If you’re a freelancer or small business owner, you understand the importance of repeat business to the growth and survival of your company.

But do you know the monetary value of repeat customers? In his book, The Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value, Frederick F. Reichheld gives two compelling stats that you need to be aware of:

• Converting just 5% more of your customers to repeat customers will generate an average of 25% – 100% more in your profit per customer numbers.
• The cost of acquiring new clients is about 500% more expensive than the cost of servicing existing clients.

So what’s the number one thing you can do to generate more return business? Provide consistent and valuable communication.

Why Your Clients Need (And Want) You To Communicate With Them

If you ask most small business owners or freelancers why they don’t communicate more frequently with their previous customers they usually respond with, “I don’t want to be a nuisance.”

But consistent, valuable communication is actually desired by most of your clients. Hoping that a previous client will call when ready is not a game plan.

They Just Don’t Think of You That Often

You’re awesome at what you do. You may be the best vendor they’ve ever worked with.

But guess what, they don’t think of you very often (if ever). Why?

They’re busy. They have other things fighting for their attention and you’re currently not one of them. The less you insert yourself into their path, the fewer of them will actually call you back.

And when they do need the service or product you provide, many of them will select from one of your competitors who are reaching out to them and asking for a shot to impress.

Previous Clients Often Don’t Know of Other Ways to Engage You

When a client hires you for a project, it’s easy to assume that they know about all of the services you provide along with how those services can benefit them. Your services are listed on your website so your clients should be aware of them. Right?

“If they need it, they’ll ask about it,” is a common phrase among those without a lot of repeat business.

No they won’t. The reason your clients haven’t purchased one of your other services is that they don’t think they need it.

When you wait for them to reach out to you, you’re hoping that they’ll do your sales work for you by diagnosing their own need, selling themselves on the idea, then contacting you just to close the sale they’ve made in their minds.

Don’t count on that happening very often.

Clients Want to Feel Like They Weren’t Just a One-Time “Transaction”
If I hire you to do something for me and, when the project is over, I never hear from you again, I assume that you don’t much care if you hear from me again. So you probably won’t.

We continue to do business with people we like, trust, and have a relationship with. But that’s a two-way street. Meaning you need to communicate with me!

If you don’t, I’ll shop around the next time I need someone – even if you’re good. After all, I may find someone who really values me and wants a long-term relationship.

Your Competitors Are Probably Talking To Your Clients

I’ve alluded to it before, but this is huge. I’ve worked with a number of different companies that would get a list of the competitors’ clients and reach out to them with better services and offers. They got a ton of business this way.

People want to be impressed. Contacting me and letting me know how you can impress me in a non-pushy, non-sleazy way will impress me. I may just give you my business over another company or person I’m using if they’re not making the same effort.

When competitors reach out to your clients and help them understand how their services can help, your clients will immediately have it in their minds that you’re somehow inferior (even if you’re not). Once that happens, it’ll be nearly impossible to salvage the client.

How to Fix the Lack of Communication

You must take the time to develop a consistent and valuable follow up strategy that occasionally includes a personal touch. There are many ways to do this, but here are a handful:

1. Email Newsletters
Email newsletters can be a great, inexpensive way to keep yourself or your business near the front of your clients’ minds. A monthly reminder to them that you’re there along with new services or highlights of stalwart services can go a long way toward driving repeat business.

2. Personal Emails
One rarely used tactic that can set you apart with your personal emails is to send someone an article or blog post about their industry or a topic they’re interested in. Just a quick note that says, “Hey Jane, I came across this article and wanted to share it with you. I know how much you love waterskiing and thought you might find it interesting.” Do that on occasion and your previous clients will think long and hard about switching to someone else.

3. Handwritten Notes
My email inbox generally frightens me. I get way too many and I don’t like checking it. But I’m like a little kid when it comes to checking the snail mail box. What’s even better is when I receive a handwritten thank you note or letter from someone. So infrequent is this type of communication anymore that it screams for my attention and appreciation.

A few months back, I took to Twitter to complain about a horrible experience I had with Sonic. I received personal phone calls and a hand-written note from the store manager along with a few gift cards. Needless to say, I’ve continued to give them my business. Had they not done that, I would have never gone back.

