All the numbers say that we should be maximising our customer value instead of chasing new customers. But that’s not sexy or fun – after all, it’s the thrill of the chase right?
Well, apparently new customers cost somewhere between 4-8 times more than repeat customers.
We call one of my favourite business models the “Hot-Tub Car-Machine” – because we’ve used it for a Car Broker, and we’ve used it for a Hot Tub Supplier.
Because we had such a fantastic sales experience at Turramurra Cyclery this week, I think I’m going to rename it the “Bike-Tub Car-Machine” Model. (Also – I really want to implement this for a high-end bike shop and be paid in contra).
The Bike-Tub Car-Machine
I get really excited when Benelds has a new client that’s a great fit for the Bike-Tub-Car-Machine model, because it’s just so easy to blow their customers away with great service.
When you get this automation model right, you go from linear growth to exponential – every product you sell becomes a product you can sell at least twice. So bear with me here.
You have a business that’s selling a high value item – an Audi R8, or a Pinarello Dogma F8 (a beautiful Italian road bicycle starting at about $10k that I may or may not like for Christmas).
You make a lot of money from your Audis and your Pinarellos, but it’s a really hands-on sale. Chances are that between the first Audi and the next one, your sales guy has moved on to the next ‘grass is greener’ role with a slightly better commission structure, and your customer has been brainwashed into heading down to the new flagship Specialized Bicycle Store by those good looking girls from the Lululemon-Specialized Team.
So how do you get the next sale? And how can you make it easy for your sales guys?
The secret sauce is that when you’re closing that bicycle or that car, you know the finance, and the warranty term – right?
And even if it’s not on finance, you can reasonably estimate how long that customer would hang on to that product – dare I say it, you could even ask the customer if all else fails!
That’s an expiry date we can capture – now we have our timeline.
Create a home for the end date in Infusionsoft as a date field. Make entering that date a key part of the sales process, whether it’s added to an internal form, a finance application – whatever. It’s a REQUIRED field because it can potentially double, triple or even quadruple your customer value.
Heck, create a saved search of all closed customers with a ‘blank’ date field, and make it an incentivised KPI if you need to.
Ok, so we have the date. The obvious thing to do here is to set a reminder that’s driven by the date.
In the case of the car-broker, how long is it until their finance expires. 3 years? Then why don’t we contact them in 2 years and 9 months to check in. It would look something like this;
Now, of course, you could also throw in some plain-text emails along the lines of
And that’s all well and good, but it’s no good selling a high value item to a customer, ignoring them for 2 years and 9 months, and then asking for the next sale.
We need to give a bit of customer love first. So let’s take that timeline back a bit further.
If, at 2 years and 9 months they’re ready to buy, then at 2 years and 3 months they’re starting to think about the next toy.
This is where, in the case of the car broker, we’d be inviting them to the drive day at Eastern Creek Race Track or the exclusive Audi hosted premiere of the next Bond film.
We can’t invite every customer we have to a drive day, or a ride day; chances are that your number of invitations is limited.
You want to put the best candidates for a new sale behind the wheel of the nicest cars, and we can’t do that if there are a bunch of tyre kickers at the event.
Besides, your best customers want to feel exclusive, not part of the unwashed masses.
Create a task or flag for ‘returning customers’ so that your admin team know who needs to get the exclusive invitations.
You can go down the rabbit hole on counting backwards from that expiry date, giving them all sorts of customer love, but that’s enough to get started.
The third part of the of the problem: how do we bridge the gap between the first sale, and the 2 years and 3 months?
Whether we’re selling cars, bicycles, hot tubs, or decks and pergolas, there is always an element of consumables.
Consumables might be something you do in-house. Bicycle servicing, hot-tub chlorine chemicals, or something you do with a partner; coupons on discount petrol and servicing with a large tyre franchise.
They’re a nice money maker on the side, but most importantly, they’re for staying in touch with the customer.
You might decide that the average car customer needs tyres every 9 months and a service every 6, and you could automate sending out coupons.
You could even upsell a hot-tub chemical or bike servicing subscription, where the chemicals are delivered to their door, or their bike is picked up and delivered back to the office, ready for the ride home.
You could get fancy, and capture the consumption rate of the customer and branch that follow up into different streams.
If you have less ‘exclusive’ events you could throw them into the mix here too – maybe inviting them to ride as part of the bike-shop team at the local mountain bike race.
And don’t forget, because you know what product they’ve purchased, you can focus your customer love. Segment people! Segment!
The Perfect Re-Sale Model
- Capture the expiry date
- Work out how far back to have the essential call from the sales guy
- From that sales guy date, work out when to spend the ‘real’ love – invitations to exclusive events etc.
- Find consumables to bridge the gap between the first sale with the customer and the expiry love date.
Don’t stop there… There’s another silver lining!
Now you have a CRM full of customers, their products, and the date that product is likely to expire in the eyes of the customer.
As a karmic prize for staying in touch with your customers, you have also developed an inventory of 2nd hand goods that have been impeccably maintained (because your sequence was on top of their servicing), accessible on demand, without any stock risk sitting on your shelf, or even a need for storage.
So what happens now, when someone comes in, lusting after that new Pinarello without ‘quite’ the cash for it?
Instead of losing the sale, you have the opportunity to make two.
All you need to do is run a search for someone with last year’s Pinarello in the right frame size, or with an approaching expiry date, pick up the phone and kindly let them know that you have a lovely customer who would be more than happy to take it off their hands and that at the same time you can put them onto a new one at a great price.
You can now give the new customer a 2nd hand bike that makes them grin, and win them for life because they got into their dream bike a couple of years before they could afford a new one, instead of being bunted out the door.
So the new customer not only bought a 2nd hand bike through you, but also allowed you to resell another premium bike to the original customer, and you made your margins on both sales.
That first bike you put into your CRM became 3 sales in the long term- plus all the consumables.
#Winning. Now… anyone know a bike shop for Benelds?