How to Build 30-50% More Customer Orders
Have you ever heard of the "Pareto Principle"? If you haven't, you are missing out on one
of the MOST EFFECTIVE routes to bigger profits.
Also known as "The Vital Few and Trivial Many Rule” the Pareto Principle was named after an Italian economist who observed in 1906 that 20% of the Italian population owned 80% of Italy's wealth. He then noticed that 20% of the pea pods in his garden accounted for 80% of his pea crop each year. Coincidence? Well, it got him thinking ...
Vilfredo Pareto applied this "80/20" rule to pretty much everything - and whether or not you agree with it is your prerogative. But when it comes to your e-business, you're missing out on a lot of profit if you don't realize that 20% of your customers are responsible for 80% of your sales!
With other applications of the Pareto Principle, it's often impossible to determine the accuracy of the ratio (e.g., 20% of the food you eat is responsible for 80% of your health).
But in your e-business you can easily track which customers are repeat customers. It's a little-recognized fact that at least 20% of people who have purchased from you once will buy from you again if you follow up with them. One-fifth of your customer base is just waiting for you to offer them something new…
In fact, our testing shows that you can boost your revenue by an extra 30% to 50% - just by following up with your customers.
Why should you follow up?
If you don't follow up with your customers, you are losing a lot of profit - it's as simple as that.
Too many Internet marketers focus on generating "transactional" income - that is, income from the sale of a single product or service. If you take this approach the number of new clients you take on will always limit your income. And the bottom line is that it costs more to acquire new customers than it does to follow up with your existing ones.
Not only that but when a person trusts you and likes your product or service enough to buy from you once, they'll often buy from you again and again. In fact, "backend" sales from your follow-up offers can immediately increase your revenue by 30% to 50%! Your existing customer base is four or five times more likely to buy from you than a "cold" market, and the “lifetime value" of these customers is one of the greatest assets of your business.
Repeat sales can be so profitable that some people even offer their product or service below cost on the first sale - just to get their potential customers to buy. Think of all the mail-order book clubs and CD clubs that let you purchase 11 books or CDs for a dollar, for example. Once people have bought for the first time, at least 20% of them will buy again. And this market should be where you focus a good deal of your attention.
You have already cultivated a relationship with your customers - you have put in the time and money to get their attention, establish credibility and close that first sale. That's by far the most difficult part - not to mention the most expensive. Think of all the planning, advertising and promotional activity that goes into getting those initial sales
But once you've acquired those customers, you can develop their "lifetime value." Show appreciation and offer them special incentives. Send them "thank you for your purchase" messages, renewal notices, and free information. Reward them for being loyal customers and they'll become even more loyal.
So what should you offer these customers? Just about anything! We’ll be discussing this further…
When should you follow up?
The question of when to follow up with your customers and subscribers is going to depend on your business. Some companies are relentless with their follow-up promotions, sending new offers on a daily basis immediately after you've given them your email address whereas others will wait until the one-year anniversary of your purchase before they contact you again. Your site will probably fall somewhere between these two extremes.
It also depends on who you're following up with ... If you're following up with first-time customer try sending out a follow-up offer 3, 7, or 10 days after the date of their initial purchase. These are the times when new clients are most likely to make a SECOND purchase.
In general, deciding exactly when you should follow up with your customers is actually quite an easy job. You simply need to look for natural opportunities to touch base with the people on your opt-in list.
Here are some examples:
Follow up after a subscription request
When someone signs up for your free newsletter, downloads a free report, or otherwise leaves their email address with you, they generally expect to get some sort of reply from you to let them know that you have received their request.
Many companies send out a message saying "Thank you for subscribing," but this is also an excellent opportunity to get a brief promotional message in front of your new subscribers. You might try something like this:
Thank you for subscribing to the Ballroom Dancing Newsletter. You'll be receiving the next issue shortly, but in the meantime, please feel free to browse through our back issues, which we've archived for you at
As a brand-new member of our ballroom dancing community, we'd also like to offer you 15% off any one of our best-selling instructional video tapes. This offer is available only to new subscribers, and if you want to take advantage of it, you'll need to visit the following page :-www.BaIlRoomdancinglessons.com/new_sub_dlscount
Again thanks for subscribing, and keep on dancing!
Follow up after a purchase
Another great opportunity for follow-up sales is shortly after a customer has made a purchase. It is a good customer service practice to follow up with all your customers at a predetermined interval after they have made a purchase from you, just to make sure they are happy with their purchase and to see if they have any questions.
Of course, this is also the perfect time to present your customers with a follow-up offer for another one of your products. You might try offering them an extended warranty plan, an upgrade to the product, or even a brand-new product that they might use with their original purchase.
The key to this approach is to emphasize in your message that you are simply following up with them to make sure they are happy with their purchase; the sales offer should be secondary to the customer service inquiry. You'll be surprised how well this type of low-key approach can work.
Follow up on a purchase anniversary
An easy way to get a follow-up promotion in front of your customers is to send them an email one month, or six months, or even a year after they made their first purchase.
Simply remind them that it was six months ago today that they bought their widget from you and to celebrate you'd like to offer them 20% off their next widget purchase.
Use your imagination
Depending on the product or service you sell, there will be many different opportunities to send follow-up promotions to your customers and subscribers. For example, if you offer a 3O-day free trial of a software product, then there is a natural opportunity to follow up with people just as their free trial is about to expire.
The most valuable follow-up tool
Obviously, sending follow-up promotions is an excellent way for your business to generate a healthy amount of extra income. In fact if you do it right you should expect to immediately increase your revenues by an extra 30% to 50% just by sending follow-up promotions. How much extra money would that be for YOUR business?
However you are probably also thinking that sending these kind of follow-up promotions is going to be an awful lot of work. You're going to have to keep track of who bought what when they bought it and then send out emails to these people on specific days.
Of course doing all this manually would take up every minute of your day so you'll want to find a way to automate this process. The good news is that there is a really simple way to automate your follow-up and it allows you to simply write your follow-up offer once and have it automatically emailed to your customers and subscribers at the appropriate times.
The tool we're referring to is auto responders and they are SO powerful that we've dedicated an entire section later to teaching you how to profit from them.
An email takes less than 15 minutes to write ... and less than five minutes to set up as an auto responder so it can be automatically sent as a follow-up email to potential buyers. We highly recommend that you start sending follow-up emails to your customers and subscribers using autoresponders. They take almost no time at all to set up, they run automatically, so you never have to touch them again and they can have a huge impact on your sales!
Plus, auto responder follow-ups can be FREE to send, provided you're using an email management solution that includes FREE unlimited auto responder series. Look around for the right software solution for your business.
So to sum up - sending follow-up promotions is one of the single most overlooked part of any online business and we really can't figure out why! People who use this technique are consistently able to generate 30% more revenue from follow-up promotions and it takes hardly any work at all!
Follow-up promotions work so well because of the '"80-20" rule, which states that 80% of your profits will come from 20% of your customers. Essentially what this rule means is that a significant percentage of your customers are just waiting for you to sell them additional products or services! Of course they aren't going to call you up and ask what they can buy so it's up to you to contact them with compelling follow-up offers!
There are a number of different ways that you can follow up with your customers and subscribers. You can contact them shortly after a purchase; you can contact them on the anniversary of a purchase; you can follow up with them to see if they have any questions they need answered; you can contact them to offer them an add-on or upgrade to their purchase; and so on – and it can all be done automatically