Your work truck, your service vans…are they worth more or less now than when you bought them? Every day you use them, they lose value…as do your tools, your phones and other business “assets.”
But your Database…if maintained and nurtured, grows year over year, making your business more and more valuable.
In the mid-90’s, I worked for Dale Bernett at American Home Improvement in La Crosse Wisconsin. Like a lot of companies, they did a good job replacing siding, windows, roofing and gutters. But what truly set them apart was Dale’s focus on creating and maintaining a high-quality database of prior customers, unsold leads, and prospects.
His marketing formula was simple: Radius (around jobs) + Rehash + Repeat Sales + Referrals = Profitability
Dale used his database of 1,200 customers, 3,900 unsold leads, and 21,000 prospects to generate approximately $1.5 million in yearly sales…over 60% of the company’s annual revenue.
Here are two ways Dale used his database:
- December in Wisconsin is a bad time for exterior remodeling. Cold, snow, holidays…a lot of things converge to make generating leads and closing sales difficult, not to mention the risk of losing quality employees when there’s no work. This gave Dale the idea to start a “Winter Booking Promotion”, a mailer went to each of his 1,200 past customers to generate Repeat Sales. The message: “Keep our crews busy in winter, and we’ll give you the best deal of the year.” The company booked $100,000 in projects in year one, and that number grew each year. Instead of burying money in ads to reach new clients, Dale’s mailer cost $720…total! With 40+ leads generated from the mailer, the lead acquisition cost was $18 each. Most importantly, it was enough to keep his sales and production staff busy through the slow months!
- He ran a “Rehash Program” on unsold leads. Dale had a database of 3,900 unsold leads. 7 out of 10 leads didn’t buy after the initial sales appointment and Dale didn’t want to lose these potential sales to a competitor. So, Dale’s Rehash Program would reach out to those unsold leads two days after the appointment… and continue to follow-up throughout the year with calls, email and direct mail. Dale’s goal was to make 10 – 12 marketing impressions per year to maximize conversion potential. This consistent follow-up led to $700,000 annually in revenue; 25% of total sales.
Because Dale had good data, he could target past clients, who already like and trust his company, for additional work. And, he was able to go back to those who didn’t buy and keep in front of them. That way, when they were ready to purchase, American Home Improvement was at the top of their mind.
And, when it came time to retire and sell the company, American Home Improvement’s physical assets didn’t matter much. What made the company worth buying was the database Dale had built…an asset that drove 60% of yearly revenue.
In the 90’s, spreadsheet software or file folders helped track and maintain your client database. Today, Customer Relationship Management software, like MarketSharp make it easy to compile and manage your Prospects, Leads and Customers, AND track opportunities and target marketing efforts based on geography, demographics, lead status, product interest, or future interest, for example.
So, what’s your database worth? Are you marketing to past customers for repeat sales? Are you staying in front of your unsold leads so they remember you when they’re ready to buy? Or, are you burning all of your energy trying to convince new folks how great your company is…something your customers and unsold leads already know.