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Building Profits & Client Base Two Sure-Fire Strategies

Building Profits & Client Base Two Sure-Fire Strategies. Julia King Tamang LERN P TACE 2009 www.lern.org. Reality check. Consider the establishments you frequent the most What keeps you coming back for more?. MacDonald’s knows it. Your grocery store knows it. Apple Computer knows it.

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Building Profits & Client Base Two Sure-Fire Strategies

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  1. Building Profits & Client Base Two Sure-Fire Strategies Julia King Tamang LERN P TACE 2009 www.lern.org

  2. Reality check • Consider the establishments you frequent the most • What keeps you coming back for more?

  3. MacDonald’s knows it

  4. Your grocery store knows it

  5. Apple Computer knows it

  6. You’re about to learn the secret

  7. Strategy number one • More frequent transactions per customer

  8. How do you get them to come more often? • Mail to the right people, more often • Use your in-house list • Hit past participants 3 times • Hit other ‘best customers’ three times, too

  9. Other repeat strategies • Discounts • Certificate programs • 20% new classes minimum • Building more for the right people • Talking to your customers in focus groups • Giving them what they want, when they ask for it

  10. Know your repeat rate 2009 Clients 2010 Clients 3050 15Clients from 2009 purchased in 2010 15/30 = a 50% Repeat Rate Goal: 50% to 75%

  11. It’s 10 times more expensive to get a new customer MAILING RESPONSE RATE AMOUNT 600 past clients 10 % 60 3,000 prospective clients .5 % 15 • Assuming the cost of each promotion is $3.00, the following is the cost to get a new client versus retaining a past client. • $3.00 X 600 = $1,800/60 = $30 • $3.00 X 3,000 = $9,000/15 = $600

  12. Know the LifeTime Valueof your clients x average contract fee 1(1 - repeat rate) 1(1 - .50) x $5,000 = $10,000

  13. If you can increase the repeat rate, you will increase the LifeTime Value 1(1 - .75) x $5,000 = $20,000 *If you can increase your average contract rate, you will increase the LifeTime Value 1(1 - .75) x $7,500 = $30,000 Repeat customers generate customer referrals, which generate additional income.

  14. Client strategywhere to expand Current Clients New Clients Existing Products This is what you have now. You have existing products for existing clients. Here’s a good way to expand. Take an existing product to a new audience. 1 3 New Products Here’s a good way to expand. Create a new product for your existing clients. Here’s a poor and risky choice. It is extremely difficult to succeed by creating a new product for a new audience. Stay away from this option. 2 4

  15. Strategy number two • Increase spending per transaction

  16. How does MacDonald’s do it?

  17. Try these proven options • Add additional services • Add optional services • Add VIP services • Add materials options • Add teacher contact options • Add individual interaction options • Add facility use options

  18. Amazon.com does it

  19. Get your registration staff to sell

  20. Get your teachers to sell

  21. Spin off your successes Pick a successful program Spin off more classes Spin off events Spin off materials Spin off webinars Spin off an online cohort Spin off one-on-one help Spin off clubs Spin off memberships

  22. Making money should be FUN Because giving customers what they want is fun.

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