It’s possible that one of the worst things your marketing can do is attract thousands and thousands of customers to your business.
Sounds a bit silly, right?
Let me explain…..
I had a client. He is a landscaper. Hardworking, experienced and expert. He employed just 1 fellow and they had been in business for years. We surveyed his previous clients and found less than 1% found him through his Yellow Pages advertisement. That ad was his only advertising avenue.
And he received many, many enquiries from his Yellow Pages ad.
It almost destroyed his business!
That Yellow Pages ad was the worst thing he ever did. I can’t remember the exact numbers but they were something like this.
5 people a week rang him after finding his business through the Yellow Pages. They all asked for quotes on some landscaping job or another. He did his best and went and saw every single person.
- Preparation time was 15 minutes.
- The average traveling time was an hour.
- The average meeting time was 30 minutes.
- The average post meeting work was an hour to put the quote together.
- His costs for each quote (petrol, paperwork, etc) was $32.
So, 260 times a year he would see these people who contacted him after seeing his Yellow Pages ad. That added up to almost 14 hours a week. And $160 per week in hard costs.
In our assessment we found that enquiries generated from the Yellow Pages advertisement were the least likely to result in a sale. The main reason for this was two-fold:
- The Yellow Pages prospects were tyre-kickers. That is they were just searching around for low prices and they weren’t committed to buying.
- Business is about relationships. People will more readily buy from those they know and those they have recommended to them. That doesn’t happen with the Yellow Pages.
Put simply, your business must attract qualified prospects. And by qualified I mean prospects who
- are highly likely to become customers, and
- will pay their bills.
Sure, the Yellow Pages were attracting a lot of prospects to my landscaper client. But these prospects were slowly destroying his business by wasting his time and money.
As soon as he stopped the ad (he actually made it just a line rather than a huge ad) and allocated the money elsewhere, his business boomed.
The best customers
I’d like to take this article a little further here and talk about the best type of customers. It’s been our experience that the best type of customers are these:
- they pay their bills on time
- they recognise the value we provide
- they understand we are the experts at what we do
- they are long-term clients
- they refer others (and the others they refer are usually great clients as well)
What all that adds up to is this: clients who are low maintenance and high profit. And these clients, not coincidentally, receive fantastic value.
You can bank on it
Banks are a good example of knowing who gives you the profit. Banks took a look at their customers and figured out that the customers with high balances, who used the ATM and Internet banking and who didn’t come into the branch were the most profitable (between 100-150% of the profit!).
People with small balances, who came into the branch constantly and who regularly complained about minor issues were the least profitable. More than that, they were actually a loss for the bank.
So that’s why the bank encourage people to use ATMS and the Internet. That’s why they close branches. And that’s why they charge transactions fees.
And that’s why people with small balances, who come into the branch regularly and who have lots of transactions leave. But, from the banks perspective, that’s not a bad thing.
Attracting the ‘right’ customers
Marketing must be about attracting the ‘right’ customers to your business. I’m sure I’m not telling you anything new here when I say that most businesses have stories of customers who simply aren’t worth the trouble.
Take care in presenting yourself to your market. It can be the difference between struggle and success.