The Leaky
Bucket List
Last year, I consulted with a speaker
who was experiencing a dip in revenue.
His cash flow was hurting a bit with the
change in the economy, new speaking
gigs were harder to attain, and repeat
bookings were not occurring readily. As
we evaluated his offerings, his system for
handling new bookings, and his strategies to stay connected to the event
planners that booked him in the past, it
became quite clear where his leaks were.
First, he had no real system for quickly
handling a speaker booking request, so
event planners were underwhelmed with
his follow through. Second, he had no
routine communication process in place
to stay engaged and connected to the
event planners in between gigs, so it was
“out of sight, out of mind.” Third, he
was so focused on generating new speaking gigs and selling his books and CDs
at events, he was completely missing a
huge profit center: His excited, raving
audiences eagerly invested at events,
but needed more support once they got
home. By being “new lead”-centric, he
was concentrating his resources on the
most expensive form of revenue generation, and he’d neglected the simple
techniques to expand the retention,
repeat and referral side.
So what can you do to increase the
three “Rs”—retention, repeat and referral business—so you can build revenues,
even in a recession? Here are five techniques that you can use to plug your
leaky bucket list:
Aim for a World-Class Culture
The fact is, you remember really bad
and really good service, but mediocre
service just fades away. We all believe
we have great value to offer the world,
but do we have a way of delivering
world-class value? A world-class culture
starts by deciding what we want our
clients and customers to say about us to
someone else. Every business has a reputation. Unfortunately, many businesses
become tarnished because they didn’t
decide early enough how they want
people to experience them.
Think of a business you absolutely
love to frequent. What do you say
about it? Consider Zappos.com as an
example. Every strategy, person and
element of its environment was chosen
to be in complete alignment with its
world-class culture and deliver “wow”
through service. This company thrives
because it built the entire business with
a clear value system from day one (and
Tony Hsieh delivers this message on
stages all over the world now).
Shift into the Retention Mindset
Think back to a time when you received
a customer complaint. What did you do?
Defend yourself? Figure out the fastest
and cheapest way to fix it? Did you just
leave it alone and say to yourself, “Oh,
well, I didn’t like working with that
client anyway”? Or did you get creative,
and determine how you could over-deliver to keep the client happy in the
face of a potential issue?
A retention mindset means you
are focused on keeping a client. When
you run the numbers on the lifetime
value of a client, you can see why it’s
so important:
Estimated Average Lifetime Value =
(Average Sale) x (Estimated Number
of times customers reorder)
GO AHEAD AND CALCULATE THIS
FIGURE RIGHT NOW.
1. Your estimated average sale is
_______________.
2. The estimated number of times a
customer reorders is ________________.
3. Now, multiply #1 by #2 to get
_________________.
This is your estimate for the average
Lifetime Value of a customer.
Imagine the lifetime value of a client
is $5,000, because an average sale is
$2,500 and they reorder, on average, at
least once.
The retention mindset would suggest
that if an issue arises, it would be
worth investing $1,000 if that meant
keeping that client longer. Most of us
think: “Wow that’s a lot of money!”
But truthfully, think what it cost you in
marketing and sales resources to obtain
that client in the first place, plus what
the client could spend with you if you
could extend the lifetime value. After
all, who wouldn’t invest $1,000 to get
an additional $4,000 in revenue?
Leverage the Reciprocity-
Generosity Connection
Not too long ago, a friend of mine was
milling about a store and the salesperson kept giving her free samples. She
was so taken aback by the generosity that she bought about $100 worth
of products that she had not intended
to buy when she walked in the store.
Generosity is the grease that leads to
reciprocal action. In other words, generosity is one of the easiest ways to
generate more repeat and referral business in a world-class culture.
Ask yourself, “How generous am I
in my business dealings?” Do you go
the extra mile, or do just enough to
be socially acceptable? Do you give
generously first without expecting
anything in return, or do you secretly
hope that it will make the person
want to reciprocate?
There are two types of reciprocity: strategically planned and responsive
gestures. Strategically planned reciprocity is thought out in advance, whereas
responsive gestures are how we react to
a situation or event.
For instance, a strategically planned
reciprocity act might be sending out a
copy of your new book to the top 25
to 50 influencers in your target market,
with a little note inviting them to let