4. Phone Calls
The smaller your company – the better this will work for you. If I order a widget from a large company then, a few weeks later, I drop into the queue of a call center employee, I tend to not care too much. If, instead, I hire a website designer for a project I’m working on and they call me a few days/weeks/months later to check in on me, I’ll appreciate it. [Note: If you're a sales person for a large company that sold me and you call me back, I'll be immensely impressed. Treat your large business like a small business - it will go a long way.]

Be Creative

There are plenty of other ways to do this. Which method(s) you choose will depend on your type of business and what information you have about your clients. The most important lesson is to be consistent. Find ways to cut through the noise without being obnoxious.

If you want more information on how to setup some automation for some of this, check out one of my previous articles: 4 Free Tools for Business Relationship Development.

Share Your Thoughts

Do you have a follow up strategy for your business? How do you keep in contact with previous clients?

We’ve all heard the axiom “Give a man a fish and he’ll eat for a day. Teach a man to fish and he’ll never go hungry.”

What happens if the man you’re trying to teach to fish doesn’t want to learn to fish? Instead, he wants you to catch him a fish each day. What do you do? If you’re a teacher, this can be a frustrating scenario.

If you’re a business person, you sell him the fish. I lost sight of this fact the other day.

Is there a scenario in your business where you’re trying to teach someone to fish who really doesn’t want to learn? Is there an opportunity to sell the person the fish instead?

Photo courtesy of Millzero

When your business is first getting started, selecting your services and setting your pricing can be overwhelming and frustrating for business owners. It helps to understand why you can feel this way and what to do about it.

• Fear of Not Offering Enough to Prospects/Clients – Many people are afraid of not having something to offer everyone who inquires about their business or walks through the front doors. They feel like they’ve “lost” a client because they didn’t have something to offer them.
• Fear of Offering the Wrong Service(s) – Others tend to waiver on the selection of the first services the business should offer. They know they need to narrow their service offerings in the early stages, but they can’t figure out which to keep and which to eliminate. They ask questions like, “What happens if I choose the wrong one?”

Fear of Not Offering Enough

Have you ever looked at the pricing sheet or service list for a business and felt like you were looking at the menu of a restaurant? How did it make you feel? Probably overwhelmed and confused.

Yet, out of fear of “losing” a prospect, we try to become all things to all people. We dilute our core service with “add-ons” and “features” that we think will make our company more appealing. Instead, they only serve to confuse the prospect and make it appear as if we don’t really understand our target audience.

The result is that our fear of offering too little causes us to offer far too much. You’re far better off starting smaller and then letting your market dictate where your service goes. Try to predict everything your market wants or needs is a losing and expensive battle.

Fear of Offering the Wrong Service(s)

For those that know they should limit their service offerings, the narrowing process can easily induce ulcers! In some ways, it feels as if you’re choosing between your kids. You love all of the potential services equally – how can you choose one over the other? It just doesn’t seem right.

On top of that, you want to make sure you have the “right” services to launch with. You’re concerned that if you select the “wrong” services, you’ll lose potential customers because they’ll view your business as unable to help them.

This stems from the idea that you’re “locked in” for some length of time in having to offer the services you select. While that may be true in some cases, a service-based business is often more fluid than that.

We’ve all heard stories of companies that started out doing one thing then evolved over time to do so much more. Amazon.com used to sell just books. Google used to be just a search engine. Neither started out trying to be everything to everyone. They evolved into that.

Pick something. Do it really well. Rinse and repeat.

Photo credit: http://www.flickr.com/photos/journeyscoffee/2158072417/

Do you remember the first time (or last time) you bought a new car? Do you remember how importantly you weighed your options? You created a spreadsheet of the different features of the vehicles you were considering. You spent days poring through reports and evaluating safety estimates until finally, you chose the most sensible, safe and economical car – never once considering what the car looked like or how it will make you feel when all your friends see you pull into the office parking lot tomorrow.

What? That’s not what you did?

It’s very likely you didn’t. The truth is, we generally know what car we want before we start shopping. The research is simply an effort on our part to feel rational when, in fact, almost every purchase we make (personally and in business) is an emotional decision. I know that you don’t make emotional purchasing decisions – only rational ones based on fact. That’s why you’ve never experience buyer’s remorse, right?

