gratitude
- -Follow up phone calls on a pre-determined basis
Make a list of all of the different relationship types you have and need to invest in. These can include customers, employees, influencers, referrers, etc.
Next, create a simple year long strategy for each relationship type. Your strategy could be a combination of the above mentioned
However you decide to proceed with your plan just make sure you put it on the schedule and actually follow through.
It can be a challenge to stay on top of things like this, but it is completely doable if your focused on making this a priority.
To make things even easier I developed software that solved all the above ideas in one easy to use solution for my own business. With Sendjim.io
we were able to automate the Gratitude Effect with ease.
Regardless if you try SendJim.io
(and you should) it is critical that you wrap your head around relationship marketing once and for all.
Don’t be like Bob and spin your wheels for years chasing moderate growth when you can set your business up to be a rocket ship.
Stop focusing on new business without having a plan in place to retain what you have already got.
Nevertheless, it would be very interesting to hear what your thoughts about the Gratitude Effect. How are you instilling Gratitude in your customers?
What would you accomplish if you knew how Gratitude when implemented properly would spread like wildfire in your market?
In case you’ve got interested in Sendjim.io
, you can get a FREE demo and send out your first Cards, Gift Certificates, Greeting Cards, or BROWNIES today!
Now get out there and start loving on people. Start triggering the gratitude effect in your most important relationships by being intentional about your follow up.
Joshua is the co-founder of SendJim.io
and he built and sold two successful service companies previously. He lives in Costa Rica with his high school sweetheart and 4 high octane kids. Learn more about Josh on his podcast HERE. For more small business tips and trainings from Josh visit HERE.