Industry expert Bob Graham Gives Simple Advice in a 2-Part Series on how to advertise on a shoe string budget. Graham is Director of Marketing at Promotions that Work and is a past President of MERA (the Mobile Electronics Retailers’ Association). He founded the Breakers Mobile Electronics store in Oxnard, CA and has over 45 years experience in retail.
Smart advertising gets the best results! In fact, in this economy smart advertising and promotions can make or break a small business! If there is a budget for marketing, use it to invest in existing customers with some form of customer appreciation. Showing a little bit of gratitude to customers will get the best return on your money!
I speak from experience when I tell you that I started a mobile electronics store on a “shoestring” budget of $5000 and built it into one of the most successful car audio stores around by “mining the gold” out of my customer data base. These things that I write here are not abstract theory in advertising and promotion but things that have been used and proven successful, not just by me but by some of the most successful specialty retailers in the country.
I have never understood why most businesses spent so much money to get new customers in the door but once sold, I guess, they figure the deal is over. But, it is not! Let me help you out here. That is not the way to specialty retail.
Once you have sold John Q Customer, he is a pretty darn valuable guy. Why? Because, if you have treated him right during the sales process, then take the time after the purchase to make him feel appreciated, he may become the best sales person you’ve ever had!
Show some love to that customer and he will recommend you to everyone he knows. Why? Because you “stick” in the customer’s mind by “standing out” from other retailers. Showing real appreciation is rare in today’s retail environment. Eddie Kay, who has written some of the best books about specialty retailing, says this, “All things being equal, your customers will buy at the cheapest place.”
In today’s market if it costs at least a few hundred dollars to get a new customer into your store then it only makes common sense to keep your existing customers happy and returning. They will, in turn, send in new customers at a fraction of the cost of “fishing” for new ones. Reaping the profits from grooming your customer/client relationship is very smart advertising.
Many surveys have been done to discover why customers leave a business, not to return. The results are repeated in books, columns, and on various web sites so recently I took the time to compile them.
Before you read the results, take a guess as to what you think the number 1 reason customers leave a place of business and do not return?
Here are the results;
Why Customers Leave:
1% Death
3% Move to a New Location
5% Buy from their friend
9% Sold to by Your Competitor
14% Product, Price, Service
68% Perceived Indifference
Notice that “Perceived Indifference” is, by far, the number one reason customers go elsewhere. So, let’s take this one more step and find out how you can show your appreciation without impinging on their privacy. Recently a survey was done to discover what that is.
Which way do customers prefer to be approached after the sale?
40% Thank you card
16% Special event card
12% Phone call
12% Thank you E-mail
8% Special offer
8% Discount
4% Gift
As you can see, the most popular form of customer appreciation is the “Thank You” card. Consumers want to feel appreciated when they make a purchase at your business, so show some LOVE by sending them a simple “Thank You” card after the sale! Then mail your customers something every couple of months to remind them who you are and what you do. This not only communicates that you remember and appreciate them but invites them to become an “insider” to your business. An “insider” is the feeling of belonging to a group where one gets special treatment and favors. This customer will now practically drag others in to your place of business as long as he feels appreciated and an “insider.” You can further develop this by forming an “Insider Club” that invites customers to join and receive discounts, special deals or whatever your imagination can muster. Coming up with new ideas on how to work your customer data base is truly like mining gold.
Source: Promotions that Work
Bob is right on in that the most valuable asset you have is your existing customers. Communicating with them through thank you cards and direct mail is the best way to grow your business. I should know, he has helped me grow my business 150% since I met him 10 years ago!
Great info! But I would have to say every market may differ… About 60% of my business comes from the local University. My shop is located in a small College town. These customers should also be thanked after the sale. But… Sending them a thank you card is not a great option. They won\’t get the mail… And if they did… They would not read it! We are talking about Today\’s students (2012) who do almost everything on a laptop. Paper equals garbage to them! For Older and local customers… The thank you card may work. Just not for a 18-25 year old college student. Facebook, twitter, email, ect… Is far better! The most important thing is to keep it personal! Not just a generic thank you. If you don\’t know enough about your customer to reach them on a social network or email? Then you haven\’t done your job of creating a repeat customer in today\’s market. Again… If your clients are local and over 30… Then the \"thank you card\" CAN work. Just know your market and your demograph. But no sense of spending money *especially on a shoe string budget* on things that don\’t work. I think the overall message here is: Be sure to thank your customers, be sincere, and try to stay in contact with them from time to time. Anyway… Great tip from Bob G!
On a side note: I started my business with $10,000 in the year 2000. 12 years… And 5 expansions later… I still have the most innovative and driven 12volt shop in the area! Proving that even with limited funds… If you have a dream, a vision, drive, faith, and some common sense… You can succeed!
Here\’s to a banner year! Best of luck everyone and happy 2012! -Joey
Thanks for the comments.
I did want to clarify 1 thing. Adjusted for inflation, $5000 in 1976, when Breakers was founded, would be about $19,455.25 in today’s money.
I have known Bob for many years. He is a promotional animal and he knows his stuff. As far as budgets go; Everything he suggests is scaleable to any size operation. How much does a postcard to a current customer cost? The ROI is MUCH greater than prospecting for new customers. Call him! Put him on the spot to explain his suggestions. As a long time small retailer, I can tell you his programs work.
BRAVO !!!
I perceive you have nailed it. The ONLY asset a specialty retailer owns is a long term profitable relationship with the consumer. That consumer should be considered a force multiplier of the retailer’s sales staff.
I suggest that your readers take a few minutes and review how they are perceived by their consumers. Then it is a good idea for the reader to visit a specialty retailer in some other business; restaraunts and hotels (hospitality business) are great resources. When the reader has a great experience at such a place he can try to replicate that feeling for his consumer by barrowing from that experience and molding it to fit his consumer.
None of this stuff is rocket science. BUT it has to be DONE if one expects results.
Ray Windsor
German Maestro
Who is Bob Graham? 5000 was like 50,000 45 years ago. Hardly a shoestring budget.
Hi Bob. Bob Graham was on the board of MERA for many years and has been very active in helping car audio retailers around the country. If everyone put as much time and energy into retail best practices as Bob, the industry would be much better off.
Bob served as Secretary/Treasurer of MERA from 1997 – 1999, Vice President from 1999 – 2000, President from 2000 – 2002 then again as President from 2004 – 2006.
He was on the CEA mobile board as liaison to MERA from 1998 until 2006.
Best,
Amy