Understanding that your customers’ decision to purchase your product or service is an emotional one can enable you to grow your business substantially. First, we need to create the necessary emotions to cause people to buy our products or services.

Playing with People’s Emotions?

If this sounds like manipulation to you, take a moment to think about this: your potential clients are going to feel something when they encounter your company – shouldn’t you be the one in control of what they feel? After all, if you don’t know what emotions you are creating right now, you’re likely losing business since people will trust feelings over facts. If they don’t feel right about your company, they generally won’t give you their money, time and trust. We have a phrase for that: gut instinct.

It sounds counter-intuitive to focus on how people are feeling while they’re evaluating our company’s product or service. That’s why we focus on the facts of what we do. “Our product is 5X faster. Yet it’s only half the price.” “We’ve worked with companies like PepsiCo, A&E TV, and Google.” “We are able to save your organization 5 man hours each week per employee.”

The Pressure to be Rational

While facts may be both important and relative to the prospect, such information will almost never be the reason they buy. Instead, these will be the reasons they tell others that they bought. You see, we don’t like to admit that we’re often emotionally motivated. Few of us will say to our friends, “I chose to go with Company X because they made me feel comfortable and safe – like coming home after a hard day at work.” Even though that’s exactly why we made the purchase, we quote whatever facts we can remember in order to sound like we actually made a rational decision.

We need to free our customers up to make emotional decisions while understanding their need to feel rational after the purchase.

Facts Support Emotions

The goal then is to engage the person through their emotions then give them the facts they need to justify how they feel. But to do this, you need to understand which emotions will cause your clients to buy. If you sell home security, fear and safety are two emotions your clients probably need to feel. Fear of not using your product and the safety they are beginning to feel as they arrive at the decision to make the purchase.

Facts support emotions – they don’t create them.

In a future post, we’ll look at ways to create the right emotions and the wrong emotions. In the meantime…

Questions: Do you know the emotions you need to create to sell your product or service? How do you go about creating them in your prospects?

A few days back, I received an email from a reader named Ana who took issue with a part of my post Once Upon a Time – Storytelling Techniques for Sales. Her concern was that practicing your story can make it lose a bit of authenticity. In this video, I respond to those concerns.

Do you want to be successful? I’m not talking about money, though that may result. I’m talking about getting from where you are to where you want to be – starting that business, getting that promotion, landing that new client, creating a new product line, etc.

I believe there are only two skills you need that will make up for any of those you may not have:

1. The Ability to Sell What You Believe In
2. The Ability to Deliver What You Sell

Everything is Sales

The economy runs on selling a product or service for money. Even if you’re a programmer or a customer service rep, you’re in sales. Everything is sales:

• Hiring Managers sell the position to potential employees. You want the best applicants? Sell them on why your company is the best place to work.
• Entrepreneurs sell ideas to potential investors. They hear hundreds, if not thousands, of pitches per year. Tell them why they should care about yours.
• Job Applicants sell themselves to a company. If two people with similar resumes apply for the same job, who gets it? The one who can sell themselves over the other person. I’ve even hired people with less experience just because they convinced me they’d work harder.
• Revolutionaries sell people on why the status quo needs to be shaken up. Every person who’s ever led a movement, first had to convince a lot of people to see things as they did. They sold their vision and ideas.

Bottom line? You’re in sales whether you want to believe it or not. Embrace it. Then learn to sell your ideas, yourself, your business and your dreams.

Deliver on What You Sell

The term “salesman” has taken on a negative connotation. Primarily because so many things or ideas we’ve been sold don’t deliver. We don’t trust salespeople. We think they’re lying. I don’t believe that most salespeople intend to be dishonest. However, I believe most people sell something and then don’t deliver. Delivering takes effort. Delivering takes diligence. Delivering is hard, constant work.

If you can learn to sell what you believe in, then deliver on what you sell – be it an idea, your skill set, your company – you will never be lacking for business or a job. Many people can do one or the other. Only the truly successful learn to do both.

Do you possess these two skills? How do you use them in your pursuit of success?

