New customers not the only route to increased profits
While not taking anything away from the importance of new customers, current customers are often overlooked as a source of increasing sales.
How can this be? I think a major reason is that many businesses find it easier to track new customers than tracking increased sales from current customers. Businesses reward employees where data is available (i.e. attracting new customers) and, therefore, employees focus on new customers.
However, not looking at current customers as sources to increase profits is a mistake. By their very nature, current customers have an established relationship with the business... thus costs of their acquisition is lower than attracting someone that is not a customer.
Dropping by a Starbucks one morning last week the sign above was prominently displayed (along with similar wording on the receipt). This "come back again later today" promotion has multiple potential benefits to the coffee chain:
- Starbucks increases sales by bringing traditional AM customers back in the PM.
- Starbucks gets the profits of the drinks ordered in the PM ($2 promotion price - actual cost associated with the drink = profit).
- Builds the habit of stopping by Starbucks after 2 PM even after this promotion ends.
The question is how can your business attract more purchases from current customers?