Regardless of what business you’re in, it’s easier to sell to existing customers than it is to get new ones. Do you know your customers? Do you know why they use your services? What attracted them to your company? What keeps them coming back to you? What does it cost you to generate a new customer? How much does it cost you to keep an existing customer?
These are good questions to ask. We know the biggest problem for small contractors is that they spend most of their time working in their businesses and not enough time working on their businesses. This is also true of larger companies. What is your uniqueness? Why do customers patronize your business?
I often ask new clients, what’s unique about their business? Why should a person become a customer? Why buy from you and not the guy down the street or across town? What’s your reputation in the community?
Why do some customers stay with you for a long time? What is it about the relationship that keeps them coming back? What can you do to develop that relationship, nurture it, and multiply it to reach all of your customers?
Are you reaching out to your existing customers on a regular basis? We know that most customers only buy a new heating and air conditioning system two or three times in their lifetime. Without built in repeat business we have to find unique ways to generate additional sales. What are you doing to generate those sales from existing customers?
Having grown up in the northeast, the oil heat guys had the best method for repeat business. Besides stopping by regularly to top off the oil tank, they always sold service contracts and they were masters at selling add-ons like humidifiers and electronic air cleaners. What are you offering your existing customers? Leads are expensive and depending on whom you listen to, customers can cost anywhere from $50 to $1000 each to acquire.
With an existing customer, you don’t have to invest prospecting dollars to keep those customers. If you have 2000 customers in your database, what would it be worth if your make a $200 - $500 sale to 10% to 20% of your list? It could potentially add anywhere from $40,000 to $200,000 or more of additional revenue. If you time it right, it could help your business through seasonal slow periods.
Are you selling service contracts? Why do customers buy service contracts? One reason is for peace of mind. It’s just like insurance; you buy that for peace of mind too. If you get into an accident you’re covered, if your home floods, you’re covered, and so is true with service contracts. A side benefit to a service contract is it gets you back in your customer’s home and you can examine their systems to make sure everything is in working order.
This gives you a chance to schedule a service call at a time when it’s convenient to both the customer and your company. It’s better to fix it before it breaks at a time that works for both parties. If you are a big proponent of service contracts, it can benefit your business when it comes time to sell. A business that has a large amount of service contracts has more resale value.
Every time you reach out to existing customers, provide them with tips to save energy, improve system efficiency, or remind them that it’s time for a spring or fall tune up. Because it doesn’t cost much to retain an existing customer, you can offer them a loyalty discount or some other discount if they purchase an upgrade to their system or a component within their system. Be creative and use your imagination.
Talk to contractors in other markets to ask what they do in their market to help themselves get through slow periods. When you travel, read the local newspapers to see what ads local contractors run in those cities. As somebody once said, every great idea I ever had, I stole from someone else. What ideas can you appropriate and repurpose to benefit your company?
A good concept for developing new ideas is to pull your team together offsite and start brainstorming. Brainstorming rules are simple and no ideas are off limits. Crazy ideas are okay. Don’t criticize anyone for an idea. When you start laughing and thinking up goofy ideas, don’t stop. You are on the right track, and will be very close to having a great idea break through.
My website contains links to all the marketing articles I’ve written for the HVAC-Talk Newsletter. If you are interested in purchasing a copy of my new book, Navigating the Marketing Maze, click here. If you need a branding consultation, a complete strategic marketing plan, or help with marketing services, call or send an email to discuss your needs.
Andy Fracica is president and CEO of Fracica Enterprises, Inc., a consulting firm specializing in marketing, and social media strategy. He has over 30 years of sales, marketing, and product management experience in the heating ventilating and air conditioning (HVAC) industry. He concentrates on helping companies deliver their message in an ever increasingly crowded market by helping HVAC dealers more effectively market their businesses without breaking their budgets. Contact him at 260-338-4554, [email protected] or visit the Fracica Enterprises, Inc. website.