If prostitution is the world’s oldest profession, storytelling is the world’s oldest pastime. We love telling stories about our vacations, our jobs, our weekends, our kids – everything.

Why?

Because stories allow us to connect emotionally with others and share in their experiences. We tell stories because stories last. We want to be remembered and understood as more than just a series of facts. I could tell you that I’m 6′ tall, weigh 175, can’t jump and was born 32 years ago. But that tells you nothing. At least nothing you’re likely to remember (or care about).

But if I regale you with a story of the fist fight I was in when I was 14 because somebody was picking on my younger brother – and you see my eyes light up as I tell it – you’ll know that I love my brother, believe in honor and integrity, and that I’m not afraid to get a little roughed up.

Now, which are you more likely to find interesting? Which “me” do you want to hear more about? Which “me” do you care more about? Which “me” would you buy? (Now you know how prostitution fits into this.)

It’s not that my height and weight are unimportant. And if you were considering me for a basketball team, you’d be sorely disappointed. However, it’s common for sales professionals to get hung up on the facts of their product and not its underlying story.

But how do you craft a story for your product or service? Is it even possible? Does your business or product have to be sexy to have a story? Every business has a story. Here are a few questions to get you started:

1. Who Does Your Product Benefit?

You should understand both the first generation and second generation impact of what you’re selling. This is a tricky one that catches a lot of people. We often get hung up on the person purchasing from us (first generation) and forget that they usually need the service to help or reach their client/customer (second generation).

Back when I was selling content management systems and online marketing services to hospitals, I had to keep two people in mind: the person buying from me and the person they were trying to reach. Both have needs and I was trying to help my clients reach their clients (or patients in this scenario).

So how did I do that?

First, by understanding the patient. What did they want from a hospital website? What did I want from a hospital’s website (I am a patient after all)? How would we like to communicate with our hospital or doctor? Then, I looked at the challenges my potential customer was facing in meeting patient expectations.

From that, I crafted a story about how our services would impact not just the hospital and its staff, but their patients as well. I showed them how we could partner with them to better serve their community.

2. How Does Your Prospect View Their Situation?

Are they optimistic? Overwhelmed? Skeptical? Do they even think they need your service? You’ll be surprised to find out how the answer to this question can help you tailor your story to each prospect. Let me show you:

Optimistic: Place the focus of your story on the future benefit of your service. Talk about all the wonderful ways it will help them better meet their clients needs, etc.

Overwhelmed: Your story should still focus on the benefits but should now include elements of how it simplified the lives of people in their situation.

Skeptical: Now your story needs to include elements of how it helped other companies do what you can do for them.

Always talk about the future benefit, but don’t forget where they are right now.

3. What Emotions Play Into the Purchase?

Is it fear? Relief? Excitement? Sadness? Empathy? Hope? Every product or service purchase meets at least one emotional need if only temporarily. Understand which emotion(s) you service, then craft your story to create them.

Need to raise money for AIDs work in Africa? Toss the stats and give me a story about a child. Name her. Tell me what she wants to be. Tell me how I can help her. Sadness, empathy, hope. Selling life insurance? Try fear and relief.

Practice, Practice, Practice

Finally, don’t forget to practice your story. Get comfortable telling it in social situations or to strangers who ask what you do. The more comfortable you are with it, the more naturally it will flow when you need it most.

An Example

Right before I posted this, I had an email exchange with a potential client I thought I’d share. I was explaining to them Ethos3′s presentation design services and how we could help them. I wrote the following in an email. Notice the story and the emotions I invoke: Distraction, Overwhelming, Confusion.

Often, presenters want to show their audience everything they will be talking about [in the PowerPoint slides]. What that does is increase the number of inputs to the audience members’ brains forcing them to “tune” something out.

Think of the new slides you sent over as being at a large party. When you’re talking to someone at a party, you’ll notice that you have to work very hard to focus on the person you’re speaking to. You also know that you could never remember everything that was said or done by everyone at the party. The reason for that is because your brain is not fully sure which input its supposed to be working with.

What we do is take our knowledge of how the human brain processes information and move your slides from “large party” to “intimate gathering.” We take the work off of the brain and allow the person to easily focus, digest and recall critical information.

Do you have a story for your product, service or business?