Traffic Building

Targeted Traffic Generation And Profit Building -Through Strategic Customer Lifetime Value & Loyalty

Learn how to generate free targeted traffic by learning to categorize your customers and recognizing the profitable ones, from the non-profitable ones.

Now you might think that this is a little obvious, but in the next few minutes I will reveal to you WHY this is important, HOW to do it, and identify some additional ways that you can grow your customers into loyal, repeat buyers, with higher lifetime value.

You might have heard somewhere along the way that it is less expensive to keep an existing customer than to acquire a new one. This statement is very true. And what's even more important to realize is that there are customers that are profitable customers, and those that are NOT profitable customers. And it's also true whether you have a bricks and mortar real world offline business, or your business is 100% online.

A study was done a few years back by a US bank, and they discovered that you can group your customers into five different categories. Instead of studying gross sales, which might have resulted in that old 80 / 20 rule where 80% of your business comes from 20% of your customers (which applies to all industries) ... but instead they studied profitability.

Here was the result rounded off to whole numbers:

5% of households represented 80% of their gross profit.

11% of households represented 25% of their gross profit

28% of households - 16%

28% of households - 2%

Now wait ... are you following the math? That's more than 100% ... what's going on here? That's 123% of the gross profit!

I said five categories ... right? The fifth category, the remaining 28% represented -22% (negative) gross profit. Almost one third of the customers were causing a negative effect on the bottom line of this bank. Every time they did business with these customers, the bank lost money.

The two things that the bank learned was that they had to identify WHO the best customers were (let's call them the GOLD customers) and treat them better than all of the other five groups.

AND, identify the losing customers - with the purpose of dropping them or turning them into profitable customers. Imagine if they could just eliminate this entire category ... they would be adding 22% to their bottom line. Not to the revenue ... to the PROFIT that the bank was making.

Finding your GOLD customers may not be as difficult as it seems. Remember that we are only seeking 5% of them. If you have a list of 1,000 customers, then you're only looking for 50! 5,000 customers? 250. Not a daunting task. And once you know WHO they are, there are steps you can take to increase your value to them ... Which in turn will create even more loyalty to you and more sales. Even if you have a list of 10,000 or 20,000 subscribers, you don't likely have 10,000 or 20,000 customers. So work with your CUSTOMER list when determining who your GOLD clientele are.

Here are some ways to reward them and treat them better.

* Have a special members only area of your site - for them ONLY

* Have a special seminar, webinar, or special report.

* Have a special invitation only or inner circle dinner at a conference

* Call them on the phone and thank them for their business

* Send them a gift card to thank them for their business

* If your business is large, have a special customer service telephone line - just for them. Make sure it is answered on the first ring.

Dropping the losers.

In addition to keeping your gold customers loyal to your business, you should do something about the losers. If these customers are costing you money and eating up your profitability they are also cutting into the value and time that you can offer your best customers.

The first step is to identify them.

Once you know WHO they are you can reprice their services, or move them toward the door.

Who are the losers in your business? Do they need more hand-holding? Do they pay their bills slower? Do they call with seemingly unnecessary questions? Do you reply to their questions in a timely manner only to have months go by before THEY get back to YOU. And then by that point you have to reopen the files, re-educate yourself on the project and bring yourself back up to speed on where you were at with the project.

In a service-based business do they ask for repeated changes to the work you provide? And expect the edits done at YOUR expense instead of theirs? Do they negotiate your rates down to razor-thin profitability promising future business or high volumes of business? Or perhaps they even renegotiate with you AFTER the work is done, figuring they have YOU stretched over a barrel because you can't sell the custom work to someone else.

The other thought to consider is that your losing customers may not be like that to everyone they do business with. They might be GOLD customers to someone else. Or they might be a customer who becomes a GOLD customer down the road.

Sometimes there are reasons that a business might hold on to the losing customers. They might not actually be undesirable. For example, they might be a prestige account, and it looks good to have them in your portfolio. Or perhaps they provide you with an endless supply of referrals. But if your losing customers aren't providing value to YOU and YOUR BUSINESS, then identify ways that you can change this, or move them into one of your other group/types of customers.

So to recap, there's more than meets the eye when you look at who you do business with. Some customers are profitable, and at the same time others are taking away from your bottom line. Since this audio series is all about driving targeted traffic to your web site, learn to identify your GOLD customers and bring them back time and time again with new compelling offers, great products, and this traffic will convert very well.