Regardless of whether you’re a yoga teacher, a graphic designer, a lawyer or a professional clown, your business bucks come from these three factors:
- Leads (people interested in what you do/sell)
- Conversion (your ability to take those leads and compel them to make contact and become customers)
- Retention (your ability to keep your clients using your business and to keep coming back – with their friends)
I’ve worked in and with small businesses my entire life and most businesses suffer from the same obsessions and neglects – people are fixated on leads. I am constantly asked about Pinterest, Cudos deals, Instagram, flyers, Google Adwords, Facebook advertising, Facebook pages, status updates, Facebook offers, and the latest-and-greatest-most-definitely-totally-effective-and-whizz-bang-shiny thing.
I am rarely asked about conversion, which justifies the time and money spent on all the above items.
I am never asked about retention, though I will talk about it regardless.
Conversion is all about communication
Communication is absolutely essential in business. You must, MUST know how to effectively and compellingly communicate the value of what you offer, you need to establish credibility with your prospects, you need to speak to their deeper desires and get to the heart of what you do and how it helps, and then – a most essential point – you need to ask them to buy.
Conversion happens on your website, in your email newsletters, through your flyers and printed materials, on the phone and in person. Online and offline communication are both essential and important. People tend to be better at one than the other, though I don’t think there’s a reason for this other than being more familiar, and hence, more practiced, at one.
If you’ve got a whole lot of leads (through your special magical shiny marketing thing), and you aren’t able to effectively convert them into clients, well, that’s just wasteful.
Retention is all about communication
Retaining your clients and inviting them to purchase more frequently and spend more money per purchase makes good business sense, as well as being efficient. Various statistics measuring the cost of retaining versus the cost of attracting new clients start from five times – it costs at least five times as much to attract a new client (your marketing costs and the rate by which people aren’t converted) as it does to retain your existing clients.
Of course, your existing clients are plagued by the shiny object syndrome too. The new competitor opens nearby, someone tells them that green juice isn’t as good as purple juice, and off they run. A good slice of your marketing budget should be given to retaining your existing clients. You might host a regular, free lunch/dinner/picnic/cocktails/party. You might give a generous discount to workshops or events. You might give them a surprise gift in their fifth order. This stuff is fun because generosity feels good.
Leads are about …
Hey, hey! It turns out leads are all about communication too.
Your marketing needs to connect with your target audience (or better yet, your ideal client) in sufficient numbers to take into account that you won’t be able to convert 100 per cent of them into clients. (I’d love to be wrong on this.)
If you’re hoping I’m going to give you the secret-special-shiny-lead generating tool, then I’m sorry to disappoint. We all want a steady stream of leads into our business. I’m a bit fan of the slow and steady – the newsletters you can set your calendar by, the regular social media updates, regular business blogging. And not putting all your eggs in one social media channel basket – a healthy marketing strategy involves a combination of things that may include networking, sponsorship, flyers, expos, online and offline advertising and public relations.
And maybe a gratuitous event or three. (Gimmick-free of course.) I don’t have the latest-and-greatest-most-definitely-totally-effective-and-whizz-bang-shiny thing. If you want to effectively do all three pieces of the puzzle, you need to focus on communicating to the exact type of person you’re seeking to attract.
