COMPOSICIÓN DEL REPORTE

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n the early 1900s, Reverend Russell Conwell earned $5 million by giving the same speech, which he titled “Acres of Diamonds,” more than 6,000 times to audiences across the country. He used the pro- ceeds to found Temple University.

His speech told the story of a farmer who sold his farm so he could travel overseas searching for diamonds. After a lifetime of searching, he returned home penniless, having never found treasure.

In the meantime, the man who had purchased the farm noticed one day a sparkle in the stream running through the property. He waded into the water and found . . . a diamond! It turned out the farm was sitting on one of the world’s largest diamond veins, which made the new owner rich beyond his dreams.

The point of Conwell’s speech was this: Most of us spend our lives going all over the place to find our fortunes. But you can find a fortune literally in your own backyard, if you just look for it. To quote Conwell: “Your diamonds are not in far distant mountains or in yonder seas. They are in your own backyard if you but dig for them.”

That fortune, yours for the taking, can make the difference between just getting by or even going under, or continuing to flourish while your competitors falter.

Here’s how to lay your hands on the acres of diamonds in your own

backyard. During a recession or business slowdown, you have to look for new sources of revenue to make up for the shortfall. And when business is bad, panic is a common reaction. You think you have to do something drastic to get back on track—like take on a partner. Or merge with an- other firm. Or move to another state. Or start looking for a new job. Or, as I discussed in the previous chapters, you blame yourself and think you’re a failure.

But, as Conwell said, there are plenty of opportunities right where you are. And for any business that has been operating for more than a year or two, one such neglected backyard fortune is inactive accounts.

There is a small fortune locked up in your dormant customers. Reacti- vating those inactive accounts is one of the easiest, quickest ways to reenergize your business during a downturn, bring in new orders, and increase revenues.

As consultant Alf Nucifora advises, “Market to your base. Revisit your loyal customers, the ones you have probably taken for granted and ignored lately.” Unlike new customers, who must be acquired through expensive prospecting, you already have the names, ad- dresses, and phone numbers of your existing customers. They already know you and your product, and have bought at least once from you. According to Lansing Chew, senior marketing manager for Experian, “It’s most cost-effective to focus on retaining your known customers— to optimize their value and the relationship you’ll have with them in the future.”

Experienced marketers know that it costs five to ten times as much to make a sale by acquiring a new customer than by selling more of your products or services to existing customers. Yet most businesses dedicate their resources to prospecting for new customers, ignoring the massive revenue potential in their existing client base. Within that base, inactive accounts that are allowed to remain inactive represent the biggest wasted potential.

To put it another way: If you are not regularly employing strate- gies to reactive dormant accounts, you are leaving thousands of dollars in sales revenues right on the table—or acres of diamonds sitting in your own backyard.

Here is a good example: A software company found that many of their customers bought their accounting software, consisting of five modules—general ledger, accounts payable, accounts receivable, in- ventory, and payroll—but never used it. No wonder when they sent

sales letters offering upgrades to the new version, response was dismal. Who wants the new version of your product when they don’t even use the old version?

Their survey also showed that the majority of these customers only owned partial systems—one or two of the modules, but not all five. Therefore the software did not give them a total solution for all their ac- counting needs, so they turned to other programs that did all five func- tions for one low price.

The company solved this problem by sending a special upgrade offer to customers who were not active users. It said: “Upgrade to the new ver- sion for X dollars. You get all these new features. Plus, we will send you upgraded versions of all five modules for the one low upgrade fee, regardless

of whether you own all five already or just a few or just one.”

It was an inexpensive offer to make, since the cost of goods in soft- ware is close to zero: It costs exactly the same to include code for five modules on a CD-ROM as it does to send code for one specific module. (The cost is in the CD-ROM, not the content recorded on it.)

The result was that 73 percent of their customers bought the up- grade. And since they had the latest version of all five modules—a total accounting solution—many finally took it out of the box, installed it on their system, and now use it to run their businesses. They went from be- ing inactive buyers to active users, which means they were more recep- tive to buying additional software products from the company.

How can you get these inactive customers to buy from you again? There are four basic methods:

1. Recontact. Simply by getting in touch with inactive customers who

haven’t heard from you in a while, you remind them of your exis- tence, which may stimulate some of them to order from you once again. Increasing frequency of contact can lead to top-of-mind awareness, meaning when prospects need your type of product or ser- vice, they think of your company first.

2. Resell. Approach inactive customers. Find out why they are not

buying. Overcome these objections by giving them reasons why they should buy.

3. Cross-sell. Customers who bought one product in your line may not

even know about the other products you sell. Let them know and you can gain many additional sales.

Why Customers Stop Buying

A customer may have stopped buying from you for one or more of the following reasons:

• They simply don’t have any money in their budget. • Your company’s price is too high.

• They no longer have a need for your products or services. • They were dissatisfied with the product.

• They had a bad experience with your company. • They never used the product they bought.

• They’re still using the product, and it hasn’t run out or worn out.

• They stopped using the product.

• They switched to one of your competitors.

• They just don’t think of you or forgot about your company. • They felt that there was a lack of personal attention. • They felt that your company had a poor response rate. • They had difficulty in doing business with you or ordering

from you.

• They found that there was a lack of availability in your se- lection of products.

• They encountered unfriendly customer service personnel. • They experienced poor or rude collection services. • They felt that you had overpromised and underdelivered. • They felt that your company had inadequately handled their

problem.

• Your salespeople used high-pressure sales tactics.

• Your company has a poor corporate image or reputation in your industry.

• They perceive your pricing as unfair or too high.

• They felt that the product or service was of poor quality. • They felt that your company had poor service delivery. • Or any of a dozen other reasons.

4. Up-sell. Offer existing customers bigger volume discounts, more op-

tions, the deluxe model, or premium service levels based on past buying habits.

We will look at simple methods for making easy sales using all four approaches. But first, you have two jobs to do: segmenting and surveying your customer database.

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