The "Golden Fuel"TM Rule
In business, "doing unto others as you would have them do unto you" is a way to maximize customer satisfaction and generate word-of-mouth referrals - the best type of advertising.
Applying the Pareto Principle, if 80% of revenue comes from 20% of clients, then each referring client is worth 16 times more in lifetime value than the clients who do not refer.
Let that sink in - your referring customers are worth sixteen times more to you than your one-hit clients. And this does not even consider that your paid advertising had no effect on bringing you these clients who account for 80% of your sales.
So most of your advertising has zero effect on most of your new sales? Wow - that's enough to make you scratch your head.
These top referring clients are a business's "Golden Fuel" for revenue growth. And by following "The Golden Fuel Rule" they can contribute more and more to your bottom line each year. The Rule is "Do unto your top referring clients 16 times more than your other clientele."
How does a smart businesses implement their "Golden Fuel" strategy? Here are the elements:
- Find these Golden Fuel customers - identify which clients are regular referrers of business
- Communicate with them - stay close with them through regular mail or e-mail communiques. Use your Web site for this.
- Give them more reasons - as well as a means - to refer their friends. Your goal should be to create a new 16X client with each new customer
- Reward them - use your imagination to give incentives or meaningful, if inexpensive gifts to your top referrers. These go a long way to show your appreciation and keep you on the front of their minds.
- Keep them satisfied - your top level service is how you established your reputation in the first place.
Disclaimer: I am the founder of a local/social media site that provides a means of rapidly deploying a "Golden Fuel" strategy for free. YouGottaCall, in our central Connecticut test market, has hundreds of local members and businesses. We're developing integration with leading social sites as well as advanced reporting features prior to release to other markets.
Until we're available in your locale, there are practical ways to implement your "Golden Fuel" strategy. Help is on the way!
- - Tim